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Healthcare and Employee Benefits February 23, 2010

This presentation outlines the background, challenges, and trends in employee healthcare benefits. It highlights strategies to improve employee health and well-being, including wellness programs, plan design changes, and cost-sharing initiatives. The summary emphasizes the importance of addressing rising healthcare costs and increasing employee engagement in personal health.

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Healthcare and Employee Benefits February 23, 2010

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  1. Healthcare and Employee Benefits February 23, 2010

  2. Healthcare Employee Benefits Summary Presentation Outline

  3. Healthcare

  4. Presentation Outline • Background • Challenges and Trends • Strategies • Summary

  5. Presentation Outline • Background • Challenges and Trends • Strategies • Summary

  6. Background • BCC • Comptroller • Tax Collector • Supervisor of Elections • Expressway Authority • Housing Finance Authority • OBT Development Board • Metroplan Orlando • Property Appraiser • Lynx • Clerk of Courts • Research and Development • I-Ride Trolley 8,370 Covered Employees Total Plan Members: 18,652

  7. Background $42M

  8. Background $96M $42M

  9. Background 1993: Began on-site Wellness Fairs, mobile mammography screenings and various mini-challenges to motivate employees toward better health. 2005: Implemented the Wellness for Life Program. 2005: Humana Medicare Advantage plan offered for the first time to Medicare eligible retirees. 1991: Wellworks Central opened to employees and eligible dependents. 2004: OC Wellness Games with 1,143 participants 1991 1993 2002 2003 2004 2005 2006 2003: Started the Wellness World Series engaging 1,200 participants to focus on their health. 2002: Live for Today, Plan for Tomorrow Benefits Newsletter launches, encouraging healthy lifestyles. 2006: Incorporated a Wellness Nurse and Wellness challenge with a $5 bi-weekly incentive credit. 1993: Began wellness education through classes, articles, e-mail tips, one-on-one wellness consultations.

  10. Background 2009: Implemented generic differential for prescriptions and carved out pharmacy with Express Scripts. 2007: County plan goes self-funded saving $6.5 million in the first year. 2008: Implemented the County’s first online open enrollment. 2009: Implemented the healthy pregnancy program to waive delivery co-pays. 2007 2008 2009 2007: By 2007 a total of six fitness centers were available to employees. 2009: HR In the Loop airs its first “webisode” communicating HR information to County employees each pay day. 2008: Began Wellness for Life Credit and Screenings increasing employee engagement in personal health. 2009: Implemented a Diabetes Management Pilot Program to employees as a result of the Wellness for Life Screenings.

  11. Background 2010: Began assessing a surcharge to tobacco users on the County’s medical plan. 2010: Increased hospital based outpatient surgery from $100 to $200. 2010: Changed inpatient co-pays to $300 on day one, and $100 for days two – four. 2010 2010: Orange County became a Tobacco-Free County, prohibiting tobacco use on County property. 2010: Began a Dependent Audit to remove ineligible dependents from the County’s medical plan. 2010: Implemented prescription step therapy and voluntary select home delivery.

  12. Background $229M $96M 9% 9% 9% 9% 9% 9% 9% 9% 9% 9%

  13. Background 0% Trend 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

  14. Background FY2010 Health Plan Budget $96 Million

  15. Background Orange County Employees 13% Premium Cost Share 87% Employer

  16. Background Florida Industry Norm Employees 24% Premium Cost Share 76% Employer

  17. Presentation Outline • Background • Challenges and Trends • Strategies • Summary

  18. Challenges and Trends • Overall cost of claims is trending at 9% and is expected to increase without major plan design changes • Unable to sustain funding for large increases year after year • Need to address total cost of plan and increase share of cost paid by employees

  19. Challenges and Trends • Health expenses are expected to jump as high as 10% nationally • 41% of employers are planning to shift a larger portion of healthcare expenses to the employee • Plan design changes (Co-Pays, Co-Insurance, Deductibles) • Increased premiums • Pharmacy plan changes

  20. Challenges and Trends Plan Design Changes • Co-Pays • Fixed payment by plan member each time a medical service is accessed • Co-Insurance • Percentage amount paid by insured plan member each time a medical service is accessed

  21. Challenges and Trends

  22. Challenges and Trends Plan Design Changes • Deductible • Amount paid by covered member before plan begins • Utilized with Health Savings or Reimbursement Account Plans • Separate amounts for employee only and family coverage

  23. Challenges and Trends Plan Design Changes • Consumer Driven Health Plans • High-Deductible Health Plan • Individual Health Account • Preventive Care • Offered by 44% of U.S. employers

  24. Challenges and Trends Employee Medical Clinics • In 2008, 25% of employers offered onsite employee medical clinics • City of Apopka • City of Ocoee • City of Port St. Lucie • City of Palm Bay • Darden Restaurants • Florida Hospital • Harris Corporation • Lockheed Martin • Rosen Hotels & Resorts • Siemens Power Generation • Universal Studios • Wheeled Coach

  25. Challenges and Trends Employee Medical Clinics Potential Benefits • Improves Follow-up Care • Lower County Cost for Care • Coordinate Occupational Medical Care Potential Savings • Initial ROI 1:1, 3:1 after three years • Lower Workers Compensation Costs • Lower Occupational Medical Costs • Higher Generic Fill Rate • Lower Risk Factors

  26. Presentation Outline • Background • Challenges and Trends • Strategies • Summary

  27. Strategies Orange County Employees • Decrease the overall cost of our health insurance plan • More evenly share the costs of health insurance premiums 13% Premium Cost Share 87% Employer Florida Industry Norm Employees 24% Premium Cost Share 76% Employer

  28. Strategies • Increase the premiums for all participants • Encourage more judicious use of health care services • Utilize models for cost control and cost sharing • Look at onsite employee medical clinics • Strengthen Wellness initiatives, requirements and incentives

  29. Strategies • Implement deductibles and co-insurance • Create more of a financial partnership with employees • Establish health savings or reimbursement accounts • Out of pocket maximums • Continue to cover preventive care

  30. Strategies • Typical employees will see: • Premium increases • Deductibles • Co-insurance and co-pays • Health Savings or Reimbursement Accounts • Maximum out-of-pocket expenses

  31. Presentation Outline • Background • Challenges and Trends • Strategies • Summary

  32. Healthcare Summary • Medical Plan Oversight Committee meetings bi-weekly • Discussions with Employee Benefits Committee • Follow-up BCC discussions and formal proposals in May • Final decision by June • Employee education campaign this summer • Open enrollment in October • Implementation in January 2011

  33. Employee Benefits

  34. Presentation Outline • Employee Benefits • Strategies • Summary

  35. Presentation Outline • Employee Benefits • Strategies • Summary

  36. Employee Benefits • Paid Leave • Retirement Contributions • Educational Assistance

  37. Employee Benefits Paid Leave Personal Leave • Used for vacations, illness, medical appointments, personal or business, etc. • Leave accruals based on length of service

  38. Employee Benefits Personal Leave • Based on an 8-hour day/40 hour week

  39. Employee Benefits Paid Leave Term Leave • 40 or more consecutive hours absent due to illness or injury • Maximum of 48 hours (Six 8-hour days) accrued annually • May require medical documentation for approval

  40. Employee Benefits Florida Retirement System • State Mandated • County paid contributions determined annually • Regular Risk: 9.85% • Special Risk: 20.92% • 2009 Contributions: • Approx. $45M

  41. Employee Benefits Educational Assistance • Program funding is determined annually • Up to $1,500 per fiscal year for successful course completion

  42. Employee Benefits Educational Assistance • Increases each year in participation and cost • Many Counties have reduced or eliminated Educational Assistance

  43. Presentation Outline • Employee Benefits • Strategies • Summary

  44. Strategies • Reevaluate Paid Leave • Explore Early Retirement Options • Review Educational Assistance

  45. Strategies Reevaluate Paid Leave State and National Trends • For new employees with 1-5 years of service, 20 days is the average combined number of personal, vacation and sick days off • In 2004, 29% of employers offered Paid Time Off (PTO) Plans • By 2008, 42% offered PTO Plans

  46. Strategies Reevaluate Paid Leave Effective October 1, 2010 for New Employees: • Eliminate Term Leave • Transition to a Paid Time Off Plan

  47. Strategies 26 22 22 20 18 18 17 15

  48. Strategies Explore Early Retirement Options • Develop incentives to bridge gap between the time an employee is FRS eligible to retire and eligible for Medicare Review Educational Assistance • Consider a temporary freeze on funding for the educational assistance program effective October 1, 2010

  49. Presentation Outline • Employee Benefits • Strategies • Summary

  50. Employee Benefits Summary • Revise paid leave • Explore early retirement options • Suspend Educational Assistance

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