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Putting the Pieces Together HDHP, HRA, HSA & FSA Results & Statistics

Putting the Pieces Together HDHP, HRA, HSA & FSA Results & Statistics. Presented by Rob Thurston of HR Consulting. Putting the Pieces Together. Basic Plan Designs Case Study Review Pitfalls in Plan Design Where do we go from Here?. Who loves CDHC?.

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Putting the Pieces Together HDHP, HRA, HSA & FSA Results & Statistics

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  1. Putting the Pieces TogetherHDHP, HRA, HSA & FSAResults & Statistics Presented by Rob Thurston of HR Consulting

  2. Putting the Pieces Together • Basic Plan Designs • Case Study Review • Pitfalls in Plan Design • Where do we go from Here?

  3. Who loves CDHC? • Large ERs love HRAs- Over 40% will offer in 2008 (who have 2500+ EEs) • 33% of these Large ERs offered HRAs in 2007 • 7% offered HRAs in 2006, 2005 • Only 5-11% of smaller ERs have offered or will offer HRAs since 2005

  4. Who loves HSAs/HDHP? • In 2005 & 2006- smaller ERs under 2500 lives- 4% offered HSAs Only 3% of large ERs offered HSAs • In 2007, 7% of smaller ERs offered HSAs versus 14.5% of larger ERs - In 2008, 10% of smaller and 24% of larger ERs will offer HSAs YET did that happen?

  5. Actual Statistics for 2008 7% of total Health Care • 1/04 1/06 1/07 1/08 • In millions: • HRA 1.3 5.1 6.0 7.4 • HSA\ • HDHP 100k 2.9 7.5 7.6 • Totals 1.4 8.0 13.5 15.0

  6. Democrats v. Republicans 11/2007 Consultants Survey- • If Democrats win, then: - only 7% feel Govt/single payor Plan - 40% see Strong CDHC growth • 19% see less popularity • 19% see new Health Care Strategy • 15% Other

  7. If Republicans win: • Consultants Survey 11/07- • Strong growth of HRAs continues • Stronger growth of HSAs/HDHP • Tax credits for individual health • Move to remove tax deductions for ER provided health • Could mean move to tax all benefits?

  8. Democrats v. Republicans • What do they really believe? Kaiser- www.health08.org/analysis • McCain would tax ER provided health benefits. No mandates • Clinton would mandate with penalties that all be covered. Single Payor • Obama would mix private and Govt with mandates for children.

  9. Continued • Hillary Care- would cost $100 billion a year; could decrease over time • Obama- $65 billion a year when fully funded • McCain- no estimate given- same as current plans HOWEVER

  10. McCain Health • 168,000,000 covered under employer plans in 2008 • Removing tax deductions to Corporations would cause 10%+ in additional costs: • - 7.65% matching FICA/Medicaid • - 2.35%+ Work Comp, FUTA/SUTA • - Would state tax health benefits too? How soon?

  11. Future of Benefits? • 60% of all health benefits paid for by the Fed/State Govts now in 2008 • Removing ER tax deductions for health will result in dropping coverage by Employers • States will create more offerings but impose mandates and requirements • Taxing Health is first step to tax all employer provided benefits

  12. State Plans/Mandates Mandates- forces uninsured, middle income families to divert money from other expenses toward medical coverage whose price/quality/plan features they cannot control. Mandates are opposed by unions, fiscal conservatives, Obama (except for children), and most Republicans.

  13. Statistics (Cont) • Hewitt Assoc Survey 2007: • 1- 30% of employers offering HSAs/ HDHP in 2007 • 2- Hewitt estimates only 3% select HSAs, but will grow to 20% by 2011

  14. Statistics (Cont) • Re-enrollments in HSAs- A-Fidelity: 95% re-enroll versus 75% for PPOs, lower for HMOs B- 85% of employers plan to help fund HSAs- about $500/single And $1000/family

  15. Statistics- (Cont) • 69% of accounts are families/kids • 62% are over age 40 • 28%- households 4+ • 39% have high school/tech school • 29% earn less than $50,000 • 20% earn less than $40,000 • 20% have less than $25,000 in net worth

  16. Statistics- (Cont) • HDHP statistics: • 1- Carriers make less $ • 2- Lower premiums/revenue/profits • 3-Actuaries using “trend Averaging” • 4- Avg price/claim & utilization • 5- OOP costs should be lower, accounts will cover OOP in future years

  17. Statistics- (Cont) • National Health Care? • -37-40% is paid by private insurance (37% in 2003) • - $2 trillion spent on health • - 16% of GDP in 2005 • - $6,697 for every American • -$250 billion OOP for EE’s (2005) • - Drugs are 20% of OOP (2005)

  18. Statistics- (Cont) • HDHP Savings: • 1- Employers keeping savings • 2- Avg Premium Savings (AHIP) in 2006 was $7,529 for HDHP • 3- That’s a 60% drop in premium • 4- 1/2006- www.VIMO.com there were 2.3 million HDHP more than Funded HSAs • 5- Only 33% open funded HSAs

  19. New Websites • www.vimo.com • www.WebMD.com • www.WorldDoc.com • www.TelaDoc.com • www.eHealthinsurance.com • www.drugstore.com • www.DestinationRX.com

  20. STEP 2: TelaDoc consulting physician is notified of patient request for consult. Step 3: Doctor reviews Electronic Health Record and calls member for consultation. Call back guaranteed in 3 hrs (typically completed in 1 hr or less.) Tela-Doc Consultation Process Consult STEP 1: Member schedules consult online or dials 1.800.TelaDoc

  21. 24/7/365 access by phone • High quality medical care • Convenience - miss less work • Saves personal time • Guaranteed call back within 3 hrs. • or consultation is FREE • No pre-existing condition clause • Fixed $35.00 consult fee • Stretch their HSA/FSA dollars • Free Electronic Health Record What Benefits Do TelaDoc Members enjoy? Access Affordability Convenience

  22. Hewitt Report- 2007 • 1- Drugs can be Preventative: Hypertension, cholesterol, diabetes, osteoporosis, strokes, pediatric and neonatal vitamins, etc.. • 2- Preventative Care: Tests, screening, smoking, obesity weight loss, etc.. • 3- Wellness/disease management

  23. Case Study 1 • 1500 employees, multiple locations located nationwide • Went from self-funded PPO & HMO option to HDHP • Offered 2 Self-funded HDHP designs: • High Option has $1000/$2000 Deductible and $3000/$6000 OOP Max • Low Option has $2000/$3000 Deductible and $5100/$10200 OOP Max

  24. Case Study 1 • Offered 2 FSA Plans, Limited Scope & Full FSA • Had S125 Plan including HDHP, FSA, Dental and Vision • Added HSA in 2005 Plan Year

  25. Case Study 1 Results • Slight Drop in FSA Participation • 63% Elected to Participate in HSA with average monthly contribution of $75 • Majority elected High Option, even though premium was higher • Claims decreased by 43%

  26. Case Study 1 • Employer exceeded goal of reducing claim cost and minimizing premium increases • Installation was not without problems: Employee view, HSA Trustee Issues & Increased workload for HR Staff • Corporate concerned that employees are not getting healthcare when needed

  27. Case Study 1 • In 2006, added a third option to plan that did not qualify for HSA ($500 Deductible) • Premium did not increase for 2006 • Employees did not go to lower deductible plan – most stayed with what they had in 2005

  28. Caution – Avoid These Potholes • COBRA applies to HRA’s • This can increase liability in case of divorce as the full balance of the account must be available to both the employee and ex-spouse • ERISA • Make sure that all plan documents, SPD’s and employee communications are accurate---watch for ERISA wording that can make a non-ERISA HSA and ERISA plan by inference

  29. Questions? • For more information, contact: • Rob Thurston (801) 765-4417 • hrcg@relia.net • www.hrconsultinggroup.com

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