build and maintain a high-functioning insurance committee ... · build and maintain a...

APRIL 13-16, 2016

Build and Maintain a High-Functioning Insurance Committee: Maximize Your Employee Benefits Program

THESE MATERIALS HAVE BEEN PREPARED BY BURNHAM BENEFITSTHEY HAVE NOT BEEN REVIEWED BY STATE CASBO FOR APPROVAL, SO THEREFORE ARE NOT AN OFFICIAL STATEMENT OF CASBO

2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 2

• Part 1: Creating a High Functioning Benefits Committee• Part 2: Plan Basics, Tools, & Tips• Part 3: The Insurance Committee and the ACA• Open Dialogue

Agenda


Part 1: Creating a high functioning Insurance Committee


First things First… Build a foundation of trust

• In order for this to get off the ground, the committee members need to view the district as honest, committed to its word, communicative and proven with its actions OUTSIDE of the committee

Building the Benefits Committee


Have the “we’re in

this together attitude”

Bargaining Unit

members

New and tenured

employees

District HR / Finance

Balanced mix of all parties

Picking the right members




Arm your committee with information

• Group Insurance 101 Training• ACA Overview• Latest products with Medical Carriers• Regional Landscape for Benefits• Review Vehicles to Purchase Benefits• Factors that Drive a Renewal• Role of Consultant, Carrier, JPA or Trust


Find a balance between information and confirmation


Status Quo

Educate on available options



Transparency

• Set goals and strategies each year – REPORT on results• Share claims data if available• Discuss district budgets and impact on benefits decisions• Carrier network changes & contracting• Benchmarking information• Rate histories• Federal/State/Local cost drivers


Best Practices for the Benefits Committee

Committee Best Practices for Success

• Regularly scheduled meetings (monthly or at least quarterly)• Strong, regular attendance by all members• Encourage ALL members to participate and contribute… no

“listeners only”• Distribute meeting agenda in advance of the meeting, allow

members to add to it• Have a good balance of Union and Management representation• Allow enough time for the meeting and stick to allotted time • Create minutes that are jointly approved by the committee• Have a mechanism for the committee to communicate amongst

itself


Best Practices for the Benefits Committee

Committee Best Practices for Success…cont.

• Have a “Pre-Meeting” with core group• Open invitation for committee members to bring interested guests


Role of the Benefits Committee

Main Responsibilities

• All stakeholders involved in the committee educate their respective groups about the benefit program, goals, and challenges

• Ongoing communication with bargaining groups• Provide recommendations, not replacing bargaining• Help the district plan for its Healthcare needs• Educate themselves on the market, alternatives, and cost-drivers

Benefits set the table for larger negotiations discussions!



Role of the Committee Member

• Act in good faith• Be ethical and forthcoming• Abstain from voting if you have a financial interest or conflict• Make recommendations to the bargaining units • Humanize H&W Benefits, don’t exploit as bargaining chip

Take care of those that take care of our kids!



Meet with District vendors

• Medical carrier representatives• Actuaries (ESPECIALLY if with CALPERS)• Technology options• Build rapport and trust with district partners• Network updates• Product updates and enhancements



The Marketing Process

• Pick the right carriers/vendors that fit with the District’s culture• Deciding to look at school pools• Self-Funding options for medical, dental, and/or vision• Setting a timeline• Interview finalists• Criteria on picking best fit carriers/vendors• Accepting change if new partners are awarded



Expense vs. Cost

VS.



The Advantages of a High Functioning Committee

• Union and Management have equal access to information and benefits professionals

• Collaborative learning environment• Information shared equally and timely with all parties• Better understanding and comfort with the benefits plans and

costs


Role of the Consultant, JPA/Trust, & Carriers

How to leverage outside help

• Consultants can be valuable unbiased resources• Moderate insurance committee meetings• Source of information to educate the committee• Has a pulse on what’s going on in the market• Not beholden to the inforce carriers/vendor• Should clearly disclose compensation and financial interests

• Lean on your carrier partners and invite them to present to the committee

• Share latest product/network developments• Set the table for upcoming renewal or market

challenges• Sounding board for issues/concerns facing your

employees


Part 2: Plan Basics, Tools & Cost Containment Strategies


JPA’s, Trusts, & Carriers

JPA – Joint Powers Authority• Pool of public educational agencies established for the purpose of

purchasing employee benefits• Public entity doing public business• Fiduciary liability resides with District and JPA• Most JPAs are represented by management

• Pool of public educational agencies established for the purpose of purchasing employee benefits

• Private entity/corporation doing public business• Fiduciary responsibility resides with Trustees• Trusts are jointly represented by management and labor

Trust



JPA / Trust Pool• All board decisions are made by Trustees/JPA/Trust governing

board• Rates are determined by experience of whole pool• Pools may be geographically rated• Carriers & benefits are chosen by JPA/Trust Governing board• Most pools are “blind” – no individual experience available• Members may be assessed for deficits• JPA/Trusts pay claims and/or premium for fully insured products



Sample of California Carriers, JPA’s & Trusts

Aetna ASCIP

Anthem Blue Cross ACSIG

Blue Shield of California CVT

Cigna REEP

Health Net SCSEBA

Kaiser SISC

United Healthcare VEBA


Cost Savings Strategies

Narrow Networks• Most medical carriers now offer these plans• JPA’s and Trusts are behind in adding to family of plans• Many employers offer both full and narrow HMO networks together• Southern California has the most options• Conduct a Disruption report if data is available• Cost usually between 5% to 7% lower than full HMO network plans• Kaiser



Exclusive Provider Organization (EPO)• In-Network Only PPO plan• Helps control cost because no out of network benefits• Covered California Exchange offers these plans• SISC, CalPERS, and CVT have plans similar to this because of weak out of network

benefits



High Deductible Health Plans (HDHP’s)• Large deductible must be satisfied before benefits kick in (min of $1,300 in 2016)• Consumerism introduced to employee population (skin in the game)• Health Savings Accounts (HSA) and Health Reimbursement Accounts (HRA)• H.S.A typically must satisfy deductible before RX copays apply• Typically, the lowest premium of plans offered• Nationally, fastest growing enrollments in these types of plans (>35%)



Self-Insurance• Self-Insurance (Self Funding) is an alternative means of financing and structuring a

group medical/dental/vision program• The employer assumes the risk of all medical expenses, however;• Eligible expenses over the Stop Loss deductible are reimbursable by the reinsurance

carrier• A TPA operates the plan, including payment of claims, maintaining eligibility, producing

plan documents and ID Cards and much more



Self Insurance vs. Fully insured

Fully Insured Self-Funded

Fixed Costs (premium) Fixed costs + variable costs

Administrator comes with Insurance

Variety of service providers

Governed by state law Governed by Federal law (ERISA)

Standard plans and benefits Flexible plan designs and benefits

All size employers Medium/large employers

Subject to all state and ACA taxes Avoids state and some ACA taxes (2-3% savings)



Power of a benefits marketing• Competition is EVERYWHERE• “Blue on Blue rule” changes playing field• 2nd year rate caps on medical possible• Premium credits/holidays• Wellness budgets from carriers• Fixed fee analysis for self-funded groups• Non medical markets need to be evaluated as well• Explore JPA/Trust/Carrier value added services


Wellness

Is it the right fit for our district?• How does it fit with our district culture?• Simple but effective programs• Focus on preventative• Crawl before you walk• Negotiate Wellness dollars from carriers or vendors• Determine “carrot” or “stick” principle if introducing incentives• Be realistic about “savings”


Contributions and Rate Tiers

Contributions• Does district contributions meet ACA affordability test?• Do plans offered by district give choice based on employee contributions?• Create district contributions that lead populations to best performing plans• Evaluate employee/spouse tier costs to drive participation into other employer plan



Tier Rates• Composite rates, 2, 3 or 4 Tiers• Supports ACA affordability test• Critical for Cadillac Tax considerations• 4-tier rates could help working spouses to join non-district plan• Will always have “winners” and “losers” with employee population when you leave

composite rates



Cash In-Lieu• Offers a defined $ amount to those who waive coverage from the District• Takes money away from health benefits• Can hurt participation, risk pool health, and claims experience• ACA Impacts for affordability test

• IRS Notice 2015-87• “unconditional” vs. “conditional” (tied to other coverage)

Example:Monthly cost of lowest available plan: $100Cash in-lieu offered to those that waive coverage: $200“Cost” used for the affordability test: $100 + $200 = $300


Part 3: Your Insurance Committee and the Affordable Care Act


Affordable Care Act

Keep the Committee informed• Employer Mandates• Cadillac Tax in 2018 (now 2020?)• Cost Factors to districts at renewal• Why look at tiered rates if composite rate is currently in place?• Employee Communication


Affordable Care Act

Cadillac Tax Strategies• Enactment delayed until (at least) 2020• Wait and see approach• Due diligence to forecast costs out to 2020 to see if potential issues arise• Super Composite rates (in most cases) will more likely fail Cadillac thresholds (as we

understand them today)• Share Cadillac Tax analysis with bargaining units and potential costs to the district.


Affordable Care Act

1094/1095 Reporting• Did you survive? • You are done, right?... If not… YOU’RE LATE!• 1095 extended for 2015 reporting year to 3/31• 1094 to 6/30 (electronically)• Support from County Office? • Outsourced…-ish, solutions?

• Best Practice – Educate your employees on what these forms are and what they mean. Both 1095-C and 1095-B.


Affordable Care Act

Variable Hour Employee Tracking• Determine Measurement, Administration and Stability periods• 12 months typically works best• Must give hours credits over summer breaks and unpaid holidays• Meet with HR team to determine what employee populations in district average close

to 30 hours per week• Outsource?


Affordable Care Act

Next Steps• Assess workforce to understand employee population (VHE’s & contributions)• Ensure system is in place to accurately measure hours• Document process for track VHE’s, develop procedures for onboarding newly eligible• Have a robust communication and education campaign for employees• Test your plans; Affordability, Minimum Value, and Cadillac Tax• Re-visit 1095 reporting vendor selection for 2016


THANK YOU!

Scott Aston, Vice PresidentBurnham Benefits Insurance Services(949) 252-4597 / [email protected]

Rich Russell, Asst. Superintendent –Personnel ServicesWhittier Union High School District(562) 698-8121 x 1030 / [email protected]

build and maintain a high-functioning insurance committee ... · build and maintain a...

Documents