1. Presented by Mark R. Anderson
4/12/2019
Spring
Kinder, Gentler CDHC Plans -
Strategies for Gradual Implementation &
Minimal Cost Shifting
Presented by:
David Cowles
Vice-President
Benemax - The Benefit Management Co.
A brief introduction either by a third party, or the presenting vendor company. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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2. Presented by Mark R. Anderson
4/12/2019
This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation.
Seven West Mill St.
Medfield, MA
4/12/2019
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3. Presented by Mark R. Anderson
4/12/2019
Benemax Founded in 1975
First Consumer Directed Health Plan: 1986
First Consumer Directed Dental Plan: 1988
Independent Patient Advocate: 1995
Web Based Benefit Management: 1998
One slide from each presenter describing his/her previous healthcare experience. Company information or logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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4. Presented by Mark R. Anderson
4/12/2019
Who is “The Consumer” in a CDHC Plan?
* Employee
> Own Health
> Own Money
* Employer
> Majority of employee health care cost
> Lost productivity (15%) due to disability
Describe what business problem the client faced. Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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5. Presented by Mark R. Anderson
4/12/2019
What Makes CDHC Work?
* Consumerism
* Tools & Incentives
> to stay healthy or get healthier
> to consume cost effectively
* The Claim Cost Curve
Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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6. Presented by Mark R. Anderson
4/12/2019
The Claim Cost Curve
* 20% of claims = 1/2% of members
* 47% of claims = 3% of members
* 87% of claims = 31% of members
* 69% of members = 13% of all claims
* Median non-Rx claim cost = $500
Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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7. Presented by Mark R. Anderson
4/12/2019
70%
69%
60%
$1,259 pmpm
50%
60%
40%
$176 pmpm
30%
$30 pmpm
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
20%
26%
24%
10%
13% 8% 0%
Healthy
Transitional
Chronically Ill/High Risk
($1-$999)
($1,000-$4,999)
($5,000-$100,000)
% Members
% of Dollars
4/12/2019
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8. Presented by Mark R. Anderson
4/12/2019
The Impact of Disability
* 10% of all employees file a disability claim
* 55% of all claims come from disabled ees
* Absence Management = Return to Work
> 30% reduction in average length of disability
> 40% reduction in average health claim cost
* Only employer can manage disability claims
This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
For additional information

9. Presented by Mark R. Anderson
4/12/2019
This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
For additional information

10. Presented by Mark R. Anderson
4/12/2019
This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
For additional information

11. Presented by Mark R. Anderson
4/12/2019
Kinder, Gentler CDHC
Step #1 - The Wrap
* Employer adds a High Deductible to Plan
> HMO, POS or PPO
> $500 to $5,000
* Employer Self-funds that Deductible
Describe the solution to the business problem. Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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12. Presented by Mark R. Anderson
4/12/2019
The Wrap - Results
* Reduces premium by 20% to 50%
* Reduces net cost by 10% to 20%
* ER benefits from good experience
* ER incented to promote health
* ER incented to promote consumerism
* ER has greater plan design flexibility
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
4/12/2019
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13. Presented by Mark R. Anderson
4/12/2019
Kinder, Gentler CDHC
Step #2: Virtual HRA
* Employer funds HRAs = New Deductible
* Employer sets Employees’ Expectations:
> Deductible increase or HRA decrease in year 2+
* Employer introduces tools:
> Promote health
> Educate consumption
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
4/12/2019
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14. Presented by Mark R. Anderson
4/12/2019
Virtual HRA - Results
* 10% to 20% net savings year one
* Employees become cost conscious year one
* Year of grace before any cost shifting
* Year to improve health (using tools)
* Year to adjust consumption (using tools)
* Year to build-up benefit bank (HRA balance)
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
4/12/2019
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15. Presented by Mark R. Anderson
4/12/2019
Kinder, Gentler CDHC
Step #3: FSA
* Employer adds corridor of employee liability
* Employer contributes to employees’ FSAs
* Employees may also contribute: pre-tax $$
* Employer introduces health tools
* Funds may be used to pay for:
> employee’s health plan claims liability
> dental, vision & alternative care expenses
* Funds unused at year end are forfeited
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
4/12/2019
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16. Presented by Mark R. Anderson
4/12/2019
Employer Funded FSA - Case Study
* HMO Renewal = +15%; Goal = +5%
* Add $500 (2x fam) deductible; Renewal = 0%
* Contribute 5% to employees’ FSAs ($300 ea)
* Employees may fund additional cost pre-tax
* FSA may pay any IRC 213 expenses
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
4/12/2019
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17. Presented by Mark R. Anderson
4/12/2019
Kinder, Gentler CDHC
Step #4: Triple Option Plan (TOP)
* Employer buys a base high deductible plan
* Employer self-funds options below deductible
* Employees choose: Gold, Silver, Bronze
* Employees pay more for richer options
* Employer cost = same for all options
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
4/12/2019
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18. Presented by Mark R. Anderson
4/12/2019
TOP - Sample Employee Options
* Gold = Virtual Indemnity Plan (100% benefit)
* Silver = Base Plan + HRA + FSA
* Bronze = Base Plan + FSA only
Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section.
4/12/2019
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19. Presented by Mark R. Anderson
4/12/2019
TOP - Case Study
* Renewal = 20%; Goal = 0%; EEs pay 20%
* Add $1,000 deductible; Renewal = 0%
* Gold: EE cost up 100%; no benefit change
* Silver: EE cost up 50%; $500 HRA
* Bronze: No EE cost change; $1k deductible
Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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20. Presented by Mark R. Anderson
4/12/2019
Kinder, Gentler CDHC
Step #5: The Blend
* Employer buys high deductible base plan
* Employer sets lower employee deductible
* Employer “wraps” the deductible difference
* Employer funds 50% of ee deduct
* Employees may fund net claims cost via FSA
Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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21. Presented by Mark R. Anderson
4/12/2019
The Blend - Case Study
* Renewal Rates = $370/980
* Employer buys plan with $3,000 deductible
* Member deductible = $1,000 (2x family)
* Employer “wraps” the $2,000 difference
* Employer funds $500 ($1k family)
* Employees may fund net claims cost via FSA
Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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22. Presented by Mark R. Anderson
4/12/2019
The Blend - Case Study Results
* Premiums reduced 40%: $222/588
* “Wrap” cost = $0 on 69% of members
* HRA pays 100% of cost for median member
* HRA + FSA tax savings = 65% of deductible
* Wrap + 1st year HRA + Admin = $60/160
* Net Plan Cost Savings: 24%
Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
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23. Presented by Mark R. Anderson
4/12/2019
Summary
* Employers can save $ without shifting cost:
> Take maximum advantage of claim cost curve
> Provide health & health care tools
> Manage absence toward “back to work”
> Incent employees to measure health care behavior
> Provide employees health & health care incentives
This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation.
4/12/2019
For additional information

24. Presented by Mark R. Anderson
4/12/2019
David Cowles
Vice President
Benemax – The Benefit Management Company
This slide may be used during the Q&A from the audience. Leave 10 minutes for questions. We suggest, if need be, you ‘plant’ a few questions in the audience, in order to ensure lively participation.
4/12/2019
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