Transcript Healthcare and the Affordable Care Act: Where Do We Go From Here?

Healthcare and the Affordable Care Act:
Where Do We Go From Here?
Presented By:
Sean J. Rabinowitz & Brian P. Lowell
October 20, 2016
Getting to Know ACBI
Sean J. Rabinowitz
Vice President, Group Benefits
[email protected] │ Direct: 203-418-4192 │ Cell: 203-298-8893
Brian P. Lowell
Sr. Benefits Consultant, Group Benefits
[email protected] │ Direct: 203-418-4201 │ Cell: 860-888-7777
2
2
Agenda
• Current Healthcare Landscape
• ACA Overview – What’s Left?
• A Look Ahead – Politics and M&A
• Employer-HR Pain Points / Areas Of Concern
• Long Term Strategy & Benefit Concepts
• Q&A
3
3
Healthcare Landscape
• ACA Provisions
• Legislative/Regulatory
Compliance
• Increased Cost Burden
• Industry Consolidation
• Streamlining
Administration
• Technology Evolution
• Financial/Plan Strategy
• ACOs / Network
Reconfiguration
4
4
Historical ACA Timeline
• FSAs capped at $2,500 (now $2,550)
• OTC Drugs no longer Pre-Tax
• W-2 reporting of Plan Cost
• SBCs & State Exchange Notices issued
• PCORI/CER Fees Begin
2010
2011
2012
• Preventive Care Services Covered
• Dependents Covered to Age 26
• Eliminate Pre-Existing Conditions <19
• Unlimited Essential Health Benefits
• Cover Out-of- Network ER as IN Net
2013
•
•
•
•
•
•
•
•
2014
2015
PCORI / CER Fee Increased
Transitional Reinsurance Fee Due
Health Insurer Fee added (Premium Tax)
Federal / State Exchanges Begin
Individual Mandate
Waiting Period Limitation – 90 days
Eliminate Pre-Existing Conditions for All
Wellness Program Incentive/Penalty
Enhancements
5
5
Historical ACA Timeline
• “Pay or Play” / Employer Mandate Begins
• Employee Eligibility Tracking
2015
•
•
•
•
• New SBC templates (April 2017)
• Re-stablished Health Insurer Fee
• Cadillac Tax (2020)
2016
2017+
6055 and 6056 IRS Reporting of Coverage
One year suspension of Health Insurer Fee
Last Year of Reinsurance Fee
All States define small group as <100 employees
 Decision left up to States
 CT elect to keep small employer < 50
6
6
In the Meantime…..
• State Insurance Co-Ops Continue to Fail
• Only 5 of 23 Co-Ops remain since 2014 inception
• Largely due to risk adjustment payment
• Many looking to survive by taking investors, becoming “for-profit”
(Maryland/Idaho)
• 2 Major Mergers and Acquisitions
1.
Aetna purchase of Humana - U.S. District Judge John D. Bates will hear the
Aetna-Humana case. He has set a trial date of Dec. 5 and said he expects a
ruling around mid-January.
2.
Anthem BCBS purchase of Cigna - U.S. Circuit Court for the District of
Columbia Judge Amy Jackson has set a trial date of Nov. 21 for the
Anthem-Cigna merger and said she will render a decision in early January
7
In the Meantime…..
Presidential Election – Clinton vs. Trump
Position
Clinton
Trump
On the ACA
•
Maintain and Build on the ACA
•
Repeal entirely incl Medicaid /
Medicare Changes, marketplaces etc
Medicare
•
•
Allow people 55-64 to buy in
Allow Medicare to negotiate drug
prices, especially for high-cost
Req. manufacturers to provide
rebates to Medicare low-income
subsidy program
Expand value based delivery
system reform
•
NO STANCE
•
•
* Courtesy of the Kaiser Family Foundation (kff.org)
8
In the Meantime…..
Presidential Election – Clinton vs. Trump
Position
Prescription Drugs
Clinton
•
•
•
•
•
•
Allow Americans to import drugs
for personal use by foreign nations
with similar safety standards to US
Limit of $250/script by insurers
Increase availability of generic
drugs by prohibiting “pay-fordelay” deals and funding FDA to
clear generic approval backlog
Lower Biologic exclusivity period
from 12 to 7 yrs and expedite
biosimilar applications
Eliminate corporate tax deductions
for consumer advertising
Hold drug companies accountable
for justifying costs
Trump
•
Allow consumers access to imported,
safe and dependable drugs from
overseas.
* Courtesy of the Kaiser Family Foundation
For full comparison, visit www.kff.org
9
Medical Trend
Why are costs rising?
• Aging Population
• Prescription Drug Costs – Specialty Rx
• Provider Consolidation
• Technology
• Utilization
10 10
Medical Trend
• Medical Trend continues near double digits
 Costs have more than DOUBLED since 2002 and nearly
TRIPLED since late 90’s.
• National Average
 2016 Avg. Single Premium - $6,435/yr
 2016 Avg. Family Premium - $18,142/yr
• Northeast
 6-10% HIGHER than average depending on plan type
11 11
Pain Points / Areas of Concern
• Healthcare spending outpacing economic
growth
 Increased Taxes and Fees
• Legislative Oversight & Regulatory Compliance
 Updates to HIPAA, ERISA, COBRA, BAAs, SPDs, Handbooks
• Reporting Requirements
 IRS
 DOL
 HHS
 CMS
 Employees
12
Long Term – Where Do We Go?
Rethink Overall Benefit Strategy:
1. Contribution / Subsidy Concepts
 Shifting Costs and Engaging Employees
2. Role of Technology
3. Alternate Funding Arrangements
4. Wellness Initiatives
5. Evaluate Plan Offerings
13
Technology
• Benefits Administration Technology
 Streamline HR, Benefits & Payroll
 Compliance Solutions
 Decision Support Tools
• Telemedicine
 Online / Telephonic Access to doctors and nurses 24/7
 Receive basic prescriptions
 Cheaper alternative to Office visit, ER, or UC
• Transparency Tools – knowledge is power
14
Funding Arrangements
• Fully Insured → Pay premium, carriers pay
claims
• Self Funded → Own your own risk
1. Fixed Cost Component
 Administrative Fee – to TPA or carrier to adjudicate claims
 Stop Loss Premium – pay reinsurer to cap individual & aggregate risk
2.
Variable Cost Component
 Pay monthly claim expense
• Level Funded → Partially Self Funded
 Fixed monthly costs with year end accounting
15
Fully Insured vs. Self Funding
Advantages
 Flexibility in plan design
 Tax savings – state / insurer fee
 Access to claim data
 Lower “retention” cost
Disadvantages
 Assume claim risk to stop loss
 Fiduciary responsibility
 Asset exposure
 Save $ if good claim experience
 Cashflow (reserves)
16
Wellness Solutions
• Tobacco Policy – Surcharge
• Biometrics and Health Risk Assessment
• Participatory vs. Performance
• Programs & Incentives
17
Plan Offering Strategy
• Employee Paid (Voluntary) Benefits
 Group discount to offer
 No cost to company
 Flexibility
• High Deductible Health Plans
 10-15% below traditional plan designs
 HSA vs. HRA
18
Plan Offering Strategy
High Deductible Health Plan
($1,300 Single / $2,600 Fam)
HSA
HRA
Employee owned
Tax sheltered $
Employer owned
Pay for health expenses
Pay for health expenses
Rollover year to year
Unused $ back to ER
2016 - $3,350/$6,750 max
19
Advantages of an HSA
• Lower premiums
• Triple tax advantage
• You own the account and funds roll over
• Investment opportunities
20
Questions?
21