M3. Strategic Planning And Design Flashcards
How do we bridge the gap from where we are to our desired state?
How many options and what plans should we offer for each benefit type?
Benefits Strategy should guide this.
- Degree of Choice
- Required admin support for them
- Employee communications and education for these programs
What are common plan considerations?
- Employee demographics
- Employee opt out
- HRIS capabilities
- Collective bargaining agreements
- Health care delivery model (private, exchange, etc.)
What is the traditional health-care delivery model?
Employee-Sponsored
- limited choice of plans such as PPO,HMO, CDHP W/HSA
- employer premium contributions vary
What is a private exchange?
Takes burden off the employer. One-stop shop for employees. Plans developed by exchange.
Could be fully insured or self funded.
Employer gives money to employee to use on the exchange.
Less administration internally
What is a public exchange?
Individual plans offered
Plan costs vary by plan and state
Small employers use it.
Some offer vision and dental
- Design philosophy and objectives
- Approach to cost
- Expense sharing
- Covered expenses
- Eligibility
What are PLAN DESIGN CONSIDERATIONS?
What are Medical Plan Considerations?
- Structures for medical plan
- Preventative care
- Quality and efficiency initiatives
- Carve out programs - Rx, vision, dental
- Covered family members - domestic partners
- Network
What are Rx Drug Plan Considerations?
- Pharmacy Benefit Managers
Are you getting any of the rebates? - Cost Sharing techniques
- Tiers of covered drugs
- Step Therapy
- Mail order
- Specific pharmacies for specialty or biotech drugs
What are dental plan considerations?
- Structure of plan
- Deductible typically applies to basic, major and orthodontic
- Co-insurance 80%typical, 50% for orthodontia
- Adverse selection- we uses plan and then leaves the plan
What are vision plan considerations?
Covered expenses and adverse selection
Life insurance considerations
- Core amount (covered by the company)
- supplemental coverage levels (buy up)
- Pay multiples or flat dollar amount, what is included in the definition of pay
- pricing options, based on age?
- AD&D
- Section 79, life insurance over $50k has to be taxed as imputed income
What should you consider when deciding to offer Dependent Life insurance to employee family members?
- What types of coverage will you offer and who is eligible to enroll?
100% employee paid
Fully insured - governed by state law
Employee is always the beneficiary
Employee must purchase supplemental life insurance for themselves TO BE ELIGIBLE TO ENROLL DEPENDENTS.
Can limit spouse and child insurances.
Could be flat rate or age banded.
Tobacco user charges
Voluntary AD&D can be offered too
Name 5 STD and LTD considerations
- Income replacement objectives - 60/66.7% , can be offset by workers comp and PTO, and social security
- Variable Pay replacement options
- Availability to hourly and salaried employees
- Coordinate with sick leave and PTO PROGRAMS.
- Start, end, and length of coverage
- Fully insured or self-insured, WAITING PERIOD OF 5-15 days, and max length of benefits
LTD TYPICALLY FULLY INSURED
MANDATED in NY, NJ, Hawaii, Puerto Rico, CA, RI
- Coordination with state mandated programs
- Taxable or not,
A…..if employer pays 100% of premiums, then employee owes taxes on all earnings received through the program.
B……if there is a premiums cost share between the employer and employee such as 50%, then 50% of employee earnings thru program are taxable income—- employee pays less taxes this way.
Name 5 Merger and Acquisition Considerations for HEALTH AND WELFARE PLAN INTEGRATION
STOCK PURCHASE TAKEOVER- you take all of that companies benefits
ASSET PURCHASE ACQUISITION- not taking benefit plans
- Cultural Differences-
- Philosophical differences
- Age and services
- Historical differences
- Geographical differences
What are…
BENEFIT PLANS TRANSITION CONSIDERATIONS
after a merger or acquisition
- Conversions of old plans to new plans, side by side comparison- gap analysis
- Conduct medical plan disruption analysis —— provider loss
- Compliance issues such as employees on FMLA
- Liability issues — typically comes out in due diligence , retiree medical, we’re 5500s filed? Plans audited??
- Integration issues
- Mid-year plan changes—-impact to deductibles
