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Reducing Budget Costs in the Turbulent Waters of PPAC When Outsourcing.

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Presentation on theme: "Reducing Budget Costs in the Turbulent Waters of PPAC When Outsourcing."— Presentation transcript:

1 Reducing Budget Costs in the Turbulent Waters of PPAC When Outsourcing

2 Should you Outsource? A core set of issues and questions must be explored when deciding to outsource. Your decision factors are grouped into 6 main categories: 1.HUMAN RESOURCES 2.FINANCIAL 3.SERVICE QUALITY 4.LEGAL AND ETHICAL CONSIDERATIONS 5.MISSION AND CULTURE 6.MANAGEMENT CONTROL AND EFFICIENCY

3 General Overview of PPAC From a Vendor Standpoint If a new hire is a variable hours employee or seasonal employee, the employee is not required to be offered health coverage unless the employee actually works, on average, at least 30 hours per week during a “measurement period” of between 3 and 12 months. Employees should receive credit for all hours they are paid or entitled to be paid for the performance of duties plus each hour for which an employee is paid or entitled to be paid on account of a period of time during which no duties are performed (such as due to vacation, illness, layoff, etc.). For hourly employees, employers must credit based on actual hours of service. Academic year employees of educational organizations cannot be treated as seasonal employees.

4 Understanding the Clock & Calendar Measurement Period (Eligibility) Period of time between 3 to 12 months (7-1-2013 to 6-30-2014) Administration Period (Enrollment) Period of time between 30 to 90 days (7-1-2014 to 8-31-2014) Stability Period (Employee is on Benefits) Period of time generally 12 months

5 Communications SEE POWERPOINT ATTACHMENT What have you heard from your Vendor’s

6 Next steps Prepare to issue notice of exchange availability. Calculate projected PCORI fee and projected temporary reinsurance program fee for budgeting purposes. Review employee work schedules and identify variable hours and seasonal employees, and employees who work close to 30 hours. Determine if you will use safe harbor measurement period and stability period and if so, begin to implement now. Determine if your lowest cost medical plan option is affordable and if not, consider adding a lower cost option. Consider steps to minimize liability such as converting employees to outsourced, independent contractors or leased employees. Reduce employee hours?

7 Areas that can be streamlined, automated, or handled externally without impacting your core competencies. Benefits: Would you be best served by finding a broker to handle your benefit needs? Recruiting: Maybe finding a contract recruiter would give you the breather you need to catch up on some of the critical HR tasks on your plate. Staffing Non-Instructional Positions: Would you be able to provide more focus on instruction, by having an experienced partner work with you to take over all aspects of staffing for non-instructional areas? What to Outsource? Examples

8 Benefits and Limitations of Outsourcing BENEFITS: Management can structure the contract so that a vendor bears the cost of bringing in new equipment and technology. Outsourcing permits districts to take advantage of economies of scale achieved by vendors. Outsourcing can enable schools to gain better control over a function.

9 Benefits and Limitations of Outsourcing BENEFITS: Outsourcing introduces an element of competition. Outsourcing allows you to strengthen your own capabilities and focus on what you do best!

10 Limitations of Outsourcing LIMITATIONS: Your district may not have the means to craft the contract with the vendor. Outsourcing may place new demands on management. Outside vendor may not understand the culture and mission of your district or education.

11 Questions you should ask BEFORE jumping in the BOAT!

12 Team based Shared goals Knowledgeable within the market One sided Contract Driven Commitment Driven Open lines of communication Turnkey Current happy customers Transparent Lack of Flexibility Lack of understanding with the market Profit motive only

13 Questions before you Jump ! Can the partner actually do the service? OR what service(s) do they specifically provide? Can the proposed partner give you examples of their infrastructure? How much does the proposed partner charge for the service? What security measures does the proposed partner have in place? Does the proposed partner have happy customers and references? Is the proposed partner committed to your success?



16 Contacts N. Henry Bledsoe President/CEO Kim Woodson Fredericka Hayes


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