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Consumer Driven Health & Wellness Plans (CDHP’s): An Educational Overview for the Employees of. The current rate of health insurance cost increases is unsustainable Cost shifting shares the burden without solving the problem

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Consumer driven health wellness plans cdhp s an educational overview for the employees of
Consumer Driven Health & Wellness Plans (CDHP’s): An Educational Overview for the Employees of


The challenge you are facing

  • The current rate of health insurance cost increases is unsustainable

  • Cost shifting shares the burden without solving the problem

  • Market forces must be introduced to break the cycle in health insurance cost increases

  • Providing information and incentives is the most effective way to engage employees and their families to make “real” change

The challenge you are facing:

9 – 11% compounded trend is the real challenge


Tactics to reduce healthcare costs
Tactics to Reduce Healthcare Costs unsustainable

  • Absorb cost increases

  • Shift contribution strategy

  • Reduce benefits

SHORT-TERM Strategies


Health insurance product spectrum
Health Insurance Product Spectrum unsustainable

Consumer Choice and Responsibility

  • HMO

  • PCP

  • Referrals

  • In-network only

  • POS

  • PCP

  • Referrals

  • Both In/Out

  • PPO

  • Tiered/Limited Networks

  • No PCP

  • Both In/Out

  • Front-end Deductible

  • Higher premiums

  • HDHP/HMO

  • Tiered/Limited Networks

  • PCP

  • In Network Only

  • Non-qualified deductible

  • 15% Lower Premiums

  • Paired with HRA

  • CDHP/HRA/HSA

  • No PCP

  • Both In/Out

  • Qualified deductible

  • Co-insurance

  • 25% Lower Premiums

  • Paired with HRA/HSA

  • Builds Value/Equity

Broad range of health plan selections


Premium unsustainable

Costs

Employee

Benefits

Budget

Benefits

Finding the right balance is a significant challenge


The consumer driven health plan value proposition
The Consumer-Driven Health unsustainablePlan Value Proposition

  • Designed to give employees a stronger voice in their own health care by encouraging and rewarding more well-informed decision-making and healthy behavior – Transparency

  • Allow employees to choose where dollars are spent, depending on their own risk tolerance and personal needs – Responsibility

  • Provide financial incentives to use care appropriately, become better educated and use decision-support tools wherever possible – Opportunity

Engage, Educate and Empower


Insurance Protection unsustainable

Insurance Protection

Insurance Protection

Wellness Programs

Wellness Programs

Insurance Protection

Healthcare

Account

Healthcare

Account

Wellness Programs

Healthcare Account is for member to “use or keep” as they see fit

Insurance protection provides comprehensive coverage and security

Coverage starts above “deductible” to encourage prudent spending for sustainability

Wellness programs provide tools and rewards to encourage healthier lifestyles, preventive care and healthy behavior

1. Insurance Protection

2. “Deductible”

3. Healthcare Account

4. Health incentives and decision-support

CDHP/Wellness is a shared responsibility solution to rising costs


The healthcare account engine of change
The Healthcare Account unsustainable“Engine of Change”


Flexible spending account fsa

Flexible Spending Account unsustainable

Flexible Spending Account (FSA)

  • Use it or lose it

  • Lowers taxes

  • Purchasing power

Usually the 1st step in CDHP adoption


Health reimbursement arrangement hra

Health Reimbursement unsustainable

Arrangement

Health Reimbursement Arrangement (HRA)

  • “Use it or keep it”

  • Credit line

Often, the 2nd step in CDHP adoption


Health savings account hsa

Health Savings unsustainable

Account

Health Savings Account (HSA)

  • Use it or keep it

  • Bank Account


Health savings account

Health Savings Account unsustainable

Health Savings Account

  • Triple Crown Tax Effect

  • 2013 IRS Maximums are:

    • $3,250 individual

    • $6,450 family

    • $1,000 catch-up for 55+

  • One-time transfer from HRA, FSA or IRA

The “purest” form of CDHP


Health wellness is an investment
Health & Wellness unsustainableis an Investment


The cause behind the cause
The Cause Behind the Cause unsustainable

Employeerelated expenses

Unhealthybehaviors

Healthrisks

Chronicdisease

Improving the health and wellness of your employees and their families is essential to long-term cost control


Most Common Healthcare Strategy: unsustainableWait for health issues, then treat.“wait for defects and then fix the defects”

Reactive approach to improving health


New Healthcare Strategy unsustainableIntegrate health into theenvironment and the culture“fix the systems that lead to the defects”

Pro-active approach to improving health



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