INCREASED COSTS/IMPACT ON EMPLOYEES
Why are the Agency’s insurance plans changing?Health care costs in Iowa and across the nation have continued to increase at a rate that exceeds general inflation. Despite these increasing costs, the Agency has managed to maintain consistent premiums since July 1, 2014, and offer comprehensive coverage while minimizing the financial impact on staff contributions. The Agency has made minor changes to insurance plan designs over the past several years. However, in light of a significant increase in insurance claims over the past two years, the Agency needed to update its medical insurance plans.
How will these changes affect employees’ costs?
There are two areas of cost: one is the cost of the insurance premium and the other is the out-of-pocket cost for medical care.
Insurance Premium
The Agency pays 100% of the single premium and 60% of the family premium as part of our compensation packages. To the extent the Agency pays more for insurance premiums, it means there are fewer dollars available to increase salaries and wages. Effective July 1, 2020, the single and family premiums would have increased by nearly 8% had we recommended a status quo approach to the plan designs. For someone with family coverage, that person's share of the monthly premium would have increased $43 to $49 per month, depending on which plan the person elected. By making some changes, the lower deductible plan will have a 0% premium increase and the higher deductible plan will have a 2% premium increase. For those with family coverage on the higher deductible plan, the 2% increase translates to about $11 per month in additional employee costs.
Out-of-Pocket
Out-of-pocket costs vary greatly based on a person's medical usage. The impact will also depend on the medical plan that is chosen. Any change might feel major to employees because it has been several years since we've changed deductibles, co-insurance and out-of-pocket maximums. The emergency room (ER) copay has been $75 for the past several years. Effective July 1, 2020, the ER copay will increase to $150.
DEDUCTIBLES & OUT-OF-POCKET MAXIMUMS
How will the new plans affect the deductibles, co-insurance and out-of-pocket maximums?In-network Deductibles
The Agency will continue to offer two plans.
Coinsurance
In the lower deductible plan, coinsurance remains unchanged at 15%. Coinsurance will increase to 20% on the higher deductible plan.
In-network Out-of-pocket Maximums (OPM)
PRESCRIPTIONS
What has changed with the approved drug list?We will continue to use the Wellmark pharmacy program (Blue Rx Complete) for prescriptions under the plan.
How much will my prescriptions cost in the new plan?
The prescription drug plans will have four tiers instead of three tiers.
Why was a 4th tier prescription drug level added?
Prescription drug costs are increasing at a rapid pace. The 4th tier copay was added to help encourage members to seek lower-cost alternatives for both the member and the plan. Medications in the 4th tier are those that have alternatives on lower tiers with similar medical outcomes or are not considered to be medically necessary.
COVERAGES
Are any services no longer covered? All health and pharmacy (and ancillary if applicable) benefits will remain the same.
What options are available to minimize employee out-of-pocket costs?
Doctor on Demand (DOD) is an affordable and convenient alternative to going to a walk-in clinic. DOD provides a more affordable and time-efficient alternative to a walk-in experience. Virtual visit doctors are Iowa board-certified, and if they refer you to a clinic visit then you are not charged by DOD.
Since DOD is not considered out-of-network, you can complete a virtual visit and get your prescription at a participating pharmacy regardless of whether you are in Iowa or traveling out of state.
PROVIDER NETWORK
How will these changes affect the provider network?We will continue to use the Wellmark Blue Choice provider network for both plans.
TAXES
What are the tax implications related to these increases?Insurance premiums paid by the employer are tax-free. The portion of family premiums paid by employees is deducted from paychecks before taxes are calculated. Out-of-pocket medical costs can be paid by the employee with pre-tax dollars to the extent the employee sets aside dollars in the Agency’s “flex medical” plan during the open enrollment period each April.
DIFFERENCES IN PLANS BASED ON EMPLOYEE TYPE
Do these changes affect all employees or just certain employee groups?All employees are offered the same medical insurance choices, regardless of their workgroup. Employees can choose single or family coverage for either of the two plans. Employee benefit summaries for each employment group are available on the intranet.
Which employee groups receive free family insurance and additional money for the HRA? Effective July 1, 2020, all employees are treated the same for insurance premiums and HRA contributions.
OPTING OUT
Can employees opt out of agency insurance if they have insurance coverage through a spouse's family plan?Yes. Under Iowa law, employees can opt-out of the Agency’s insurance plan. They will need to sign a Declination Waiver provided by the Benefits Specialist. Employer-paid single coverage is offered to all full-time employees. The Agency provides no incentive for employees to opt-out of the insurance plan. It is likely that some employees have double coverage because of a spouse’s insurance plan.
HOW THESE PLANS WERE DETERMINED
These are big increases across the board. Shouldn’t we have made small adjustments over the past few years rather than wait to make these large changes in one year? Were these decisions made as a result of consulting employees?The recommendations were supported by the Insurance Committee at its last meeting on Jan. 24, 2020. The Committee worked collaboratively with the Agency’s employee benefits consultants and a Wellmark Blue Cross/Blue Shield Account Manager. In February 2020, the Agency’s board of directors approved the Insurance Committee’s recommendations. Going forward, the Agency intends to consider insurance plan design changes every three to five years rather than making smaller changes each year.
INSURANCE COMMITTEE
Who are the insurance committee members and what groups do they represent in the agency?Keri Renze and Doug Olson -- Certified Union
Teri Hazen -- Classified Union
Doug Schuster and Steve Jordan -- Classified Non-Union
Nia Chiaramonte and Brian Whalen -- Leaders
Juliette Houseman -- Benefits Specialist
Kurt Subra -- APC
ADDITIONAL SUPPORT TO THE AGENCY
In addition, our employee benefits consultants participate in our annual health insurance decision-making process by providing research, data, usage, industry trends, and more. The Wellmark BC/BS account manager assigned to our account is also a partner and participates in most insurance committee meetings.CHOOSING YOUR MEDICAL PLAN
What would be the advantages or disadvantages of moving from the higher deductible to the lower deductible?The answer to this question varies by individual. A few considerations for an employee (and their spouse and/or dependents, if applicable) should include the following: single or family coverage, pregnancy or planning a surgery, specific higher cost health conditions, and/or regular use of prescription drugs. The prescription copays should be reviewed based on what the employee or family member utilizes.
I’m enrolled in the higher family deductible plan now, but I want to drop to the lower family deductible for this next year due to the increases. However, the following year I may want to go back to the higher family deductible plan. How does this affect my HRA? Can I drop to the lower deductible plan this year and elect the higher deductible plan the following year?
Each April during the Agency’s annual enrollment period, an employee can decide which deductible plan to enroll in for the following benefit plan year which begins on July 1. HRA contributions are made on behalf of employees enrolled in the higher deductible plan. If an employee receives HRA contributions and then the following year decides to drop to the lower deductible, the employee still has access to his or her HRA, but no HRA contributions are received when the employee is enrolled in the lower deductible plan. If the employee moves back to the higher deductible plan the following year, then the HRA contributions resume.
HRA CHANGES
What is happening with the HRA?Effective July 1, 2020, HRA contributions will be the same for all employees electing the higher deductible plan. Employees with single coverage will receive $900/year and employees with family coverage will receive $1,920/year.
Why is there such a huge increase in HRA for family/union?
The IRS has special rules for self-funded employee benefit plans. The Agency needed to address the discrepancy in HRA contributions between the union and non-union employees who participate in family insurance coverage.
Is the HRA pushing up the costs of the medical plan?
No. The HRA is intended to be a benefits equalizer. The HRA is not funded by the medical plan.
INSURANCE TERMS
Premium: The amount the Agency and you pay for your health insurance coverage every month. The employer-paid portion is a tax-free benefit. The amount you contribute towards the family insurance premium is deducted pre-tax from your paycheck.Deductible: The amount of medical costs that you pay at 100% before coinsurance is applied. Even though the Agency’s fiscal year is July 1 - June 30, the insurance industry accounts for deductibles and out-of-pocket maximums based on a calendar year. Those who have met their deductibles by June 30, 2020, will now have higher deductibles to meet between July 1 and December 31.
Coinsurance: Once you’ve met your deductible, this is the percentage of medical costs for which you are responsible for covered services until you satisfy your out-of-pocket maximum. Effective July 1, 2020, the coinsurance percentage on the lower deductible plan will remain at 15%. Coinsurance will be increased to 20% on the higher deductible plan. Coinsurance also applies to office visits unless it is waived by the plan for preventative services.
Out-of-pocket maximum: This is the most that you will be required to pay out of pocket for covered medical expenses during a year. This includes your deductible and coinsurance payments. For prescription drugs, your copays will accumulate up to a separate out-of-pocket maximum of $3,600. Expenses that do not count towards your in-network out-of-pocket maximum(s): monthly premium contributions, expenses not covered by your plan, and out-of-network expenses. Once you have paid the maximum out-of-pocket amount, your insurance should pay 100 percent of your covered medical expenses.
Copay: An out of pocket cost that applies to prescription drugs in the Agency’s plans. The copays accumulate towards the prescription drug annual out-of-pocket maximum.
Covered person: This is any person who is eligible to receive benefits on your health insurance plan. This would include the policy owner (you) and any family members covered by your plan.
Explanation of Benefits (EOB): This document is an account statement and not a bill. After you make a claim on your policy and the insurance company has made a payment, you will receive an EOB in the mail. It will explain the actions the insurer took on the claim, the available benefits, your portion of the cost and, if necessary, any reasons for denying the claim. The EOB also explains the claims appeal process.
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