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SEPTEMBER 12, 2014

HOW DO YOU CHANGE YOUR PLANS TO MAKE THEM AFFORDABLE TO BOTH EMPLOYEES AND EMPLOYERS? FEI BOSTON PROFESSIONAL DEVELOPMENT SESSION. SEPTEMBER 12, 2014. Liz Spath Principal Employee Health & Benefits - Boston. Agenda. Strategies toward successfully adjusting to ACA requirements

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SEPTEMBER 12, 2014

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  1. HOW DO YOU CHANGE YOUR PLANS TO MAKE THEM AFFORDABLE TO BOTH EMPLOYEES AND EMPLOYERS?FEI BOSTON PROFESSIONAL DEVELOPMENT SESSION SEPTEMBER 12, 2014 Liz SpathPrincipalEmployee Health & Benefits - Boston

  2. Agenda • Strategies toward successfully adjusting to ACA requirements • Private Exchanges • Plan design and eligibility strategies • Getting ready for the data mandates • Planning ahead for 2018 excise tax – strategic use of wellness plans

  3. Key Issues Converge to Reshape Benefits Strategy Health Care Costs Employers Individuals $4T Shifting Responsibilities 2000 2005 2010 2015 2000 2005 2010 2015F $4T * Source BLS

  4. What a Well Run Private Exchange Accomplishes • Enables ongoing ability to bend the cost trend • Improves service quality • Offers high touch customer support • Allows for flexibilitywith ability to pivot over time (no “lock in”) • Leverages flexible, scalable technology

  5. Right-sizing: Mercer Marketplace Results Of all employees bought supplemental health $800 Per-employee cost reduction from right-sizing benefits Availability of Supplemental Benefits Support Right-Sizing 24% 35% Of employees electing $1,500 or $2,500 deductible medical bought supplemental health

  6. Non-Medical: Mercer Marketplace Results Active marketing of all lines of coverage 9.4% Average savings for LAD benefits offered via Marketplace Aggressive carrier bids Multi-line discounts Note: Results vary by client

  7. Top Three Reasons for Employer Adoptions of Mercer Marketplace Simplified plan management #1 Reason – 33% Expanded and comprehensive employee choice #1 Reason - 15% Immediate and/or future cost savings #1 Reason - 24% Note: Reflects % of early adopters ranking reason as a significant factor in their decision to move to Mercer Marketplace; for most clients, more than one reason played a significant role.   

  8. ACA Reporting Begins in 2016 (For 2015 Data)Purpose and Types of Reporting • Employer mandate: Did the employer offer the requisite coverage to avoid assessments?Individual mandate: Did the taxpayer have the requisite coverage?Public exchange premium subsidies:Should IRS claw back any premium subsidy taxpayer got last year?May taxpayer claim premium subsidy for any months of last year? • Minimum Essential Coverage* (§6055) • Minimum Essential Coverage* (§6055) • IRS FilingInclude all covered individuals enrolled in MEC. • Individual Statements to each “responsible individual” who enrolls self or others in MEC • IRS FilingInclude each full-time employee • Individual Statements to each employee who was full time for at least 1 month during reporting year. * No small employer exemption.

  9. What Are My MEC and Shared Responsibility Reporting Requirements? 4 Self-Insured Employers Employer reports both MEC (6055) and ESR (6056) information on a single employee statement 1095-C. Fully-Insured Employers Insurer will provide MEC (6055) information on Form 1095-B. Employer will provide ESR (6056) information on Form 1095-C.

  10. The Role of WellnessKnowing and Adopting Best Practices

  11. Best PracticesBetter Answers. Key Questions  Plan Design Is our cost sharing approach tracking?  Program Participation Are enough of the right people participating in our programs? Health and Lifestyle Risk Have there been changes in health or lifestyle risks that are driving our costs? Lifestyle Risk and Compliance Has there been a reduction in the number of modifiable lifestyle risks and an increase in compliance among program participants? Are our programs working? What’s driving our trend? Unit Cost and Intensity Has the price of health care services changed? Is the intensity of the units of service increasing? Illness Burden and Disease Prevalence Have there been appropriate changes in illness over time?  Utilization Are our members’ utilization of services increasing, decreasing or shifting to contribute to our costs?  Cost What is the relationship between cost and program participation?

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