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The AGC Alternative: “How to Gain Control Over Your Benefits Budget and Offer Employees More of What They Want”
The AGC Alternative:“How to Gain Control Over Your Benefits Budget and Offer Employees More of
What They Want”
• Why Employers Offer Benefits
• Employee Benefit Program Challenges
• Current Solutions
• A Technology Based Solution
• How Defined Contribution Works
• The AGC Alternative
• Real Case Study
• The Future of Private Exchanges
• Questions
The AGC AlternativeWhat we will cover today
Why Do Employers Offer Benefits?
Increase your appeal – attracting the employees you want
Minimize your Turnover Rate – retaining the employees you want
Better Moral
Healthier EmployeesBetter Job Performance Increased Productivity=
Employee Benefit Program Challenges
Plan Costs
Health care costs have outpaced GDP growth since the 1970s and continue to rise. Current trend is 9% - 10% annually.
Cost of benefits as a percentage of compensation have increased from 5% in 1950 to 30-40% today
Employees generally do not understand the total cost of the plan
Increased Administration
Increased Compliance
Limited Choice or customization
Most employer plans provide more coverage than some employees need
Why are these the only choices year after year?
A Solution – A Technology PlatformExpand On What You Are Already Offering
Web based Technology Simple to use Internet based enrollment process Much more choice available to employees for all types
of insurance Robust technology includes strong decision support
tools Personal recommendations based on individual needs Still a group (employer) sponsored program
Defined Contribution Model
Employer makes available a fund to employees Employees choose their own plans based on
individual needs Employer cost is much more predictable and
easier to budget
Defined Contribution
Allows employer to predetermine a set dollar amount on a per employee basis for each employee to spend
The DC is set based on current costs, employers budget, and benchmarks
More plan choice allows employees to “shop” for the best plan for them at the cost they choose
Significant flexibility in how the DC is structured
“Very few people spend other people’s money as carefully as they spend their own.”
Milton Friedman, renowned economist
Manage Costs
Defined Contribution - helps to budget and manage current costs
Employee Health Management (Wellness) –manage long term costs
Help employees find the right plan
Consumer Driven Health Plans – HSA’S and HRA’s
Reduce Administration
Why Employee Choice Matters
• On average, 8% - 10% of an employee population does not incur any claim in a given year
• An additional 13% to 18% incur less than $500 in claims• Almost 50% of an average group incurs less than $1,000 in
claims
(MetLife’s 12th Annual U.S. Employee Benefit Trends Study)
Why Health Management Matters
• Keeping healthy employees healthy • Assisting employees with chronic conditions better manage
the condition helps the employee and helps the plan costs• Happier and healthier employees are more productive
employees
For every 100 employees, 70% of costs are for conditions that are lifestyle related
The AGC Alternative• Exclusively available for AGC Members
• Currently available in these states for groups with less than 100 employees: (More will be added through 2015)
• Available in all states for groups with more than 100 employees
• Must have at least 10 eligible employees
• AZ• CT• FL• GA
• IL• MD• ME• MN
• NC• NJ• NY• OH
• PA• SC• TN• TX
• VA• WI
The AGC Alternative
The Carriers/Partners Liazon - Technology Platform
Willis – Broker of record
Aetna – Medical
MetLife – Dental, Life and Disability
Group Vision Services (Eyemed) – Vision
Viverie – Wellness
Innotech – Call Center
Benefits of The AGC AlternativeFor You
Better cost predictability and budgeting
Robust technology platform with administrative support and carrier connectivity – No cost to member firms
Consultation on ACA compliance and general compliance issues
Call center to take work off of your desk – No cost to member firms
• A more attractive plan offering for your employees
For Your Employees
A personalized employee experience with more plan options
Robust decision support tools
An insurance program designed for each employee
Wellness education that’s tailored to individual needs
Online and “live” customer service
Higher satisfaction with their benefits
Case Study – Employees find the right insurance
Defined Benefit
Employer offers 2 basic health plans and one dental plan
Employer covers 70% of plan
Employer costs can vary depending on how many employees enroll in each plan
Employee has no idea of employer’s actual costs
Employee always selects the top PPO plan because it’s the best available
Defined Contribution
Employer now offers 5 health plans, dental and vision
Employer now provides a flat amount per employee regardless of the plan they choose
Employee knows exactly what each plan costs and now has plan options that scale better to their lifestyle
When given choice and control to spend “their” money, employee chooses a plan below the top PPO
Results• 2015 Total costs projected 4% below 2014• 48% drop in average payroll deduction - $900 /employee
Healthcare Benefit Insights Interest in private exchanges remains strong
– 47% have implemented or are considering implementing a
private exchange by 2018
In considering a private exchange, employers say the
consumer experience matters
– 96% say experience and track record are key consideration
when choosing exchange vendor
– 85% of 2014 respondents said it is very important that the
exchange offers sound support in decision making(Private Exchange Evaluation Collaborative 2014 Employer Study)
SourcePrivate Exchange: Accenture analysis, based on data from; U.S. Census, Bureau of Labor Statistics, Kaiser Employer Health Benefits 2012 Annual Survey.
Healthcare Benefit Insights
