HUMAN RESOURCES / LABOR RELATIONS BENEFITS OVERVIEW. Washtenaw County Board of Commissioners Working Session August 5, 2010

Transcription

1 HUMAN RESOURCES / LABOR RELATIONS BENEFITS OVERVIEW Washtenaw County Board of Commissioners Working Session August 5, 2010

2 AGENDA 1. Current Cost of Health Care Benefits 2. Current Washtenaw County Benefits 3. Health Care Reform Timeline for Impact 4. Dependent Audit 5. Fringe Benefit Workgroup

3 CURRENT COST OFHEALTH CARE BENEFITS Medical Dental Life / AD&D Long Term Disability ,833,943 1,096, , , ,034,697 1,081, , , ,605,234 1,202, , , ,380,677 1,205, , , ,805,304 1,446, , , Projected 19,779,402 1,304, , ,705 Includes both employer and employee contributions

4 CURRENT WASHTENAW COUNTYBENEFITS Flexible Benefits Program Core Benefits include medical, dental, life insurance, and long term disability insurance at no cost to most Union employee; $600 annual cost for MNA I/II members and Non Union employees, and $400 annual cost for APA / PDA members MEDICAL (2010 projected total cost $19.8M) shifted all medical plans to Community Blue PPO to focus on preventive maintenance Employees hired prior to 1/1/09 CORE plan = Blue Cross / Blue Shield Community Blue PPO1 with $0/$30 prescriptions Employees hired 1/1/09 and beyond CORE plan is tiered as follows with $0/$30 prescriptions: First 3 years of employment Community Blue PPO10 Years 4 7 of employment Community Blue PPO2 Years 8+ of employment Community Blue PPO1 DENTAL (2010 projected total cost $1.3M) Currently offered through Blue Cross / Blue Shield; Basic coverage provided as part of CORE plan with the ability to buy up to Enhanced Basic = 100% coverage on preventive cleanings and exams, 50% coverage on most diagnostic procedures, up to an annual maximum of $750 per person per contract Enhanced = 100% coverage on preventive cleanings and exams, 80% coverage on most diagnostic procedures, up to an annual maximum of $1000 per person per contract

5 CURRENT WASHTENAW COUNTY BENEFITS (CONT.) LIFE INSURANCE AND ACCIDENTIAL DEATH / DISMEMBERMENT (2010 projected total cost $410K) Currently offered through UNUM; LI 01 provided as part of CORE plan with the ability to buy up to LI 02 LI 06 through bi weekly payroll deductions LI 01 1x salary $50,000 maximum LI 02 2x salary $100,000 maximum LI 03 3x salary $150,000 maximum LI 04 4x salary $200,000 maximum LI 05 5x salary $250,000 maximum LI 06 6x salary $300,000 maximum LONG TERM DISABILITY (2010 projected total cost $286K) Currently offered through UNUM; LT 01 provided as part of CORE plan with the ability to buy up to LT 02 LT 04 through bi weekly payroll deductions Plan Covered Salary Elimination Period Maximum Monthly Benefit LT 01 50% up to $60, days $2,500 LT 02 50% up to $60, days $2,500 LT 03 60% up to $70, days $3,500 LT 04 67% up to $63, days $3,500

6 CURRENT WASHTENAW COUNTY BENEFITS (CONT.) OTHER OPTIONAL COVERAGE Employee 100% Paid Vision coverage available through Blue Vision VSP Short term Disability coverage available through AFLAC to provide a source of income in the event an employee becomes disabled due to sickness or off the job injury Life Insurance coverage available through AFLAC; 10 year term life to also coverage spouse and children if desired; options include $12,580, $25,000, $50,000 and $100,000 benefits Flexible Spending Accounts Dependent Care $5,000 maximum pre tax deduction for expenses related to dependent care Health Care $3,000 maximum pre tax deduction; designed to reimburse out of pocket health care expenses incurred by the employee or eligible dependents that are not reimbursable through any other benefit (e.g., co pays, deductibles, contacts)

7 HEALTH CARE REFORM TIMELINE FOR IMPACT 2010 Reinsurance for Employer Provided Retiree Health Coverage Health and Human Services will create a temporary reinsurance program to reimburse employers for part of their retiree health care costs for retirees over age 55 who are not eligible for Medicare or active employer provided health benefits; the program will reimburse employers 80% of the cost per enrollee in excess of $15,000 and below $90,000 Funds are limited to $5 billion in subsidies to those employers submitting accurate applications; funds available on a first come, first serve basis; applications were available for submission at the end of June, 2010, and Washtenaw County has submitted their application Effective 90 days after the 3/23/10 enactment; businesses may begin applying to HHS for reimbursement by July, 2010

8 HEALTH CARE REFORM TIMELINE FOR IMPACT 2011 Adult Child Coverage all group health plans must extend eligibility to married or unmarried dependents of the covered employee through the year ending when the dependent turns 26 as long as the dependent is not eligible for coverage under another employer sponsored group benefit plan. Lack of other available coverage for the child as a requirement is eliminated in 2014 Eliminates the following restrictions: Financial dependency on the participant or primary subscriber Residency with the participant or primary subscriber Student status Marital status Employment Eligibility for other coverage (in 2014) Effective 1/1/11 Impact projected 1 1 ½% cost increase; primary impact will be providing coverage for adult children between ages for both active and retiree plans Preventive Care Coverage employer plans must provide coverage without cost sharing for preventive services rated A or B by the U.S. Preventive Services Task Force; includes recommended immunizations, preventive care for infants, children and adolescents and preventive care & screening for women Effective 1/1/11 Impact nationally projected 3 ½ 4% cost increase; will have little to no impact on Washtenaw County as full preventive care coverage is already provided for in current plans

9 HEALTH CARE REFORM TIMELINE FOR IMPACT (CONT.) 2011 (cont.) Lifetime Dollar Limits on Plan Benefits group plans may not place lifetime limits on essential health benefits: Ambulatory patient services Emergency services Hospitalization Maternity & newborn care Mental health & substance use Prescription drugs Rehabilitative & habilitative services and devices Laboratory services Preventive & wellness service Chronic disease management Pediatric services, including oral and vision care Effective 1/1/11; no impact on Washtenaw County, with the exception of $5 million total lifetime limit Annual Dollar Limits on Plan Benefits group plans may place only restrictive annual limits on essential health benefits as defined by the Health and Human Services Secretary for plan years expiring before 1/1/2014; all annual limits on essential health benefits will be phased out by /1/11 12/31/11 $750,000 1/1/12 12/31/12 $1,250,000 1/1/13 12/31/11 $2,000,000 Effective 1/1/11; full prohibition is effective with the first plan year beginning in 2014

10 HEALTH CARE REFORM TIMELINE FOR IMPACT (CONT.) 2011 (cont.) No Rescissions plans can not rescind coverage of an enrollee except in cases of fraud Effective 1/1/11 W2 Aggregate Cost Reporting all employers must include on W2s the aggregate cost of employersponsored health benefits, for informational purposes Effective 2011 Over the Counter Drugs will no longer be reimbursable under medical FSAs unless they are prescribed by a doctor Effective 1/1/11 National Public Long term Care Program all employers will be required to enroll employees in a new national public long term care program unless the employee opts out; mandatory payroll deduction Effective in 2011

11 HEALTH CARE REFORM TIMELINE FOR IMPACT (CONT.) 2012 Summary of Benefits & Coverage Explanation all group plans, and group and individual health insurers, will have to provide a summary of benefits and a coverage explanation (no more than 4 pages in length) that meets specified criteria to all enrollees when: they apply for coverage they enroll or re enroll in coverage the policy is delivered and identify any material modification is made to the terms of their coverage Effective in 2012 Annual Reports to HHS Secretary all group plans and all individual and group carriers will have to annually submit reports to the HHS Secretary on whether or not the benefits provided under their plans meet criteria to be established by HHS on: Improving health outcomes Preventing hospital readmissions Improving patient safety and reducing medical errors Including wellness and health promotion activities Report must also be provided to all plan participants during the annual open enrollment period; fines may be imposed for non compliance Effective in 2012

12 HEALTH CARE REFORM TIMELINE FOR IMPACT (CONT.) 2013 Medicare Payroll Tax increase for high wage employees and new tax on unearned income 0 9% increase for wages received during the year above $200,000 for individuals and above $250,000 for joint filers 3.8% Medicare contribution on certain unearned income from individuals with AGI over $200,000 and above $250,000 or joint filers Effective in 2013; it is anticipated that this will not occur at the group level, but rather be a selfreporting item for those who are self employed Flexible Spending Accounts pre tax contributions to medical flexible spending accounts will be limited to $2,500 per year, with the cap annually indexed for inflation Effective in 2013 New Federal Premium Tax a new premium tax shall be made on fully insured and self insured group health plans to fun comparative effectiveness research programs; imposing an annual fee on private insurance plans equal to $2 for each individual covered Effective in 2013

13 HEALTH CARE REFORM TIMELINE FOR IMPACT (CONT.) 2014 Play or Pay employers with an average of at least 50 employees during 121 days or more in the preceding calendar year are required to offer minimum essential benefits packages to full time employees and their dependents Effective 1/1/14 Health Insurance Portability and Accountability Act (HIPAA) Wellness Programs employers may offer financial incentives to employees for participating in wellness programs of up to 30% of the cost of coverage; wellness programs must satisfy the HIPAA nondiscrimination requirements, and the government can increase the limit to 50% if deemed appropriate Effective in 2014

14 HEALTH CARE REFORM TIMELINE FOR IMPACT (CONT.) 2018 Excise Tax (Cadillac Plan Tax) a 40% excise tax shall be imposed on insurers (for insured coverage) and employers (for self insured coverage) to the extent that the aggregate annual value of an employee s health coverage, including medical, prescription, HRA, health care FSA, and employer HAS contributions exceeds $10,200 for an individual or $27,500 for a family Threshold values are indexed to changes in the CPI. For retirees age 55 to 64, the threshold is raised by $1,650 for individuals and $3,450 for families. The threshold is also raised for certain high risk professions, including law enforcement, fire protection, certain utility workers and others. The threshold is also adjusted to reflect higher health care costs attributable to age or gender in the workforce. Employers are responsible for calculating the value of excess coverage using COBRA rules and for making reports to insurers and the government Effective 1/1/18

15 DEPENDENT AUDIT Human Resources, with the assistance of UNUM & Complete Benefit Alliance LLC (CBA), will be performing a dependent audit during the 2010 Open Enrollment process in October for all employees Dependent audits are completed to verify that dependents being covered are eligible and appropriate Research has shown that typically, up to 12% of employees have ineligible dependents on the plan Typically 60% of an employer plan cost is attributable to dependents A full dependent audit may save up to 5% of the cost of our overall health plan Audit Process Verification of all employee dependents listed on their health care insurance CBA will meet with all employees in a consulting session to: Verify accuracy of dependents being covered Provide an explanation of Washtenaw County benefits (see sample booklet) Review other voluntary benefit opportunities offered through UNUM that are available for employee purchase through bi weekly payroll deduction Assist employees in enrolling in benefits effective 1/1/11 Employees will be provided a hidden paycheck or benefit statement that details their total compensation, including salary, health care and retirement benefits

16 FRINGE BENEFIT WORKGROUP Established as a subcommittee of the Labor Management Team Educate, review and analyze fringe benefits provided by Washtenaw County Begin with a comprehensive review of fringe benefits currently provided Review potential options for benefit modifications and associated costs Include representatives from labor, management and benefit agent Kick off meeting August 16, 2010 and expected to continue through March/April, 2011

17 QUESTIONS