1 PSU Professional Development Center Welcomes You! Carmen Schwisow Program Manager Professional Development Center

Welcome! Thank you Healthcare Reform in PDX HR How the HR Certificate at Portland State can help Introduction of Panelists & Program

Federal Health Care Reform Laws  The Patient Protection and Affordable Care Act and the companion Health Care and Education Reconciliation Act will affect employee health plans and other benefits  The new laws are phased in over many years  Election results and legal challenges may lead to changes

Outstanding Issues  2012 Presidential election  States – delay exchange funding? Decline Medicaid expansion funds?  Challenges to contraception mandate  Creation of exchanges  Guidance pending from IRS/DOL/HHS

Provisions Effective in 2012  Four-page (double-sided) summary of benefits  Plans must give 60 days’ advance notice of changes to summaries  Penalty for noncompliance – up to $1k per person per day  W-2 reporting on cost of coverage

Women’s Health Care Services  For plan years starting on or after 8/1/12, non-grandfathered plans must include – Well-woman visits Gestational diabetes screening Contraception (subject to exception for religious employers) Nursing support and supplies Domestic violence screening and counseling

Provisions Effective in 2013  FSA contributions limited to $2,500 (indexed)  Medicare hospital insurance tax increased from 1.45% to 2.35% on employee share for earned income over $200k ($250k if joint)  2.9% excise tax on medical device makers; may be passed on  Employers must give notice of health insurance exchange and premium credits, effective 3/1/13

Provisions Effective in 2014  Play-or-pay mandate for employers with at least 50 FTE employees  Waiting periods limited to 90 days  Non-grandfathered plans must cover clinical trials for cancer or similar conditions  Wellness programs may offer up to 30% reward (up from current 20%)

Caution!  Multiple bills make for confusion – be careful where you get your information  Guidance regularly being issued by Internal Revenue Service and U.S. Departments of Labor and Health & Human Services  This is general information, not legal advice

Confidential | Planar Systems 10 Chiefly competitive reasons  Hard to attract and retain employees without health coverage  There would be a huge advantage to those employers offering health coverage in attracting the best candidates

Confidential | Planar Systems 11 Chiefly competitive reasons  Hard to attract and retain employees without health coverage  There would be a huge advantage to those employers offering health coverage in attracting the best candidates

Confidential | Planar Systems 12 Employers also continue health coverage  Employers feel moral obligation to provide health coverage  Need access to care for employees to be productive  Cannot image not offering health coverage in mature industries  Wage increases traded for health coverage maintenance in past  Executives demand health coverage  Do not want total cost of health coverage to be imputed income now  Cadillac plan results in some imputed income in 2018

Confidential | Planar Systems 13 Health Care offered in the US  Bureau of Labor Statistics 2009 National Compensation Survey Latest data published nationally 74% offered medical plan 76% enroll 48% offered dental plan 79% enroll 20% offered vision plan 77% enroll Medical coverage offered to 88% FT ees Medical coverage offered to 24% PT ees 58% PT ees enroll Greater income, education, skills more likely to have coverage

Healthcare Changes Challenges and Strategies from an HR Department Manager’s Perspective

Context for Employee Benefits Financial context:  While average wages and salaries have increased by 1- 3% per year recently, medical insurance has increased an average of 9-12%  Benefits constitute 40.2% of payroll costs*  HR Directors need to control costs for both the company and for employees *US Chamber of Commerce 2004 data

Challenges Actual and potential cost increases  Example: coverage for adult dependents Last minute changes (grrrrrrr!)  Example: changing the FSA limits in the middle of open enrollment Administrative / system changes take time  Example: we had to cover adult dependents, but carriers computer systems wouldn’t allow enrollment Uncertainty  In this election year, healthcare reform is a political football

Strategies Partner with your benefits broker and insurance carriers for information Stay nimble… change is pretty much inevitable Work at balancing business needs with employee needs

18 is an Independent Licensee of the Blue Cross and Blue Shield Association. The Regence Group Jim Walton, Director of New Sales Regence BlueCross BlueShield of Oregon Jim Walton, Director of New Sales Regence BlueCross BlueShield of Oregon Exchange 2.0 Fall/Winter 2012 PSU HR Presentation Regence BlueCross BlueShield of Oregon is an Independent Licensee of the Blue Cross and Blue Shield Association © The Regence Group, all rights reserved.

19 Oregon Exchange – Structure Public corporation- own entity Similar to SAIF, or OHSU Governance: Citizen Board – 9 Members Appointed by the Governor and were confirmed by the Senate- September 23, 2011 At least 2 consumer members, and no more than 2 members can have ties to insurance or health care industry Board makes decisions, not recommendations

20 The Oregon Health Insurance Exchange Corporation Mission Statement Improving the health of all Oregonians by providing health coverage options, increasing access to information, and fostering quality and value in the health care system.

21 A Population Divided Oregon Health Insurance Enrollment 2010*

22 Individual Exchange: Tax Credits and Cost-Sharing Reductions Exchange and HHS determine if individual is eligible for tax subsidy and cost share subsidy Available only to individuals purchasing in Exchange Sliding credit amount based on 133% - 400% Federal Poverty Level (FPL) Not available to groups members in Exchange Cost Sharing Credit available up to 250% FPL One third, one half or two thirds credit on out of pocket costs

23 Exchange Premium Limits by Income Up to 133% FPL: 2.0% of income % FPL: 3.0% - 4.0% of income % FPL: 4.0% - 6.3% of income % FPL: 6.3% -8.05% of income % FPL: 8.05% - 9.5% of income % FPL: Capped to 9.5% of income

24 Federal Poverty Guidelines – 2012 Family Size100%200%300%400% 1$11,170$22,340$33,510$44,680 2$15,130$30,260$45,390$60,520 3$19,090$38,180$57,270$76,360 4$23,050$46,100$69,150$92,200 5$27,010$54,020$81,030$108,040 6$30,390$61,940$92,910$123,880 7$34,930$69,860$104,790$139,720 8$38,890$77,780$116,670$155,560

25 Individual Example Let’s do some math…Single Parent/Two Kids $700 monthly premium. (2 nd lowest Silver Plan) Annual income $38,180 (200% FPL) Premium percentage is 6.0% of annual income, or $2,223.6 ($185 per month) Advance credit is $700 (premium) – $185 (max allowed premium percentage)= $515/month ½ Cost Subsidy (deductibles, co pays, co-insurance, max out of pocket)

26 Cost Sharing Subsidies Cost Subsidy 0% 1/3 1/2 2/3 Federal Poverty Level 251% % % % Actuarial Value - Possible Silver Plan Base - 70%73%87%94% Deductible - Individual $1,750 $500$50 Maximum out of Pocket - Individual $5,750$4,000$1,200$600 Copay / Coinsurance Inpatient and Outpatient 30% 10% Emergency Room 30% 10% Preventive Visits and Services $0 Office Visits - Primary Care $35 $10 Office Visits - Specialists $60 $25 Prescription Drug - Generic $10 $5 Prescription Drug - Preferred Brand 50% 30% Prescription Drug - Non-Preferred Brand 50%

27 Individual Eligibility

Questions?