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Benefits
pg.
1
Health Care Plan - Cost Management Recommendations Executive Summary
As
a
follow
up
to
last
year’s
Board
meeting
where
we
agreed
that
we
would
conduct
further
analysis
of
our
health
care
plan
costs,
we
have
completed
a
review
of
the
medical
insurance
plan
in
order
to
develop
alternatives
to
reduce
future
costs
while
maintaining
a
competitive
program
compared
to
other
not
‐
for
‐
profit
organizations.
The
following
summarizes
the
key
medical
plan
cost
issues
and
our
recommendations
for
reducing
costs,
as
well
as
strategies
for
future
cost
management
of
our
medical
expenses
under
the
plan.
Background
For
the
2011
calendar
year,
medical
costs
per
employee
rose
55%
over
the
2010
costs.
Although
the
Foundation’s
prior
claim
experience
was
quite
low,
the
law
of
averages
more
than
caught
up
with
us
in
2011.
This
claim
experience
was
caused
by
a
significant
increase
in
claims
between
$20K
and
$100K
plus
a
few
large
claims.
For
2011,
our
average
annual
cost
per
employee
was
$11,673
compared
to
a
national
average
of
$10,621
for
other
employers
with
similar
plans.
For
2012,
our
costs
are
trending
about
6.9%
over
forecast
based
on
claims
through
July,
so
we
are
still
experiencing
a
high
level
of
claims.
We
have
identified
three
main
drivers
for
this
increase
in
costs:
No
employee
contributions
are
required
for
dependent
coverage.
–
Employees
have
no
incentive
not
to
cover
their
spouse/dependent
under
our
plan
because
coverage
is
free
even
when
coverage
is
available
through
a
working
spouse’s
plan.
As
a
result,
almost
all
employees
elect
to
cover
their
entire
family
under
the
Foundation
plan
so
we
end
up
with
an
“adverse
selection”.
Approximately
one
‐
third
of
employees
have
dependent
coverage.
Non
‐
profit
benchmarking
information
for
international
NGOs
shows
that
the
average
monthly
contributions
for
covering
a
spouse,
child(ren)
or
a
family
are
$250,
$200
and
$350,
respectively,
so
we
are
significantly
below
the
common
practice.
We
maintain
a
generous
plan
design
compared
to
the
competitive
market.
–
Certain
features
of
the
plan
(e.g.,
co
‐
pays)
have
not
been
adjusted
to
competitive
norms.
The
key
plan
coverage
provisions
compared
to
2011
benchmarking
data
show
that
our
plan
provisions,
except
for
preventative
care,
are
significantly
more
generous
than
the
norms
as
follows:
Benefits
pg.
2
Clinton
Foundation
Medical
Plan
Provisions
vs.
Benchmarking
Data
Current
Plan
Market
Deductibles
Individual/Family
Individual/Family
Network
Providers
$250/$500
$500/$1,000
Non
‐
Network
Providers
$500/$1,000
$750/$1,500
Out
‐
of
‐
Pocket
Maximums
Network
Providers
$1,000/$2,000
$1,500/$3,000
Non
‐
Network
Providers
$2,500/$5,000
$3,000/$6,000
Office
Visit
Co
‐
Pays
Network
Providers
$15
for
charges
up
to
$300
$25
for
charges
up
to
$300
Prescription
Drug
Co
‐
Pays
Generic
$5
$10
Preferred
Brand
$20
$25
Non
‐
Preferred
Brand
$30
$50
Preventative
Care
Subject
to
deductibles,
co
‐
pays
and
co
‐
insurance
Pay
at
100%
We
use
regional
provider
networks
and
have
allowed
providers
in
our
network
that
provide
lower
or
no
discounts.
–
The
provider
discounts
obtained
by
using
smaller,
regional
networks
are
substantially
less
than
using
a
national
network
(e.g.,
CIGNA
or
Aetna).
We
also
have
the
legacy
of
a
past
practice
where
we
allowed
employees
to
include
any
doctor
they
nominated
in
the
network
even
when
we
did
not
obtain
a
discount.
Based
on
a
recent
analysis
we
conducted
using
the
CIGNA
and
Aetna
networks,
92%
of
the
Little
Rock
and
84%
of
the
New
York
providers
currently
used
by
our
employees
participate
in
these
national
networks,
presenting
an
opportunity
to
achieve
cost
savings
with
a
fairly
moderate
level
of
disruption.
Recommendations
Based
on
the
total
compensation
strategy
we
adopted
last
year,
which
targets
our
compensation
and
benefit
programs
at
the
average
level
provided
by
other
similar
organizations,
we
recommend
the
following
approach
for
addressing
these
issues: