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 Spath Principal Employee 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
Continued Cost Pressure
Costs
Employers spend close to 8% of total comp on healthcare, up from 6.6% in 2004*
Cost pressures increasing, expect shift from public to private sector
10%+ savings possible
Healthcare Reform
Compliance & Costs
ACA taxes, minimum benefits, coverage requirements, etc.
40% of companies have a plan that will exceed excise tax thresholds in 2018
40% excise tax on costs that exceed
2018 thresholds: $10,200/single and $27,500/family
Employee Consumerism
Employee Choice
Diverse workforce demanding more choice, greater support in decision- making
Employees seek choice against limited options and employer-managed budgets
$4T
Health Care Costs
Shifting Responsibilities
$4T
Employers
Individuals
2000
2005
2010
2015F
* 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 flexibility with ability to pivot over time (no “lock in”)
Leverages flexible, scalable technology

5. Right-sizing: Mercer Marketplace Results
$800
Per-employee cost reduction from right-sizing benefits
Availability of Supplemental Benefits Support Right-Sizing
24%
Of all employees bought supplemental health
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 Filing Include all covered individuals enrolled in MEC.
Individual Statements to each “responsible individual” who enrolls self or others in MEC
IRS Filing Include 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
What Are My MEC and Shared Responsibility Reporting Requirements?
1094-C Transmittal Form
1095-C Employee Statement
Employer IRS Information Return
1094-B Transmittal Form
1095-B Employee Statement
Insurer IRS Information Return
Self-Insured Employers
Fully-Insured Employers
Employer reports both MEC (6055) and ESR (6056) information on a single employee statement 1095-C.
Insurer will provide MEC (6055) information on Form 1095-B.
Employer will provide ESR (6056) information on Form 1095-C.
1094-C Transmittal Form
1095-C Employee Statement
Employer IRS Information Return

10. The Role of Wellness Knowing and Adopting Best Practices
When Wellness Fails…
You think one size fits all
You address the needs of the disease and not the person
You have a myopic ROI approach
You fear bad press
Targeting Success…
Tailored
Relevant
Timely
Simple

11. Best Practices Better 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?
What’s driving our trend?
Are our programs working?
 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?