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Whitman College. Fringe Benefits Committees May 14, 2014. Agenda. Healthcare Reform Update Plan Performance Routine and Preventive Care Employee Assistance Plan Transgendered Surgery Update Healthcare/Insurance Market Changes. Healthcare Reform – Update - 2014. - PowerPoint PPT Presentation
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Whitman College
Fringe Benefits CommitteesMay 14, 2014
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Agenda Healthcare Reform Update Plan Performance Routine and Preventive Care Employee Assistance Plan Transgendered Surgery Update Healthcare/Insurance Market
Changes
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Healthcare Reform – Update - 2014
Individual Exchanges OnlinePSF did a Seminar at Whitman in NovemberOpen enrollment periodOregon is a mess, WA is not
Individual MandateAll Americans must have coverage or pay a
penalty (assessed on tax return) 2014 penalty is $95 or 1% of earnings, increasing
to $695 or 2.5% of earnings in 2016
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Healthcare Reform – Update - 2014
Individual ExchangesIndividual Plans
Subsidies for those who don’t have access to coverage through their employer
– Families won’t be eligible for subsidies if the employee has access to adequate and affordable coverage through their employer
Subsidies for those at 400% of FPL and below Four Benefit Levels – different by state Deductible cannot be higher than $2,000 (except
for young invincible – under age 32)
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Healthcare Reform – Update - 2014
What Changed in 2014?Annual Limits Prohibited On “Essential
Benefits”No Pre-Existing Limitations for AdultsMaximum out of pocket for medical plans
limited to HSA Maximum 2014: $6,350 single, $12,700 family
Copays apply to out of pocket maximum Medical in 2014, Rx in 2015
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Healthcare Reform – Update - 2015
2015 – Employer Mandate (delayed from 2014 to 2015 Pay or Play? What does that mean?
Employers with more than 50 employees are required to provide adequate and affordable medical benefits to their employees (play) OR pay penalties ($2,000/employee if no benefits provided, $3,000/employee if standards not met)
– Adequacy standard – the plan has to cover 60% of the cost of eligible expenses
– Affordability standard – payroll deductions for employee only medical coverage cannot exceed 9.5% of income
– Whitman College meets both standards
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Healthcare Reform – Update - 2015
2015 – Impact on the CollegeWho is the College required to provide
benefits to (to avoid penalties)? Employees who are regularly scheduled to work 30
or more hours per week, or 130 hours per month For those with variable work hours, seasonal, etc.
the government provides a “safe harbor” that allows employers to look back up to 12 months to determine if the 130 hours per month threshold is met
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Healthcare Reform – Update – 2016 and Beyond
2016 Employer reporting requirements (IRS)
2018 Excise tax for high cost plans that (in theory) offer
generous benefits that insolate plan participants from the cost of care (due to low cost share – deductibles, copays, out of pocket maximums)
For plans whose total annual cost exceeds $10,200 individual, $27,500 family
40% tax on amounts over limits
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Plan Performance - Self Insurance A tool for managing cash flow, avoiding
some taxes, more control of the plan Components
Plan Administration (Work of Premera) Insurance (Purchased from Lifewise)
Individual Claimants over $100,000 per year Aggregate of all claims paid during the year (120% of the
expected claims) Paid Claims Incurred But Not Reported (IBNR) Reserves (to be
used to pay claims in the event of plan termination)
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Plan Performance2012 & 2013
*In 2012, there were 5 claimants with total claims in excess of $100,000 and in 2013 there were 3.
Type of Charge Calendar Year2012
2012 PEPM
Calendar Year2013
2013 PEPM
Administration $ 371,341 $ 66.57 $ 379,158 $ 66.93
Insurance $ 807,097 $144.69 $ 866,745 $153.00
Claims Medical/Rx/Vision* DentalTotal Claims
$3,820,951$ 277,081$4,098,032
$685.00$ 49.67$734.68
$3,971,822$ 304,873$4,276,695
$701.12$ 53.82$754.93
Less Reinsurance Pmt -$ 290,317 -$52.05 -$ 267,478 -$47.22
Net Overall Total $4,986,153 $893.88 $5,255,120 $927.65
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Plan Performance2013 & 2014 YTD
*The 2014 first quarter expenses are 7.2% higher than the first quarter of 2013.
Type of Charge Calendar Year2013
2013 PEPM
Jan-March 2014 2014PEPM
Administration $ 379,158 $ 66.93 $ 98,600 $ 68.52
Insurance $ 866,745 $153.00 $ 211,260 $146.81
Claims Medical/Rx/Vision DentalTotal Claims
$3,971,822$ 304,873$4,276,695
$701.12$ 53.82$754.93
$ 924,478$ 81,989$1,006,467
$642.44$ 56.98$699.42
Less Reinsurance Pmt -$ 267,478 -$47.22 -$ 0 -$ 00.00
Net Overall Total* $5,255,120 $927.65 $1,316,327 $914.75
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Plan Performance How does that compare with what we were
expecting for 2013? Total costs were lower than we expected Claimants with expenses over $25,000 were above
norm with 40.4% of total paid claims (norm is between 35% & 38%) by 22 individuals
There were 3 claimants each with total costs over $100,000
Dental costs leveled out
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Plan Performance How did 2013 compare with Whitman’s
Budget? Goal was to under-fund expected costs to use about
$368,036 of current reserve What happened? Budget of $5,341,698 and actual
expenses of $5,257,194 for a gain of $84,504 (98.4% of budget)
How about so far 2014? Goal is to under-fund expected costs to use about
$410,000 of current reserve for the year What’s happening? Budget of $1,352,026 and actual
expenses of $1,316,747 for a gain of $35,279 for the first quarter (97.4% of budget)
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Plan Performance History of EE Cost Share for Claims
Paid 2011 Paid 2012 Paid 2013AdministrationStop LossTotal Fixed Costs
$ 355,420$ 643,643$ 999,063
$ 371,341$ 807,097$1,178,438
$ 379,158$ 866,745$1,245,903
Overall H/C Claims, including patient shareLess: Reinsured ClaimsNet Overall Claims
$4,667,859-$ 286,363$4,381,496
$4,778,940-$ 290,317$4,488,623
$4,976,219-$ 267,478$4,708,741
Overall Costs (Fixed + Claims) $5,380,559 $5,667,061 $5,954,644
Patient Cost Share (ded, copay, coins)% of Overall Costs
$ 689,64312.8%
$ 686,908 12.1%
$ 699,52411.7%
Plan Cost Share (paid from reserve acct) $4,690,916 $4,980,153 $5,255,120
EE PR Ded (deposit into reserve acct) $824,154 $1,176,886 $1,274,085
Whitman Cost Share (net paid) $3,866,762 $3,803,267 $3,981,035
Overall Percentage Paid by Employee 28.1% 32.9% 33.1%
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Plan Performance What is driving your medical and
prescription costs? We do an annual deep dive into your claim data De-identified claims information is added to a data
warehouse called MedStat Whitman College utilization is compared with
norms (based on size, industry, company location)
We can drill down to see what is driving costs, where the plan may or may not be working, if people are having their preventive care, etc.
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Plan PerformancePreferred Providers
96.3% of claims99.4% of costsDiscount of 36.5% or $2,884,423 ($509
PEPM)Cost Drivers – outside norms
Outpatient SurgeryOffice VisitsOutpatient Behavioral HealthMusculoskeletal, circulatory problems
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Plan PerformanceTop 10 Major Diagnostic Categories
MDC 2014 % of paid Medical Claims
2013 % of paid Medical Claims
2013 Rank
1. Musculoskeletal 16.6% 15.6% 12. Circulatory 12.5% 8.6% 53. Factors Influencing Health 11.6% 9.8% 24. Cancers 7.0% 9.3% 45. Mental Health 6.8% 9.4% 36. Skin 5.9% 4.0% 97. Eye 5.9% 3.9% 108. Nervous 5.6% 4.9% 79. Pregnancy 4.2% 4.8% 810. Digestive 4.1% 6.4% 6
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Plan PerformanceWhat was the breakout of paid
medical claims?Place of Service 2011 % of
Medical Paid2012 % of
Medical paid2013 % of
Medical PaidPrescription Drugs 17% 16% 16%
Inpatient Hospital 26% 18% 18%
Outpatient Hospital 30% 38% 33%
Office Visits 24% 23% 26%
Surgical Center 2% 2% 3%
Other 1% 3% 3%
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Plan PerformanceTop 10 Claimants
2013 Accounted for 31.8% of total paid medical claims 3 were over $100,000 Variety of Diagnosis
2012 accounted for 33% of total paid medical claims 5 were over $100,000 paid 4 were cancer diagnosis
2011 Accounted for 34% of total paid medical claims 4 were over $100,000 paid Variety of diagnosis
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Plan PerformanceUse of few drive cost of plan (“80/20
Rule”)87.7% of claimants had total paid less
than $5,000 (11.3% of total paid claims) 12.3% of claimants had 88.7% of total paid
claims75.5% had total paid less than $2,500
(9.7% of total)53.7% had total paid less than $1,000
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Plan PerformancePrescription Drugs
83% of scripts were generic, compared with 81.9% in 2012, 71.2% in 2011
Average Paid - Generic $33.56, Brand $287.64
Top 4 were specialty medications2 MS drugs at $4,289 and $4,154 per
script2 for rheumatoid arthritis at $2,464 and
$2,210 per scriptNew Therapies (Specialty)
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Routine and Preventive CareAre Whitman employees and families
having their routine care?890 total covered individualsPreventive care visits: 389, 130 were kidsCervical cancer screenings: 139, 328 females
between 20 and 60Breast cancer screenings: 141, 246 females
over 40Prostate cancer screenings: 67, 220 males
over 40
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Routine and Preventive CareReminders?
From the providers?Premera in 2013
Two year birthday cards with reminders about immunizations (ongoing)
Colorectal Screenings: calls to members age 50 to 75 who had not been screened (according to claim data)
Hypertension – calls to those diagnosed to get their blood pressure monitored
Diabetes phone calls (2) to encourage tests associated with diabetes (eye, H1C, etc)
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Healthcare/Insurance Marketplace UpdatesMany changes, some resulting from
the implementation of the ACAInformation only (you may hear or read
about these)Restriction of coverage for SpousesHigh Deductible Plans
Cost and Quality, Transparency ToolsEmployer Defined Contribution/Private
Healthcare Exchanges (Marketplace)
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Questions?Thank you!