1 / 21

Scott R. Baldwin Area Senior Vice President, Education Managing Partner

Negotiation Trends and Employee Benefits... A Total Compensation Approach. Scott R. Baldwin Area Senior Vice President, Education Managing Partner Gallagher Benefit Services, Inc. scott_baldwin@ajg.com 630.285.3755.

jessamine-french
Download Presentation

Scott R. Baldwin Area Senior Vice President, Education Managing Partner

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Negotiation Trends and Employee Benefits... A Total Compensation Approach Scott R. Baldwin Area Senior Vice President, Education Managing Partner Gallagher Benefit Services, Inc. scott_baldwin@ajg.com 630.285.3755

  2. Employee Benefits & Negotiations • Role of Insurance/Employee Benefits • Relationship to Negotiations • Yesterday…Today…Years to Come • Integrated? • Total Compensation? • What is current environment? • Insurance Committee? • Representation to Bargaining Team? • Is there Common Ground? • Communication of Value

  3. Employee Benefits & Negotiations • Bargaining Team Education • Common Body of Information • Benchmarking • Plan Modeling • Contribution Modeling • Plan Migration • Total Compensation • Wellness and Consumerism • Healthcare Reform 2012 – 2018

  4. Average District Plan Design * Based on internal GBS data. Sample size of 140 Illinois School Districts

  5. Cost of Coverage: Monthly Premium Increase over the years(Medical Inflation costs average 9% to 11%)

  6. Cost of Insurance Coverage:$10,548,732 per year

  7. How do our premiums compare to others?(From a survey of 145 Northern Illinois school plans)

  8. Contribution Structure • What are districts doing today? • Typical arrangements • Typical bargaining strategy • What are the dangers? • “Affordability” and the exchange • Impact of plan migration • Is there an optimal plan design? • Short and long term strategy

  9. Healthcare Reform 2012 - 2018 • Administrative Impact • Financial Impact • Plan Design Side Effects

  10. OTC drug reimbursements • HSA penalties • W-2 Reporting • Employee notification requirements Timeline • Medical industry taxes • FSA limits • Itemized medical expense deduction changes • Medicare taxes • Part D drug subsidy deduction eliminated • Early retire reinsurance • High-risk pools • W-2 Reporting • Plan disclosure requirements • Employer and individual mandates • Insurance exchanges • Patient protections • “Cadillac” excise tax (2018) • Coverage expansion mandates • Patient protections

  11. Administrative Impact on Schools • Communication Requirements • Educating Employees about Options • Standardized Communication Practices • Data Collection Requirements • W-2 Reporting • IRS/HHS Communication Requirements • Benefits Changes • “Grandfathered” Status • FSA restrictions • Preventative Services • Annual/Lifetime Limits

  12. Financial Impact on Schools • Plan Design • Common School District Plan Designs • Cadillac Tax implications • “Optimal” plan design • Contribution Strategies • Plan Migration • Penalties/Fees • Incentives • “Optimal” contribution strategy

  13. Plan Design Side Effects • Higher costs • Compounded over time • “Cadillac Plan” tax implications • 2018 limits - $10,200 for employee only and $27,500 for family • $5,280 and $14,235, respectively, in today’s dollars • 40% excise tax on additional dollars spent • $125,000 penalty for a 250 employee district with an average plan • Is there an optimal plan design? • Short and Long Term Strategy

  14. Wellness Programs • A “Wellness Program” is an employer effort to reduce long term medical program costs and decrease absenteeism by engaging employees in disease management and health promotion strategies.

  15. Wellness Programs • Wellness ROI • $3.27 reduction in medical costs per dollar spent* • $2.73 reduction in absenteeism costs per dollar spent* • Incentives allowed under Healthcare Reform • Allows 30% cost of coverage discount for program participants • “Discount” rather than “Surcharge” • Carrot vs. Stick Approach • Drives participation * Baicker, K., D. Cutler, and Z. Song. "Workplace Wellness Programs Can Generate Savings." Health Affairs 29.2 (2010): 304-11. Print.

  16. Wellness Programs • Developing a Culture of Wellness (and realizing ROI) • Monitor Participation • ROI maximized with 70%+ participation • Invest in your program • 1-2% of Claims Costs • Create an active Wellness Committee • Drives the message to employee population • Encourages a “Culture of Wellness” • Set long term goals, and drive toward them • Every “wellness” activity should drive toward those goals

  17. Consumer Driven Healthcare • Health Savings Account (“HSA”) Programs • What are they? • How do they benefit the District? • Trend Management • Lower Plan Costs • How do they benefit Employees? • Flexibility and Control • Become an Engaged and Educated Consumer

  18. What are we driving toward?

  19. What the Future Might Look Like • Plan Design • Contribution • Consumerism • Reporting and Compliance

  20. Bargaining to the Future • Where you are today along with local factors will drive how you proceed. • Consider bigger strategic questions such as whether to continue to offer health insurance or to have employees access it through the exchanges. • Remain current on regulations, trends and new legislation. • Educate…Communicate…Negotiate

  21. Q&A

More Related