Annual Meeting

February 12th 2015

Issues Facing Small Employers

Employer Attitudes Toward Health Insurance

Most companies with less than 50 employees will continue to offer health insurance.

68% strongly agree they will continue coverage, 28% most likely will offer coverage, 4% will stop all together.

Employer health insurance related concerns

77% how to control escalating cost

10% helping employees make best choices

8% avoiding ACA penalties

* Source: NFIB Research Foundation

Employers Source of ACA Information

42% General News

15% Health Insurer

12% Trade Association

10% Business/Advisor/Broker

8% Healthcare Provider

5% Other

4% Government

4% No useful information

Employers Offering Coverage

84% of employers offer health insurance

14% of those not offering insurance provide some type of reimbursement for insurance

13% plan to cut hours of part-time next year, however only half of these cuts are associated with ACA

Employer Plan offerings & cost*

Average premium for single employees is $503 and $1,403 for family

Average employer contributions are $86 per month single, and $459 for family

Copays for office visits average $23 for PCP and $35 for specialist

Average prescription copays are $11 for 1st tier, $31 2nd tier, and $53 for 3rd tier.

Average deductibles are now $1032 for single coverage, with the deductible increasing to $1,797 for employers less than 200.

*Kaiser Family Foundation 2014

Employer Actions taken to contain cost

Took lower profit 66%

Became more efficient 48%

Delayed postpone business investment 40%

Wage freeze or reduction 37%

Raised prices 30%

Increase employee cost 30%

Reduced hours 17%

Took health tax credit 17%

Reduced non-health employee benefits 12%

Where do Employers go from here

Current ER Sponsored Group

Plans• High employer

engagement• Less employee

choice• Group based model• Single or limited

multi-carrier models• Employer subsidies

with Defined Benefit approach

Private Exchanges

• 3rd party or insurer host

• Insured or self insured

• Employer subsidizes through Defined Contribution

• Employer determined plan offering but less involved

Public Exchanges

• Governmental subsidies included

• Various attributes/types which differ by state model

• Employer has no control

• Insured individual products

Employer Involvement LowHigh

Advantages of Private Exchanges

Employer still maintains programs which helps attract and retain employees

Defined contribution model provides employees with fixed pre-tax dollar amount so that they choose how much to spend

Employer decides the defined contribution amount

Reduces Administration, eliminates paperwork

Allows Employer to set budget and control annual cost increases

Distances employer from plan design selection

Advantages (cont)

Promote employee choice, engagement, and consumerism.

Employees select plan designs that are customized to individual needs

Consumers are going to trade off benefits and consider

Higher deductibles

Less network flexibility

Create cost sharing

Ancillary products

Disadvantage Of Private exchanges

Does nothing to contain costs, future costs shift to employee

What does a Private Exchangelook like?

Employee Log In Main Page

Employee Open Enrollment – Employee Information

Employee Open Enrollment – Medical Selection

Employee Open Enrollment – Decision Support

Employee Open Enrollment – Decision Support

Employee Open Enrollment – Enrollment Summary

Overview of Public Exchanges

IRS/DOL/HHS prohibits employer arrangements that reimburse employees for individual insurance.

Must be integrated with group health coverage to comply with ACA

Rules apply to pre and post tax arrangements

Guidance does not prohibit increasing raises or salary

Increase can not be conditioned on obtaining individual coverage

Public Exchange, Employer no longer provides insurances

Compliance and administrative costs eliminated

John Smith

Employer ConcernsACA

Determining if they are an applicable large employer

Aggregation

Waiting Periods

6055/6056 reporting

Under 50 carrier responsibility

Over 50 employer must file 1094c/1095c

General Compliance

Summary plan documents

Premium only plan documents

Medicare Part D Notice

Marketplace Notice