PA 152 Compliance Plan Design Strategic Initiative July 24, 2012 - - PowerPoint PPT Presentation

PA 152 Compliance Plan Design Strategic Initiative July 24, 2012

Presented by: Brenda White, Vice President Leslie Foster, Senior Account Specialist Aon 171 Monroe Avenue NW, Suite 525 Grand Rapids, MI 49503

Hard Cap Contribution

• Michigan Publically Funded Health Insurance Contribution Act
• Requires a hard cap on employer contributions to the cost of medical

& prescription coverage – $5,500 x number of employees with Single coverage – $11,000 x number of employees with Double coverage – $15,000 x number of employees with Family coverage

• Payments can then be allocated among employees and plans as the

County sees fit

• Hard cap is adjusted annually based on U.S. CPI
• On December 22, Allegan County’s Board opted to exempt the

County from the requirements in 2012 so that alternative plan options could be implemented effective January 1, 2013

100% PPO New Traditional High Deductible Single Double Family Single Double Family Single Double Family Enrollment 46 36 88 16 40 65 2 Current Monthly Illustrative Rate $615.90 $1,478.15 $1,847.70 $541.34 $1,299.22 $1,624.03 $407.31 $977.52 $1,221.91 Impact on EMPLOYEE Payroll Contribution Rate Single Double Family Single Double Family Single Double Family Current Contribution Strategy $61.59 $147.82 $184.77 $13.53 $32.48 $40.60 $10.18 $24.44 $30.55 Remainder of Annual Hard Cap Costs $78.78 $280.74 $298.85 $41.50 $191.28 $187.02 $0.00 $30.43 $0.00

2012 PA 152 Impact

(absent Board action to exempt Allegan County)

Notes:

• Includes medical, prescription, dental, and vision
• Current Contribution Strategy for most groups is 80% employer contribution to the cost of the 100% plan and

95% employer contribution to the cost of the other two plans

• Remainder of Annual Hard Cap Costs is the employee contribution that would have been in effect if the Board

had not acted to exempt Allegan County from the Hard Cap Costs in 2012. Employee contributions under the hard cap are calculated as the total cost less the hard cap contribution, divided by 24 pay periods

Overview of Cost in Self Funded Environment

Self Funded Illustrative Rates

Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 8 Option 9 100% PPO New Traditional High Deductible PPO 1 PPO 2 80% PPO HSA Design 1 HSA Design 2 In-Network In-Network In-Network In-Network In-Network In-Network In-Network Individual Deductible $250 $1,000 $100 $500 $250 $1,250 $3,000 F amily Deductible $500 $2,000 $200 $1,000 $500 $2,500 $6,000 Individual Out-of-Pocket Max $1,000/contract $1,000 $500 $1,000 $1,000 $1,000 $1,000 F amily Out-of-Pocket Max $1,000/contract $2,000 $1,000 $2,000 $2,000 $2,000 $2,000 Coinsurance 100% 80% 80% 90% 70% 80% 100% 80% Physician Office Visits $20 $20 $30 $10 $20 $20 100% after ded 80% after ded Preventive Care 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits Hospital Emergency Room $50, waived if admitted, acc injury 80% after ded $100, waived if admitted, acc injury $75, waived if admitted, acc injury $100, waived if admitted, acc injury $50, waived if admitted, acc injury 100% after ded 80% after ded G eneric $10 $10 $10 $15 $10 $10 $10 after ded $10 after ded Brand F

• rmulary

$15 $40 $60 $25 $40 $40 $40 after ded $40 after ded Brand Non-F

• rmulary

$20 $40 $60 $35 $40 $40 $80 after ded $80 after ded F INANCIALS Monthly Illustrative Rates (Per mont h) Single $581.06 $503.31 $367.06 $501.62 $399.72 $434.02 $332.10 $481.32 Double $1,394.55 $1,207.96 $880.93 $1,203.89 $959.35 $1,041.68 $797.05 $1,155.17 Family $1,743.17 $1,509.93 $1,101.17 $1,504.86 $1,199.17 $1,302.08 $996.30 $1,443.96 Payroll Contributions (Per pay check; 24 pays/ year) Single $84.96 $46.09 $0 $45.24 $0 $11.44 $0 $35.09 Double $203.91 $110.62 $0 $108.58 $0 $27.48 $0 $84.22 Family $254.88 $138.26 $0 $135.73 $0 $34.34 $0 $105.28 Annual Contributions (Per year) Single $2,039 $1,106 $0 $1,086 $0 $275 $0 $842 Double $4,894 $2,655 $0 $2,606 $0 $659 $0 $2,021 Family $6,117 $3,318 $0 $3,257 $0 $824 $0 $2,527 Notes :

• Contributions are under the hard cap
• Rates shown in the "Financials" section are 2013 rates
• Out-of-Network benefit for all options are located on Sharepoint
• Option 8 assumes $0 ER contribution
• New Traditional U&C applies out-of-network

CURRENT None N/A

• Rates have been re-configured so that family contributions are higher than double

contributions

• Figures in blue represent costs that fell below the re-tiered annual hard cap amt of either $4,933.63 (S), $11,840.72 (D), or

$14,800.90 (F)

• If you elect not to enroll in medical insurance through Allegan County you will receive an opt-
• ut credit of $3,000

Self Funded Illustrative Rates

Option 1 Opt ion 2 Option 3 Opt ion 4 Option 5 Opt ion 6 Option 8 Opt ion 9 100% PPO New Traditional High Deductible PPO 1 PPO 2 80% PPO HSA Design 1 HSA Design 2 In-Network In-Network In-Network In-Network In-Network In-Network In-Network Individual Deduct ible $250 $1,000 $100 $500 $250 $1,250 $3,000 F amily Deduct ible $500 $2,000 $200 $1,000 $500 $2,500 $6,000 Individual Out -of-Pocket Max $1,000/contract $1,000 $500 $1,000 $1,000 $1,000 $1,000 F amily Out- of- Pocket Max $1,000/contract $2,000 $1,000 $2,000 $2,000 $2,000 $2,000 Coinsurance 100% 80% 80% 90% 70% 80% 100% 80% Physician Office Visit s $20 $20 $30 $10 $20 $20 100% after ded 80% after ded Preventive Care 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits 100%, visit limits Hospital E mergency Room $50, waived if admitted, acc injury 80% after ded $100, waived if admitted, acc injury $75, waived if admitted, acc injury $100, waived if admitted, acc injury $50, waived if admitted, acc injury 100% after ded 80% after ded G eneric $10 $10 $10 $15 $10 $10 $10 after ded $10 after ded Brand F

• rmulary

$15 $40 $60 $25 $40 $40 $40 after ded $40 after ded Brand Non- F

• rmulary

$20 $40 $60 $35 $40 $40 $80 after ded $80 after ded F INANCIALS Monthly Illustrat ive Rates (Per mont h) Single $581.06 $503.31 $367.06 $501.62 $399.72 $434.02 $332.10 $481.32 Double $1,394.55 $1,207.96 $880.93 $1,203.89 $959.35 $1,041.68 $797.05 $1,155.17 Family $1,743.17 $1,509.93 $1,101.17 $1,504.86 $1,199.17 $1,302.08 $996.30 $1,443.96 Single $32.26 $32.26 $32.26 $32.26 $32.26 $32.26 $32.26 $32.26 Double $77.41 $77.41 $77.41 $77.41 $77.41 $77.41 $77.41 $77.41 Family $96.77 $96.77 $96.77 $96.77 $96.77 $96.77 $96.77 $96.77 Single $5.82 $5.82 $5.82 $5.82 $5.82 $5.82 $5.82 $5.82 Double $13.97 $13.97 $13.97 $13.97 $13.97 $13.97 $13.97 $13.97 Family $17.46 $17.46 $17.46 $17.46 $17.46 $17.46 $17.46 $17.46 Single $619.14 $541.39 $405.14 $539.70 $437.80 $472.10 $370.18 $519.40 Double $1,485.93 $1,299.34 $972.31 $1,295.27 $1,050.73 $1,133.06 $888.43 $1,246.55 Family $1,857.40 $1,624.16 $1,215.40 $1,619.09 $1,313.40 $1,416.31 $1,110.53 $1,558.19 Payroll Cont ribut ions (Per pay check; 24 pays/ year) Single $104.00 $65.13 $0 $64.28 $13.33 $30.48 $0 $54.13 Double $249.60 $156.31 $0 $154.27 $32.00 $73.17 $0 $129.91 Family $312.00 $195.38 $0 $192.84 $40.00 $91.45 $0 $162.39 Annual Cont ributions (Per year) Single $2,496 $1,563 $0 $1,543 $320 $732 $0 $1,299 Double $5,990 $3,751 $0 $3,703 $768 $1,756 $0 $3,118 Family $7,488 $4,689 $0 $4,628 $960 $2,195 $0 $3,897 Notes :

• Contributions are under the hard cap
• Rates shown in the "Financials" section are 2013 rates
• Out-of-Network benefit for all options are located on Sharepoint
• Option 8 assumes $0 ER contribution

M e d ic a l/ R x D e n ta l

• New Traditional U&C applies out-of-network

CURRE NT None N/ A V is io n T

• ta

l

• Rates have been re-configured so that family contributions are higher than double

contributions

• Figures in blue represent costs that fell below the re-tiered annual hard cap amt of either $4,933.63 (S), $11,840.72 (D), or

$14,800.90 (F)

• If you elect not to enroll in medical insurance through Allegan County you will receive an opt-
• ut credit of $3,000

Plan Comparison - Assumptions

• Assumes a single employee utilizing in-network services
• Assumes brand formulary prescriptions were filled
• Assumes office visits cost $120 each
• Assumes generic drugs cost $40 each and brand name drugs cost

$100 each

Plan Comparison – High Utilizer

Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 8 Option 9 100% PPO New Traditional High Deductible PPO 1 PPO 2 80% PPO HSA Design 1 HSA Design 2

Copays Annual Contribution

$2,496 $1,563 $0 $1,543 $320 $732 $0 $1,299

* Brand Formulary Medication

$3,000 $1,000

TOTAL

(Out-of Pocket Max) $4,173 $960 N/A $250 $1,250 $400 $960 20% after ded

Coinsurance Maximum

(your portion) $1,000

Brand Rx* - 24

$400

Deductible

(your portion)

Hospital Visit (I npatient) - 1

ER Visit - 1

Office Visits - 20

$500 $1,000 $400 $960 $3,306 $100 $500 $200 $600 $3,018 $1,000 $1,000 $600 $360 None N/A $250 $1,000 $400 $960 $3,392 20% after ded 0% 20% after ded 0% 20% after ded $960 $2,210 $3,259 $50 0% $100 20% after ded $1,440 $4,140 $75 10% after ded $100 30% after ded $50 $3,280

Plan Comparison – Low Utilizer

Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 8 Option 9 100% PPO New Traditional High Deductible PPO 1 PPO 2 80% PPO HSA Design 1 HSA Design 2

Copays 2Generic Rx - 1 Brand Rx* - 1 Annual Contribution

$2,496 $1,563 $0 $1,543 $320 $732 $0 $1,299

* Brand Formulary Medication Notes: With respect to this illustration,

1 Office visits will be assessed at $120/visit (when a flat copay does not apply ) 2 Generic prescription total cost will be assessed at $40; Brand at $100

$0 $0 $500 $0 $0 $360 $360 $500 $1,299 $0 $0 Not Utilized Not Utilized Not Utilized Not Utilized Not Utilized $500 $50 $140 $140 $430 $842 $0

TOTAL

(Out-of Pocket Max) $2,581 $1,673 $160 $1,613 $25 $50 $70 $40 $50

Hospital Visit (I npatient) - 0

$0 $0 $0 $0

Coinsurance Maximum

(your portion)

Deductible

(your portion) Not Utilized $0

1Office Visits - 3

$60 $60 $90 $30 $60 $60

ER Visit - 0

$0 $0 $0 $0

Plan Comparison – Best Case

Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 8 Option 9 100% PPO New Traditional High Deductible PPO 1 PPO 2 80% PPO HSA Design 1 HSA Design 2

Copays Preventive Care - 1

Covered 100% Covered 100% Covered 100% Covered 100% Covered 100% Covered 100% Covered 100% Covered 100%

2Generic Rx - 0

Brand Rx* - 0 Annual Contribution

$2,496 $1,563 $0 $1,543 $320 $732 $0 $1,299

* Brand Formulary Medication

Not Utilized Not Utilized Not Utilized

Coinsurance Maximum

(your portion)

Deductible

(your portion) Not Utilized Not Utilized Not Utilized Not Utilized Not Utilized $0 $0 $0 $0

ER Visit - 0

$0 $0 $0 $0 $0

Office Visits - 0

$0 $0 $0 $0 $0 $0 $0

Hospital Visit (I npatient) - 0

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $732 $0 $1,299

TOTAL

(Out-of Pocket Max) $2,496 $1,563 $0 $1,543 $320

PA 152 Compliance Plan Design Strategic Initiative

Group Discussion, Q/A