Presented by: Cheryl Mueller, Account Manager, HORAN Leslie Miller, Vice President of Market Development, HORAN Rhonda Marcucci, CPA, Partner and Consultant, GruppoMarcucci Manny B. Menendez, Business Development Lead, Bloom Health Health Care Exchanges May 14, 2013
50
Embed
Health Care Exchanges - HORAN 5-1… · Exchanges . May 14, 2013 . 2 ... Grab your Spyglass . A look at Private Exchanges from Wild West ... Variable employer cost of health care
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Presented by: Cheryl Mueller, Account Manager, HORAN Leslie Miller, Vice President of Market Development, HORAN Rhonda Marcucci, CPA, Partner and Consultant, GruppoMarcucci Manny B. Menendez, Business Development Lead, Bloom Health
Health Care Exchanges
May 14, 2013
2
Today we’ll cover…. 1. Health Care Exchanges OR ‘The Wild West” 2. What is an Exchange (Public or Private) 3. Understand the Current & Ever Changing Marketplace 4. Emerging Technology Trends 5. Multi-Carrier Exchanges vs. Sole Carrier Exchanges 6. Analyze the Value Proposition for HIX
Speakers
3
Rhonda Marcucci Manny Menendez • Works with businesses in all employer
market segments from small group to Fortune 100
• Develops exchange strategies, participates in implementation and execution of exchange solutions with distribution partners
• Supports Bloom’s strategic health plan partners with their product strategy and go to market initiatives
• Marcucci works in the HR and Benefits Administration Technology and Outsourcing industry and focusing on consultation for the 25 – 20,000+ employee market
• Focuses on start-up ventures inherent on leveraging a corporation’s existing asset base
Health Insurance Exchanges (HIX) OVERVIEW
4
Health Care Reform
The Wild West
Exchanges
Health Care Exchanges:
The Wild West
6
What is a Health Insurance Exchange (HIX)
• A virtual marketplace of health insurance products. It is not an insurance company.
• Offered to individuals, small groups or large employers
• Driven by technology – Clicks not Bricks • Public or Private
Health Care Exchanges Private v. Public Shootout at the OK Corral
7
Public (State) Exchanges • Will states be ready for January 2014 deadline? • Federal governmental is huge player; will control
many states
Private Exchanges • Ramping up quickly • Defined contribution will gain significant traction • Increased consumer choice means many will buy
lower cost plans
8
Public Exchanges vs. Private Exchanges (Anticipated Health Care Reform Changes)
Public Exchange Private Exchange
Governance State / Federal / Partnership Private
Market Segments • Small groups 2 – 50* • Individual
• All Group Sizes • Individual
Product Offerings Medical & Dental Medical, Dental, Life, Wellness, all Ancillary and Worksite
Funding • Government subsidies • Individually paid post-tax
• Pre-tax payroll deductions
9
• An exchange run by a private sector company or private nonprofit corporation, including: – Brokers/ Consultants – Carriers – Administrative Services Providers – Employers – Others
• Designed to help purchasers find best possible plan value, personalized to specific health conditions, doctor/hospital network, and risk tolerance
• Offer consumer-friendly ways to purchase insurance and non-insurance based products
What is a “Private” Insurance Exchange?
10
State of the Private Exchange Market
• No complete solution exists today—market is rapidly evolving
• Some employers will explore exchanges as an option; brokers preparing to answer questions and advise on solutions
• Forces that drove defined contribution in retirement space are being accelerated by PPACA and the economy – shaping how medical benefits will be delivered in the future
11
Wild West Marketplace Rapid
Expansion
Fighting over territory
Lots of players
Wide open new territory -- attracts
speculators
Not always a sheriff in town
Why Explosion of Exchange Development?
Recognitions: • Industry may eventually go defined contribution —
necessitates wide variety of choice
• Greater blend between core and voluntary—employees contribute to all lines of coverage
• Full service exchange platform solves admin inefficiencies for employer- sponsored plan (lower end market)
12
Why Explosion of Exchange Development?
Responses: • Private sector: Assumes state exchanges are not
going to be very good
• Advisors: Embracing paradigm shift from employer as the buyer to employee/consumer as the buyer
• Media: Significant national coverage focusing on employers; industry is listening
13
Private Exchange Components and Considerations
14
Employer Contribution,
“Defined Contribution”
Consumer Shopping Experience
Products and Carriers “The Store”
Tech & Admin Support
Why Defined Contribution?
• Employers want a budget— defined contribution gets them there
• Lack of choice for employees created an over-insured situation
• A wide variety of choice with limited defined contribution (budget) lets employees choose appropriate coverage for their situation
16
Consumer Shopping Experience
• Eligibility &Enrollment platform
• Spending account administration
• Payroll deduction calculations
• Billing & Payment services
• Administrative package
17
Technology & Administration Support
Putting some “horse sense” to exchanges
18
Who runs it? Exchange
Type Public (Ind & SHOP) Private Hybrid
What are the products in the
store?
Insurance Type
Store Offering
Providers
Individual
Medical Only
Open/Multi
Group
Health
Closed/Single
Medicare
All Benefits
Selective
What’s the shopping
experience?
Where’s the money
coming from?
Location
Tools
Support
Clicks Bricks
Decision Support
Administrative
Education
Billing
Year-round Portal Personal
Funding Personal
Paycheck
Defined Contribution
Subsidies
Recognized Wild West Hazards
• Lack of market definition
• Getting folks attention • Competitors
– Story v. reality
• Things don’t always work
• Flood of regulations – Technology
• The UNKNOWN!
19
Grab your Spyglass A look at Private Exchanges from Wild West
Cast of Characters
• Trading Post: Vendors
• Fur Traders: Carriers
• The Sheriff: PPACA
• The Town Folk: Employers
• Wagon Trail Bosses: Advisors/Consultants
20
With the PPACA Sheriff in town… • Employers making changes to current plans
• Employers expect higher cost as a result of PPACA
• Employers overwhelmed by compliance requirements; HR technology can’t support PPACA requirements
21
• Defined Contributions (consumer driven approaches)
• Decision support tools become more important
Grab your Spyglass The Trading Post (Technology Vendor) View
• Many vendors; few have end-to-end solutions • Must consider all components:
– Defined contribution – Products – Decision Support Tools – Administration support – Risk adjustment
• Burrs under the Saddle (Challenges):
– Integration – Product placement (getting carriers to play)
22
Grab your Spyglass The Trading Post (Technology Vendor) View
• Overwhelmed by requests (sound familiar?) – Most not fully developed
• Concerned about custom v. packaged • Many different approaches • Lacks a clear vision to build to
• Worried about managing wagon trail bosses (brokers)
23
Grab your Spyglass The Fur Traders’ (Carrier) View
• Navigating new territory… – Individual v. group insurance – Expansion of plan choice – Underwriting is changing – Lots of requests from consultants
to participate
• Gun shy to participate in multi-carrier exchanges
• Portfolio expansion • Building brand with consumers • Brick & mortar strategy • New distribution channels
24
What We’re Hearing from Carriers
• Very resource constrained • Overwhelmed with requests • Need projections on business
brokers/sponsors will drive to us • Building own exchange, why can’t you use ours? • Want pilots—cannot go national right now • If competition commits to a market; we will too • Not interested in a multi-carrier employee choice
marketplace
Benefit Admin vs. Private Marketplace
Defined Contribution
-Sometimes -Simple schemes -Not very budget driven
-Most of the time -Complex schemes -Very budget driven
Products & Carriers
-Limited selection of plans -One off per employer
-Wide selection of plans -Fixed menu plans that drive efficiencies
Consumer Experience
-Automation focus -Some decision support -Some engagement
-Automation is a given -High degree of decision support -High degree of engagement
Tech & Admin Support
-A la carte options -Fixed menu of options -Efficiency driven
26
Benefit Administration
Private Marketplace
Taming the Wild West • Understand your role in the Wild West
Defined Contribution Solutions • Employer fixes (reduced) Defined Contribution, eliminating migration risk • Employee choice spans a wider spectrum of plan value, and employees
A combination of online and live support that generates a custom list of recommended health products and related services that best match specific needs.
The exchange market is evolving. The type of coverage available, the scope of services provided, and the
opportunity to create customized solutions are likely to vary by employer size.
Public Exchange
Public, or Private Limited Options Insured model Single Carrier
(if Private)
Private Exchange Expanded Options
Insured or ASO Single Carrier
(If insured)
Private Exchange Customized Options
Insured or ASO Multi-Carrier
(If > 4,000)
How Can HORAN Help?
• Short Term • Mid Term • Never Term
Exchanges Are One of Many Solutions
How HORAN Can Help
43
THE JOURNEY
Traditional Coverage
Traditional Defined Contribution
Traditional Coverage
Traditional Defined
Contribution
Individual Market
Exchange Defined
Contribution
Group Insurance Coverage
Defined Contribution Funding Strategy
Defined Contribution through a Private Exchange
No Group Insurance Coverage – possible employer subsidy for individual coverage, or salary adjustment
44
HIX: Health Insurance Line Leader, Fast Follower or
None of the Above?
EXCHANGES
45
• What are you currently doing? • How do you unwind it? • What does it cost? • Redundant or complimentary? • Transition timing? • Exit fees?
How Much Change?
46
“Defined Contribution”
• Consulting regarding methodologies - How much? - For whom? - For what? - Funding vehicles-HRA, Section 125 • Which lines of coverage? - Medical only - All - Something in between • Voluntary opportunity
Employer Contribution
47
The Town Folk (Employer) View • Why should I do this? • How will I determine the defined
contribution amount? • What will be the impact on my current HR and benefits
technology strategy? • How do I determine if this is real? • How will this help me be compliant with PPACA? • What’s the fall out if my employees pick the wrong plan(s)? • Can I customize the exchange? • How do I evaluate if my “trusted advisor” is the exchange
sponsor?
Grab Your Spyglass
48
Employee Benefits Consulting Wealth Management Life & Disability Insurance
49
Disclaimer
The information contained in this presentation is informational only and is not intended as, nor should be construed as, legal or accounting advice. Neither HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statue and regulation and their impact on you and your organization.