OMG! We re Thinking of Moving to a Private Health Care Exchange What Do I Tell My Employees? July 16, 2014

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1 OMG! We re Thinking of Moving to a Private Health Care Exchange What Do I Tell My Employees? July 16, 2014

2 Agenda How Did We Get Here? Private Exchange 101 Telling Your Story The Employee Experience Nuts and Bolts The Takeaway 1

3 Fear Factor How many of you are considering moving your employees to a private health care exchange in the next 3 years? What has the conversation with senior leadership been like? What are the driving factors that initiated the conversation? What are your most pressing concerns about making this move? 2

4 Agenda How Did We Get Here? Private Exchange 101 Telling Your Story The Employee Experience Nuts and Bolts The Takeaway 3

5 Fee-for-service Freedom of choice Annual deductible Coinsurance UCR charge or schedule Traditional Healthcare Dominated Prior to 1970 Claim forms and reimbursement checks Doctors and other medical professionals made independent healthcare decisions. 4

6 Along Came HMOs Prepaid arrangements Primary Care Physicians (PCPs) Referrals required No deductible No coinsurance No paperwork No choice 5

7 Early Competitive Response New Cost- Containment Features Precertification Second surgical opinions Nurse phone lines Case management 6

8 Preferred Provider Organizations (PPOs) Cross between fee-for-service plans and HMOs Contract with provider network Can go out of network No referrals PPOs offer employees a lower-cost alternative plus a safety net. 7

9 Impact of Managed Care Employees still don t know the true cost of healthcare services Employees lack sense of ownership for true cost Information on quality, outcomes and provider training is not required or readily available 8

10 What Employers Did to Better Manage Costs Raised deductibles, copays and coinsurance Increased employee contributions Introduced tiered and specialty drug programs Cut back or eliminated retiree health benefits 9

11 Choose healthcare products like you choose any other consumer product Identify need Research alternatives Compare quality and price Make informed decision Consumerism 10

12 Consumer-Driven Health Plans (CDHPs) Plan design is consistent with consumerism and wellness messages Encourages employee responsibility and accountability High deductible Transparent costs Health Reimbursement Arrangement (HRA) Deductible Company-Funded Portion of Deductible Employee-Paid Portion of Deductible Traditional Health Coverage Deductible Traditional Health Coverage + Health Savings Account (HSA) Health Savings Account 11

13 Make costs more transparent Make employees more responsible for the money they spend Provide information about quality, outcomes and training Introduce wellness incentive programs Implement value-based health plans Where do we go from here? 12

14 Now: Emergence of Private Health Exchanges DC-ification of health care plans is it just more cost shifting? Employee awareness and involvement ( don t sit back take action ) Employee responsibility to make educated, cost-effective health care decisions Opportunities to get healthier maybe 13

15 Agenda How Did We Get Here? Private Exchange 101 Telling Your Story The Employee Experience Nuts and Bolts The Takeaway 14

16 Private Exchange 101 What is a Health Insurance Exchange? Online marketplace through which individuals can purchase health insurance and evaluate different plan designs, carriers and/or networks Similar concept to a retail website, like Two types of Exchanges Public Exchanges ( Marketplaces ) Private Exchanges 15

17 Private Exchange 101 What is a Public Health Insurance Marketplace? Created by the Affordable Care Act Individuals may go online and select their own plan, at the level they want May be eligible for a federal premium assistance tax credit ( subsidy ) 16

18 Private Exchange 101 What is a Private Health Insurance Exchange? Shares features similar with public marketplaces, but with key differences: May use a defined contribution (DC) approach to EE contributions Operated by private sector companies Cannot take advantage of federal subsidies Low-income employees purchasing coverage on a Private Exchange will not receive government subsidies Often include a wide array of other benefit offerings in their portfolio 17

19 Private Exchange 101 What is a Private Health Insurance Exchange? (continued) Two types of delivery models: 1. Single-Carrier Exchanges: Run by insurers, offering variety only on plan design and network options 2. Multi-Carrier Exchanges: Run by third parties; include numerous plan design options from many insurers A private exchange is many potential solutions, not a single solution Many companies offer exchange solutions Different models, varying plan designs, varying number of available plans Can be a dramatic change OR a virtual non-event ( It depends ) 18

20 Private Exchange 101 Lessons From the Affordable Care Act How do you think the recent public exchange rollout may influence your employees reaction to a private exchange? Would you even call it a private exchange? 19

21 Agenda How Did We Get Here? Private Exchange 101 Telling Your Story The Employee Experience Nuts and Bolts The Takeaway 20

22 Telling Your Story What is your Organizational Brand? Identity: Who We Are Mission: Why We Must Exist Values: What We Stand For Legend: How We Are Remembered Reward: What s in it for me? How would you describe your organization brand? How does a private exchange fit the story of your organization brand? How would you describe where you are on the continuum of relating to your employees more paternalistic vs. more independent? 21

23 What s your organization s philosophy about offering health care? Are you offering more choice and a chance to buy down? Are you offering access to tools/ancillary benefits not offered now? Are you getting out of the benefits business altogether? To what degree do you want to emphasize cost control? Do you want to create a more self-reliant employee population? What kinds of health care plans do you offer now? How are your plans administered? Telling Your Story What additional responsibility do you want employees to take for learning about coverage options? About controlling costs theirs and yours? About being more informed on the path to healthier behavior? 22

24 Telling Your Story Transparency is Key; Employees Want and Expect Honesty What are the results your organization expects? Make it relevant What is the financial driver of change? Will these changes save your organization money? How will your organization use the savings? Caution: Be careful about promised savings Less expensive doesn t always equal better There are no guarantees about future costs 23

25 Agenda How Did We Get Here? Private Exchange 101 Telling Your Story The Employee Experience Nuts and Bolts The Takeaway 24

26 The Employee Experience How do employees access information now? What responsibilities do they have for being involved health care consumers? What decision tools are available to them? What makes your population unique (e.g., technology accessibility, age, socioeconomic diversity, work environment)? What unusual engagement and communications challenges does your population present you with? 25

27 The Employee Experience What could moving to a private exchange mean to your employees? Positives More choice/freedom Best quality and price, based on vendor s negotiating power with insurance companies More tools (after years of being told to take responsibility without being given the tools to do so, now is the time) 26

28 The Employee Experience What could moving to a private exchange mean to your employees? Challenges Change = bad Sense of abandonment Feeling overwhelmed by choice, additional responsibility Just tell me what to do mentality Cutting through the noise Employees have limited time/desire 27

29 How can you know? The Employee Experience Focus groups Concern: message control Natural message dissemination 28

30 The Employee Experience What You Say You have more choice You have new tools at your fingertips Contact the Exchange if you have questions Now you can learn the real cost of medical tests and procedures, and find the most cost-effective, high quality care options You will have lower-cost coverage options available What Employees Hear; What They Think I have more decisions to make; Spare me I m on overload I have to learn how to use something new; I don t know how to use the last thing that was new Now I have to call another customer service department and deal with them; I want to speak with someone I know and trust I m being asked to make decisions I m not equipped to make; I don t have the time to do this I ll have lower-quality health care options available; How will I know if I have the right coverage? 29

31 The Employee Experience Continued Evolution of Health Care Decision Making Need for basic benefits education Not business as usual time investment Helping employees educate themselves about the true cost Health Care Cost Institute Initiative: 2015 Aetna, Humana, UnitedHealthcare 30

32 The Employee Experience Employee Impact Will be on a Continuum How ready for change are employees? Perceived magnitude of change depends on current situation: Using the web for the first time to enroll/ get benefits information? Expanding choice can create confusion Change in organization brand, EVP? Just a new website with new choices OR an entirely new approach to healthcare 31

33 Agenda How Did We Get Here? Private Exchange 101 Telling Your Story The Employee Experience Nuts and Bolts The Takeaway 32

34 Nuts and Bolts Developing a Communications Plan 1 Establish a benefits brand 2 Consistency and persistency of key messages 3 Support of senior leadership 4 Know your audience(s) 33

35 Communications Logistics Process Gather support Announce Educate Who What How When Follow-up Nuts and Bolts 34

36 Nuts and Bolts Use Exchange Vendor Communications The basic package Announcement ( /Postcard/Letter) Brochure/User Guide FAQs Reminder Postcard Why (and how) to supplement the basics Important: Co-brand/co-message all information 35

37 Nuts and Bolts Keys to Success Simplify complex choices Don t be afraid to color outside the lines Start early 36

38 Gathering Feedback Nuts and Bolts What is your feedback mechanism? Adjust your communications plan based on feedback How do you handle unexpected hot button issues/unanticipated problems? 37

39 Post-implementation Nuts and Bolts Establish the role of HR Who do employees go to? Coordination with carrier/insurers Don t stop communicating Rely on your established brand to shape future communications 38

40 Agenda How Did We Get Here? Private Exchange 101 Telling Your Story The Employee Experience Nuts and Bolts The Takeaway 39

41 Temper expectations Don t oversell The Takeaway What do you want employees to know, feel and do as a result of changes? This is only as big a deal as you make it it doesn t have to be an OMG! moment 40

42 Andrew Kaplan T: Erin Naumann T: