HealthCare Exchange Solutions

May/June 2014

Exchange Connecting the Dots Between Private Exchanges and Wellness Are you asking the right compliance questions?

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INSIDE

FEATURE 11 Connecting the Dots Between Wellness and Private Exchanges As private health insurance exchanges continue to capture the attention of forward-thinking employers, advisors, health plans and other stake holders across the country, many have rightfully posed the question: will these exchanges actually deliver on the promise of a sustained reduction in employer health care spend?

While early customer data from Mercer and Aon Hewitt indicates that private exchanges have been effective in reducing costs in the short term, the jury is still out on private exchanges as a viable, long-term solution. However, among many of the emerging exchange experts, there has been a consensus forming that population health management will be an essential component of any effective private exchange solution.

In a continuation of our panel series on private exchanges, we asked five private exchange thought leaders to discuss the role of wellness in the realm of health exchanges.

7 Private Exchange Profile Customizing the Health Insurance Shopping Experience With private health insurance exchange enrollment projected to reach 40 million people by 2018, health plans are not thinking if they should offer employers private exchanges so much as how they will implement them and what 4 Publisher’s Letter CEO/Publisher Doug Field covers the latest trends in private exchanges and shares what’s happening at The Institute for HealthCare Consumerism around exchanges.

they’ll look like. The driving factor? Cost — to employers, their employees and the entire health care industry.

By Jeff Yaniga, VP of Exchanges, Connecture

9 Legal & Compliance Are You Asking the Right Questions?

Many of the private exchange strategies that employers are currently examining 5

Briefs & Innovations Keeping you up-to-date with the latest news, research and innovation in de ned contribution and health insurance exchanges.

DEPARTMENTS contemplate a private exchange offering “fully-insured” group health plans. Here, the employer contracts with an insurance company, effectively shifting all of the health risks of its employees to the insurer.

However, a private exchange may be utilized to offer “selfinsured” group health plans to employees, which allows the employer to continue to control and manage the employees’ utilization of health care.

By Chris Condeluci, Counsel, Venable LLP

HealthCare Exchange Solutions™ I www.TheIHCC.com I May/June 2014

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PUBLISHER

Exchange www.theihcc.com VOLUME 10 NO. 3 | MAY/JUNE 2014

Looking at the Complete Picture of Private Exchanges

Published by FieldMedia LLC 292 South Main Street, Suite 400 Alpharetta, GA 30009 Fax: 770.663.4409 CEO

Doug Field @ theihcc.com MANAGING DIRECTOR

At the recently completed 2014 FORUM & Expo, health exchanges were predictably a hot ticket item. Although private exchange adoption still remains relatively low, employers and brokers are seriously examining whether an exchange is right for them or their clients.

At a general session panel featuring experts from bswift, Employers Health, ConnectYourCare and PricewaterhouseCoopers, a common theme developed: employer-sponsored wellness initiatives will continue to have an important role in the era of health exchanges. And all exchange solutions should be seriously looking at how they will incorporate the health management aspect into their model.

Brent Macy

MANAGING EDITOR

Jonathan Field

SENIOR EDITOR

Heather Loveridge hloveridge@theihcc.com ACCOUNT MANAGER

Joni Lipson

MARKETING COMMUNICATIONS MANAGER

Lana Perry

In this pages of this issue, we’ve brought together a number of private exchange thought leaders to discuss how private exchanges and workplace wellness will continue to evolve symbiotically over the coming decade. Many thanks to John Kaegi, Healthstat; Brad Wolfsen, bswift; Sherri Bockhorst, Buck Consultants; Nancy Scola Lombaer, Laurus Strategies; and Stephanie Pronk and Mike Christie, Aon Hewitt, for their contributions.

During the week of FORUM & Expo, The Institute for HealthCare Consumerism also made a signi cant announcement regarding updates to its industry-leading private exchange resource, PrivateHealthCareEXCHANGES.com. Following a brief hiatus, the Web site is now updated with over 145 private exchange solutions and a new blog. Access to the database is now available to the public for a one-time $99 fee.

And nally, remember that nominations are currently open for the 2014 HealthCare Consumerism Superstars awards. In 2013, we launched “The Most Effective Private Exchange Implementation” award for employers, brokers or solution providers that have had considerable success with a private exchange.

ART DIRECTOR

Kellie Frissell

GRAPHIC DESIGN

Patrick Washington DIRECTOR OF EDUCATION SERVICES AND PROGRAMS

Dusty Rhodes CHAIRMAN OF IHC ADVISORY BOARD

Ronald E. Bachman, CEO, Healthcare Visions EDITORIAL ADVISORY BOARD

Kim Adler, Allstate; Diana Andersen, Zions Bancorporation; Bill Bennett; Doug Bulleit, DCS Health; Jon Comola, Wye River Group; John Hickman, Alston+Bird LLP; Tony Holmes, Sanders McConnell, TSYS Healthcare; Roy Ramthun, HSA Consulting Services LLC; John Young, Consumerdriven LLC WEBMASTERS

Kevin Carnegie

After awarding Darden Restaraunts, PrimePay and Analysts International Corporation the initial exchange awards last year, we’re looking for another three recipients for 2014. You can nominate a colleague, partner, client or vendor by visiting our homepage. Nominations close on August 15, and winners will be announced at the 2014 FORUM West in Las Vegas this November.

Tom Becher ASSOCIATE WEB ADMINISTRATOR

Tim Hemendinger

DIRECTOR OF CONFERENCE SPONSORSHIP/ CORPORATE MEMBERSHIP/REPRINTS

Rogers Beasley

Sincerely, BUSINESS MANAGER

Karen Raudabaugh

Doug Field CEO/Publisher dfield@fieldmedia.com

™ Volume 10 Issue 3 Copyright ©2014 by FieldMedia LLC. All rights reserved.

™ is a trademark of FieldMedia LLC. ™ is published eight times yearly by FieldMedia LLC., 292 South Main Street, Suite 400, Alpharetta, GA 30009. Periodical postage

TO SUBSCRIBE: Make checks and money orders payable to ™ magazine 292 S. Main Street, Suite 400, Alpharetta, GA following rates: single copy $7.50; $75.00/yr in the U.S., $105/yr in Canada and $170/yr international. Please contact FieldMedia at 404.671.9551 or PRINTED IN THE U.S.A. ™ is designed to provide both accurate and authoritative information with regard to the understanding that the publisher

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Send letters to the editor and editorial inquiries to the above address or to

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May/June 2014 I www.TheIHCC.com I HealthCare Exchange Solutions™

NEWS BRIEFS & INNOVATIONS

NEWS BRIEFS WageWorks Tapped as Provider of Consumer-Directed Benefits for Liazon Private Exchanges

employees. Employees can shop the AultCare Choices Marketplace using those funds, choosing their insurance from a range of medical, dental and visions plans.

WageWorks, Inc. has announced an agreement to be a national administration partner for flexible spending accounts, health reimbursement arrangements and health savings accounts for the Bright Choices Exchange® and other private exchanges powered

by Liazon Corporation. Liazon helps employers save money on their health care costs by setting predictable budgets while allowing employees to personalize their bene ts package with a selection of health, dental, vision, life, disability and other bene ts. As a national partner, WageWorks’ consumer-directed bene ts will be offered to employees via Liazon’s private exchanges throughout the United States.

HDH Group Launches Your SelectBenefits

Utah’s Avenue H Pioneers Small Business Health Care Exchange with PlanSource Technology

Principal Financial Group® announces an agreement with Liazon’s Bright Choices® as the rst private exchange access point for employer-sponsored group bene t plans. The Bright Choices Exchange is a private bene ts exchange where an employer can choose how much to spend each year on bene ts, then each employee determines how to spend their share of the money.

Through this exchange, The Principal will offer all ancillary group bene ts, including, dental, life insurance, disability insurance and critical illness.

PlanSource has announced that it successfully powered the rollout of the online health insurance marketplace and bene ts shopping platform for Utah’s small business health care exchange, Avenue H. Since 2010, Avenue H has helped Utah’s small businesses control costs and simplify their bene ts management, while offering expanded health coverage options to their employees. After three years, however, state of cials knew they needed to improve the ef ciency of their enrollment process, especially the manual intervention dictated by participating insurance carriers and the nature of the state’s program. When open enrollment for the Health Insurance Marketplace started on October 1, 2013, Utah of cials saw it as an opportunity to update their processes on a single endto-end solution.

Bloom Health Names Anudeep Parhar as Chief Technology Officer Bloom Health has announced the hiring of Anudeep Parhar as its chief technology of cer. Parhar will lead Bloom Health’s technology strategy including deployment and management of current technologies and evaluation, optimization and deployment of future platform tools. He will also oversee project de nition, engineering and platform development on Bloom’s technology stack. As a member of the executive leadership team, Parhar will help drive overall company strategy and future direction. Parhar has held leadership positions at companies in the Twin Cities including Digital River, Blue Cross and Blue Shield of Minnesota and Thomson Reuters.

AultCare Offers AultCare Choices Marketplace To Employer Groups Through ConnectedHealth AultCare, one of the largest hospital-based preferred provider organizations in the Midwest, has partnered with ConnectedHealth to launch AultCare Choices Marketplace, a consumer-focused e-commerce bene ts platform. With AultCare Choices Marketplace, the company’s employer clients will be able to set the contribution amount they want to allocate for each category of bene ts-eligible

The HDH Group has announced the availability of its new private exchange, Your SelectBene ts™. This online marketplace provides mid-size employers a comprehensive solution for better managing the costs and compliance requirements of their health bene t programs in the complex, post-health reform environment. It is the rst independent private health insurance exchange available that includes plans from Highmark and UPMC, along with other leading carriers.

The Principal Signs Private Benefits Exchange Agreement

Krauter & Company Advances its Private Exchange Platform with Advisory Services Employers are looking for the most effective way to control health care spend while continuing to meet the needs of a diverse workforce; many are turning to private exchanges. However, the popularity and rapid growth of private sector exchanges has also resulted in confusion and hesitation for companies faced with tackling increasing health care costs. Krauter & Company’s Private Health Exchange Solution Platform provides an innovative and timely approach to identify which exchange meets the client’s best interests while also evaluating more traditional strategies. With multiple established private exchange partnerships in place, Krauter & Company’s Exchange Services provides clients with a side by side analysis of traditional plans and multiple exchanges.

Benefit Express Releases Defined Contribution System, My Benefit Shoppe Bene t Express Services, LLC has released My Bene t Shoppe, a de ned contribution market for employee bene ts enrollment. When employers determine the money they will allocate to their employees for their annual bene ts, they can better predict and control their costs. Employees then log-in into My Bene t Shoppe, and through the de ned contribution approach, they can use credits to spend on the bene ts that they choose. With My Bene t Shoppe, employees may purchase insurance such as health, dental, life, disability and much more. Any amount in excess of the de ned contribution is taken from payroll deductions.

HealthCare Exchange Solutions™ I www.TheIHCC.com I May/June 2014

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N

PRIVATE EXCHANGE PROFILE

Customizing the Health Insurance Shopping Experience

BY JEFF YANIGA » VP OF EXCHANGES » CONNECTURE

With private health insurance exchange enrollment projected to reach 40 million people by 2018, health plans are not thinking if they should offer employers private exchanges so much as how they will implement them and what they’ll look like. The driving factor? Cost — to employers, their employees and the entire health care industry.

According to the Kaiser Family Foundation, health insurance premiums increased 160 percent during the past 12 years, far surpassing inflation that climbed 33 percent during the same period. That’s a strong basis to seek a smarter approach to health insurance coverage and control cost.

While the majority of employers used to feel health insurance was necessary to stay competitive, now less than half feel this way; 30 percent welcome the opportunity to shift these costs to employees and 24 percent to the government (Source: Harris Interactive).

The once sacred health insurance bene t is being viewed in a completely different way by employers today and trending that way in the future.

So the question is how should brokers, bene t consultants and health plans adapt? The answer is to make shopping for and purchasing health insurance easy, to offer value to the employer and their employees, and to build loyalty.

Connecture’s One Marketplace: An Intuitive Health Insurance Shopping Experience Connecture, Inc., a provider of Web-based information systems used to create health insurance marketplaces, has a unique view of the individual, leading to an easier and ultimately more costeffective health insurance shopping experience. Through its One Marketplace strategy – based on 15 years’ working with multiple plans, government entities and agents representing employers, and with successful experience integrating with other complex systems — Connecture tracks one record for each individual throughout their coverage history.

That means if employment status changes, coverage options shift, or someone moves from an individual to a family plan, they do not need to start from scratch. In fact, One Marketplace is built on the idea that all health insurance channels should be available to the consumer, either through their employer or directly.

How does it work? Depending on the employer, there are many private exchange options ranging from one designed to provide

health coverage through a single health plan with a de ned contribution to a much broader option that covers retirees, individuals and groups for health and ancillary services through a combination of partners with both a de ned contribution and de ned bene t option. Employers may also offer a health savings account.

Once in the exchange, consumers have a personalized shopping experience that tracks the degree to which they would like to interact, provides pre-loaded elds for convenience, and conducts cost-saving analysis that alerts consumers to things like upcoming Medicare options based in their age. Decision support questions are personalized for the user’s “season in life” and uncover recommendations for voluntary and ancillary products as well as medical products. Connecture’s marketplaces include easy-to-use decision support tools, such as click-to-chat/call, physician search, and an out-of-pocket cost calculator to determine overall cost – not just the monthly premium.

Connecture’s One Marketplace technology and analytics also recognize that some consumers are hesitant when shopping online for health insurance, especially for the rst time, and allow them to come back as often as necessary before making a purchase.

Health insurance is a signi cant nancial commitment, so it is critical the shopping experience is a good one and consumers feel empowered to do what’s right for them.

For the employer, private exchanges open up new channels for part-time workers and retirees, even as they move away from providing health care. But private exchanges should not be considered a short-term nancial cost curve strategy — they involve a major shift in behavior, transparency and a commitment to ensuring an experience for employees that is not intimidating.

Most employers want to get out of the health bene ts business to save money. This can be achieved by partnering with health plans that can provide an intuitive private exchange platform and guidance on how to make the best health coverage decisions. This will ultimately save money for employers and their employees, and impact nationwide health costs over time.

HealthCare Exchange Solutions™ I www.TheIHCC.com I May/June 2014

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LEGAL & COMPLIANCE

BY CHRISTOPHER E. CONDELUCI COUNSEL VENABLE LLP

Are You Asking the Right Questions?

M

any of the private exchange strategies that employers are currently examining contemplate a private exchange offering “fully-insured” group health plans.

Here, the employer contracts with an insurance company, effectively shifting all of the health risks of its employees to the insurer. However, a private exchange may be utilized to offer “self-insured” group health plans to employees, which allows the employer to continue to control and manage the employees’ utilization of health care. Interestingly, regardless of whether a fully-insured or self-insured employer chooses to partner with a private exchange, the legal obligations are essentially the same as they are today.

Tax Treatment of Employer Contributions Even if an employer adopts a “de ned contribution” funding strategy, the contributions used by an employee to purchase a health plan (fully-insured or self-insured) through a private exchange may be deducted by the employer as an “ordinary and necessary” business expense. These employer contributions are also not taxable to the employee for income and FICA tax purposes.

And, employee contributions for coverage under the plans may be made on a pre-tax basis through a Code section 125 cafeteria plan.

Obligations Under the Employee Retirement Income Security Act Regardless of whether an employer is offering fully-insured or selfinsured group health plans through a private exchange, the employer is subject to all of ERISA’s requirements (e.g., ERISA’s reporting and disclosure requirements, duciary responsibilities, and claims procedures).

In the case of a self-insured employer partnering with a private exchange, the employer would continue to enjoy “ERISA preemption,” which means, among other things, the self-insured employer would not

pay state premium taxes and the employer would not be required to comply with state insurance laws that mandate that certain bene ts be offered under the plans.

State Insurance Laws Speaking of state insurance laws, fully-insured group health plans offered through a private exchange would be required to comply with the bene t mandates in the state in which the health plans are issued (i.e., the “situs” state). Many states only require coverage of the bene t mandates of the “situs” state. However, some states require coverage of some or all of the “home” state’s bene t mandates, regardless of where the plans are sitused.

Note: fully-insured employers are required to pay premium taxes in all states in which their employees are working.

The Patient Protection and Affordable Care Act The ACA set forth new requirements applicable to both fully-insured and self-insured group health plans, and the plans offered through a private exchange must comply with these new rules. Regardless of whether an employer partners with a private exchange, an employer with 50 or more “full-time equivalent” employees remains subject to the “employer mandate”. In most if not all cases, the private exchange will help the employer offer an “affordable/minimum value” plan(s). Finally, the employer must comply with the “high-cost plan tax” in 2018.

What Issues Must an Employer Consider When Deciding to Partner With a Private Exchange?

As stated, employers are subject to ERISA’s duciary requirements, which means an employer deciding whether it should partner with a private exchange must determine whether the move is, among other things, in the best interest of its employees and for the exclusive HealthCare Exchange Solutions™ I www.TheIHCC.com I May/June 2014

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LEGAL & COMPLIANCE

purpose of providing plan bene ts, including defraying reasonable expenses of plan administration.

As a result, an employer must ensure that the fees charged for partnering with the private exchange are reasonable. If commissions are paid (in the case of a fully-insured private exchange), the employer should weigh whether these commissions are reasonable, and the employer should ensure that “steering” is not occurring (for example, in the case of a fully-insured multi-carrier exchange).

If an employer decides to partner with a single-carrier private exchange, the employer should ensure that the premium rates for plans inside the private exchange are competitive with plans sold outside of the exchange.

Finally, regardless of whether the employer will offer fullyinsured or self-insured plans, an employer must weigh whether a conflict of interest is present in cases where a bene t consulting rm is seeking to offer its private exchange capabilities to the employer’s employees.

Employers must also pay close attention to the terms of any contract. For example, is the contract a year-to-year contract, or does the contract require the employer to commit to a multiple year partnership? If the contract is multi-year, are there fees associated with terminating the contract before the end of its term? Are there reasons for early termination that do not trigger a nancial penalty?

For example, if the employer is partnering with a multi-carrier private exchange, can an employer terminate the agreement if one of the insurance carriers exits the exchange? If the contract runs through 2017, can an employer terminate its partnership if a state in which the employer operates elects to allow fully-insured large group plans to be sold through the ACA Exchange (because upon such an election, many of the ACA market reforms that are applicable to individual and small group coverage will apply to fully-insured large group plans sold inside and outside of the ACA Exchange (e.g., the new adjusted community premium rating rules)?

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May/June 2014 I www.TheIHCC.com I HealthCare Exchange Solutions™

Finally, in the case of contracting, the employer may consider obligating the private exchange to similar fiduciary responsibilities the employer is under (i.e., acting in the best interest of the employer’s employees).

Although this may prove dif cult from a contract negotiation perspective, the federal government itself may impose duciary obligations on private exchanges at some point in the future.

Are There Other Things to Consider?

In addition to the requirement to perform its “due diligence” before agreeing to partner with a private exchange, an employer must consider other dimensions of a private exchange. For example, does the employer simply want to offer “pre-packaged” health plans developed by the private exchange (or in the case of a fully-insured private exchange, plans developed by the insurance carrier or carriers working with the private exchange)? Or does the employer want to develop its own plan designs? What type of education tools and decision-support system does the employer want to deploy, and what is the level of customer services? For example, does the private exchange have a call-center with licensed professionals that may assist an employee who has questions during the shopping experience on the private exchange portal?

Although compliance issues associated with partnering with a private exchange are generally no different than the compliance issues today, when it comes to deciding whether to partner with a private exchange — and which private exchange company to partner with — a signi cant amount of thought must go into making any such decision. This is because the law requires it. Moreover, strategic thinking should be a part of any decision to partner with a private exchange to ensure that the features that the private exchange is offering provides the employer — and its employees — the best value.

CONNECTING THE DOTS BETWEEN PRIVATE EXCHANGES AND WELLNESS

Don’t Give up on Wellness in Lieu of an Exchange

BY SHERRI BOCKHORST, NATIONAL PRACTICE LEADER, HEALTH EXCHANGE SOLUTIONS, BUCK CONSULTANTS

As private exchanges continue to gain employer should be asking is, “How does our exchange address sustainability?” survey , 87 percent of employers believe that managing employee health is an important role of their organization. This is because only four health risk behaviors — lack of exercise or physical activity, poor nutrition, tobacco use and drinking too much alcohol — cause much of the direct and indirect health care costs (e.g. medical expenditures, lost productivity and workdays) in the United States.

In our view, private exchanges that are focused predominately

on competition among health plans to reduce premiums are missing the most sizable opportunity to reduce the cost of care: prevention. According to California Department of Managed Health Care enrollment reports, one in three members will not return to the same health plan in California the next year. Meaning even the most well-intended health plans may not have the member enrolled with them long enough to impact health and productivity.

That’s why we took a comprehensive approach to our private exchange solution — RightOpt. We address the varying health-related needs of all family members through what we’ve named “choose, use and improve”. While we offer a strong administration solution to support HealthCare Exchange Solutions™ I www.TheIHCC.com I May/June 2014

11

Connecting the Dots Between Private Exchanges and Wellness employee choice at time of enrollment, we also offer support to members during the year on how to use care appropriately and improve their health.

Our Working Well survey also showed that employers recognize value in extending wellness initiatives to family members of their employees.

Seventy-one percent of respondents — up from 65 percent in the 2010 survey — include family members in some aspect of their health and wellness programs. Through RightOpt, we personalize the experience for each family member based on that person’s health, age, gender, preferences and readiness for change. The result is that every family member is engaged in health-related decisions. The goal is to make it as simple as possible for individuals to access the information they need when they need it, using any handheld device or computer. Long gone are

60-page enrollment guides that gather dust.

Does it work? Our results show it does. Reducing health risks is a step that continues to gain momentum as wellness efforts mature — 84 percent of employers surveyed report medium to high impact for their step could mean you might be looking to unwind your exchange solution than simply shifting costs and reducing the health and productivity of your workforce, I encourage you (especially if you’re one of the 76 percent of supports continuing this momentum.

The Private Exchange Impact on Health Promotion

BY JOHN KAEGI, CHIEF STRATEGIST, HEALTHSTAT, INC.

their employees to share annual medical cost increases which tend to create wiser consumption of health care. Employees use health care more cost-consciously when they are directly exposed to the cost of insurance.

The future of health promotion may be brighter thanks to the expansion of private health insurance exchanges (or marketplaces).

Private exchanges are burgeoning as employer counterpoints to ObamaCare’s public exchanges, and Healthstat has created an interesting scenario about how private exchanges will

exchange assumes the responsibility for helping employees with plan selection and coverage issues, supplanting that role of the employer’s human resources department.

The resulting savings can fund additional

and become a windfall for health promotion.

Why Private Exchanges?

Compared to buying health insurance straight from insurers, private exchange platforms offer employers three advantages: 1. larger insurance pools that reduce the

thought unaffordable luxuries. Private exchange products will eventually include health promotion bundled with worksite health centers, alongside health insurance plan choices.

2. which their employees share more of the burden of increasing medical cost 3. Choice of more affordable health insurance plans bundled with other cost for their employees.

The opportunity to market efficient, bundled plans is enticing large benefits Walmart into the private exchange arena, and employers are quickly embracing the concept.

In 2013, an employer survey by the National Business Group on Health found that 30 percent from private exchanges by 2015. Employers are quickly realizing that private exchanges offer more protection from continuing medical

For example, employers can elect to bear the full burden of medical inflation, or they can constrain their contributions, forcing their employees to share annual medical cost increases which tend to create wiser consumption of health care.

The Role of Private Insurance Exchanges Bundled plans in private exchanges will offer employers more choice and improved productivity at lower costs. They can administer insurers resulting in expanded choice and improved risk pools, all the while increasing employee cost sensitivity.

For example, employers can elect to

create worksite cultures of health and well being. they can constrain their contributions, forcing 12

May/June 2014 I www.TheIHCC.com I HealthCare Exchange Solutions™

How Private Exchanges Help Employers services; their private exchanges will do the clinics and coaching that employers struggle to fund in addition to health insurance will become attractive uses for the money saved by private Private exchange clients will be able to afford more convenient, round-the-clock health care — plus provide incentives to engage in health promotion and behavior change and access to professional wellness coaching right on site. And the good news continues because worksite health access and promotion further reduces downstream health care costs. Perhaps more importantly, they will increase employee productivity while also creating an employer-of-choice reputation.

Net, Net Private exchanges are the product of American business ingenuity in the face of

unrelenting medical cost inflation. Most employers already believe that health promotion can provide relief from bloated insurance costs, implement them.

We believe that all health insurance will eventually be purchased through private exchanges because they offer a better economic value, including bundled health promotion services. We are excited about the prospect

of more affordable coverage and expanded health promotion promised by the emergence of private exchanges.

How the Emerging Private Exchanges Will Impact Employee Population Health

BY NANCY SCOLA LOMBAER, PARTNER, LAURUS STRATEGIES

The surge of interest in private exchange solutions is not technically related to the Affordable Care Act, though it has been a catalyst to employers reassessing the value of providing Financial through education and counseling as well as to insurance products such as life insurance, disability and wealth accumulation vehicles.

compliance and administrative complexity.

In order to navigate these changes, many employers are relying heavily on outsourced themselves from the management of the health plans. For some employers, this may be an eliminating employer-sponsored health plans at some point in the future.

The fragmentation of the employee population among multiple health plans caused by private exchanges will provide a variety of wellness, health management and coaching programs that may or may not be able to produce

A well-being program that is supported by both senior management and the culture of the company can produce positive results without the traditional linkage to the health plans.

Work-life balance – access to time savers, stress reducers as well as programs/policies that help employees about their work and community.

the private exchange offers fully insured plans, not the employer.

One strategy to ensure an ROI to the employer is to develop a broad well-being and their families that are already participating in the health plans.

being happy, healthy and prosperous. Laurus Strategies believes that these concepts can translate into an employee well-being program addressing the following categories: Health – physical and behavioral

By addressing well-being in the broad sense, employers can try to impact the root cause of poor health, low productivity and lack of engagement.

A well-being program that is supported by both senior management and the culture of the company can produce positive results without the traditional linkage to the health plans.

Defined Contribution Gives Employers a Path to Turbocharge Wellness Incentives

BY BRAD WOLFSEN, EXECUTIVE DIRECTOR, BSWIFT EXCHANGE SOLUTIONS

Private benefits exchanges currently dominate the conference and webinar circuit.

Despite the energy focused on converting the reality is that adoption remains relatively limited. exchange adoption is what to do with wellness.

Most cost-conscious managers have

invested significantly in developing and communicating their wellness initiatives.

Wellness is typically integrated with the annual enrollment cycle; in particular, premium-based wellness incentives — the most commonly used incentive for wellness — are closely tied to the corporate cost-sharing philosophy. As a result, many administrators view the separation of continued on page HCX 14 HealthCare Exchange Solutions™ I www.TheIHCC.com I May/June 2014

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Connecting the Dots Between Private Exchanges and Wellness Wellness, continued from page HCX 13

wellness management from plan design

wellness incentives can be better positioned vs.

contribution private exchanges for their active employees.

However, savvy exchange administrators are addressing this challenge in the marketplace by integrating configurable health risk assessments, biometric testing and wellness programming into their exchanges. By replicating some of these “common core” wellness solutions within the exchange format, administrators can

approach, employers communicate the employee dollar contribution, usually pegged at 20 percent

through the exchange’s aggregated purchasing, while not abandoning their legacy investments.

In addition, the recently released 2014 incentives are much more likely to drive engagement than are low-value incentives. In

value incentives, up to the 30 percent maximum, must communicate a doubling of contribution cost to employees who fail wellness goals.

that employers, in general, are moving away from wellness incentives that are embedded in plan designs and abandoning co-pay reductions and plan eligibility criteria in favor of premium credits or surcharges and cash incentives. By eliminating the plan design incentive, it is much easier to leverage the standard designs available Defined

transition to a high-value incentive program. A wellness incentive of 20 percent to 30 percent of plan value can easily be stacked on top of the employer funding commitment as an earn-up that employees receive for participating in wellness approach translates employee behavior directly

contribution

reframes

the

employers’ efforts to increase employee accountability for their healthy and unhealthy behaviors. While carefully evaluating the capabilities of private exchange operators, benefits managers should also consider exchanges as an opportunity to turbocharge their wellness incentives.

Employee Wellness in the Era of Health Insurance Exchanges

BY STEPHANIE PRONK, HEALTH TRANSFORMATION TEAM LEADER, AND MIKE CHRISTIE, SENIOR VICE PRESIDENT, NATIONAL EXCHANGE SALES, AON HEWITT

Health insurance exchanges have been a hot topic for the health care industry since the passage of the Patient Protection and Affordable Care Act. While the general public and media have been closely following the rollout of the public health exchanges, private health exchanges have also emerged, allowing employers to provide group coverage to employees through a competitive marketplace.

At the same time, managing employee health and wellness has become increasingly important as population health continues to decline. We know from experience and supported by research that employees with strong overall and 32 percent more likely to stay with the company. A highly engaged workforce provides better business results, including 21 percent higher productivity and 22 percent To manage costs and improve employee health, wellness programs, services and resources to creating a work environment and culture that makes being at one’s optimal health easy to incorporate into the daily work life.

Employers are also looking at forms of incentive designs that move from compliance-based incentives to a focus on commitment rewards that actually provide meaning and value to employees. Emerging examples include completing a preventive care exam that triggers a charitable contribution to pay for a preventive care exam of someone in need or addressing prolonged sitting with a movement break challenge that leads to being rewarded with a sit-to-stand workstation.

For a large portion of organizations, these wellness initiatives will continue to reside with the employer.

However, it will be important that private exchanges also 14

May/June 2014 I www.TheIHCC.com I HealthCare Exchange Solutions™

Employers are also looking at forms of incentive designs that move from compliancebased incentives to a focus on commitment rewards that actually provide meaning and value to employees.

have options for employers as it relates to keeping members healthy, reducing members at risk and managing the severity of disease. So how can an exchange facilitate more effective health and wellness programs?

Employers that move to private health exchanges have the opportunity to focus more on employee health versus health insurance. With standardized plan designs and multiple carrier options, private health exchanges let employers spend less time on plan design and focus more on the development and effectiveness of their population health strategies.

Additionally, in an exchange model, employees have more ownership, accountability and choice for their overall health care and greater clarity of the trade-offs they make.

Through greater transparency around the costs of care, they can better understand how their health and health expenses are connected.

We are already beginning to see these results play out. Of the 600,000 employees and their family members Aon Active Health Exchange, three-quarters of employees said they had a good understanding of how they share the cost of group medical coverage with their employer. In chose the health plan that offered the best value for them and their family, and 87 percent liked being able to choose among multiple carriers.

No matter how employers decide to fund health care insurance, whether through traditional approaches or through a private health exchange, employee health and wellbeing continues to be an important strategy for all U.S. and global businesses.

EXCHANGE SOLUTION PROVIDER MEMBER PROFILES

HSA/HRA/FSA TECHNOLOGY: ADMINISTRATION & MANAGEMENT

TSYS HEALTHCARE TSYS Healthcare® provides end-toend strategic payment solutions for 706.649.5080 consumer directed healthcare. We www.tsys.com/healthcare partner with benefits administrators, healthcare@tsys.com financial institutions, health plans, and software providers to navigate all aspects of HSAs, HRAs, FSAs, transportation accounts, cash reimbursements, and lines of credit. TSYS Healthcare cards offer participants the security they expect along with the ability to conveniently access funds from multiple accounts and manage their benefits payments with simplified single-card access. Clients and partners benefit from simplified processes, reduced paperwork and cost savings that can contribute to improved return on investment.

“We built the TSYS Healthcare platform to meet the market demand for reliable, configurable and intelligent solutions. Understanding the dynamic U.S. healthcare market, our customers rely on our option-driven system to prepare them for the future.”

— Trey Jinks, Group Executive, TSYS Healthcare HSA/HRA/FSA TECHNOLOGY: ADMINISTRATION & MANAGEMENT

A PRIVATE EXCHANGE THAT SIMPLIFIES HEALTH INSURANCE

INSUREXSOLUTIONS

10275 W. Higgins Road, Suite 500 Rosemont, IL 60018 855-563-6993 info@insurexsolutions.com www.insurexsolutions.com

The InsureXSolutions® private exchange offers employers a simplified role in the new health insurance marketplace. Employers with part-time workers or retirees, as well as small businesses can utilize this exchange to empower their employees to choose the health and dental insurance that best fits their personal and family needs. Employers can reduce costs and administrative tasks, while employees receive interactive support tools and personal guidance from our licensed insurance professionals. Available in select markets, InsureXSolutions is exclusively offered and operated

by Flexible Benefit Service Corporation (Flex). Contact your broker or consultant, call us directly at 855-563-6993, or visit www.insurexsolutions.com to learn more.

BENEFIT ADMINISTRATION/PRIVATE EXCHANGES

Since 1988, CieloStar (formerly OutsourceOne) CIELOSTAR has helped brokers, employers and employees 530 U.S. Trust Building navigate the ever-changing world of benefits.

730 Second Avenue South Now, with the dawn of “Defined Contribution Minneapolis, MN 55402 Health Care” we are again on the leading edge.

With a team of industry thought leaders, CieloStar 612.436.2706 makes navigating healthand benefits choices john.reynolds@cielostar.com easy for employers and employees by offering comprehensive benefits administration solutions with a high-touch, high technology model—most recently launching a proprietary private health insurance exchange.

“Fueled by the far-reaching impact and complexities of health care reform taking effect in 2013 and 2014, employers and employees increasingly find themselves in a ‘farmer’s market’ of benefits choices. Cielostar is uniquely positioned with enabling technology that helps purchasers and consumers make the best possible decisions and create a best-in-class benefits administration process. Our unique comprehensive approach to benefits offers everything from back room technology for enrollment, data, billing and call centers to complete solutions for COBRA, CDHP and health insurance exchanges.”

— John Reynolds, CEO, Cielostar HSA / HRA / FSA ADMINISTRATION AND FINANCE

Evolution1 and our Partners serve more EVOLUTION1, INC. than 9 million consumers, making us 952.908.9056 the nation’s largest electronic payment, www.evolution1.com on-premise and cloud computing sales@evolution1.com healthcare solution that administers reimbursement accounts, including HSAs, HRAs, FSAs, VEBAs, Wellness and Transit Plans. It is the only solution that offers a single end-to-end user experience, provides innovative auto-substantiation technologies, and automates workflow for Partners, employers, and consumers. It does all this on one technology platform comprised of 1Cloud™, 1Direct™, 1Pay™, 1View™, 1Plan™, and 1Mobile™. Evolution1 and our Partners are dedicated to delivering value, reducing costs and simplifying the business of healthcare.

“The combination of our innovative products will further our leadership position in a rapidly changing healthcare market. Together with our Partners we are committed to reducing costs and simplifying the business of healthcare.”

— Jeff Young Chairman and CEO, Evolution1

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