Tag Archives: PPACA

The Practical Aspects of Creating an International Benefit Strategy Policy

Change is constant, particularly in the realm of international employee benefits. There is a social time bomb ticking – the number of employees paying into various social security systems around the world is diminishing while the number of recipients is increasing. To defuse this situation, many governments are reducing benefits while raising taxes, thereby shifting the burden to the employer.

Today’s multinational employee is evolving into the transnational of tomorrow as corporations do away with defined headquarters and instead move to regional centers of operations. But at the same time, in response to recent global economic pressures, many multinationals have gone in the opposite direction by centralizing global human resource functions. Continue reading The Practical Aspects of Creating an International Benefit Strategy Policy

Ovation Shines a Light on the Newest Players in the Connecticut Health Plan Market

Executives representing more than 60 Hartford-area companies joined the Ovation team for a thought leadership event last week. The event was the third in the organization’s Chief Executive Series which takes place in May and November each year. The focus was on “Emerging Market Forces in the New World of Connecticut Health Plans” and featured a panel of leaders from Harvard Pilgrim Healthcare, HealthyCT, ProHealth Physicians and Rogers Benefit Group. Ovation Managing Principals Bill Carew and Brian Driscoll acted as panel moderators.

Continue reading Ovation Shines a Light on the Newest Players in the Connecticut Health Plan Market

Spring Ahead with 6 Benefit Plan Design Strategies that Pay it Forward

As we move from the remnants of a tough winter toward the promises of spring, it’s a great time for employers to begin planning a long-term employee benefits strategy, one that transcends the seasons of the calendar.  Instead of focusing on one renewal to the next, which has been common practice for many years, employers (regardless of size) should establish a benefits strategy that is three to five years into the future–essentially paying it forward from one renewal to the next.  Each renewal then becomes one of several tactical elements within the parameters of this long-term strategy.

In general, the long-term strategy should focus on five things:

  • Offering competitive benefits to retain and attract employees
  • Managing costs that fit within the budget
  • Having healthy employees and family members
  • Dealing with minimal administrative headaches
  • Complying with state and federal mandates, including the Affordable Care Act (ACA)

Many employers embark on a long-term strategy that focuses on these “five things,” but more often than not, they do not stay the course, falling back to status quo tactics such as a carrier RFP, a plan design change, or an employee contribution adjustment to save money at any cost without a comprehensive look at the long-term picture.  The aforementioned tactics are merely a cost shift to employees and do not tackle the root cause of the cost issue, namely the health of the covered population.  In addition, these tactics may not mitigate the costs associated with the ACA such as the Transitional Reinsurance Fee, the Health Insurer Tax, and the Cadillac Tax.

These days, in response to the ACA, there a number of long-term strategies employers can put in place, none of which is mutually exclusive of the other.  Here are but a few:

  • High Deductible Health Plan with a Health Savings Account/Health Reimbursement Arrangement (CDHP). This strategy involves increasing individual engagement and accountability by getting individuals more involved in the buying process.  The deductible (vs. copayments) helps individuals better understand the cost of healthcare and may steer them toward lower cost settings such as a 24/7 nurse line, a convenience care clinic, an urgent care center, or their PCP.  The personal account, (otherwise known as an HSA/HRA) enables employees to use their own money or employer money set aside for them to buy healthcare services more judiciously than they might under a traditional copayment plan.  It is important to note that the successful roll out of these plans requires 1) a robust communication campaign, 2) a fairly easy to understand plan design, 3) some level of employer funding.
  • Self-Insurance. This strategy enables employers to take charge of their employee benefits program without the dependency of the insurance carrier.  Actionable data is readily available and can be analyzed to help better manage and develop the long-term strategy.  Additionally, the employer will avoid such costs as premium tax and the Health Insurer Tax, which could equate to 4 to6% of total costs.  Obviously, there are some risks associated with self-insurance since the employer pays claims to an individual and aggregate stop loss limit.  Newer self-insured products such as level-funded self-insurance have mitigated some of the risks of self-insurance for smaller employers.
  • Private Exchange with a Defined Contribution. This strategy provides budgeting ability and administrative efficiency, including plan options that are ACA compliant, to employers.  It provides customizable choice and decision support to employees similar to shopping experiences they may have on Amazon.com.  A private exchange can have fully-insured or self-insured funding.
  • Health and Wellness Program. This strategy is simple in concept but often difficult to implement.  It’s simply about offering programs to individuals that keep them healthy and out of harm’s way.  The difficulty in implementation usually comes down to the lack of leadership support.  Return on investment figures vary widely and are not always scientific as much of the “savings” is cost avoidance (i.e. the cost of the heart attack that did not happen because an individual participated in an employee sponsored health and wellness program and began eating better and exercising).  The successful health and wellness program should follow these steps:
    • Secure leadership support
    • Create a wellness team
    • Collect data to drive health initiatives
    • Develop a long-term project plan
    • Implement appropriate programs
    • Create a supportive environment
    • Evaluate outcomes

Health and wellness programs can be done in conjunction with any funding type and with a private exchange.

  • Integrated Benefits. Often referred to as voluntary or worksite benefits, Integrated Benefits are becoming an increasingly popular and cost effective employee benefit.  Life and disability products can augment or replace employer paid coverage.  Also, accident and critical illness products can fill the perceived gap in coverage often associated with high deductible health plans, providing indemnity coverage for named accidents and illnesses.
  • Captive Insurance Program. This strategy involves the employer becoming an owner, generally one of many owners, of its own insurance company called a captive.  It also includes conditions for participation such as having a high CDHP employee participation and/or a health and wellness program.  Like self-insurance, the captive groups are responsible for paying claims to the point in which stop loss coverage takes effect.  If there is money remaining in the captive pool at the end of the year, the captive groups receive a dividend.  The set-up of a captive requires some up front capital and the paperwork is more complex than traditional funding options; however, due to the conditions and mix of groups within the captive, they can have better long-term cost outcomes than traditionally funded programs.

The primary takeaway? Employers should be wary of traditional, short-term tactics to meet recurring objectives (i.e. the “five things”).  Each of the strategies above requires planning and execution over an extended period of time, and employee communication is paramount.  As spring is upon us, it’s a great time for employers to take a fresh look at their current benefits strategy and work with their benefits advisor on a long-term strategy that can pay it forward, evolving and flexing as the market changes.

4 Emerging Health Plan Innovations in the Connecticut Insurance Market

One of the new trends that have emerged as a result of the Affordable Care Act (ACA) is the strategic option for employers to define their contribution and provide employees with significantly more choices in the insurance products they may want to buy for themselves and their families.  The platform to do this is known as a Private Exchange, and there are many options available, as I outlined in my last post: Choices on Top of Choices: Deciphering the Private Marketplace Landscape with 7 Essential Components.

As many are aware, Ovation has been hosting bi-weekly seminars on our own Private Exchange, the Digital Benefits Marketplace (DBM).  These seminars explore the concept of how the rise of the consumer will transform the future of employer-sponsored benefit plans. Each of the seminars has included an opportunity to see a test drive of the marketplace from the employer’s perspective. Additionally, we are pleased to announce the completion of our Digital Benefits Marketplace Experience Room, in which employers can receive a one-on-one test drive of the solution (see photos below).


















In addition to this exciting new macro trend in healthcare, employers sponsoring a health plan in Connecticut should be aware of the three recent emerging options: Healthy CT, Harvard Pilgrim HealthCare and ProHealth Physicians Accountable Care Organization (ACO).

A brief overview of each follows:

Healthy CT

HealthyCT is a non-profit, Consumer Operated and Oriented Plan (COOP), whose development was encouraged by healthcare reform law and funded by the federal government.  Their model is based upon the concept of a Patient Centered Medical Home (PCMH) relying heavily on the Primary Care systems to help improve quality of care while lowering costs. Their provider network development is ongoing.

HealthyCT has been writing individual and small business coverage since January 1, 2014 and has recently begun targeting larger groups (50 employees or more) with very aggressive pricing. To learn more, visit www.healthyct.org.

Harvard Pilgrim HealthCare (HPHC)

Harvard Pilgrim HealthCare, also a non-profit, has been around for 35 years primarily serving members in Massachusetts, but they have their sights set on Connecticut with a tentative roll out of July 2014. For 10 years, HPHC has been recognized as America’s number one health plan.  HPHC has been using the services of Mickey Hebert, whose background in the Connecticut marketplace should accelerate HPHC’s acclimation to the state.  To learn more visit www.harvardpilgrimhealth.org.

ProHealth Physicians Accountable Care Organization (ACO)

ProHealth Physicians was formed in 1997 with a mission to empower Primary Care physicians through improved care processes and patient outcomes. One of the health system models encouraged by health care reform is the concept of an Accountable Care Organization (ACO). ProHealth has formed an ACO and are in the process of developing a direct-to-employer solution to improve quality of care and reduce cost. ProHealth believes their approach to population health management and provider reimbursements will improve the system for all constituents. To learn more visit https://www.prohealthmd.com/.

These innovative insurance options are a direct result of the emerging healthcare marketplace. Each represents a potential option for employers who offer a health plan in the state of Connecticut. The genesis and practical application of these options, plus the Digital Benefits Marketplace, will be discussed in Ovation’s spring Chief Executive Series event, “Emerging Market Forces in the New World of Connecticut Health Plans” on May 21st, 2014 at The Society Room in Hartford, Connecticut.

For more information or to register, contact Lisa Hathaway at lhathaway@digitalbenefitadvisors.com.