As America undergoes one of its largest revolutions to its healthcare system, employers and employees are left worrying about the impact it may have on employee health benefits. While employers see offering health benefits as key to retaining and attracting top talent, their employees value the opportunity to continue to receive coverage for themselves and their families.

2. The current state of PPACA &
employee health benefits
US Healthcare Reform & The Impact on Employers

3. Key PPACA provisions affecting
Employer-Sponsored Insurance…
• Minimum Loss Ratios By Market Of 80% Or 85% (Large Vs. Small
Employers)
• Rate Review
• Guaranteed Issue
• Guarantee Renewability
• Policies Cannot Carry Pre-existing Conditions
• No Discrimination On Health Status
• No Discrimination Of Plan For Highly Compensated Employees Vs.
Non Highly Compensated Employees (Executives Vs. Non Executive)

4. Key PPACA provisions affecting
Employer-Sponsored Insurance…
• Additional taxation of certain types of policies by 2018 for
exceptionally rich benefits if not offered to everyone (some
employers offer more than one plan and employees may choose)
• No lifetime maximums nor annual limits
• Coverage of preventative care without cost sharing
• Extension of adult dependent coverage to age 26
• No pre-existing condition restriction
• Must provide “essential health” benefit package as outlined by the
law

5. 9 Out Of 10 Employers Say Offering
Medical Insurance Plays A Key Role In
Hiring New Employees.

6. Future PPACA Provisions Affecting
Employers To Be Implemented…
#HealthInsights
JANUARY 2015
Employer Shared
Responsibility takes effect.
JANUARY 2018
Excise Tax on Cadillac plans
takes effect. “Cadillac Tax”

7. Comparing Plan Types…
Provision
Exchange
Plan
Grand-
fathered
Plan
Employer
Sponsored
plan
Self-
Insured
plan
No lifetime or annual limits. ✔
✔
(Annual limits do
not apply)
✔ ✔
Dependents under age 26. ✔ ✔ ✔ ✔
Plan administrative costs. ✔ ✔ ✔
Preventive services. ✔ ✔ ✔
Patient protections. ✔ ✔ ✔
Out-of-pocket maximums. ✔ ✔ ✔
Pricing. ✔ Small group only.
Deductibles. Small group only. Small group only.
Minimum services covered. ✔ Small group only.

8. Starting in 2018, a 40% excise tax will be
imposed on the portion of employer-
sponsored health coverage that generally
exceeds $10,200 a year for single coverage
and $27,500 for families.
Excise Tax on Cadillac Plans…
#HealthInsights

9. Insurers will group your company with other local
employers and set premium rates based on age,
location, family size and smoking status.
Beginning in 2014, the PPACA requires a
modified community rating for individual
& small-group markets…

10. More than 2/3 of employers currently
providing health benefits (69%) have
analyzed how the PPACA will affect
their health care plan costs.
Are US Employers prepared for the PPACA?

11. 80/20 medical loss ratio
Comprehensive coverage for health benefits package
Essential health benefits requirements
Guaranteed issue and renewability
Prohibition of discrimination based on salary
Annual limitation on deductibles for employer
sponsored plans
PPACA mandates contributing to
increasing costs…

12. Medium-size and large employers are
experiencing cost increases close to 5% due
to the PPACA. A considerable portion of
smaller businesses are experiencing cost
increases above 15 percent.
28%
19%
1%
4% 4%
0%
5%
10%
15%
20%
25%
30%
0-50 FTEs 51-499 FTEs 500-4,999 FTEs 5,000-9,999 FTEs 10,000 FTEs

13. Employers have begun to see cost
increases to their employee health
plans of as much as 15%.
Providing Insurance
to Uninsured
Transitional
Reinsurance
Human Resources
& Employee
Communication
Administrative Cost
PCORI Fee
28% 35%
38%
18%
13%

14. In 2007, 73% of large companies surveyed said
they would continue to offer health care
benefits for the next 10 years. today only 23%
make this prediction.

15. How will employers react?
53% 36%
28%29%
Shift High Cost Employees
Into Private Exchanges
Increase Preventative
Measures (i.e. Wellness,
Value-based Health,
Disease Management)
Reduce Current Levels of
Health Benefit Coverage &
Contributions
Shift to High-Deductible Plan

16. 4 out of 5 employers will raise
deductibles and copays for
employees,

17. Businesses are seeing as
much as a 50% increase on
health plan renewals.

18. Employer contributions have
increased 89% in 10 years
Employer Contributions - $6,657
Employee Contributions - $2,412
Employer Contributions - $11,786
Employee Contributions - $4,565
Avg. Annual Premium
$9,068
2003
2013
Avg. Annual Premium
$16,351

19. 100 million individuals receive health
insurance coverage through a self-
funded employer-sponsored plan,
making up almost 61% of the
commercial health insurance market.