HealthFlex Plan Sponsor Update — May 2020 Plan Sponsor Update
Agenda • Looking Ahead: 2021 – 2021 HealthFlex Premiums and Rating Methodology – 2021 Plan Changes and Rationale • Looking Back: 2019 – Financial Results and Experience – Summary Reporting • 2020 Updates: AE Results and Other Updates 2 | Wespath 2 | Wespath
2021 HealthFlex Rates and Plan Changes
2019: Overall a Really Good Year!
2021 Premium Increases Medical Dental +2.1% 0% Overall to to By Conference +1% +8.9% -10% +10% 5 | Wespath 5 | Wespath
2021 Medical Premium Increases by Sponsor 10% Increases 9% Ranged 8% from 1-8.9% 7% 6% 5% 4% 3% 2% 1% 0% 6 | Wespath 6 | Wespath
Vision Plan Premium increases Exam Core Remains at $0 (included with Medical) • $2.08 /monthly increase Full Benefit improvement — Service for individuals frames every 12 months • $5.36 /monthly increase for families Premier Slight decrease Benefit improvement — glasses + contacts, or 2 nd pair of glasses 7 | Wespath 7 | Wespath
Why Such a Favorable Result? • Some good luck • Large/growing population helps mitigate inevitable catastrophic claims • Greater migration into HRA/HSA plans promotes consumerism and lower net cost • Focus on well-being helps manage potential costs 8 | Wespath 8 | Wespath
HealthFlex: Low Average Annual Rate Trend 8% 7% Industry Average Annualized Trend: 6% 5-6% 5% 4% HealthFlex 3% Average Trend: 2% 3.2% 1% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 -1% -2% 9 | Wespath 9 | Wespath
2021: 2.1% average rate increase includes slightly more valuable plans — making a good year even better!
2021 HealthFlex Plan Design Changes HSA Plans HRA Plans B1000 H1500 H2000 H3000 C2000 C3000 B1000 Health Account $750/$1,500 $500/$1,000 None $1,000/$2,000 $250/$500 None Contributions Deductible $1,500/$3,000 $2,000/$4,000 $3,000/$6,000 $2,000/$4,000 $3,000/$6,000 $1,000/$2,000 If > 1 person is covered the family deductible always applies Co-insurance 80% │ 20% 70% │ 30% 40% │ 60% 80% │ 20% 50% │ 50% 80% │ 20% Out-of-Pocket Max $5,000/ $5,000/ $6,000/ $5,000/ $5,000/ $5,000/ (OOP) $10,000 $10,000 $12,000 $10,000 $10,000 $10,000 Pharmacy Generics: $10-$25 60% after Generics: $10-$25 Generics: Highlights after deductible deductible $10-$25 Preferred brand: 30% Preferred brand 30% Preferred after deductible brand: 30% 11 | Wespath 11 | Wespath
2021 Change — Maximum Out-of-Pocket Cost Reduced/Simplified Out-of-Pocket Maximums • $5,000/$10,000 for all plans except H3000 • $6,000/$12,000 for H3000 Rationale Net increase to overall costs: 1 – 3% per plan Participant disruption: Zero to positive 12 | Wespath 12 | Wespath
2021 Change — Refined Pharmacy Cost-Share Simple • Transparent • Promoting Consumerism • $10/$25 for 30/90 day generics • 30% coinsurance for formulary brand Rx ($30/$75 minimum – $65/165 max) • 40% coinsurance for non-formulary brand Rx ($50/$125 minimum – $120/$300 max) • HSA plans require deductible first (except preventive list) • H3000 = 60% coinsurance with no min/max (except OOP) We continue to explore point of sale rebates for the future! 13 | Wespath 13 | Wespath
Possible Change in Pharmacy Benefits Manager • Wespath is currently mid-RFP for 1/1/21 with our Church Benefits Association peers in our Pharmacy Benefits Coalition • Initial financial offer from OptumRx was not competitive • Wespath is reviewing options and expects to make an announcement of the final decision later this month. 14 | Wespath 14 | Wespath
Other Minor Rate Adjustments for 2021 Dental Tier Structure • Historically, dental tier ratios have varied widely among plan sponsors ─ Participant + 1 has ranged from: 1.66 – 2.27 ─ Participant + Family has ranged from: 2.33 – 3.13 • Industry claims experience suggests an appropriate ratio is 1:2:3 • Decision: Harmonize plan factors to 2.0 and 3.0 for all plan sponsors Reminder: Wespath completed a similar exercise for medical plans for 2020 15 | Wespath 15 | Wespath
HealthFlex Exchange for 2021 HealthFlex Exchange will be the only supported HealthFlex option in 2021 and beyond • All plan sponsors offer all 6 medical/3 dental/3 vision plans • Premium credit and default plan must be selected by June 30 • New for 2021: Dental/vision dependents can vary, but the participant must be enrolled in medical in order for dependents to be eligible for any plans (participant must be enrolled in dental/vision to cover dependents) ─ Exception: Split families where participant is covered in the Medicare plan and dependents remain on HealthFlex coverage 16 | Wespath 16 | Wespath
Looking Back — 2019 Financials and Reporting
How Did We Get to Such a Great Outcome? 2019 claims experience was slightly below expectations overall — even better for HRA/HSA plans! 18 | Wespath 18 | Wespath
Loss Ratio by Plan Type 150% HRA/HSA plans 116% 110% 110% 101% continue to have 97% 96% 100% 86% 83% significantly lower 72% 70% 69% loss ratios than the 60% PPO, even as 50% HRA/HSA population grows 0% Overall PPO HRA Plans HSA Plans 2017 2018 2019 2017 does not include rebates, about 7% impact 19 | Wespath 19 | Wespath
Average Paid Claims Per Member $700 $638 $566 $600 $518 $504 Lower per $470 $500 member cost in $368 $400 $333 HRA/HSA plans due to plan value, $300 $230 selection bias and $200 consumerism $100 $0 Overall PPO HRA Plans HSA Plans 2017 2018 2019 20 | Wespath 20 | Wespath
92% of Costs Are Direct Participant Costs Total HealthFlex 1.2% 1.3% Claims (medical, Rx, BH) 8.0% 3.4% Health Account Funding Well-being Program Well-being Incentives Administration 86.1% The vast majority (92%) of dollars spent by HealthFlex directly benefit participants: Claims, account funding, incentives 21 | Wespath 21 | Wespath
What Makes Up 8% Administrative Costs? • Vendor partner administrative service fees: – BCBS, UHC, OptumRx, Cigna – Basic Vision (VSP) • Wespath staff and overhead • Systems costs (Businessolver) • Professional services and communications 22 | Wespath 22 | Wespath
Variability by Plan Sponsor Percent of administrative costs is higher in low-claims year Conversely, if claims experience is higher than planned, administrative costs make up a lower percentage of total premiums 23 | Wespath 23 | Wespath
Top Conditions and Medications Mostly unchanged from 2018 Costly medications: Costly conditions: • Diabetes • Cancers • Chronic Inflammatory • Diabetes • Cancer • Musculoskeletal • Hemophilia • Circulatory 24 | Wespath 24 | Wespath
High Cost Claims Have Significant Impact Allowed claims cost per member per year: • For participants 506 17,231 with claims <$50K: 3% of claimants participants participants $4,582 = 42% of claims $57.2 $78.9 • For participants million million with claims >$50K: $113,109 • For participants with claims >$200K: $306,930 Claimants <$50K High Cost Claimants (>$50K) 25 | Wespath 25 | Wespath
Extremely High Cost Medications Hemlibra Zolgensma and Afstyla For pediatric patients <2 with spinal muscular For hemophilia atrophy Over $1 million $2.1 million for 2 patients in per patient 2019 26 | Wespath 26 | Wespath
How Do We Try To Control Costs? • Promote better consumerism through HRA/HSA plans • Purchase medications through a coalition • Medical necessity rules, prior authorizations, and case management • Encourage healthy behaviors through the well-being programs Commitment to stewardship and sustainability 27 | Wespath 27 | Wespath
Wise Consumerism Saves Money • Generic medications when possible • Shopping around for non-emergency services (X-rays or lab services) • Using the lowest cost, appropriate site of care (e.g. nurse line, walk-in clinic, telemedicine) • Encouraging participants to treat plan dollars as their own www.myalex.com/healthflex/mmyp 28 | Wespath 28 | Wespath
Lowest Cost, Appropriate Site of Care • Telemedicine or walk-in clinics vs. Urgent Care or emergency room if not an emergency • Using Nurseline for advice if unsure • Leveraging Blueprint for Wellness screening to avoid expensive lab tests 29 | Wespath 29 | Wespath
Well-Being Programs Address Costly Areas 30 | Wespath 30 | Wespath
WebMD Coaching Results for 2019 Change in Risk from 2017-2019, as measured by HQ Coaching participants Coaching Non-Participants Coaching Participants showed greater % Categorized as High Risk +3.50% -1.00% improvement in % Categorized as Low Risk -4.70% +4.10% multiple risk areas Those Reporting compared those who Poor Emotional Health -1.10% -5.10% did not participate in Those Reporting High Stress -1.40% -6.90% coaching, even Those Reporting High Weight -6.60% -9.00% though coaching Those Reporting participants were on Poor Physical Activity -3.80% -6.00% average one year Those Reporting Poor Diet -3.60% -6.50% older. Total HQ Cohort = 5821, average age = 54.2; Coaching Cohort = 1717, average age = 55.1 31 | Wespath 31 | Wespath
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