+

The Obamacare OpportunitySurviving & Thriving in a Post-ACA World

William C. ShortPresident & CEO, AmeriFlex Business Solutions

+ Agenda

The Affordable Care Act: A Brief Background

The Key Players & the Great Incentives Problem

Looking into the Crystal Ball: What Lies Ahead for Health Care?

The Opportunity

You are no longer a broker!

Build-a-plan exercise

Gateway questions every broker should be asking their clients

Q&A

+ The Affordable Care Act: A Brief Background Signed into law March 23, 2010; represents most significant

regulatory overhaul of U.S. healthcare system since Medicare/Medicaid of 1965

ACA goals: make health care more affordable, reduce uninsured, reduce costs for individuals and government

To achieve its goals, the ACA introduced a number of mechanisms, including mandates, subsidies, and insurance exchanges

+ The Affordable Care Act: A Brief Background

The rising cost trend within the U.S. healthcare system was used as the political rationale for the ACA. But has the law addressed this issue?

+

The $64,000 $2 Trillion Question:

Will the ACA address the problem of rising healthcare costs?

Let’s start by asking: What drove costs up in the first place?

+ The Key Players and theGreat Incentives Problem Rising costs in health care are due to a fundamental

misalignment of incentives between the “key players”: the Patient, the Provider, and the Insurance Company

Let’s look at each of these players a little more closely…

+ The Patient

Pays premiums each month

Service associated with co-pays and coinsurance

Insulated from true cost of care

What are costs/incentives for the patient?

+ Health Care and the All-You-Can-Eat Buffet

+ The Provider

Medicine not an exact science

Who is the “customer”? Who pays the provider, and

what is the cost of a provider getting “paid”?

Factors leading to hyper increase in costs since inception of managed care

What are costs/incentives for the provider?

+ The Insurance Company

What are health insurance companies? Or, more importantly, what are they not?

How do insurance companies make money? Which brings us back to…

What are costs/incentives for the health insurance company?

+ The ACA “Fix”?

Did the ACA fix the misalignment of incentives between the patient, the provider, and the insurance company?

+ Looking into the Crystal Ball:What Lies Ahead for Health Care? The ACA will keep changing Medicaid/Medicare for all Deductibles for these plans will be BIG Coverage will be bad Network coverage will be bad Long waits for providers that actually accept these plans

Looking to other countries and the Medicare supplement market in the U.S.

You can’t beat the market

Who is depressed?.....

But…Don’t give up yet!

+ To Attract and Retain

Prior to the ACA, why did employers offer benefits?

The opportunity is starting to present itself… Employer and employee taxes going up Deductibles and cost sharing increasing Health spending accounts (FSA, HSA, HRA) looking better than

ever

Don’t forget, indemnity and voluntary benefits exist outside of the ACA and can help “bridge the gap”

+ The Scenarios: Employer offers major medical plan

that is ACA-compliant High deductibles, unaffordable, poor

network Employer offers health spending

account (FSA, HSA, HRA), voluntary benefits, wellness

The Outcome (Either Way): Need for greater employee education =

Opportunity Reconciliation of premium collection =

Opportunity Need for a TPA = Opportunity Individual worries about ability to pay

for care, or desires higher standard of care = Opportunity

The Goal is to take the Employer and their Employees from here…

A non-complaint benefit plan that is too expensive for all parties

…to here…

A compliant and affordable benefit plan that delivers value required to attract and retain talent

+ Tailor the Benefit to the Individual

Using health spending accounts to save individual money on taxes

Educate individual on his/her benefit package

Present voluntary benefit product that is specific to his/her needs

Access to pre-tax (cheaper) funds and voluntary benefit products will help individual access the growing second-tier private market

+ The Power of Pre-Tax

Pre-tax dollars are cheaper than post-tax dollars

Health spending accounts are the vehicle to free up cash to pay for voluntary benefits

+ Additional Benefits to Employer

Offering employees numerous benefit plan options can quickly turn into an administrative nightmare for employers

Solutions: Consolidated billing Partnership with payroll provider that can manage all deductions at

no additional cost Partnership with TPA to reduce costs and maximize efficiencies

+ The Post-ACA Broker Consultant

Where brokers/agents become “consultants”

Enhanced brand

“Stickiness” factor

Block out competition from payroll vendors entering benefits space

+ Educate Yourself

Get to know the ACA Huge law with more regulations being created every day Opportunities “lurk” within the law and its regulations

Become a trusted source for your clients Partner with organizations that can deliver information to your door

Get certified ECFC (ecfc.org)

+ Build-a-Plan Exercise

Scenario One: John: The 27-35 “Invincible” In good health Single $45,000 take home pay Major Medical Coverage is not affordable but offered by his

employer FSA plan is offered

+ Build-a-Plan Exercise

Scenario One: While John thinks he is invincible, a strong case can be made that

setting up an FSA to free up dollars to buy a critical illness policy is worthwhile

John can put $1,000 in his FSA and, by leveraging the power of pre-tax vs. post tax dollars, not only afford a $40,000 critical illness policy, but also have more available funds left over

+ Build-a-Plan Exercise

Scenario Two: Susan: 30-45 Married 2 Kids under the age of 10 Family is healthy but has a lot of routine doctor visits and day care

expenses Husband also works but it is not offered health benefits through his

employer $55,000 base for Susan/ combined income $110,000 annual Major Medical Plan is offered by Employer, in which she is enrolled,

but the deductible is $10,000 for her family and she has access to an HSA with facilitated pretax contributions via payroll

+ Build-a-Plan Exercise Scenario Two: Susan is trying to figure out how to manage the below deductible

exposure (or ‘cost sharing’) She likes the idea of contributing pre-tax into an HSA and is

considering a qualifying hospital rider

+ Build-a-Plan Exercise

Scenario Three: Steve is a 60 year married man, income is $75,000, only he and his

wife need coverage His employer offers a $5,000 HDHP and is funding $2,500 into an

HRA, but only after the first $2,500 has been spent The HDHP pays 100% after the deductible

Health Plan

$2,500 HRA

$2,500 Gap

+ Build-a-Plan Exercise

Scenario Three: Steve is looking to find ways to mitigate the first $2,500 in exposure Below is a possible solution:

+ Gateway Questions To Ask Clients & Prospects Now How are you handling ACA compliance?

Do you have a POP on file?

How are you managing the growing ‘cost-sharing’ that is being placed on your employers?

What percentage of your employee base is hourly/part-time? How are you ensuring they do not work more than 30 hours? Are you offering any sort of benefits to help attract and retain the

right talent?

+ Conclusion

What can history teach us?

Understand stakeholder incentives Craft a strategy to help individual achieve success Find your value proposition

Become a “total solutions expert” Block out the competition and get your clients to “stick”

Become an ACA expert

Ask the right questions now to reframe your value, get ahead of your competition, and drive new business to your door

Questions?