TPG’s Healthcare Review: November, 2014
The Plan
Welcome to the eleventh edition of TPG’s Healthcare Review, a forum to keep our current clients, prospective clients, and candidates apprised of the ever-changing landscape of healthcare in a post-reform world. Tracking the iterations, implementations, extensions and exemptions of the Patient Protection and Affordable Care Act of 2010 (PPACA) can be a full time job. Each new day seems to bring a wave of information which needs to be fully digested before the next news cycle starts. Again, it is our intent to update this newsletter monthly through the end of 2014 to keep you well-informed of the latest developments and their implications. We thank you in advance for your interest, and welcome your comments and questions throughout the year.
We are just over a month away from the implementation date of the Employer Mandate of PPACA on January 1, 2105. The Performance Group has been preparing for this event for over two and a half years. All of the “i’s” have been dotted and the “t’s” have been crossed and we are presently rolling out the plan to those employees who are “Benefit Eligible” on January 1st. Our plan will also add additional employees as they become eligible throughout the year. No more practice, no more hypotheticals, the curtain is rising and we are ready.
As we designed our plan, the centerpiece of our thought process was to create a cost sharing model which would be affordable to both our employees and our clients. The original plan included a Bronze level policy for employees which would cover most of their needs with catastrophic protection. Unfortunately, when the insurance plans were rolled out for 2015, the costs had increased significantly over the prior year and a participation rate of 70% amongst the employees put these plans out of reach.
Through our research, we were able to obtain a PPACA compliant plan which met the definition of Minimum Essential Coverage (MEC) through Transamerica. Although this type of “skinny” plan was available through a poorly written part of the law, its coverage will meet the needs of 95% of those covered. This plan will be available for 2015 as our plan was in process prior to the Administration closing the availability of these plans. With the results of the mid-term elections, the jury is still out on any amendments which will become part of the law before the 2016 plan year.
The total cost of our plan is approximately $170 per month for each employee that participates. The employee cost will be $20 per week on a pretax basis. This will leave a cost to the client of around $86 per month for each employee that participates (including the 5% administration fee). The employee cost is well within the definition of “affordable” as stated within the law, and will provide coverages with reasonable copays and a strong network of providers.
The Performance Group has contracted with Colonial Life to meet with all eligible employees for one on one meetings to discuss the plan and some additional coverages which would be available to them. Throughout the past year we have written about our concerns regarding the lack of “health insurance knowledge” within the general populace. This is why we decided to team up with Colonial to help educate our employees to the benefits and risks of having proper coverage. The MEC plan that we are offering does not cover hospitalization, however Colonial Life will offer a medical bridge and/or accident insurance to the employee, at their option and cost, to cover those risks.
The client will receive reports on a monthly basis which will be used to track compliance for the TPG employees working within their facilities. Included in those reports will be a list of all qualified employees and the hours they have worked. There will also be a separate list of all the employees who have opted in to the TPG Healthcare Plan. Finally, there will be a list of all the employees who have declined or waived coverage. As final rules are rolled out by the enforcement agencies within the government, TPG is committed to keeping all reporting requirements of our clients in compliance with the law.
As for the cost to the client of approximately $86 per month per participating employee, we will offer the option of the client paying actual costs plus a 5% administrative fee or we can place the cost based on our estimates into an updated mark-up. Each client will need to decide by the implementation date of January 1, 2015. It is important to note that not all employees that are Benefit Eligible will participate in the plan. Many of these employees already have healthcare coverage either through a government program, a spouse’s insurance coverage or a parental plan if the individual has not yet attained the age of 26. There will also be individuals who decide not to participate and just pay the penalty of the Individual mandate. At TPG, our goal is to have participation in the twenty percent range, thus limiting the cost to our clients.
Meetings with Benefit Eligible employees are currently being scheduled for the first and second weeks of December. Our next major wave of meetings will be in mid-February, preparing for April 1, 2015 Benefit Eligible group of employees. We believe we have come up with a great plan to care for our employees and provide our clients with a productive and motivated group of workers.
Please let us know if you have any questions regarding our plan and the benefits provided. At The Performance Group, we want to wish you and your families a wonderful and happy Thanksgiving. Be safe and thank you for your continued interest.
Thomas E. Readdy
President
The Performance Group
Contact A Performance Consultant