hCentive_BenefitsExchanges_May 08 2014

Benefits Exchanges, Explained!

Rajeev Mudumba VP, Strategic Alliances

hCentive May 08th, 2014

© 2014 by hCentive, Inc. All rights reserved

Our mission:

Who we are OVERVIEW

•  First and Largest Developer of State Exchanges

•  Integrating and Connecting the Nation’s Largest Health

Plans to all 50 Exchanges/Marketplaces

•  Headquartered in Reston, VA with back office in Noida,

India. Regional Offices in NY, CO and PA

•  Over 500 employees and growing

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Insurance Carriers

State Exchanges

Who we serve

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© 2014 by hCentive, Inc. All rights reserved 4

Rajeev Mudumba Rajeev Mudumba is VP of Strategic Alliances at hCen<ve. In this role he oversees strategic partnerships & business rela<ons for hCen<ve. Prior to this, Rajeev has managed Private Exchange Solu<ons at hCen<ve. He has over 18 years of interna<onal leadership experience in the Health & Wellness and Technology Consul<ng industries. Rajeev received his MBA from Old Dominion University, Norfolk, VA. He also holds an MBA from Center for Management Research & Development, Pune, India and a Masters in Personnel Management from Pune University, India.


•  Retail Consumerization – What is the context in the Benefits world? •  What are Private Exchanges? What do they offer? What more will they

offer? •  Why will Private Exchanges complement than compete with – FFM and

state-based exchanges? •  How will the role of Brokers evolve in the post PPACA world?

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Where did we come from? An employer-driven payer model…. Where are we headed? Involve employees and individuals to make their own health decisions with a defined contribution approach…. “If at first the idea is not absurd, then there is no hope for it.”

― Albert Einstein

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Retail Consumerization – What is the Context in the Benefits World?

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•  I haven’t been to my bank unless I am signing a mortgage! •  Most of my travel was booked online, however; I need advise from my

agent on specifics from time to time. •  I haven’t paid a bill in person or via mail

Reason – Technology has streamlined the process, minimized or removed paperwork totally and saves valuable time and energy along the way. Online Banking, Travel & Payments are here….to stay! Why not how we buy our benefits?

Over the last several years…

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Performance Transparency

Customer Experience

Price

Quality

What Does Consumerization Mean? A Health Plan Perspective

9Consumer Empowerment

Choice and Flexibility

More Control over

Employer Benefit $

Lower Switching

Cost

More Purchase Op>ons

Ø  Industry Consolidation

v  Need for Scale and Scope Economies will lead to Consolidation

Ø Business Model Innovation

v  Partnered ecosystem with collective accountability will evolve

Ø Sustainability

Challenge v  Unless clear Competitive

Advantage is created, member retention is difficult

Market Shifts

10© 2014, hCentive, Inc. All rights reserved


•  Retail centered & consumer focused •  Online and offline storefronts •  Wholesale markets for individual & group plans •  Point of sale innovation, integrated billing & payment services •  Packaged innovative benefit plans combining traditional

insurance models with care solutions •  Retail, Travel & Banking have gone through change, now it’s

health insurance & other benefits!

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•  Create competition in the insurance marketplace

•  Protect consumers

•  Promote good administrative services

•  Establish high standards for health plans

•  Provide easy to understand information & engage consumers

•  Create seamless integration with Federal & State entities

Quality Care – Efficient Services – Lower Costs

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•  Provide consumers product/services know-how in simple terms for quick assimilation

•  Provision clear, comparable information about health insurance plans

•  Provide a simple, easy-to-use “shopping experience” with robust decision assistor tools to facilitate informed purchase decisions

•  Facilitate ongoing support to build on consumer loyalty

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•  Benefits has evolved into an e-commerce product, branding & appeal will play a crucial part in where the customer goes; cost & value not withstanding.

•  The exchange navigators provide the orientation, education, and assistance in plan administration

•  Designing your exchange to follow the consumer & the cost.

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Types of Exchange Play Exchange Operated by

•  SBE at Eligible Individuals & Family

•  SBE at Eligible SHOPS (<50 and <100 in 2016)

•  Operated by Carriers

•  Operated by emerging and established Intermediaries •  New business model -‐ free benefit system to employers with broker

commission as revenue

•  True compe<<ve marketplace likely operated by Benefit Expert Intermediaries

•  Operated by Carriers, TPA

Individual Public Exchange

SHOP Public Exchange

Single-‐Carrier Private Exchange

Mul>-‐Carrier ’No-‐Choice’ Private Exchange

Mul>-‐Carrier ‘Choice’ Private Exchange

Single-‐Carrier Private-‐Private Exchange

What are Private Exchanges? What do they offer? What more will they offer?

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•  Robust consumer-centric, functionality-oriented Web Portal •  Customer Service Support •  Marketing & Outreach Services •  Provider Integration Support

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Move and Align Fully-‐insured Employers (or migrants from Self-‐Insured) move to Defined Contribu>on model by alloca>ng a fixed dollars

Stay and Involve Self-‐insured employers custom-‐design defined-‐benefit plans with emphasis on wellness and healthy lifestyle

Stay and Shop Fully-‐insured employers nego>ate and shop to get the best rate defined-‐benefit plans

Dump and Exit Employers pay free-‐rider penalty and exit from offering benefits to employees

Employer Benefit Strategies

Large Group Small Group

High In

come

Small Group

Low In

come

Large Group

Low Incom

e, Re>rees, High Income

High Income

Small Group

High Income

Mul>-‐Carrier ‘Choice’ Private

Exchange

Single-‐Carrie

r Priv

ate Exchan

ge Single-‐Carrier Private-‐Private

Exchange

Individu

al Pub

lic Excha

nge

Mul>-‐Ca

rrier ’No-‐Ch

oice’

Private Exchan

ge

SHOP Pu

blic Excha

nge

Small Group is < 125 Large Group is > 125


Fully Insured Employer

62.6M (20%)

Self Insured Employer

90.8M (29%)

Individual

15.6M (5%)

Medicaid

51M (16%)

Medicare

40.7M (13%)

Uninsured & Other Public (Dual etc.) 53.2M (17%)

Health Plan PE Carrier Enrollment / PE

Health Plan PE State Medicaid CMS Part A/B – 28 M Health Plan

Broker Broker Broker Medicaid Health Plan

Health Plans – Part C – 12 M Part D

Public Exchange

Benefit Consultant Exchange

TPA Public Exchange Public Exchange to Medicaid

Broker

Consor<um E-‐Broker Re<ree Exchange

PEO E-‐Broker

Public Exchange

E-‐Broker

U.S. Popula>on of about 313.9M

Consum

er Engagem

ent A

venu

es

2011-‐12 distribu<on -‐ h`p://kff.org/other/state-‐indicator/total-‐popula<on/


•  Integration of health, payroll, workforce productivity & wellness solutions •  Integration of tax-advantaged benefits (HRAs, HSAs, IRAs) •  Partner with third party vendors to develop add-on insurance products

to attract employee buy in

After that…. •  Follow the cost •  Find triggers and send alerts to integrated products/services •  Enable employee health & productivity management •  Facilitate & Show Cost Savings

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Why will Private Exchanges complement than compete with – FFM and state-based

exchanges?

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•  Federal Mandate: Individual and SHOP (<50 Employees)

•  State Mandate: Specific to states

•  Centered around Essential Health Benefits

•  Compliance heavy: for payers and employers

•  Large Employer: Availability in 2017

•  hCentive has built the following State Exchanges: NY, CO, KY

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•  Some compliance expected •  Less rigid, offer benefits more than just health •  Flexible and can be customized to address the needs of any employer

group •  Richer benefits offered at competitive prices •  Choice & Consumer Experience are a priority

•  Are an extension to what Public Exchanges have to offer… •  Can interact with Public Exchanges and bring the best of both

worlds to consumers….

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•  Private exchanges do not replace the role of benefit consultants, agents, brokers or administrators.

•  They serve as a new avenue to service clients.

•  Sales through exchanges are an added revenue stream.

•  Health Plans continue to move out of their comfort zones to package and integrate their products with complementary ancillary products/services to engage consumers better and keep them.

•  Innovation in exchange marketplaces in terms of new offerings as well as new ways to package and sell products ensures the health of a growing new market.

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•  Private Exchanges drive an advantage by integrating tightly with federal & state exchanges to ensure consumers have the advantage of reviewing their federal subsidy eligibility on the public exchange and make purchases within the private exchange.

•  Public Exchanges are able to extend their presence into new

marketplaces while private exchanges are able to provide the best of both worlds to consumers.

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•  Private Exchanges enable Brokers, Employers and Members to interact in more meaningful and beneficial ways with the end consumers.

•  Private Exchanges offer robust financial modeling & decision making tools to support the online shopping experience.

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How will the role of Brokers evolve in the post PPACA world?

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§  Be open to adapt, move from being a sales agent to a consultant, an educator §  Tap into Individual Markets through Small Businesses not offering health insurance, as

you know insurance is mandatory. §  Become a cer<fied producer with your State Exchange. §  Partner with a defined contribu<on provider to provide plans to small businesses that

cannot afford or meet minimum par<cipa<on requirements to offer group plans. §  Incorporate a Private Exchange solu<on! Offer products beyond health. §  Become an Obamacare expert.

Ninety-‐four percent of small businesses believe the need for an outside advisor will increase or stay the same in the next two years. According to the U.S. Census Bureau, 98 percent of businesses in the U.S. have fewer than 100 employees, accoun>ng for approximately 35 percent of the U.S. workforce (40 million workers). Yet only half of these companies use an advisor for business or personal needs regardless of whether they offer benefits to employees.

-‐ LIMRA, Worldwide Research & Consul<ng Org.

© 2014 hCentive, Inc. All Rights Reserved. 28


WebInsure Benefits Exchange

Employees

Shopping Enrollment Administration

Integrated Shopping

HRA/HIA

Consolidated Enrollment SSO/API Integration with Administrators

Medical Dental Vision Life Accident STD/LTD

Carrier Dispatching

Life Status Changes

COBRA

COBRA

Commuter Transit 401 K FSA

Integrated Experience

Payroll Integration Renewals

Payroll

Consolidated Billing

An integrated benefits management suite that assists employers in the design, purchase and administration of employee benefits or contribution while bringing the cost advantages

of a competitive marketplace and lowering the administrative costs.

Exchange Operations

G R A P H I C R E P R E S E N T A T I O N

WebInsure Benefits Exchange

Employer

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© 2014 by hCentive, Inc. All rights reserved © 2012 hCentive, Inc. All Rights Reserved.

§  Lower total cost of client ownership through outsourcing §  Complete payroll reconcilia<on process §  State-‐of-‐the-‐art support center with consistent, consistent messaging to par<cipants

§  Customized communica<ons and fulfillment services; variety of methods to provide consistent, focused message

§  One-‐stop-‐shop for client benefits administra<ve needs §  Breadth of product line made available §  Parameter-‐driven, flexible configura<on -‐ permihng complex case set up §  Automated electronic verifica<on and reconcilia<on of eligibility feeds

© 2013 hCentive, Inc. All Rights Reserved. 30


Contact: Rajeev Mudumba | VP Strategic Alliances Direct 732.309.2228 [email protected]

Questions?

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hCentive_BenefitsExchanges_May 08 2014

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rajeev mudumba rajeev

nations largest health