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Whitman College

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.

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Whitman College

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  1. Whitman College Fringe Benefits Committees May 14, 2014

  2. Agenda • Healthcare Reform Update • Plan Performance • Routine and Preventive Care • Employee Assistance Plan • Transgendered Surgery Update • Healthcare/Insurance Market Changes

  3. Healthcare Reform – Update - 2014 • Individual Exchanges Online • PSF did a Seminar at Whitman in November • Open enrollment period • Oregon is a mess, WA is not • Individual Mandate • All 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

  4. Healthcare Reform – Update - 2014 • Individual Exchanges • Individual 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)

  5. Healthcare Reform – Update - 2014 • What Changed in 2014? • Annual Limits Prohibited On “Essential Benefits” • No Pre-Existing Limitations for Adults • Maximum 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

  6. 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

  7. Healthcare Reform – Update - 2015 • 2015 – Impact on the College • Who 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

  8. 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

  9. 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)

  10. Plan Performance2012 & 2013 *In 2012, there were 5 claimants with total claims in excess of $100,000 and in 2013 there were 3.

  11. Plan Performance2013 & 2014 YTD *The 2014 first quarter expenses are 7.2% higher than the first quarter of 2013.

  12. 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

  13. 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)

  14. Plan Performance • History of EE Cost Share for Claims

  15. 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.

  16. Plan Performance • Preferred Providers • 96.3% of claims • 99.4% of costs • Discount of 36.5% or $2,884,423 ($509 PEPM) • Cost Drivers – outside norms • Outpatient Surgery • Office Visits • Outpatient Behavioral Health • Musculoskeletal, circulatory problems

  17. Plan Performance • Top 10 Major Diagnostic Categories

  18. Plan Performance • What was the breakout of paid medical claims?

  19. Plan Performance • Top 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

  20. Plan Performance • Use 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 claims • 75.5% had total paid less than $2,500 (9.7% of total) • 53.7% had total paid less than $1,000

  21. Plan Performance • Prescription 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 medications • 2 MS drugs at $4,289 and $4,154 per script • 2 for rheumatoid arthritis at $2,464 and $2,210 per script • New Therapies (Specialty)

  22. Routine and Preventive Care • Are Whitman employees and families having their routine care? • 890 total covered individuals • Preventive care visits: 389, 130 were kids • Cervical cancer screenings: 139, 328 females between 20 and 60 • Breast cancer screenings: 141, 246 females over 40 • Prostate cancer screenings: 67, 220 males over 40

  23. Routine and Preventive Care • Reminders? • 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)

  24. Healthcare/Insurance Marketplace Updates • Many changes, some resulting from the implementation of the ACA • Information only (you may hear or read about these) • Restriction of coverage for Spouses • High Deductible Plans • Cost and Quality, Transparency Tools • Employer Defined Contribution/Private Healthcare Exchanges (Marketplace)

  25. Questions? • Thank you!

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