The 2015 Nonprofit Employee Benefits Survey

Transcription

1 AN ANNUAL RESEARCH REPORT BY PPI BENEFIT SOLUTIONS (PPI) The 2015 Nonprofit Employee Benefits Survey COMPREHENSIVE ANALYSIS

2 TABLE OF CONTENTS 03 Executive Summary RESULTS Prevalence of Benefits Selecting Benefit Plans Enrollment Methods Eligibility and Waiting Periods Contribution Strategies Copays, Coinsurance, and Deductibles Prescriptions Compliance Conclusion Overview of Participants About the Survey Page 2

3 EXECUTIVE SUMMARY 2015 is a monumental year for employer-sponsored benefits as the Affordable Care Act s (ACA) Employer Mandate, or Pay or Play, became effective January 1st for employers with 100 or more full-time equivalent employees. In addition the perennial strain of rising healthcare costs, these unprecedented regulary changes are putting additional pressure on employers as they determine if, when, and how the law applies, whether they qualify for a delay in its implementation, what constitutes a full-time employee, and how satisfy the new IRS reporting requirements. Our 2015 Nonprofit Employee Benefits Survey results indicate that nonprofits understanding of the ACA has dropped: in 2014, 92% of surveyed nonprofits felt they had at least a moderate understanding of the law; in 2015 that number plummeted 47%. In 2014, 18% of employers felt that they were extremely knowledgeable of the ACA, only 5% made that claim in Although few nonprofit organizations (NPOs) are going so far as eliminate healthcare benefits or reduce their employee-only premium contributions as a result of the ACA, they are changing the types of plans being offered and decreasing dependent contributions, thus shifting more cost on employees. This trend is reflected among our 2015 survey results. 56% of surveyed nonprofits now have a Health Savings Account (HSA) option in place, up from only 12% in 2014, evidence that consumer directed health plans (CDHPs) are quickly gaining momentum throughout the nonprofit secr. As a trade-off for lower premiums, HSA-compatible plans feature high deductibles, exposing consumers the true costs of the care they receive. To help offset these high deductibles, more employers are offering group voluntary products that feature very low premiums and help reduce an employee s overall out-of-pocket expenses. One might infer that access these products supports nonprofit employee retention efforts, which can be a challenge in an accelerating economy. Although not highest on the list of challenges, easing the benefits administration burden through aumation can impact the botm line, especially given the volume of data employers must maintain and harvest comply with new regulations. In addition, we see less resistance employee self-service, as former concerns about the lack of Internet access and familiarity among personnel are waning. In 2014, 15% of surveyed nonprofits used employee self-service, and in 2015, that number has increased 23%. As more NPOs embrace technology manage their operations, it is likely that employee self-service adoption will continue on this upward trend. We hope the following survey report provides you with helpful information! We welcome your feedback and ideas for future surveys Results: Nonprofits are growing less confident in their understanding of Healthcare Reform (ACA) as new regulations are put in effect: see page 25. The majority of nonprofits have not calculated the cost of compliance with Healthcare Reform (ACA): see page 25. More employers are offering High Deductible Health Plans and Tax Advantage Accounts control costs: see page 6. The prevalence of voluntary benefits continues rise as a way increase choice for employees at little no cost for employers: see page 6. The transition away from paper enrollment has been slow among nonprofits, but use of online self-service is steadily increasing: see page 11. Page 3

4 PREVALENCE OF BENEFITS All Benefits. The most prevalent benefits among surveyed nonprofits are group medical, group dental, and employer-paid life insurance, each of which are offered by more than 90% of participants. Nearly 100% of participants offer group medical employees, which may be a result of new regulations imposed by Healthcare Reform (ACA). These regulations state that beginning in 2015, employers with 100 or more full-time employees (which made up about 75% of our 2015 survey participants) must offer affordable medical coverage full-time employees, and their dependents, or be subject certain penalties. Group Medical Group Dental (of any plan type) Employer-Paid Life Insurance Tax Advantage Accounts (HSA, HRA, FSA, etc.) Group Vision Group Long-Term Disability (LTD) Group Short-Term Disability (STD) Voluntary Life Spouse Life Child Life Supplemental Medical Voluntary Dental Voluntary Vision Voluntary Long-Term Disability (LTD) Voluntary Short-Term Disability (STD) Accident Insurance (separate from AD&D) Critical Illness Cancer Benefit Long-Term Care Group Legal Docrs by phone or online Identity Theft Tuition Assistance/Continuing Education Pet Insurance Other Membership or Discount Programs 8.3% 10.8% 5.8% 7.1% 7.1% 4.6% 36.3% 31.7% 19.6% 22.1% 20.4% 28.3% 34.2% 18.3% 25.4% 35.4% 29.2% 47.1% 49.2% 54.6% 70.4% 80.9% 93.5% 94.7% 98.8% Page 4

5 Medical Plans. Preferred Provider Organizations (PPOs) are the most common medical plan type offered by surveyed nonprofits. In addition, 55.6% of nonprofit medical plans can be categorized as a High Deductible Health Plan (HDHP). HDHPs have lower premiums and higher deductibles than traditional health plans. Dental Plans. Preferred Provider Organizations (PPOs) are the most common dental plan type offered by surveyed nonprofits, accounting for 73.7% of results. PPO 73.7% PPO 54.6% POS 10.5% POS HMO 35.2% 31.9% DMO/DHMO Monthly Switch 4.7% 39.8% Indemnity 0.5% Indemnity 2.3% EPO 21.3% HDHP What s the Difference Between a Medical PPO, POS, HMO, and EPO? 55.6% The general characteristics of a dental PPO, POS, and DMO/DHMO (refer HMO in the chart) are comparable medical, so please refer the chart on the left for basic guidance. A dental plan described as a monthly switch allows employees switch between a DMO/DHMO and either a PPO or indemnity plan. An indemnity plan, or fee-for-service plan, reimburses the covered person for incurred expenses once the deductible is met. Have To Stay In-Network? Cost-Sharing Advantages/ Disadvantages PPO (Preferred Provider Organization) No Deductible, copay Flexibility; no referrals; expensive copays POS (Point of Service) No Deductible, copay Lower cost if in-network HMO (Health Maintenance Organization) Yes, except emergencies Copay Lower cost; less freedom choose provider EPO (Exclusive Provider Organization) Yes Copay Lower cost; more restrictive network Page 5

6 Tax Advantage Accounts. Flexible Spending Accounts (FSAs) are the most common type of tax advantage account offered by nonprofits, accounting for 82.0% of results. This shows a 23.8% increase over 2014, when FSAs were offered by 58.2% of participants. INSIGHT: More Employers Offering HDHPs, Tax Advantage Accounts, and Voluntary Benefits Help Control Costs HSA HRA 55.6% 51.9% FSA Limited Purpose FSA Transit/Parking Dependent Care Spending Account 27.8% 49.6% 69.9% 82.0% 1) More HDHPs Percentage What s the Difference Between an HSA, HRA, and FSA? Who contributes? Who owns the account? Does the money roll over? 2) More Tax Advantage Accounts *Graph shows change from Percentage FSA HSA HRA HSA (Health Savings Account) HRA (Health Reimbursement Account) FSA (Flexible Spending Account) Employer or employee Employer only Employer or employee Employee Employer Employer Yes Employer decides Some employers allow up $500; otherwise the money goes back the employer 3) More Voluntary Benefits *Graph shows change from Percentage Transit Cancer Critical Illness Page 6

7 Employer-Paid Life Insurance. The most common employer-paid life insurance is 1X Salary, accounting for 36.1% of results. Of the 8.4% of participants who selected other, 65% wrote in 1.5X Salary. Paid Leave. The most prevalent paid leave benefits offered by nonprofits are holidays, bereavement time, and sick leave. Vacation days and personal days are also offered by the large majority. Multiple of Annual Income: Fixed Dollar Amount: Paid time off (bundled vacation, sick, personal days) 39.1% 36.1% 1X Salary 9.6% $1 $19,999 Paid time off annual rollover allowance Bought time off 2.9% 28.2% Holidays 96.0% 22.3% 2X Salary 9.0% $20,000 $39,999 Floating holidays 32.8% Sick leave 79.9% 3.0% 3X Salary 9.0% $40,000 $74,999 Paid sick leave cash-out option Vacation days 7.5% 75.3% Personal days 59.8% 0.6% 4X Salary 1.8% $75,000 or more Bereavement Parental leave/ Elder care 26.4% 83.3% 0.0% 5X Salary 8.4% Other Military leave Paternity leave 28.7% 40.8% Page 7

8 Wellness Programs. Employee assistance programs (EAPs) are the most common wellness benefit offered by nonprofit employers, as reported by 66.9% of participants. This represents a 7.5% increase from 2014 results, and a 33% increase since Following EAPs are flu vaccinations, gym membership discounts or reimbursements, health fairs, and health/biometric screenings. 14.3% 13.5% Services provided by a third party wellness company Onsite gym facility 66.9% Employee Assistance Programs (EAP) 51.9% Flu vaccinations 12.8% Nutritional counseling 9.8% Premium discounts for participation in a wellness program 39.1% Gym membership discount or reimbursement 24.8% Health fairs 8.3% 5.3% Premium discount for completing a Health Risk Assessment Premium discount for participation in a weight loss program 20.3% 19.5% Health/biometric screenings Healthcare advocate/coach 4.5% Premium discounts for not using bacco products 3.0% Telemedicine Services Page 8

9 SELECTING BENEFIT PLANS Objectives. Not surprisingly, the number one objective when selecting benefit plans continues be controlling costs, as indicated by the 97.3% of participants who rated it very extremely important. This was considered the p objective in both 2013 and 2014 as well. Following this is attracting and retaining employees and increasing employee job satisfaction. This combination of trying control the cost of benefits while using them attract talent and improve employee job satisfaction creates a ugh balancing act for employers. Nearly 80% of employers also consider providing benefit options that are easy understand a p objective. Very few participants consider any of the listed objectives be slightly not at all important. Objectives Considered Very Extremely Important Controlling costs Attracting & retaining 97.3% 97.3% employees 85.9% 85.9% 80 Increasing Providing employee benefit options 97.3% 97.3% 85.9% 85.9% job that are easy 80.4% 80.4% 79.6% satisfaction understand 79.6% Controlling costs 75.2% 22.1% Attracting & retaining employees 41.8% 44.1% 13.2% Extremely important Increasing employee job satisfaction 31.8% 48.6% 18.2% Very important Moderately important Slightly important Not at all important Reducing benefit administration costs Providing benefit options that are easy understand Addressing employees' diverse needs 35.9% 34.1% 28.6% 38.2% 45.5% 40.5% 20.9% 17.7% 25.5% 5.0% Encouraging healthy lifestyles 32.0% 35.6% 25.6% 5.5% Statistics less than 5% are not labeled Page 9

10 Challenges. The most challenging facr when providing employee benefits is cost nonprofit, as indicated by the 89.4% of participants who rated this very extremely challenging. Cost employees is the second most challenging facr, and has been a rising concern since It is surprising that the number of participants who consider Healthcare Reform Implementation be extremely challenging has decreased almost 10% in the last year, from 28.3% in % in This contradicts results listed later in this report which show that nonprofits are growing less confident in their understanding of Healthcare Reform. We suspect that this is because nonprofits have begun relying more heavily on their brokers or benefits administrars when it comes Healthcare Reform, and therefore see it as less of a challenge. Cost Employees Has Steadily Increased as a Top Challenge Since % % % % Cost nonprofit 59.4% 30.9% 9.7% Cost employees Plan design/quality of benefits and networks 42.9% 36.4% 14.3% 20.5% 38.1% 28.8% 9.8% Administrative burden 11.2% 20.5% 43.7% 20.0% Extremely challenging Very challenging Moderately challenging Employee education and communication Competition for talent 10.2% 31.5% 37.0% 9.9% 22.5% 38.5% 15.7% 19.7% 5.6% 9.4% Slightly challenging Not at all challenging Compliance with state and federal regulations 13.8% 20.3% 32.3% 24.0% 9.7% Employee resistance change 12.0% 30.4% 35.0% 15.7% 6.9% Healthcare Reform Implementation 18.4% 26.9% 34.0% 14.2% 6.6% Meeting the needs of diverse employee populations 15.3% 25.9% 40.3% 14.8% Statistics less than 5% are not labeled Page 10

11 ENROLLMENT METHODS Paper enrollment is the most widely used enrollment method among nonprofit employers. Although paper has been the p result for the last several years, its prevalence has begun decline, dropping from 83.8% in % in INSIGHT: Nonprofit Use of Employee Self-Service Steadily Increasing We find it surprising that nonprofits still rely so heavily on paper, while corporate employers continue move wards paperless enrollment. We expect see this downward trend continue in years come. In comparison, online employee self-service rose from 14.5% in % in Paper Enrollment Decreasing Percentage % % 55.8% Paper Group Meetings 49.1% 22.8% One-On-One Meetings Online Employee Self-Service Online Employee Self-Service Increasing Percentage % 8.3% 2015 Why Are Nonprofits Moving Employee Self-Service? 3.6% Telephonic Reduces burden on limited staff by eliminating time consuming and tedious paper processing Empowers employees become more involved in their benefits Increases security of employees personal and identifiable information Easier manage eligibility data over multiple classes of employees Gives employees 24/7 access benefits information Page 11

12 ELIGIBILITY AND WAITING PERIODS Medical Eligibility. A majority of nonprofits, 52.1%, require employees work 30 hours per week be eligible for medical benefits. This was true in 2014 as well, and accounted for 35.2% of results. To be eligible for medical benefits, 12.4% of participants still require employees work more than 30 hours per week. Depending on the size of the employer and its orientation period, this may not comply with ACA requirements. What is the ACA s Employer Mandate? The ACA s Employer Mandate requires employers offer health insurance that is affordable and provides minimum value their full-time employees and dependents or face penalties. Who does this apply? Employers with 1-49 Full-Time Equivalent Employees N/A N/A More than 30 Hrs/Wk 12.4% Less than 20 Hrs/Wk 3.7% Employers with Full-Time Equivalent Employees Employers with 100 or More Full-Time Equivalent Employees Additional one-year delay as long as certain conditions are met Employer must offer coverage 70% of full-time employees Employer must offer coverage 95% of full-time employees Employer must offer coverage 95% of full-time employees 30 Hrs/Wk 52.1% 20 Hrs/Wk 15.2% Hrs/Wk 16.6% Who is considered a full-time employee? An employee who works an average of 30 hours or more per week. Who is considered a full-time equivalent employee? A combination of employees, each of whom individually is not full-time, but who, in combination, are equivalent a full-time employee. What does minimum value mean? A plan provides minimum value if it is designed pay at least 60% of the tal cost of medical services for a standard population. How is affordable coverage determined? Coverage is considered affordable if the employee s contribution for self-only coverage does not exceed 9.5% of the employee s wages. For more information, please see our Healthcare Reform Kit at ppibenefits.com/hcr-kit. Page 12

13 Medical Waiting Period. First of the month following the date of hire is the most common waiting period for nonprofit medical plans, accounting for 25.3% of results. 2.8% of surveyed nonprofits impose a medical waiting period of first of the month after 90 days, which, depending on the date of hire, may not be in compliance with the ACA. Under the ACA, a group health plan or payer offering group health insurance coverage may not apply any waiting period that exceeds 90 days. For plan years beginning 1/1/2015, final rules allow for a one month employment-based orientation period. However, depending on the length of the subsequent waiting period, the employer may be out of compliance with the Employer Mandate which requires coverage be offered a full-time employee by the first day of the fourth month following employment. Life Waiting Period. First of the month following the date of hire is the most common waiting period for nonprofit life plans, accounting for 26.1% of results. 12.4% of respondents selected other, the majority of whom wrote in first of the month after 90 days. Some, however, indicated that their waiting periods are as long as one year or first of the month after 12 months. 10.1% Active upon date of hire 25.3% First of the month following date of hire 14.3% Active upon date of hire 26.1% First of the month following date of hire 5.5% 30 days from date of hire 13.8% First of the month after 30 days 4.3% 30 days from date of hire 11.8% First of the month after 30 days 4.1% 60 days from date of hire 20.7% First of the month after 60 days 3.1% 60 days from date of hire 10.6% First of the month after 60 days 14.3% 90 days from date of hire 2.8% First of the month after 90 days 17.4% 90 days from date of hire Page 13

14 CONTRIBUTION STRATEGIES Medical Contribution Strategies. The majority of nonprofit medical plans feature a percentage of premium contribution with a four tier rate structure (employee only, employee plus spouse, employee plus child(ren), employee plus family). Of the participants who selected Other, most specified that they base contributions on the number of hours employees work. Percentage of premium Defined contribution Based on years of service 5.4% 10.7% 41.1% Defined Contribution Strategies. We asked participants who currently use a defined contribution funding strategy describe how the contributions are structured: Separate Other contributions for medical and other benefits 25.3% 13.7% Equal, fixed dollar amount for all employees Fixed dollar amount by dependent tier 33.7% 27.4% Based on compensation or position 13.1% Varies by plan type 13.1% Some coverages remain 100% employer-paid 82.2% No dependent coverage 5.4% Health plan waivers retain full contribution 1.4% 2-tier dependent structure 5.4% Health plan waivers forfeit contributions 19.2% 3-tier dependent structure 11.3% Health plan waivers receive a smaller contribution 8.2% 4-tier dependent structure 39.3% Employees forfeit any remaining credit 8.2% Other 6.0% Employees retain any unused credit 1.4% Page 14

15 Funding of Medical Coverage For Employees and Dependents. The cost of medical coverage for employees and dependents is most often split between the organization and the employee. The majority of surveyed nonprofits do not extend medical coverage part-time employees, non-dependent children*, or dependent grandchildren. *Employers who do not offer coverage non-dependent children may not be in compliance with the ACA. The ACA requires that if coverage is offered children, eligibility cannot be conditioned upon financial dependence. It can only be conditioned upon relationship (birth or adopted children) and age (until 26). Opposite-Sex Domestic Partners 16.3% 17.1% Same-Sex Domestic Partners Do not cover Paid 100% by organization Cost shared by organization and employee Paid 100% by employee 46.4% 33.2% 47.7% 31.1% Full-Time Employees Part-Time Employees Dependent Children Foster Children 14.5% 16.4% 13.5% 85.0% 35.5% 52.0% 77.1% 48.4% 32.3% Opposite-Sex Spouses Same-Sex Spouses Non-Dependent Children Dependent Grandchildren 16.1% 16.2% 12.8% 13.2% 21.3% 23.3% 75.9% 71.1% 65.4% 61.9% Statistics less than 5% are not labeled Page 15

16 Funding of Additional Benefits. The cost of dental coverage is most commonly shared by employer and employee, as noted by 60% of participants. About 25% of employers cover the full cost of dental coverage for employees. Life insurance is most often covered 100% by the employer, as indicated by nearly 85% of participants. The majority of surveyed nonprofits also cover the cost of long-term disability, 71.4%, and short-term disability, 53.3%. Funding of employer-sponsored vision is fairly evenly split between employer-paid and cost shared. Almost 25% of participants only offer voluntary vision (employee-paid), and nearly 30% do not offer vision coverage at all. Paid in full by employer Cost shared by employer and employee Employer-paid base plan with employee buy-up Employee-paid (voluntary) Do not offer 5.3% 10.5% 26.9% 7.6% 12.5% 10.1% Dental Life Long-Term Disability 59.6% 83.5% 71.4% 17.4% 28.3% 18.7% Short-Term Disability 21.0% 53.3% Vision 27.7% 24.7% 6.0% Statistics less than 5% are not labeled Page 16

17 Monthly Employee Payroll Deduction for the Medical Plan with the Most Enrolled Participants. Employee Only - Employee Payroll Deduction Employee Plus Child(ren) - Employee Payroll Deduction None 14.4% None 6.5% Less than $ % Less than $50 1.9% $50 $ % $50 $ % $101 $ % $101 $ % $151 $ % $151 $ % $201 $ % $201 $ % $251 $ % $251 $ % $301 $ % $301 $ % $401 $ % $401 $ % $501 $ % $501 $ % $601 $ % $601 $ % More than $ % More than $ % Employee Plus Spouse - Employee Payroll Deduction Employee Plus Family - Employee Payroll Deduction None 7.7% None 5.6% Less than $50 1.9% Less than $50 1.9% $50 $100 $101 $ % 11.6% $50 $100 $101 $ % 6.9% $151 $ % $151 $ % $201 $ % $201 $ % $251 $ % $251 $ % $301 $ % $301 $ % $401 $500 $501 $ % 7.1% $401 $500 $501 $ % 12.5% $601 $ % $601 $ % More than $ % More than $ % Page 17

18 Annual Percentage of Premium Employer Contribution for the Medical Plan with the Most Enrolled Participants. Employee Only - Percentage of Premium Contribution Employee Plus Family - Percentage of Premium Contribution 34.6% 36.5% 30.3% 13.0% 17.4% 13.8% 10.8% 9.6% 6.5% 3.8% 4.3% 7.6% 7.8% 4.2% Less than 25% 25% 40% 41% 55% 56% 70% 71% 85% 86% 99% 100% Less than 25% 25% 40% 41% 55% 56% 70% 71% 85% 86% 99% 100% Employee Plus Dependent - Percentage of Premium Contribution 36.6% 13.4% 16.5% 15.9% 6.7% 6.1% 4.9% Less than 25% 25% 40% 41% 55% 56% 70% 71% 85% 86% 99% 100% Page 18

19 Annual Fixed Dollar Amount Employer Contribution for the Medical Plan with the Most Enrolled Participants. Employee Only - Fixed Dollar Contribution Employee Plus Family - Fixed Dollar Contribution 26.9% 27.1% 22.9% 19.2% 19.2% 18.8% Less than $5,000 $5,000 $5,999 $6,000 $6, % $7,000 $7, % $8,000 $8, % $9,000 $9, % 3.8% $10,000 $11,999 $12,000 $13, % 7.7% $14,000 $15,999 $16,000 or more Less than $5,000 $5,000 $5, % $6,000 $6, % $7,000 $7, % $8,000 $8, % $9,000 $9, % $10,000 $11, % $12,000 $13, % $14,000 $16,000 or $15,999 more Employee Plus Dependent - Fixed Dollar Contribution 26.1% 17.4% 17.4% 8.7% 4.3% 6.5% 6.5% 4.3% 2.2% 6.5% Less than $5,000 $5,000 $5,999 $6,000 $6,999 $7,000 $7,999 $8,000 $8,999 $9,000 $9,999 $10,000 $11,999 $12,000 $13,999 $14,000 $16,000 or $15,999 more Page 19

20 COPAYS, COINSURANCE, AND DEDUCTIBLES In-Network PCP and Specialist Copayment Amounts for the Medical Plan with the Most Enrolled Participants. The copayment (copay) amount for nonprofit medical plans is most often between $20 and $35 for a primary care physician (PCP), as reported by 75.1% of surveyed nonprofits. For a specialist, the copay is most often between $40 and $45, as reported by 33.3% of surveyed nonprofits. In-Network PCP and Specialist Coinsurance Amounts for the Medical Plan with the Most Enrolled Participants. The coinsurance amount for nonprofit medical plans is often less than 10% for both primary care physicians (PCPs), as reported by 38.9% of surveyed nonprofits, and specialists, as reported by 39.3% of surveyed nonprofits. None of our participants reported a copay of more than $60 for a PCP, and only 6.4% reported that their copay was this high for a specialist. Less than 10% 38.9% 39.3% 10% 15% 14.8% 14.0% Less than $20 6.4% 16.8% 20% 25% 24.1% 21.5% $20 $ % 38.5% 30% 35% 6.5% 6.5% $30 $ % 36.6% 40% 45% 0.9% 1.9% $40 $45 4.3% 33.3% 50% 55% 4.6% 5.6% $50 $55 More than $60 0.0% 3.7% 6.4% 22.4% PCP 60% 65% 70% or more 0.0% 0.0% 0.0% 10.2% 11.2% PCP Specialist Specialist Page 20

21 Annual, In-Network Deductible for the MEDICAL PLAN with the Most Enrolled Participants. PPO Plan - Annual, In-Network Deductible POS Plan - Annual, In-Network Deductible $0 32.6% $0 38.7% $1 $ % $1 $ % $1,000 $2, % $1,000 $2, % $2,500 $3, % $2,500 $3, % $4,000 $5, % $4,000 $5, % $5,500 $6, % $5,500 $6, % $7,000 $8, % $7,000 $8, % $9,000 $14, % $9,000 $14, % HMO Plan - Annual, In-Network Deductible EPO Plan - Annual, In-Network Deductible $0 44.8% $0 34.0% $1 $ % $1 $ % $1,000 $2, % $1,000 $2, % $2,500 $3, % $2,500 $3, % $4,000 $5, % $4,000 $5, % $5,500 $6, % $5,500 $6, % $7,000 $8, % $7,000 $8, % $9,000 $14, % $9,000 $14, % Page 21

22 Annual, IN-NETWORK Deductible for the DENTAL PLAN with the Most Enrolled Participants. What s the difference between copays, coinsurance, and deductibles? $0 $1 $24 $25 $49 $50 $99 $100 $149 $150 $199 $200 $249 $250 $299 $300 or more 3.8% 1.9% 3.2% 0.6% 1.3% 4.4% 12.7% 33.5% 38.6% Copays/ Copayments Definition Example A fixed amount you pay for healthcare services that is typically paid at the time of service. Copayments vary by plan and can change depending on the type of care you receive. The copayment you owe when you visit your primary care physician (PCP) might be $25. However, your copayment may be higher if you go the emergency room, a specialist, or an out-of-network docr. Annual, OUT-OF-NETWORK Deductible for the DENTAL PLAN with the Most Enrolled Participants. Coinsurance Definition Your share of the cost of a covered health care service, calculated as a percentage of your plan s allowed amount for that service. You will start paying coinsurance once you ve met your plan s deductible. $0 10.6% Example If your health insurance or plan s allowed amount for an office visit is $100 and you ve already met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan will pay $80. $1 $24 3.5% $25 $49 $50 $99 $100 $ % 8.5% 47.2% Definition The amount you owe for health care services before your health insurance or plan begins pay. $150 $199 $200 $249 $250 $299 $300 or more 0.7% 0.0% 7.0% 12.0% Deductibles Example For example, if your deductible is $2,500, you will pay 100% of the cost of covered health care services until you ve paid $2,500. After that, you ll share the cost with your plan through copays and coinsurance. The deductible may not apply all services. Page 22

23 PRESCRIPTIONS Prescription Drug Plans. The majority of surveyed nonprofits offer a three tier prescription drug plan employees, as indicated by 66% of participants. What do prescription drug tiers mean? Drug tiers divide prescription drugs in different levels of cost. Drugs in Tier 1 will be the least expensive, while drugs in Tier 4 will be the most expensive. First-Tier Drugs Often includes generic medications. 12.3% Plan pays once deductible is met 4.3% Single tier Second-Tier Drugs Third-Tier Drugs Often includes preferred brand name medications. Often includes non-preferred brand name medications. Fourth-Tier Drugs Often includes specialty medications. Single Tier Plan: Payment is the same regardless of the drug. 8.6% Two tiers 66.0% Three tiers Two Tier Plan: Prescription drugs will typically be grouped in two levels of payment: Tier 1: Low cost, generic drugs Tier 2: Higher cost, brand-name drugs Three Tier Plan: Prescription drugs will typically be grouped in three levels of payment: Tier 1: Low cost, generic drugs Tier 2: Intermediate cost for specially selected brand-name drugs Tier 3: Highest cost for specially selected brand-name drugs 8.6% Four tiers Four Tier Plan: Prescription drugs will typically be grouped in four levels of payment: Tier 1: Low cost, generic drugs Tier 2: Intermediate cost for specially selected brand-name drugs Tier 3: Higher cost for specially selected brand-name drugs Tier 4: Highest cost for specially selected brand-name drugs Page 23

24 30-day Supply (Retail) Copayment Amounts for the Prescription Drug Plan with the Most Enrolled Employees. 30-day Supply (Retail) Coinsurance Amounts for the Prescription Drug Plan with the Most Enrolled Employees. First-Tier Drugs Second-Tier Drugs First-Tier Drugs Second-Tier Drugs 17.1% 19.1% 10.3% 20.0% 20.0% 80.7% 67.6% 80.0% 20.0% 60.0% 22.6% Third-Tier Drugs 6.5% 18.5% 10.5% Fourth-Tier Drugs 10.5% 10.5% 15.8% 14.8 Third-Tier Drugs Fourth-Tier Drugs 46.8% 52.6% 33.3% 51.9% 33.3% 50.0% 16.7% Specialty Drugs 50.0% 10.0% 10.0% 20.0% Less than $20 $20 $39 $40 $59 $60 $79 $80 $99 $100 or more 25.0% Specialty Drugs 37.5% 37.5% Less than 40% 40% 89% 90% 100% Statistics less than 5% are not labeled Statistics less than 5% are not labeled Page 24

25 COMPLIANCE Understanding Healthcare Reform (ACA). More than 50% of nonprofits report that they have very little no understanding of how Healthcare Reform (ACA) and its reporting requirements apply their organization. INSIGHT: Nonprofits Growing Less Confident in their Understanding of Healthcare Reform (ACA) 4.9% 38.3% 14.8% 14.8% 27.2% Extremely thorough understanding Very thorough understanding Moderate understanding Very little understanding No understanding Nonprofits reporting a VERY EXTREMELY thorough understanding of Healthcare Reform Percentage % Cost of Healthcare Reform (ACA) Compliance. 56.4% of nonprofits have not yet calculated the cost of compliance with Healthcare Reform (ACA). This number has decreased slightly over the last year, from 60.5% in Nonprofits reporting VERY LITTLE NO understanding of Healthcare Reform Percentage % 7.4% % 12.9% 7.4% 16.0% Raises expenses less than 5% Raises expenses 5% 10% Raises expenses more than 10% It will not raise expenses Have not calculated the cost How can you learn more about Healthcare Reform (ACA)? Check out our Healthcare Reform Kit at: ppibenefits.com/hcr-kit. The kit includes: Employer Action Overview, including how PPI can help Healthcare Reform Timeline Employer Mandate Flowchart Summary of the Impact on Employees And more! Page 25

26 Cost-Saving Strategies in Response Rising Costs. Increasing employee contributions, offering a high deductible medical plan (HDHP), and implementing or expanding a wellness program with incentives are among the p cost-saving strategies implemented by nonprofit employers in response rising healthcare costs. These results are consistent with those of Among the least likely cost-saving strategies are reduce or eliminate dependent coverage, restrict eligibility for coverage, and offer a Minimum Value plan only. We have already implemented this We plan implement this in the next year We plan implement this in the next 3 years We plan implement this at some point but we aren t sure when We do not plan implement this Increase employee contributions 41.8% 11.0% 6.8% 15.8% 24.7% Reduce or drop certain benefits 15.8% 9.0% 7.5% 9.8% 57.9% Reduce or eliminate dependent coverage 5.6% 7.1% 82.5% Offer a high-deductible medical plan 38.7% 5.6% 17.6% 34.5% Extend the new hire waiting period 7.7% 6.9% 81.5% Restrict eligibility for coverage 6.3% 88.3% Move a private exchange marketplace 12.6% 79.5% Change a defined contribution model Replace some benefits with employee-paid voluntary plans Offer a Minimum Value plan ONLY 11.9% 9.5% 71.4% 10.5% 12.9% 70.2% 10.4% 82.4% Consolidate administration 15.2% 7.2% 8.0% 67.2% Wellness incentives 20.6% 9.2% 13.7% 26.0% 30.5% Statistics less than 5% are not labeled Page 26

27 INSIGHT: Nonprofits Show a Slow, but Steadily Growing Interest in Private Exchange Marketplaces Compliance with State and Federal Regulations. More than 90% of nonprofits are very extremely confident that their benefit plans are compliant with state and federal regulations. Only 1.2% are slightly not at all confident. 0.6% 0.6% Nonprofits who plan move a private exchange marketplace Percentage % % 5.9% 50.9% Extremely confident Very confident Moderately confident Slightly confident Not at all confident 100 Nonprofits who DO NOT plan move a private exchange marketplace Percentage % 2015 Likelihood Discontinue Healthcare Benefits and Send Employees a State or Federal Healthcare Exchange. Almost 80% of surveyed nonprofits are not at all likely discontinue healthcare benefits and send employees a state or federal exchange. 60 Why Are More Nonprofits Considering Private Exchange Marketplaces? 20.9% Defined contribution funding allows for more predictable cost control Retail-like shopping experience with extensive plan choice Decision support and educational ols Reduced administrative burden on human resources departments 79.1% Very likely Moderately likely Not at all likely Page 27

28 CONCLUSION 2015 Trend Opportunity for Nonprofit Employers Nonprofit employers are struggling understand and maintain compliance with the complex tracking and reporting requirements put in place by the Affordable Care Act (ACA). Gain a better understanding of the Affordable Care Act (ACA) and develop a plan comply with 2015/2016 requirements. Look your benefits administrar or broker for ACA information and service solutions Leverage data collection and reporting from Benefits, Payroll, and HRIS systems Access PPI s Healthcare Reform Kit at ppibenefits.com/hcr-kit Consumer directed health plans (CDHPs) and tax advantage spending accounts continue gain momentum among nonprofit employers. Consider the cost benefits and higher deductibles offered by consumer directed health plans (CDHPs) and tax advantage spending accounts. Assumes that employees are better managers of their overall healthcare expenses and encourages careful consideration of costly procedures Voluntary, employee-paid benefits are growing in popularity as attractive, supplemental benefit options. Adding employee-paid, voluntary plans benefits packages may encourage enrollment in consumer directed health plans (CDHPs) and reduce employees overall out-of-pocket expenses. Offers employees more choice, at little no expense for the employer Aids in employee retention efforts Benefits administration services, such as online employee self-service, are increasing in prevalence as nonprofit employers struggle with the volume of data they must maintain comply with new regulations. Evaluate the option of switching online employee self-service lessen the strain on human resources and offer employees a more favorable enrollment experience. Eliminates time-consuming, inefficient, and tedious paper processes Increases security of employees personal and identifiable information Employees gain access a 24/7 enrollment portal with benefits information Page 28

29 OVERVIEW OF PARTICIPANTS The 2015 Nonprofit Employee Benefits Survey was conducted over a period of four weeks, beginning March 9, 2015 and ending April 3, A tal of 299 responses were received, representing a 16% increase over last year s participation. The majority of responses were submitted by human resources professionals at mid-sized private nonprofits located in northeastern United States. Company Size. 10.5% 9.3% Nonprofit Location. 18.2% 46.1% 15.9% Less than 20 employees employees employees employees More than 500 employees 3.1% 1.9% 91.9% 501(c) Classifications. 0.8% 2.3% 13.3% Northeast Midwest West South Southwest 86.7% 501(c)(3) - Charitable Organizations (Public Charity or Private Foundation) All other 501(c) classifications Page 29

30 Nonprofit Classifications. Participant Job Title. 24.4% Human Services 3.9% Mental Health & Crisis Intervention Benefits Manager/ Direcr/Coordinar CFO/Controller/ Direcr of Finance 13.3% 11.3% COO/Operations Direcr/Manager 2.3% Executive Direcr/ President/CEO 6.3% 15.9% Healthcare 3.1% Arts, Culture, & Humanities Human Resources Manager/Direcr/ Coordinar Office Manager 6.3% 48.0% Program Manager/ Direcr/Coordinar 1.2% Other 11.3% 15.5% 2.3% Education Environment 5.8% Housing & Shelter 2.7% Volunteerism & Grant Making Foundations Page 30

31 ABOUT PPI PPI Benefit Solutions, working exclusively through benefits brokers, helps smaller, mid-sized employers relieve the day--day challenges of managing an employee benefits program. With over 40 years of benefits administration experience working with nonprofit organizations, PPI leverages strategic relationships with a broad array of nationally recognized insurance carriers and powerful, web-based technology provide a single solution for multiple carrier enrollments and eligibility processing (including online enrollment and employee self-service), electronic eligibility data and discrepancy management, true premium billing and payments, COBRA administration, and member advocacy services, all at little or no cost the employer. PPI (Professional Pensions Inc., dba PPI Benefit Solutions) is a subsidiary of NFP Corp. (NFP). For more information, visit ABOUT THE SURVEY Supporting the nonprofit community with insurance and service solutions that meet unique fiscal and management needs is a rich part of our hisry and value system. As a result, we continually strive improve the way we support the benefit selection and management process. In 2009, we recognized that most compensation and benefit surveys did not target smaller, private nonprofit organizations and offered very little benefits-specific data. We set out close that gap and developed an annual survey that would help our nonprofit clients benchmark their benefit plans against organizations of similar size and location. Each year, our Annual Nonprofit Employee Benefits Survey continues grow in number of participants, and now reaches far beyond our own nonprofit client base. As the health care marketplace continues evolve, PPI will continue provide valuable insight in the fundamental concerns and challenges of nonprofit benefit plan sponsors. Facts Year Established PPI Employees...55 Clients...1,381 Covered Members...140,000 Annual Premium...$418 million Page 31

32 A: 10 Research Pkwy. Ste. 200, Wallingford, CT P: W: This material was created by PPI Benefit Solutions provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. PPI is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). Copyright 2015, Professional Pensions, Inc.