part two strategy total rewards and the sweet spot
TRANSCRIPT
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Webinar HandoutPart II — Strategy, Total Rewards & the “ Sweet Spot”
Presented by
HCR & Strategy Pt II– LMC 10-11-2012 ― October 2012
HealthcareReform
Strategy & Decision-Making for 2014 and Beyond
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Webinar HandoutPart II — Strategy, Total Rewards & the “ Sweet Spot”
© 2012 Gallagher Benefits Services, Inc.
HCR & Strategy Pt II– LMC 10-11-2012 ― October 2012
i
This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It isprovided to seminar participants or sold with the understanding that the publisher is not engaged in rendering legal,accounting, tax, or other professional service. If legal advice or other expert assistance is required, the services of acompetent professional should be sought.
Neither this manual/reference, nor any seminar presentation where it is used, should be construed as legal advice. If youneed legal advice upon which you can rely, you must seek a written legal opinion from your attorney.
Copyright law prohibits the reproduction or transmission in any form or by any means, whether mechanical, photographic orelectronic, of any portion of this publication without the express written permission Gallagher Benefits Services, Inc.
Healthcare ReformStrategy & Decision-Making
for 2014 and Beyond
3600 American Blvd. WestSuite 500
Bloomington, MN 55431952.356.3840
www.gallagherbenefits.com/minneapolis
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Healthcare ReformStrategy & Decision-Making
for 2014 and Beyond
Part IITable of Contents
Chapter 1 Employer Shared Responsibility .......................1
Chapter 2 Individual Financial Analysis Example ...............5
Chapter 3 Organizational Financial Analysis Example .........7
Chapter 4 A Strategic Total Rewards Approach ............... 11
Chapter 5 Hitting the “Sweet Spot(s)” in 2014 and 2018 ... 15
Chapter 6 Resources ................................................ 21
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iii
PartII
EmployerShared
Responsibility
A Strategic
Total RewardsApproach
Hitting the“SweetSpot(s)”
Resources
IndividualFinancial
Analysis Ex.
OrganizationalFinancial
Analysis Ex.
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Chapter 1 Employer Shared Responsibility
Employers who employedan average of 50+ full-time employees onbusiness days during thepreceding calendar year
FT = 30 HPW avg.
All FT and PT employeesmust be counted on a full-time equivalent basis todetermine size ofemployer
Mo. hrs. of PT
120
Certain seasonal workersare not counted in thiscalculation
In determining eligibility,employer must apply“controlled group” and“affiliated service group”rules under InternalRevenue Code – subsidiaries and affiliatedcompanies may need tobe combined
= FT Equiv
If “minimum essentialcoverage” is NOT offeredto FT employees AND anyFT employee enrolls inExchange plan and receivespremium assistance fromfederal government:
$2,000 annually for each FT employee(first 30 free)
If “minimum essentialcoverage” IS offered to FTemployees BUT any FTemployee enrolls in Exchangeplan and receives premiumassistance from federalgovernment:
$3,000 annually ($250 permonth) for each FT employeereceiving premium assistance,capped at amount equal to$2,000 for all FT employees(less first 30)
Penalties are assessedmonthly
No penalties apply to PTemployees
Exchange notifies employerthat FT employee iseligible for tax credit
EmployerShared
Responsibility
Penalties
EmployersSubject
Penalty“Bucket”
#1
$2,000
Penalty“Bucket”
#2
$3,000a.k.a.“Pay ”
a.k.a.“Play ”
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hese “rules” aremerely beingonsidered byegulatory agencies.o guidance orroposed regulationsave been issued.nformation commentsrom regulatory
fficials indicate thisepresents agencies’urrent thinking, andolicits comments onhese approaches.
RS Notice012-58ssuedug. 31,2012
mployersmay rely onuidancet least throughnd of 2014
onversely,mployer
may employmonth-by-
monthetermination
Ongoing employees — safe harbor “Ongoing” = those employed for at least one
complete “standard measurement period” Standard measurement period (SMP) is
determined by employer; cannot be less than3, and cannot more than 12 consecutivecalendar months
If employee averages at least 30 HPW duringSMP, then employee is considered FTE forfollowing stability period, regardless of hoursactually worked during the stability period
If employee does not average 30 HPW during
SMP, employee may be treated as not FTEduring following stability period
Stability period must be at least 6 calendarmonths, or if longer, the length of themeasurement period
Employer may also adopt an administrativeperiod between SMP and stability period of upto 90 days
New employees — safe harbor If employee is reasonably expected to work FT,
employer offering coverage at or beforeemployee’s first three calendar months ofemployment will not be subject to sharedresponsibility payment
Variable hour and seasonal employees o Initial measurement period (IMP)of 3 to 12
months may be used in which employermeasures hours of service
o Stability period must be at least 6 calendarmonths, or if longer, the length of the
measurement periodo Administrative period of no longer than 90
days may be used, including any periodbetween start date and beginning of IMP, andany period between IMP and date coverage iseffective; IMP + administrative periodtogether cannot extend beyond last day offirst calendar month beginning on or after thefirst anniversary of employee’s start date
Transition rule requires HPW measurement forfirst full SMP after hire
Full-TimeEmployee
“SubstantiallyAll” Wording& Exceptions
EmployerSharedResponsibility
IRS Notice 2011-36 (emphasis added):
“It is contemplated that the proposed regulations would make clear that an employeroffering coverage to all, or substantially all, of its full-time employees would not besubject to the §4980H(a) assessable payment provisions. Comments are requested onthe challenges employers may face in being able to offer coverage to certaincategories of employees even after implementation of the changes made by theAffordable Care Act to the group insurance market, and on other situations whereapplication of the . . . assessable payment may not be appropriate. Comments arerequested on whether there are appropriate exceptions that should be provided forunder the employer responsibility provisions . . .”
Measurement period must apply uniformly toemployees in same employment classification:collectively bargained and non-collectivelybargained; salaried and hourly; different
business entities; employees in different states
Variable hour employee =
employee for whom it cannot bedetermined that the employee isreasonably expected to average30 HPW, including employee forwhom initial employment periodat 30 HPW+ is reasonablyexpected to be of limitedduration.
Seasonal employee — employerare permitted to use areasonable, good-faithinterpretation of the termthrough at least 2014
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Eligible individuals:
Individuals with household incomesbetween 100% and 400% of the federal
poverty level (FPL) may purchasesubsidized coverage in an Exchange if:
Not enrolled inemployer (or certainother) coverage
Do not have access toemployer-basedcoverage that:
Pays at least 60%of coveredmedical costs
(a.k.a.“minimum value”)
Is priced to theindividual at nomore than 9.5% of
the individual’shousehold income
and
and
Premium purchase tax credit:
Annual credit is sum of monthly credits
Monthly credit is the lesser of:
Monthly premiumfor coverage under
an Exchange plan
or
Monthlypremium for 2nd-least expensiveSilver planavailable
Premiumcost forbenefitsjudged tonon-essential
1/12t ofemployee’shouseholdincome foryear
Applicabletablepercentage—
— X
Table percentage isa sliding scale from2% for 133% of FPL to9.5% of 400% of FPL
Cost-sharing subsidies:
Exchanges may reduce out-of-pocket costsbased on income – ranges from 94% (for100%-150% of FPL) to 70% (for 250%-400%of FPL) of coverage of plan’s benefits
IRS Regulations on
Health InsurancePremium Tax Credit(§1.36B-2(c)(3)(v)(A)(1)(emphasis added):
“. . . an eligibleemployer-sponsoredplan is affordable for anemployee or a relatedindividual if the portionof the annual premiumthe employee must pay,
whether by salaryreduction or otherwise(required contribution),for self-only coveragefor the taxable yeardoes not exceed [9.5percent].”
EmployerShared
ResponsibilityIndividual
Subsidies inExchanges
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These “rules” aremerely beingconsidered by
regulatory agencies.No guidance orproposed regulationshave been issued.Information commentsfrom regulatoryofficials indicate thisrepresents agencies’current thinking, andsolicits comments onthese approaches.
Note:$11,310 =$7.25/hour for 52
weeks at 30 HPW
W-2 income 9.50% Mo. Prem.
$11,310 $1,074 $90
$20,000 $1,900 $158
$30,000 $2,850 $238$40,000 $3,800 $317
$50,000 $4,750 $396
$60,000 $5,700 $475
$70,000 $6,650 $554
$80,000 $7,600 $633
$90,000 $8,550 $713
$100,000 $9,500 $792
$110,000 $10,450 $871
$120,000 $11,400 $950
$130,000 $12,350 $1,029
$140,000 $13,300 $1,108
$150,000 $14,250 $1,188
IRS Notice 2011-73 (emphasis added):
“ . . . Treasury and the IRS expect to propose an affordability safe harbor . .. It is contemplated that under the proposed safe harbor, . . . the employermust offer its full-time employees (and their dependents) the opportunity toenroll in minimum essential coverage, and . . . the employee portion of theself-only premium for the employer’s lowest cost coverage that providesminimum value (the employee contribution) must not exceed 9.5 percent ofthe employee’s W -2 wages. . . . Application of this safe harbor would bedetermined after the end of the calendar year and on an employee-by-employee basis . . .”
EmployerSharedResponsibility
AffordabilitySafe Harbor
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Since we do not knowhat Federal PoverLevel will be in 201we are using 2012 F
data in this analysis
$35,000 x .095 =$3,325
$3,325 ÷ 12 = $277.
See table page 33Family size = 5Household income(HHI)* = $67,5259.5% trigger is $534Subsidy = cost of 2n
least expensive silvplan less $452.98 inthis income/familysize corridor
* HHI = MAGIFor purposes ofcalculating MAGI todetermine eligibilitfor the premium tacredit, the statutorrequirements wereamended to includesocial security bene
Chapter 2 Individual Financial Analysis Example
Let’s take a look at how the Exchange subsidy and Employer Shared Responsibilitysafe harbor dynamic would stack up for an individual employee and the employerthat employs him/her.
If 2012 was 2014 . . .
Employee $35,000
Spouse $32,525 + three childrenHousehold Income $67,525
Monthly employee Monthly employeecontribution for contribution forindividual coverage family coverage
Lowest CostCurrent plan $ $
If this amount is more than
$277.08, the employer is not inthe Employer SharedResponsibility “safe harbor” withrespect to this employee. Thismeans that if the employeepurchases coverage through theExchange with a federal subsidy,the employer will be assessedthe $3,000 penalty.
If this amount is less than$534.57, the employee is not
eligible for federal subsidies forcoverage purchased through theExchange.
If this amount is more than$534.57, the employee is eligible
for federal subsidies for coveragepurchased through the Exchange.The subsidy is approximately thecost of the 2nd least expensivesilver plan available through theExchange, less $452.98.
If this amount is less than
$277.08, the employer is in theEmployer Shared Responsibility“safe harbor” with respect to thisemployee. This means that evenif the employee purchasescoverage through the Exchangewith a federal subsidy, theemployer will not be assessed the$3,000 penalty.
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Penalty/TaxIf 2012 was 2014 . . .
. . . and the employee decided to decline employer-sponsored coverage and decline coverage through the exchange the year’s penalty/tax would be:
$395.25
Calculation:$95 x 2 adults = $190.00 $67,525 Household income$47.50 x 3 children = $142.50 ($28,000) Deductions
$332.50 $39,525x .01
$395.25
The following year (if 2013 was 2015 and the employee’s income remained thesame . . .), the penalty/tax would be:
$1,137.50
Calculation:$325 x 2 adults = $650.00 $67,525 Household income
$162.50 x 3 children = $487.50 ($28,000) Deductions$1,137.50 $39,525x .02
$790.50
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Healthcare Reform ― Strategy & Decision-Making – Part II Notes
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Chapter 3 Organizational Financial Analysis Example
Since the passage of the Patient Protection and Affordable Care Act, a frequentcomment has gone something like this:
“We presently pay $10,000 [put your number here] to subsidize ouremployees’ health insurance. It will be much less expensive for us to dropcoverage and pay the $2,000 penalty .”
This view ignores a number of crucially important factors, and implies orpresumes a number of factors that may well not be supportable:
Your organization will be able to reduce overall compensation by $8,000[put your number here] per employee and continue to attract, retain andengage good talent.
Employees will be able to go to the Exchange in 2014 and purchaseacceptable coverage with the amount they presently pay for subsidizedcoverage through your organization.
Employees will prefer negotiating health insurance issues over theInternet through the Exchange to relying on you for assistance andsupport.
Making a poor decision in these areas could present significant challenges to thecompetitiveness and success of your organization.
Let’s take a look at an example to throw some light on the first of these issues.
City of Mosquito Heights300 Employees
285 employees have coverage through City15 do not have coverage through City
Family Individual
EmployER subsidy* $14,400 $7,600
EmployEE contribution* $4,800 = $400/mo $0 = $0/mo
Total cost $19,200 = $1,600/mo $7,600 = $633/mo
* Contribution schedule: Family coverage: Employer – 75% Employee – 25% Single coverage: Employer – 100% Employee – 0%
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* Penalties are nottax-advantaged,hence, this number isgrossed up to accountfor a 35% corporatetax
Notes:
$14,400 in pre-taxcompensationtranslates to about29% of overall (after-tax) compensation foran employee earning$35,000 in salary.
$14,400 in pre-taxcompensationtranslates to about15% of overall (after-tax) compensation foran employee earning$80,000 in salary.
City of Mosquito Heights300 Employees
285 employees have coverage through City(145 family ― 140 single)
15 employees do not have coverage through City
$2,088,000 Family units$1,064,000 Individual units
Present employer cost $3,152,000 “Savings” to drop coverageShared responsibility penalty ($729,000) $2,000 per FTE, first 30 “free”*
$2,423,000 “Savings”
Around $2.5 million in “savings,” right?
But how will the reduction of $7,600 to $14,400 in total compensation “play”with 285 of your employees? Will you be able to continue to attract good talent
when you drop 15-30% (see side bar) of total compensation from employees’pockets?
Will employees be able to purchase an acceptable medical plan for free (individual) or $400 (family) per month through the Exchange in 2014 (seetable, page 33)?
How will this affect the organization’s human capital/talent management andoverall business competitiveness?
The employer could add back additional (taxable) salary, but that wouldobviously eat into the purported “savings” that the employer was trying to gain
by dropping insurance.
Examples: If the City decided to add back $14,400 in cash compensation forthe 145 employees formerly on family coverage (grossed up to $19,200 toaccount for taxes), and $7,600 for the 140 employees formerly on singlecoverage (grossed up to $10,133 to account for taxes), the result would be
an additional $4,202,620 . . .resulting in an overall cost increase of
$1,777,620 .
Even if the City decided to add back just $12,000 for just the top 175 earners(leaving in this example at least 110 employees with significantly less in totalcompensation), grossed up to $16,000 to account for taxes, the result:
an additional $2,800,000 . . .resulting in an overall cost increase of
$377,000.
We believe that a more in-depth, targeted analysis is appropriate for anyorganization that wants to maintain its competitiveness.
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Important note:$760 is 9.5% of$8,000. For anyemployee makingamount or more (income), the empwould be in the
Employer SharedResponsibilityaffordability safeharbor, and wouldbe subject to apenalty (and $8,0less than minimumwage for an emplworking 30 HPW).
Let’s take a closer look at some other options that might make more financialsense.
What would happen if the City maintained its health plan benefit, but increasedrequired employee contributions to 35% for family coverage and 10% for single?
City of Mosquito Heights300 Employees
Family Individual
EmployER subsidy $12,480 $6,840
EmployEE contribution $6,720 = $560/mo $760 = $63/mo
Total cost $19,200 = $1,600/mo $7,600 = $633/mo
* New contribution schedule: Family coverage: Employer – 65% Employee – 35% Single coverage: Employer – 90% Employee – 10%
Key New Assumptions265 of 285 of employees originally covered through City remain on plan20 of 285 of employees originally covered through City drop coverage10 of 15 formerly not on the plan come on the plan5 of 15 formerly not on the plan still are not on the plan
Of the 25 (total) not covered by City’s plan:
3 have household income above 400% of the federal poverty level, andtherefore are not eligible for federal subsidies for coverage purchasedthrough the exchange; many will likely be covered through a spouse’s employer’s plan
22 have household income below 400% of the federal poverty level andcould potentially be eligible for federal subsidies for coveragepurchased through the exchange; some may become covered througha spouse’s employer’s plan; some may choose to not purchasecoverage. However, all 22 are within the City’s affordability safeharbor, since $760 is 9.5% of $8,000, which would be less thanminimum wage at 30 HPW, so none would subject the City to apenalty.
Important NoteThe federal subsidy for a family of five with a household income of$67,525 (using 2012 FPL data) would be the price for the 2nd least expensivesilver plan (a 70% to value plan) available on the Exchange in excess of:
$453/month$5,436/year
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1,920 is theifference betweenhe original employeeontribution for familyoverage and thenew” contribution foramily coverage.
760 is the differencebetween the originalmployee contributionor single coverage
nd the “new”ontribution for singleoverage.
City of Mosquito Heights300 Employees
275 employees have coverage through City(140 family ― 135 single)
25 employees do not have coverage through City
$1,747,200 Family units$923,400 Individual units
“New” total employer cost $2,670,600
“Savings” by dropping plan $3,152,000“New” total employer cost $2,670,600
$481,400 Adjusted savings
$481,400 Shared responsibility penalty $0Adjusted savings $481,400
If the City of Mosquito Heights decided to add $1,920 in cash compensation forthe 140 employees with family coverage (grossed up to $2,560 to account fortaxes) and $760 for the 135 employees with single coverage (grossed up to$1,013) to account for taxes, the outcome would be:
an additional $495,155 . . .resulting in an additional cost of
$13,755(0.4% of original cost — essentially break-even)
If, instead, the City decided to add back $1,500 in cash compensation for the top175 earners, grossed up to $2,000 to account for taxes, the result would be
an additional $350,000 . . .resulting in a net savings of
$131,400
Of course, these hypothetical results are based on a number of challengingpresumptions/forecasts. The point is that each employer needs to take a careful,reasoned, analytical and strategic approach to total rewards management andstrategic benefits design/management.
The objective must be for each organization to determine what approach, whatunique benefits design, and what overall strategy best supports its overallorganizational strategy. In this way, the organization has a far better chance ofremaining competitive and successful.
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Chapter 4 A Strategic Total Rewards Approach
In the new healthcare reform environment, an integrated, strategic approach tobenefits and compensation issues will be imperative. A well-designed overallcompensation (“total rewards”) package is one that supports an organization’s
human capital/talent management strategy, which in turn is a key driver of theorganization’s overall business strategy.
Professional Development
Performance managementTraining & organization devel.Career development
Work-Life Programs
Work flexibilityWellnessDependent support
Benefits
Health — Life — DisabilityRetirementPaid time off
Compensation
Base payVariable payMerit pay
Human Capital / Talent Management Strategy
Organizational Strategy
Engage & retainemployees
Attracttalent
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Professional & Org.
Development
Employer
Employees
Wellness& Work-Life
Benefits
Compensation
?General
assumptions
External
benchmarks
Cost & risk
concernsInformal inputand/or
intermittentsurveys
Segmented design
Siloed delivery( )
Traditional Process
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Compensation
Benefits
Wellness & Work-Life
Prof. & Org.Development
Total Rewards
Defined
business
value
Employer
Core
talent
Multiple tools &processes
Strategic Alignment Process
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Align total rewards strategy with organization’svision/mission/strategy
Determine competitive position in marketplacefor various employee groups
Determine optimal mix of elements for variousemployee groups
Determine manner in which reward elementswill be earned & allocated
Gather internal &external data
Conductbenchmarkinganalysis
Conduct interviews& focus groups
CultureRole of HR
Organization needs
Employee needs
Budget
Administration
Readiness for change
Quantitative measurements Employee attraction,
retention & engagement Legal compliance Results of performance-
based rewards
Overall costs Productivity
Qualitative measurements
TotalRewards
Measurements
ConductAssessments
Issues toConsider
TotalRewardsStrategy
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Chapter 5 Hitting the “Sweet Spot(s)” in 2014 & 2018
As the significant changes planned under healthcare reform for 2014 and2018 approach, each employer will need to engage in careful analysis and
planning to find important benefit “sweet spots.” The first is the sweetspot between the cost increases anticipated as a result of PPACA’s benefitmandates, and the “Cadillac” or high-cost plan taxes that will be imposedin 2018 on plans with values in excess of legislated high cost limits.
Adding benefit mandateswill increase the cost of
providing coverage
Medical inflation willcontinue to affect the cost
of providing coverage
40% tax will be imposed onvalue of plan in excess of
high cost health planlimits in 2018
2018
High Cost – Family$2,292/month$27,500/year
High Cost – Individual$850/month$10,200/year
2012
High Cost – Family$1,294/month$15,528/year
High Cost – Individual$480/month$5,760/year
Based onannual trend
of 10%
Sweet SpotPPACA
Mandates “Cadillac Plan”
Tax
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The second “sweet spot” will be determined by the employer’s designatedemployee benefit contributions vis-à-vis its employees’ household incomeamounts.
Higher underlying healthplan cost to employer
Fewer $3,000 federalpenalties
Lower (taxable) cashcompensation may be
acceptable
Movement to the planchanges the risk profile
Lower underlying healthplan cost to employer
More $3,000 federalpenalties
Push for higher (taxable) cashcompensation
Movement from the planchanges the risk profile
No health plan cost toemployer
$2,000 federal penalty foreach FTE (after first 30)
Strong push for higher (taxable) cashcompensationto replace lost
benefit purchasing power
Remember that Treasury and the IRS are expected to propose an affordability safe harbor foremployers within which the assessable payment (penalty) would not apply based on this formula:
Employee contribution for self-only coverage for lowest-cost planproviding minimum essential coverage
Employee’s wages as shown on W-2 form
Regulatory agencies have stated that basing affordability calculations in this way would provide amore workable and predictable method for both employers and employees. However, theemployee’s eligibility for the premium tax credit would continue to be based on theaffordability of employer-sponsored coverage relative to the employee’s household income.
≤ 9.5%
Sweet SpotLow
Percentage High
Percentage
EmployeeContribution
HouseholdIncome
Abandonment ofER-sponsored
Health Benefits
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Away from the employer’s plan To Medicaid To Exchange with subsidy
To spouse’s plan To other unsubsidized
coverage To uninsured
To the employer’s plan From spouse’s plan From being uninsured
From Medicaid From other unsubsidized
coverage
Employee contributionrequirement and out-of-pocketcosts versus similar costs forother coverage Employer’s premium
classifications/categories Contribution stratification
by income level?
Relative richness of employerplan versus other options
Non-financial issues: Administration simplicity Employer advocacy Other factors
Financial trends Underlying medical costs Plan claims experience
Plan specifics/terms
Where people are covered whoare not presently on your plan
Degree of flexibility bycollective bargaining units andagreements
What competitors for labor aredoing
Sweet Spot
MovementDriven By
Key InformationNeeded
Anticipationof Movement
in 2014
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Example of Choices for Employee ― 2014
Employer-sponsored coverage
Option #1 Option #2
Single
Single +1
Family
Exchange coverage – subsidies available if household income ≤ 400% of FPL
Platinum plan Insurer #1 Insurer #2 Insurer #3 Insurer #4
Single
Single + spouse
Single + 1 child
Single+spouse+1
Single + 2 children
Single+spouse+2
etc.
Gold plan Insurer #1 Insurer #2 Insurer #3 Insurer #4Single
Single + spouse
Single + 1 child
Single+spouse+1
Single + 2 children
Single+spouse+2
etc.
Silver plan Insurer #1 Insurer #2 Insurer #3 Insurer #4
Single
Single + spouse
Single + 1 childSingle+spouse+1
Single + 2 children
Single+spouse+2
etc.
Bronze plan Insurer #1 Insurer #2 Insurer #3 Insurer #4
Single
Single + spouse
Single + 1 child
Single+spouse+1
Single + 2 children
Single+spouse+2
etc.
Spouse's employer-sponsored coverage
Option #1 Option #2
Single
Single +1
Family
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Exchange Subsidies using 2012 Federal Poverty Level Guidelines(Sorted by family size)
Subsidy is approx. the cost for 2nd least expensive Silver plan less amount in last column.
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12Subsidy = cost for 2nd-leastexpensive “silver” plan less
1 $ 11,170 1.33 $ 14,856.10 0.0300 $ 117.61 $ 37.14
1 $ 11,170 1.50 $ 16,755.00 0.0400 $ 132.64 $ 55.851 $ 11,170 2.00 $ 22,340.00 0.0630 $ 176.86 $ 117.291 $ 11,170 2.50 $ 27,925.00 0.0805 $ 221.07 $ 187.331 $ 11,170 3.00 $ 33,510.00 0.0950 $ 265.29 $ 265.29
1 $ 11,170 4.00 $ 44,680.00 0.0950 $ 353.72 $ 353.72
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12 Subsidy = cost for 2nd-leastexpensive “silver” plan less
2 $ 15,130 1.33 $ 20,122.90 0.0300 $ 159.31 $ 50.31
2 $ 15,130 1.50 $ 22,695.00 0.0400 $ 179.67 $ 75.652 $ 15,130 2.00 $ 30,260.00 0.0630 $ 239.56 $ 158.872 $ 15,130 2.50 $ 37,825.00 0.0805 $ 299.45 $ 253.74
2 $ 15,130 3.00 $ 45,390.00 0.0950 $ 359.34 $ 359.34
2 $ 15,130 4.00 $ 60,520.00 0.0950 $ 479.12 $ 479.12
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12 Subsidy = cost for 2nd-leastexpensive “silver” plan less
3 $ 19,090 1.33 $ 25,389.70 0.0300 $ 201.00 $ 63.47
3 $ 19,090 1.50 $ 28,635.00 0.0400 $ 226.69 $ 95.453 $ 19,090 2.00 $ 38,180.00 0.0630 $ 302.26 $ 200.453 $ 19,090 2.50 $ 47,725.00 0.0805 $ 377.82 $ 320.16
3 $ 19,090 3.00 $ 57,270.00 0.0950 $ 453.39 $ 453.393 $ 19,090 4.00 $ 76,360.00 0.0950 $ 604.52 $ 604.52
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12 Subsidy = cost for 2nd-leastexpensive “silver” plan less
4 $ 23,050 1.33 $ 30,656.50 0.0300 $ 242.70 $ 76.644 $ 23,050 1.50 $ 34,575.00 0.0400 $ 273.72 $ 115.25
4 $ 23,050 2.00 $ 46,100.00 0.0630 $ 364.96 $ 242.034 $ 23,050 2.50 $ 57,625.00 0.0805 $ 456.20 $ 386.57
4 $ 23,050 3.00 $ 69,150.00 0.0950 $ 547.44 $ 547.44
4 $ 23,050 4.00 $ 92,200.00 0.0950 $ 729.92 $ 729.92
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12 Subsidy = cost for 2nd-leastexpensive “silver” plan less
5 $ 27,010 1.33 $ 35,923.30 0.0300 $ 284.39 $ 89.815 $ 27,010 1.50 $ 40,515.00 0.0400 $ 320.74 $ 135.05
5 $ 27,010 2.00 $ 54,020.00 0.0630 $ 427.66 $ 283.615 $ 27,010 2.50 $ 67,525.00 0.0805 $ 534.57 $ 452.98
5 $ 27,010 3.00 $ 81,030.00 0.0950 $ 641.49 $ 641.495 $ 27,010 4.00 $108,040.00 0.0950 $ 855.32 $ 855.32
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12 Subsidy = cost for 2nd-leastexpensive “silver” plan less
6 $ 30,970 1.33 $ 41,190.10 0.0300 $ 26.09 $ 102.986 $ 30,970 1.50 $ 46,455.00 0.0400 $ 367.77 $ 154.856 $ 30,970 2.00 $ 61,940.00 0.0630 $ 490.36 $ 325.19
6 $ 30,970 2.50 $ 77,425.00 0.0805 $ 612.95 $ 519.396 $ 30,970 3.00 $ 92,910.00 0.0950 $ 735.54 $ 735.546 $ 30,970 4.00 $123,880.00 0.0950 $ 980.72 $ 980.72
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Exchange Subsidies using 2012 Federal Poverty Level Guidelines(Sorted by “household income”)
* Subsidy is approx. the cost for 2nd least expensive Silver plan less amount in last column.
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12Subsidy = cost for 2nd-leastexpensive “silver” plan less
1 $ 11,170 1.33 $ 14,856.10 0.0300 $ 117.61 $ 37.14
1 $ 11,170 1.50 $ 16,755.00 0.0400 $ 132.64 $ 55.852 $ 15,130 1.33 $ 20,122.90 0.0300 $ 159.31 $ 50.31
1 $ 11,170 2.00 $ 22,340.00 0.0630 $ 176.86 $ 117.292 $ 15,130 1.50 $ 22,695.00 0.0400 $ 179.67 $ 75.653 $ 19,090 1.33 $ 25,389.70 0.0300 $ 201.00 $ 63.47
1 $ 11,170 2.50 $ 27,925.00 0.0805 $ 221.07 $ 187.333 $ 19,090 1.50 $ 28,635.00 0.0400 $ 226.69 $ 95.45
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12Subsidy = cost for 2nd-leastexpensive “silver” plan less
2 $ 15,130 2.00 $ 30,260.00 0.0630 $ 239.56 $ 158.874 $ 23,050 1.33 $ 30,656.50 0.0300 $ 242.70 $ 76.64
1 $ 11,170 3.00 $ 33,510.00 0.0950 $ 265.29 $ 265.294 $ 23,050 1.50 $ 34,575.00 0.0400 $ 273.72 $ 115.25
5 $ 27,010 1.33 $ 35,923.30 0.0300 $ 284.39 $ 89.812 $ 15,130 2.50 $ 37,825.00 0.0805 $ 299.45 $ 253.74
3 $ 19,090 2.00 $ 38,180.00 0.0630 $ 302.26 $ 200.45
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12Subsidy = cost for 2nd-leastexpensive “silver” plan less
5 $ 27,010 1.50 $ 40,515.00 0.0400 $ 320.74 $ 135.056 $ 30,970 1.33 $ 41,190.10 0.0300 $ 326.09 $ 102.98
1 $ 11,170 4.00 $ 44,680.00 0.0950 $ 353.72 $ 353.722 $ 15,130 3.00 $ 45,390.00 0.0950 $ 359.34 $ 359.344 $ 23,050 2.00 $ 46,100.00 0.0630 $ 364.96 $ 242.03
6 $ 30,970 1.50 $ 46,455.00 0.0400 $ 367.77 $ 154.853 $ 19,090 2.50 $ 47,725.00 0.0805 $ 377.82 $ 320.16
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12Subsidy = cost for 2nd-leastexpensive “silver” plan less
5 $ 27,010 2.00 $ 54,020.00 0.0630 $ 427.66 $ 283.61
3 $ 19,090 3.00 $ 57,270.00 0.0950 $ 453.39 $ 453.39
4 $ 23,050 2.50 $ 57,625.00 0.0805 $ 456.20 $ 386.572 $ 15,130 4.00 $ 60,520.00 0.0950 $ 479.12 $ 479.126 $ 30,970 2.00 $ 61,940.00 0.0630 $ 490.36 $ 325.19
5 $ 27,010 2.50 $ 67,525.00 0.0805 $ 534.57 $ 452.984 $ 23,050 3.00 $ 69,150.00 0.0950 $ 547.44 $ 547.44
Fam. Size FPL 2012 % of FPL Hhld income Table factor 9.5% trigger/12 Subsidy = cost for 2nd
-leastexpensive “silver” plan less
3 $ 19,090 4.00 $ 76,360.00 0.0950 $ 604.52 $ 604.526 $ 30,970 2.50 $ 77,425.00 0.0805 $ 612.95 $ 519.39
5 $ 27,010 3.00 $ 81,030.00 0.0950 $ 641.49 $ 641.494 $ 23,050 4.00 $ 92,200.00 0.0950 $ 729.92 $ 729.92
6 $ 30,970 3.00 $ 92,910.00 0.0950 $ 735.54 $ 735.545 $ 27,010 4.00 $108,040.00 0.0950 $ 855.32 $ 855.326 $ 30,970 4.00 $123,880.00 0.0950 $ 980.72 $ 980.72
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Chapter 6 Resources
DOL link – Patient Protection and Affordable Care Acthttp://www.dol.gov/ebsa/healthreform/
HHS link – Health Reformhttp://www.healthcare.gov/
White House link – Health Reform in Actionhttp://www.whitehouse.gov/healthreform
GBS Internet website link
http://www.gbshealthcarereform.com
U.S. Department of Justice ― Defending the Affordable Care Act http://www.justice.gov/healthcare
Resources
GovernmentResources
GallagherResources
http://www.dol.gov/ebsa/healthreform/http://www.healthcare.gov/http://www.whitehouse.gov/healthreformhttp://www/http://www/http://www.whitehouse.gov/healthreformhttp://www.healthcare.gov/http://www.dol.gov/ebsa/healthreform/
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www.gallagherbenefits.com
Healthcare
Reform
ResourcesInformational
Resources
Health Care Reform
Interest in Private Insurance Exchanges, “Defined Contribution”
Plans Likely To Increase Due To Health Reform
Federal health care reform legislation and the desire of employers to limittheir health insurance costs are likely to fuel interest in "defined
contribution" (DC) health benefits and private health insurance exchanges,
according to a new report
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ResourcesWorkforceEvaluation
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ResourcesWellness
Consulting ComplianceConsulting
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ResourcesHealthcare
ReformPlanner
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Resources FinancialOutlook Tool
Frequency of Simulated Percent Impact