Swedish Medical Center SEIU Healthcare 1199 NW Overview of proposed Medical and Paid Leave Benefits

Transcription

1 Swedish Medical Center SEIU Healthcare 1199 NW Overview of proposed Medical and Paid Leave Benefits May 28, 2015

2 Guiding Principles Swedish s proposal is rooted in a shared interest with our caregivers to provide benefits that: Both Swedish and caregivers are striving to be healthy Both Swedish and caregivers desire programs that provide protection for both the benefit-eligible caregiver and their covered family members Programs that are aligned with the care delivery system and include choice for the member The proposed designs are intended to be sustainable, and provide stability without dramatic changes each calendar year 2

3 Agenda Medical Benefits Value of medical proposal 2016 medical options Paid Leave Benefits Program design changes for new hires, effective Jan. 1,

4 Proposed Medical Benefits

5 Value of Medical Proposal Engages and empowers caregivers in the use of their medical plan, by offering: Meaningful choices A way to save for future health care expenses Benefits that are sustainable Remains competitive with other health care organizations and other employers Allows better management of medical costs 5

6 Eligibility date New Hires Current: 1 st of the month after completing 30 days of service; elections must be made within first 31 days (e.g. hired Feb. 5, benefits start April 1) Proposed: Eligible on date of hire (elections must be made within first 30 days) Rehires*, transfers, status change to newly benefit-eligible Current: 1st of the month after completing 31 days of service; elections must be made within first 31 days Proposed: Eligible first of month following or concurrent with start date (elections to be made within 30 days); coverage effective first of month following election *Rehires after more than 30 days 6

7 Proposed medical plan options Caregiver choice Current: Swedish PPO Medical Plan Proposed: Continue to offer Swedish PPO Medical Plan through 2016 no change to current plan provisions or payroll deductions. PPO not offered in 2017 or NEW Swedish Group Health HMO Medical Plan with copayments and low deductible; expected to include Swedish primary care providers as part of the Group Health network. NEW Swedish HSA Medical Plan with a Health Savings Account; $0 premium contribution for full-time caregivers ( FTE). In 2016, Swedish to fully-fund deductible with HSA seed for first dollar coverage (resulting in a $0 deductible for singles). 7

8 Enhanced dependent subsidy Improved subsidy of dependent coverage for part-time ( FTE) Current: Swedish PPO Medical Plan provides 0% subsidy for coverage of part-time caregivers (0.5 to 0.89 FTE) covering dependents on their plan Proposed: Swedish Group Health HMO and Swedish HSA Medical Plans provide at least 50% for part-time caregivers (0.5 to 0.89) covering dependents on their plan 8

9 1 Why offer new medical plans? Choice of medical plans and improved plan features for all Provides a medical plan with a well-managed HMO network and another with a savings opportunity (HSA) for health care in retirement and medical, dental, and vision expenses today Fidelity estimates a couple retiring today at age 65 will need $220,000 for health care alone Provide an incentive for caregivers to focus on making smart choices when using health care services Better manage costs for themselves and for Swedish 9

10 Medical plan coverage Glossary of terms Annual deductible: Amount you* pay each year for covered expenses before the Plan begins paying Annual out-of-pocket maximum: The most you* pay each year for covered expenses before the Plan begins paying 100% Copay/copayment: The dollar amount you* pay for a covered expense Coinsurance: The Plan and you* share the cost of the covered expense *and/or covered family members 10

11 Current Swedish PPO Medical Plan No Change for 2016 Swedish Preferred Network (Tier 1) Other In-Network (Tier 2) Out-of-Network (Tier 3) Annual deductible $300 per person / $600 family $450 per person / $900 family $1,300 per person /$2,600 family Annual out-of-pocket maximum* $3,000 per person / $6,000 family $4,500 per person / $9,000 family $7,300 per person / $14,600 family Preventive care 0% (covered in full) 40%, after deductible Primary care office visits $10 copay, after deductible $35 copay, after deductible 40%, after deductible Specialist office visits 20%, after deductible 30%, after deductible 40%, after deductible Inpatient hospital facility services $200 copay + 0% $200 copay + 40%, after deductible $200 copay + 50%, after deductible Professional services 20%, after deductible 20%, after deductible 40%, after deductible Outpatient facility services 0%, after deductible 40%, after deductible 50%, after deductible Emergency room (copay waived 20% after deductible, plus: if admitted) 1 st visit: $75 copay; 2 nd visit: $100 copay; Additional visits: $150 copay each Bariatric Surgery Not covered Not covered Not covered Prescription Drug Out-of-pocket maximum:$2,100 caregiver only/ $4,200 if covering Out-of-pocket maximum dependents N/A Approved preventive drugs 0% (covered in full) for drugs used to treat certain conditions (e.g. diabetes, high blood pressure) in alignment with IRS guidance Not covered Generic: $7.50 Generic: $15 Retail pharmacy (30-day Formulary: $30 Formulary: $40 supply) Non-formulary: $60 Non-formulary: $70 Not covered Specialty medications $75; covered only if ordered through plan s preferred specialty pharmacy Not covered *Out-of-pocket maximum includes deductible 11

12 Proposed Swedish Group Health HMO Medical Plan In-Network Out-of-Network Annual deductible $200 individual / $600 family Not covered Annual out-of-pocket maximum* $1,700 individual / $5,100 family Not covered Preventive care 0% (covered in full) Not covered Primary care office visits 10%, after deductible plus $15 copay Not covered Specialist office visits 10%, after deductible plus $30 copay Not covered Inpatient hospital facility services 10%, after deductible Not covered Professional services 10%, after deductible Not covered Outpatient facility services 10%, after deductible Not covered Emergency room 10%, after deductible plus $150 copay in- or out-of-network, waived if admitted Bariatric surgery Not covered Not covered Prescription drugs (30 day supply) Covered if filled at Group Health or approved pharmacy partner Generic: $15 Formulary Brand: $30 Non-Formulary: Not Covered Mail order: 90 days, 2 times retail Not covered *Out-of-pocket maximum includes deductible and in-network cost-sharing (e.g. medical and pharmacy copays) 12

13 Proposed Swedish HSA Medical Plan Providence-Swedish Health Alliance (Tier 1) Other In-Network (Tier 2) Out-of-Network (Tier 3) $3,000 caregiver only / Annual deductible $1,500 caregiver only / $3,000 if covering dependents $6,000 if covering dependents Swedish-provided HSA seed $1,500 caregiver only / $2,200 if covering dependents Net deductible (deductible less HSA seed) $0 caregiver only / $800 if covering dependents (or $1,500 caregiver only / $3,800 if covering dependents, if utilizing out-of-network services) Annual out-of-pocket maximum* $3,000 caregiver only / $6,000 if covering dependents $6,000 caregiver only / $12,000 if covering dependents Preventive care 0% (covered in full) 50%, after deductible Primary care office visits 10%, after deductible 25%, after deductible 50%, after deductible Specialist office visits 10%, after deductible 25%, after deductible 50%, after deductible Inpatient hospital facility services 10%, after deductible 25%, after deductible 50% after deductible Professional services 10%, after deductible 25%, after deductible 50%, after deductible Outpatient facility services 10% after deductible 25%, after deductible 50%, after deductible Emergency room 25%, after deductible for all 3 tiers Bariatric surgery 10%, after deductible Not covered Not covered Prescription drugs (30 day Out of pocket maximum combined with medical supply) Mail order: 90 days, 3 times Swedish or retail cost N/A Approved preventive drugs 0% (covered in full) for drugs used to treat certain conditions (e.g. diabetes, high blood pressure) in alignment with IRS guidance Not covered Non-preventive drugs (brand and specialty: maximum paid after deductible is $150 per Rx for 30 day supply) *Out-of-pocket maximum includes deductible Generic: 10% Brand formulary: 20% Non-formulary: 40% Specialty: 20% Generic: 10% Brand formulary: 30% Non-formulary: 50% Specialty: 20% Not covered 13

14 Expanded hospital network for Swedish HSA Medical Plan using the ACO network Facility Preferred/ Tier 1 Swedish PPO Medical Plan Other In- Network/ Tier 2 Providence- Swedish ACO/ Tier 1 Swedish HSA Medical Plan Other In- Network/ Tier 2 Out-of-Network/ Tier 3 Swedish Medical Center Yes No Providence Health & Services Yes No Kadlec Regional Medical Center Seattle Children's Harborview Medical Center Seattle Cancer Care Alliance No Overlake Hospital Medical Center Yes Valley Medical Center No Yes Franciscan Health System No MultiCare Health System Virginia Mason Medical Center UW Medical Center Evergreen Medical Center No Yes NW Hospital 14

15 More straightforward medical groups added to tier 1 for the Swedish HSA Medical Plan Providers Swedish PPO Medical Plan Swedish HSA Medical Plan Swedish Medical Group The PolyClinic Minor & James Medical Proliance clinics using Swedish Epic Community Connect Portal Pacific Medical Center Providence Medical Group Puget Sound Family Physicians Proliance OPA Ortho Others meeting criteria or as required for network adequacy Preferred/ Tier 1 Other In-Network/ Tier 2 Providence-Swedish ACO/ Tier 1 Yes No Yes No No If they have admit privileges at SMC Only those select clinics using Swedish/Epic portal No No Yes Yes Other In-Network/ Tier 2 Generally other providers contracted with the wrap network 15

16 HSA Medical Plan Transparency with an account-based plan 16

17 How the HSA works with the Swedish HSA Medical Plan Swedish-provided HSA account pays up to the first $2,200 of health care expenses you have this year (first-dollar coverage)! 17

18 What exactly is an HSA? TAX Tax-free account you can use to help pay your share of health care expenses, such as medical, dental and vision deductibles and coinsurance amounts Use the account to pay for your tax dependents costs too, even if you do not cover them on the medical plan HSA funds are always yours, they rollover each year (no use it or lose it), and are completely portable take your account with you! 18

19 Proposed 2016 medical contributions Move to 4-tier structure Waive (decline) coverage credit is sunset 2016 Twice-Monthly Caregiver Contributions, 24 pay periods per year Swedish Group Health HMO Medical Plan Swedish HSA Medical Plan Swedish PPO Medical Plan Wellness Works Rate Non-Wellness Works Rate Not Applicable* Wellness Works Rate Non-Wellness Works Rate Full time rates ( FTE) Caregiver only $25.83 $42.50 $0.00 $3.00 $35.50 Caregiver + child(ren) $76.83 $93.50 $21.00 $35.50 $68.00 Caregiver + spouse/dp $94.16 $ $35.50 $64.00 $96.50 Caregiver + family $ $ $57.00 $96.50 $ Part-time rates (.5.89 FTE) Caregiver only $39.83 $56.50 $24.00 $3.00 $35.50 Caregiver + child(ren) $ $ $52.50 $ $ Caregiver + spouse/dp $ $ $71.50 $ $ Caregiver + family $ $ $ $ $ *Wellness incentives for Swedish HSA Medical Plan participants are deposited into a Health Savings Account in lieu of a premium credit 19

20 How do the new plans compare cost- and coverage-wise? Low scenarios Moderate High Use of health care services in

21 Scenario 1: Low use Preventive care only, no out-of-pocket costs Meet Sarah She s in her mid 20 s and single Sarah is generally in good health She also exercises regularly She sees the doctor for preventive care Full-time (0.9 to 1.0 FTE), Caregiver-only coverage Swedish PPO Plan Group Health HMO Plan HSA Medical Plan Annual premium ($72) ($620) $0 Out-of-pocket costs $0 $0 $0 Swedish HSA contribution $0 $0 $1,500 Total cost or gain* ($72) ($620) $1,500 *Estimates are illustrative and assume Wellness Works credit is earned; actual costs will vary based on services utilized. The HSA Medical Plan member comes out $1,500 ahead, while the cost to the Swedish PPO and Group Health HMO member is $72 and $620, respectively. The $1,500 left in the HSA rolls over to

22 June 5 th update: This slide has been corrected to reflect the corrected expected cost for each medical plan. SEIU 1199NW has also received notice of the revised scenario estimate. Scenario 2: Moderate use Meet Cheryl She s in her early 40 s and is a single mom of two children ages 10 and 13 Cheryl has Type 2 Diabetes and takes regular medication to manage her blood sugar Each family member gets regular check-ups and sees the doctor occasionally for other issues Full-time (0.9 to 1.0 FTE), Caregiver + child(ren) coverage Swedish PPO Plan Group Health HMO Plan HSA Medical Plan Annual premium ($852) ($1,844) ($504) Out-of-pocket costs ($1,178) ($1,132) ($3,113) Swedish HSA contribution $0 $0 $2,200 Total cost or gain* ($2,030) ($2,976) ($1,417) The cost to the HSA Medical Plan member is $1,417, compared with a cost to the Swedish PPO member of $2,030 and the Group Health HMO member of $2,976. The HSA is completely used so no roll over into *Estimates are illustrative and assume Wellness Works credit is earned; actual costs will vary based on services utilized. 22

23 Scenario 3: High use Reaches the out-of-pocket maximum Meet Ralph He s in his early 50 s and single Ralph recently had a skiing accident and requires many visits to specialists and physical therapy Full-time (0.9 to 1.0 FTE), Caregiver-only coverage Swedish PPO Plan Group Health HMO Plan HSA Medical Plan Annual premium ($72) ($620) $0 Out-of-pocket costs ($3,000) ($1,700) ($3,000) Swedish HSA contribution $0 $0 $1,500 Total cost or gain* ($3,072) ($2,320) ($1,500) *Estimates are illustrative and assume Wellness Works credit is earned; actual costs will vary based on services utilized. The cost to the HSA Medical Plan member is $1,500, compared with a cost to the Swedish PPO member of $3,072, and the Group Health HMO member of $2,320. The HSA is completely used so no roll over into

24 Well-being incentive Spouses/domestic partners incented to participate in future years Swedish Group Health HMO Medical Plan 2016: Automatically receive Wellness Works premium share level for both the caregiver and spouse/domestic partner 2017/18: Caregivers can earn up to $400 by completing required activities An additional $400 can be earned if the spouse/domestic partner also completes required activities Swedish HSA Medical Plan 2016: Swedish automatically makes contribution to Health Savings Account: $1,500 for caregiver only, $2,200 if enrolling a dependent 2017/18: Caregivers can earn up to $700 by completing required activities An additional $700 can be earned if the spouse/domestic partner also completes required activities 24

25 How the plans compare with Metallic Value Metal Plan Name CMS Value Swedish PPO Medical Plan Swedish HSA Plan w/ 2016 Incentive Swedish HSA Plan w/ 2017/18 Incentive Swedish Group Health HMO 87% 91% 86% 90% 1. Platinum: >90% 2. Gold: 80% 89% 3. Silver: 70 % 79% 4. Bronze: 60 % 69% The majority of employers are moving to or planning to move to Silver level plans 80% of individual exchange enrollees selected a Silver level plan *Estimate based on consultant s proprietary method of calculation based on proposed plan design; is not actual CMS valuation 25

26 Proposed Paid Leave Benefits

27 Paid Leave Benefit Proposal Starting Jan. 1, 2016 new hires receive: New Paid Time Off (PTO) program vs. Annual Leave Short-term disability (STD) benefit vs. Sick time Existing SEIU members can: Continue under the existing Annual Leave and Sick design asis, or Option to elect to transition to the new design through a special, one time election opportunity 27

28 Why change paid leave benefits? Current State 8 different designs across Swedish Medical Center Outcomes Individual INCONSISTENT rewards Perception of INEQUITY CONFUSING for new hires Organization Administratively COMPLEX CONFUSING for support staff COSTLY Annual Leave/Vacation + Sick Individual INFLEXIBLE INCONSISTENT financial protection Hurts MORALE Organization Subject to MISUSE UNRELIABLE workforce UNPLANNED costs 28

29 New Paid Time Off (PTO) Design Key Updates: One bank Vacation, personal use, incidental sick and holidays Eligibility 0.5 FTE and higher (20 hours per week) aligned with other benefit plans Accruals Begin date of hire Tenure-based plan with increases on anniversary dates; NOT hours based Maximum balance is 1.5x annual accrual amount; NOT prorated by FTE No voluntary annual cash-out opportunity 29

30 Proposed PTO schedule Assumes 1.0 FTE Years of Service Annual Staff PTO (days) Max. Bank* Staff PTO (hours) Per Pay Period / Max. Bank* Per Year 0 to < / to < / to < / to < / / *Not prorated by FTE 30

31 New PTO Design A richer vested benefit Years of Service Current Annual Leave Proposed PTO Design Average Value of Increased Benefit 0 to < $1,368 3 to < $1,739 5 to < $1, to < $1, $842 *Summary reflects PTO for full-time caregivers (1.0); PTO for part-time caregivers will be prorated Employees will receive short term disability that provides 60% protection for up to 26 weeks of a disability in place of the 12 days of accrued sick. 31

32 Benchmarking: Paid Time Off Review of proposed schedule compared to Towers Watson benchmarking database of 114 health services organization Survey data indicates that 75-90% of healthcare industry employers offer PTO Years of Service Proposed PTO Schedule Health Services Median PTO Time 0 to < to < to < to < to < Note: Towers Watson s health services database includes other large systems such as Ascension Health, Baylor Health Care System, Catholic Health Initiatives, Cedars-Sinai, CHE/Trinity Health, Intermountain Healthcare, Kaiser Permanente Northern California, St. Joseph Health (CA), Tenet Healthcare Corporation 32

33 Proposed Short-Term Disability benefit Short-Term Disability (STD) = Employer-paid, taxable wage replacement for non-occupational illness/injury including maternity The Short-Term Disability benefit replaces the Sick bank benefit Provision Eligibility Short-Term Disability Begin the same day as other health benefits (no enrollment required) Waiting period 7 calendar days (shifts missed likely less) Benefit *60% of regular pay for up to 25 weeks (through Payroll) Can use PTO to supplement up to 100% of regular pay Other Caregiver s own non-work-related illness/injury *$400 per week minimum benefit (1.0 FTE) 33

34 Benchmarking: Short-Term Disability Survey data indicates that employer-paid Short-Term Disability is the norm in most industries 70-80% employers providing such a benefit Healthcare industry employers have lagged in offering Short-Term Disability benefits ~25-40% of health services industry employer offer Short- Term Disability The healthcare industry is trending toward offering a Short-Term Disability program because: The benefit is medically managed It is integrated with other programs (e.g. PTO and Long-Term Disability) Supports return to work process 34

35 Large gap between Annual/Sick and LTD Currently Vacation/Annual Leave and Sick can result in an unpaid gap Vacation and Sick Unpaid Long-Term Disability 3 years: 6 days Vacation/AL + 11 Sick days = 3.5 weeks paid 10 years: 19 Days Vacation/AL + 26 Sick days = 8.9 weeks paid 3 years: 22.5 weeks unpaid 10 years: 17.1 weeks unpaid 60% regular pay after 180 days 66-2/3% buy-up available at open enrollment Example shown: Swedish union members with 3 and 10 years of service. Assumes 8 hour work schedule; 5 day work week. 35

36 Paid Leave Scenario 1 Short-Term Disability benefit bridges the pay gap Leave of Absence (Self) Week 1 STD: Week 2 26 LTD: Week 27 and beyond PTO for any shifts missed 60% of regular pay PTO may be used to top-up to 100% 60% of regular pay 66 2/3% buy-up available at open enrollment Payable up to Social Security normal retirement age (longer in some cases) 36

37 Paid Leave Scenario 2 Short-Term Disability benefit bridges the pay gap Leave of Absence (Maternity) Week 1 PTO for any shifts missed STD: Week 2 6 (healthy) 60% of regular pay PTO may be used to top-up to 100% STD: Week 7 26 LTD: Week 27 and beyond (complications) Short-Term Disability 60% of regular pay PTO or existing Sick may be used to top-up to 100% Long-Term Disability 66 2/3% buy-up available at open enrollment 37

38 Why change paid leave benefits? Future State Outcomes Individual FAIRNESS & equity CLARITY and understanding Proposed Design Organization Administrative SIMPLICITY CLARITY for support staff Paid Time Off (PTO) + Short-Term Disability (STD) Individual FLEXIBILITY Financial SECURITY ENGAGEMENT Organization INTEGRATION of Benefits Optimized workforce PRODUCTIVITY PREDICTABLE costs Attract & retain TOP TALENT 38

39 This presentation highlights some of the features of the Swedish benefits program. This presentation does not include all plan rules and details. The terms of the benefit plans are governed by legal documents, including insurance contracts. 39