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BOT makes decision on future rate structure of Regence/Asuris HDHP

Thanks to all who were able to attend one of the four regional Health Care Forums and answered the follow-up survey questions. Your feedback proved to be invaluable to the Employee Benefits Advisory Committee (EBAC) and Board of Trustees (BOT). After thoughtful discussion and much group input, EBAC made a recommendation to the BOT that was approved at their April 17 meeting.

The Regence/Asuris HDHP will increase 6% in addition to the standard trend increase for the 2016 and 2017 plan years, and in 2018 will move to a tiered rate structure.

Background about High Deductible Health Plan (HDHP) decisions

In the fall of 2014, the Employee Benefits Advisory Committee (EBAC) and Board of Trustees (BOT) reviewed current medical plan relative and actuarial values, as provided by our broker consultant Aon Hewitt. All plans were found to be in line from an actuarial perspective, except the Regence/Asuris High Deductible Health Plan (HDHP). Further, the impacts of subsidizing employee out-of-pocket costs were discussed.

Employer contribution to a tax favored account elevates the actuarial value of the plan – the higher the contribution, the less the employee pays out-of-pocket. While the EBAC came up with suggestions on how to better align plan rates in the future, the BOT ultimately deferred making a decision in late 2014, and requested further input and information from staff and membership. The BOT also requested the information be provided to them in early 2015, so that decisions impacting 2016 rating would be known by membership in advance of budget preparation.

Regional Health Care Forums – member input

Staff held four Regional Health Care Forums in February, and asked membership to attend or view the video, and answer a short survey. Because we are a member governed pool, it is paramount that membership have direct input into the decision making process. Your feedback proved to be invaluable to the Employee Benefits Advisory Committee (EBAC) and Board of Trustees (BOT), who met following these Regional Forums.

Upcoming rate adjustments

After thoughtful and interactive discussion, EBAC made a recommendation to the BOT that was approved at their April 17 meeting. Based on this decision, the Regence/Asuris HDHP will increase 6% in addition to the standard trend increase for the 2016 and 2017 plan years, and in 2018 will move to a tiered rate structure based on employer contributions to a tax favored health account.

The AWC Trust actuaries recommended a 6% trend adjustment to the HDHP for 2016-17 as a blended and simplistic approach, allowing one rate for all regardless of tax favored account contributions made by the employer. The pricing was actuarially based on an average contribution to an HSA or HRA of 50% of the deductible. While most employers on this plan contribute more than 50% of the deductible, your EBAC/BOT felt this was a fair compromise, while still moving to get the plan more appropriately rated.

Since the 6% adjustment is added to the necessary rate adjustment for all AWC Trust medical plans, you are probably wondering what the 2016 projections are – it’s still a little early to give estimates, so look to the July issue of For Your Health. However, a rustic calculation using our pure trend, estimates the HDHP rate increase somewhere between 12-15% in 2016. This places the HDHP well below the 2018 Excise Tax by 21% or less, even for those funding 100% of the deductible.

In 2018, the direction is to move the RBS/ANH HDHP to a tiered rating structure, where premium rates will depend on the amount the employer is contributing to a tax favored health plan. Further information and clarification will be known about the Excise Tax, which will be helpful as EBAC and the BOT work to better fine-tune this policy and rating tiers.

This policy positions the Trust to move forward in working to rate the RBS/ANH HDHP appropriately, while still keeping the plan an attractive option and competitively rated. Continuous review of plan growth and experience will occur as membership enrollment shift occurs.

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