[PPT] - their Employees Total family premiums for employer health plans are PowerPoint Presentation

SLIDE 1

Impact of Healthcare Costs

n Employers and

their Employees

Christan Royer

Director of Benefits, Indiana University

SLIDE 2

WOODGROVE BANK

Total family premiums for employer health plans are rising.

2

Source: https://www.wsj.com/articles/employer-provided-health-insurance-approaches-20-000-a-year-1538575201

SLIDE 3

WOODGROVE BANK

Employer premiums have risen, and so have employee contributions.

3

*Estimate is statistically different from estimates for the previous year shown (p<.05). SOURCE: KFF Employer Health Benefits Survey, 2018; Kaiser/HRET Survey of Employer-Sponsored Health Benefits. 1999-2017

SLIDE 4

WOODGROVE BANK

Employee premiums for family coverage are growing faster than median income.

4

Source: https://www.washingtonpost.com/opinions/health-care-rules-the-labor-market/2018/09/02/05d13672-ad2f-11e8-b1da-ff7faa680710_story.html?utm_term=.254e58c8f444

SLIDE 5

WOODGROVE BANK

Employee costs for employer coverage are growing faster than median income.

5

*Estimate is statistically different from estimates for the previous year shown (p<.05). SOURCE: KFF Employer Health Benefits Survey, 2018; Kaiser/HRET Survey of Employer-Sponsored Health Benefits. 1999-2017. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999 – 2018; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999 – 2018 (April to April).

SLIDE 6

HEALTHCARE SNAPSHOT

Indiana University

6

SLIDE 7

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Employer healthcare costs are growing

7

$207 $219 $233 $248 $280

$0 $50 $100 $150 $200 $250 $300 2014 2015 2016 2017 2018

Millions

SOURCE: IU Annual Open Enrollment Publications

The IU healthcare budget has increased

35%

in 4 years.

SLIDE 8

WOODGROVE BANK

Employee premiums are not affordable

8

Annual Salary: $40,000
Medical Plan: HDHP with HSA
Level of Coverage: Family

$1,320.48 $1,561.62 $1,651.18 $1,746.36 $1,781.40 $1,862.16 $2,005.56 Annual Medical Premium

Employee premiums for family coverage

increased by 52% over the past 6 years.

That’s an average increase of 8%

annually.

Premium contributions consume about

5% of the employee’s base salary.

SOURCE: IU Annual Open Enrollment Publications

SLIDE 9

WOODGROVE BANK

Rising PEPY costs

9

PEPY costs increased

30%

from 2013 to 2017.

$2,427 $2,427 $2,523 $2,546 $2,552 $8,966 $10,090 $10,349 $11,453 $12,194

2013 2014 2015 2016 2017 Employee Pays Employer Pays

$12,517 $12,872 $13,999 $14,746 $11,393

SOURCE: IU Claims Data, Med and Rx, Paid March 2013 through February 2018

SLIDE 10

WOODGROVE BANK

2.00% 2.00% 2.00% 2.50% 2.00% 1.50% 2.30% 0.70% 1.30% 2.30% 7.40% 8.00% 7.10% 6.30% 6.30% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 2013 2014 2015 2016 2017 Employee Pay Increase Overall Inflation Avg Healthcare Trend

Healthcare cost outpaces employee pay and inflation.

10

Source: IU Data,, Fiscal Year 2013-2017; Mercer’s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) 1993-2017.

SLIDE 11

WOODGROVE BANK

Skyrocketing outpatient PEPY costs

11 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Feb 2013 - Jan 2014 Feb 2014 - Jan 2015 Feb 2015 - Jan 2016 Feb 2016 - Jan 2017 Feb 2017 - Jan 2018 Feb 2018 - Jan 2019

Net Pay PEPY Facility Outpatient Net Pay PEPY Facility Outpatient % Change

SLIDE 12

WOODGROVE BANK

Impact of healthcare costs on employers and employees

12

Healthcare expenditures are a large proportion of employer

budgets

Costs are growing rapidly on a per employee basis, at rates

far above the cost of living

These increases are challenging the ability to provide

raises to employees

To shield employees at IU, a greater proportion these costs

have shifted to the employer’s budget over time

Employers can’t keep doing the same thing and expect different results.

This is

NOT

sustainable.

SLIDE 13

WOODGROVE BANK

Employers are nearing the end of their ability to improvise.

13 https://www.healthcareittoday.com/2016/03/18/health-it-humor-fun-friday/

IF YOU CAN’T AFFORD TO SEE A DOCTOR, YOU GET REFERRED TO THE AIRPORT FOR A FREE X-RAY AND COMPLETE “ENHANCED PAT-DOWN.”

SLIDE 14

WOODGROVE BANK

Levers for employers to adjust

14

Increase Premiums Health Savings Account (HSA) Deductible and Out-

f-Pocket Maximums

CURRENT

Contracted Medicare Plus Pricing Narrow or Tiered Networks Direct Contracting with Providers

FUTURE

SLIDE 15

WOODGROVE BANK

Impact of Healthcare Costs on Employers and their Employees

15

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Hassan Azar

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Kathy Donnenson

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Dawn Kopacz

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Nicole Williams