1. The Horton Group prides itself on keeping our clients informed of changes and newsworthy information
pertaining to Insurance, Risk Management and Employee Benefits. We regularly send you newsletters
and offer training through Webinars and Seminars. I help contribute some of that content and must
admit finding the right balance without overload is a constant challenge.
It is difficult to summarize the hundreds of news and legislative articles reviewed each week and provide
a concise summary of the Affordable Care Act with a focused strategy in mind. The market and laws are
constantly changing. With numerous guidance documents from Health and Human Services coming out
each month (1,000 page due this month alone), we try to focus on what will remain and help our clients
make the ultimate benefit offering decision of "pay or play".
If the answer is to "play" (offer benefits), the fundamentals of containing or lowering risk will continue
to be the focal point. Key tactics will include: appropriate funding mechanisms, consumer driven or
value driven plan designs, plan use education, effective contribution models, worksite wellness,
compliance and financial analytics to drive strategy and measure return on investment.
In my view, Healthcare Reform is here to stay, so let's develop strategies to deal with it!
As a result, I wish to provide a supplement to our Agency communications that is consistent with what
you will need to understand the challenges that lie ahead and determine solutions to them. With this in
mind, please watch for my ongoing healthcare blog "From the Desk of Mike Wojcik". It will feature
Healthcare Market Trends and Surveys from the insurance and provider world, Legislative Updates and
Impacts on state and federal levels, Human Resource Challenges and other appropriate topics.
After 25 years in healthcare related circles, I have seen a lot of good in our current model. On the flip
side, there has been a lot of waste, abuse, mismanagement and wrong with the system. I feel a
responsibility and have a passion to see our current model survive, albeit more efficient, affordable and
accessible to all.
Hope you enjoy the content,
Mike
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

2. Market Trends & Surveys
Most U.S. Employers Plan to Keep Coverage After 2014.........The Affordable Care Act (ACA) certainly has
created the need for employers to reevaluate the purpose of their benefit programs or "Benefit
Philosophy" as we call it. It was simple before, benefits provided a means to attract and retain a quality
workforce. Today it goes much deeper, larger companies and organizations measure the effectiveness
of offering benefit programs and costs associated with productivity management. Dependent on your
industry, benefits can impact the top 3 or 4 line items on your financial statements. To eliminate
healthcare benefits is certainly a huge impact, but what else does it affect?
Offering benefits was always an employers decision, however through ACA, in 2014 there will be
penalties associated with that decision for employers with over 50 employees. Numerous surveys were
done to see what employers are thinking. Some outliers, like the McKinsey report showed 30% of
respondents would drop coverage, most other surveys, and in particular one by the International
Foundation of Employee Benefit Plans (IFEBP), showed less than 1 percent of employers will stop
coverage. It will probably be somewhere in-between as they say, dependent on the size of the
organization, their financial strength and what their "Benefit Philosophy" is. The SHRM organization
followed and summarized several surveys and predicted some outcomes. Read more ...
Understanding U.S. Healthcare Spending....The National Institute For Health Care Management
published a brief July 2011 stating U.S. spending for health care has hit $8,100 per person, almost a two-
fold increase since 1997. Spending is highly concentrated among a relatively small portion of high-cost
users with 5% of the population responsible for almost 50% of all spending. People with at least once
chronic health condition were two to four times more likely than the general population to have
spending in the top 5%, with the risk increasing as the number of chronic conditions rose. The link with
obesity related conditions was also evident in this work. Nearly half of all people in the top 5% of
spending reported having hypertension, one-third had lipid disorders (high cholesterol), and more than
one-quarter had diabetes. Read More...
Health Savings Account Enrollment Continues to Grow.... According to a January, 1, 2011 survey by
America's Health Insurance Plans (AHIP), approximately 11.4 million Americans are covered by health
savings accounts (HSAs) linked to high-deductible health plans (HDHPs), an increase of more than 14%
since 2010 and nearly doubling in the past three years. Other findings from the survey showed between
January 2010 and January 2011, the fastest growing market of HSA plans was for large-group coverage,
which rose by 26%, followed by individual market coverage, which grew by 15%.
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

3. HSA's and Consumer Driven Health programs play a key role in containing healthcare costs as they
engage the end user - which is the employee and/or dependents in the true cost of health care. If
coupled properly with plan education and worksite wellness, employees can develop a greater
awareness of their personal health and the impact of their personal spending, thus controlling cost.
Read More...
Actuarial survey says transparency would reduce healthcare costs... Although issued last year, this
survey published in Healthcare Finance News seems more relevant now, particularly as participation
grows in Consumer Driven Health Plans.
Conducted by the Society of Actuaries, two surveys produced results showing transparency between
providers and patients would be very effective in bending the healthcare cost curve downward. More
transparency showing pricing of procedures and outcomes can produce fewer errors, less fraud and a
better platform for individuals to make informed decisions on their care. Read More...
Legislative Updates and Impacts
Young Adults Flock to Parents' Health Plans... One of the early provisions of the Affordable Care Act
allowed dependents younger than age 26 to remain on their parents' health plans. Health and Human
Services predicted 1.2 million would sign up for coverage in 2011, but early numbers show it could be
much larger.
Prior to the federal law passing, many insurers dropped coverage of enrollees' children at age 18 or 21,
or when the children graduated. The law has been helpful in getting coverage for dependents which
could have been difficult before due to pricing or individual policy underwriting. As a result, it is
anticipated that family premiums will increase by about 1 percent.
Caution: If you are considering adding a dependent child who is pregnant to your plan, make sure you
have options to insure the new grandchild(ren). The law extends to direct dependents only. Even
though the federal law mandates no underwriting for individual insurance policies for children under
age 19, most insurance carriers have stopped selling children's individual policies for the time being. If
in Illinois, the State All Kid's program requires an earnings test to be under 300% of the Federal Poverty
Level. This was changed from 400% on July 1, 2011. Read More...
Medicaid increases use of health care, decreases financial strain, improves health... The Affordable Care
Act will expand Medicaid eligibility to 133% of the poverty level in 2014. According to the Governor
Quinn's Health Care Reform Implementation Council Initial Report (March 31, 2011) the best estimate of
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com

4. the number on uninsured in Illinois is 1.5 million. Of that group it is anticipated that between 500,000
and 800,000 people will be added to Medicaid at that time.
It has been unclear whether Medicaid coverage has any effect. A first of its kind study from the
researchers of Harvard School of Public Health, the National Bureau of Economic Research and several
other organizations was released July 7, 2011 showed positive impacts. The study included 10,000 low
income, uninsured residents of Oregon in 2008. They were enrolled into Medicaid as a result of a
lottery from an original group of 90,000 entries.
A year after enrollment the study showed improvements in physical and mental health as a result of
having insurance coverage. These individuals were also less likely to have to borrow money to pay for
their care. The study continues trying to directly measure health outcomes including cholesterol,
diabetes control, blood pressure and obesity. Read More...
Human Resource Center
The Power of Employee Education to Influence Workforce Satisfaction.... The Affordable Care Act (ACA)
will call for greater benefit communication and education platforms to remain compliant. We are
already up to 15 Model Notices in some cases, and soon will be required to use standardized
communication pieces and 60 day advance notices of changes. We might as well get the most value for
the efforts.
Coincidentally, recent data from Tower's Watson and Unum Studies show a direct correlation between
employee satisfaction/productivity and benefit communication. Companies with excellent or very good
benefits who did not education effectively reported a 64% satisfaction rate while those who did, had an
88% satisfaction rate. Companies with fair or poor benefits who did not educate effectively reported a
13% satisfaction rate while those who did had a 45% satisfaction rate. Read More...
Horton Webinars & Seminars (Reminders)
Upcoming Horton Events... Read More…
ph: (708) 845-3126 • mike.wojcik@thehortongroup.com