NEW PEEC SURVEY: Despite Delay in Excise Tax, Employers Continue to Explore Value of Private Exchanges

According to a survey of employers conducted by the Private Exchange Evaluation Collaborative (PEEC), 46% have implemented or are continuing to look at private health insurance exchanges to offer health benefits for their covered populations. Over the last few months PEEC has polled employers for a broad study on their views and intentions related to exchanges. A second shorter study was conducted in January to gauge strategies in light of the two-year delay in the implementation of the excise tax.

Under the Affordable Care Act, employers whose health benefits cost more than $10,200 for individuals or $27,500 for families have to pay an excise or “Cadillac” tax of 40% on the amount above those figures. Prior to the extension of the excise tax implementation, employers were modeling whether their plans would hit the tax thresholds, and if so, when that would take place. Over 40% of employers expected to be exposed to the tax in 2018.

"Overall, interest in private exchanges remains strong. This year’s results show interest is highest among small and mid-market employers, with 50% showing interest” says Barbara Gniewek, Principal at PricewaterhouseCoopers (PwC). “Interestingly, these employers are thought to have the most to gain from a private exchange, but noted a lack of available information and education on the solutions. 36% of employers over 10,000 have or are considering private exchanges.”

Key findings

• When asked if they would consider using a private exchange for full-time active employees before 2019, 6% of employers responded they have contracted with an exchange, the same percent as in 2014 and somewhat fewer (40% versus 41%) indicated they are still considering this strategy.
• Over half of employers (53%) agreed that if an industry peer moved to a private exchange they would be more likely to do so.
• The rate of employers considering the public exchange for full-time active employees did not change year over year (16% in 2014 and 2015).
• Key attributes considered when evaluating private exchanges have remained stable from 2014 to 2015, with high priority placed on cost of moving to an exchange, customer experience, and networks available from the exchange plans.
• Almost half of early adopters of exchanges said they were able to save money.
• Company size is a determining factor in whether or not a company will consider a private exchange, with greater interest from small and mid-sized firms than larger ones.
• While over 60% of employers anticipate the excise tax will be repealed, employers continue to aggressively look at ways to reduce their exposure to the tax law.

An executive summary of the findings along with additional details can be accessed here.

“Employers are more invested than ever in the value of their health care dollar,” said Larry Boress, president and CEO of the Midwest Business Group on Health. “Motivated by high medical care costs and their potential exposure to the ACA's excise tax, interest remains high among health care purchasers in exploring the potential value of private exchanges and other strategies to reduce their exposure to the tax. Many are focused on improving employee engagement through a suite of tools and services that will ultimately enhance the health of their population.”

Survey details

These results come from two online surveys of employers’ views on health insurance exchanges conducted in November 2015 and January 2016. More than 350 employers (28% had less than 500 employees, 21% had 500 – 2,499 employees, 23% had 2,500 – 9,999 employees, and 28% had over 10,000 employees) from 34 different industries across the nation participated in the November survey. PEEC also surveyed 129 employers in January 2016 after the delay in the excise tax implementation was announced, to understand how this delay may have changed their views or intentions related to private exchange and other benefit and worksite activities.

About the Private Exchange Evaluation Collaborative (PEEC)The Private Exchange Evaluation Collaborative (PEEC) is an initiative launched in 2013 by four leading nonprofit business coalitions, Employers Health Coalition, Inc. (Ohio), Midwest Business Group on Health, Northeast Business Group on Health, and the Pacific Business Group on Health – all independent coalitions representing employer health care interests –and PricewaterhouseCoopers (PwC) (not an exchange provider). PEEC will solicit and provide unbiased, comparative information and support on private exchange strategies and purchasing decisions.

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Pacific Business Group on Health Receives 2015 Membership Award from NBCH

Coalition recognized for leadership role in public reporting, payment reform and quality measurement

DALLAS – Nov. 18, 2015 – The Pacific Business Group on Health (PBGH) was honored with the 2015 Membership Award by the National Business Coalition on Health (NBCH) for their leadership and efforts to work with purchasers across the country in collaboration with health plans and providers to improve quality and value in the US health system.

Lauren Vela, Sr. Director, Member Value for PBGH, accepts the award from NBCH CEO Charles Smithers and Karen van Caulil, NBCH Board Chair and President and CEO of the Florida Health Care Coalition.

A non-profit business coalition focused on improving the quality and affordability of health care, PBGH represents 60 large health care purchaser members with more than 10 million employees, retirees and dependents in California.

“PBGH is proud to be honored for the work we do on behalf of, and alongside our members,” said David Lansky, president and CEO of PBGH. “We have the great fortune of working with forward thinking purchasers who are dedicated to improving the value and outcomes of health care for their covered populations and health care consumers nationwide. On behalf of our members we would like to thank NBCH for recognizing our efforts to transform US health care.”

The coalition demonstrated leadership particularly in the areas of value-based purchasing initiatives and innovative benefit design strategies. Key PBGH policy programs include:
· Leveraging the clout of large purchasers to improve quality measurement
· Public reporting of provider and health plan performance information
· Collaborating with public officials to inform development and implementation of innovative payment and delivery reform policies
· Aligning public sector efforts with private purchaser activities to support comprehensive, system-wide transformation

Specific payment reform efforts in 2015 include recruiting large self-insured employers into state-based multi-payer initiatives, as well as the creation of a nation-wide Purchaser Value Network (PVN) to harvest and spread best practices in payment reform among public and private purchasers across the country.

PBGH also works with federal and state policymakers to facilitate the use of innovative benefit design strategies among its broader membership base. In 2015, this effort has included shaping implementation of the excise tax on high cost employer-sponsored health insurance plans, alignment of EEOC wellness regulations with the goals of the Americans with Disabilities Act, and clarification of recent HHS guidance on embedded out-of-pocket limits. The policy team also works with the administration to identify and remove regulatory barriers to value-based insurance design and purchasing initiatives like the Employer Centers of Excellence Network (ECEN).

PBGH engages both its members and the broader purchaser community in the performance measurement and reporting enterprise through the Consumer-Purchaser Alliance. The Alliance regularly develops education and advocacy materials for purchasing organizations and disseminates that information through email alerts, a periodic newsletter, website updates, webinars, traditional press, public comment letters, and social media.

“As health care costs continue to rise, coalitions are playing a critical role in reforming the system through community collaboration and purchasing strategies to improve the quality and value in care delivery,” said Karen van Caulil, NBCH board chair and president and CEO of the Florida Health Care Coalition. “We congratulate PBGH on receiving this well-deserved recognition for their efforts to improve health and health care.”

About the Pacific Business Group on Health

PBGH is a non-profit business coalition focused on improving the quality and affordability of health care. The group represents 60 large health care purchaser members with more than 10 million employees, retirees and dependents in California. Follow on Twitter: @PBGH_updates

About the National Business Coalition on Health

National Business Coalition on Health (NBCH) is a national nonprofit membership organization of purchaser-led health care coalitions, representing more than 7,000 employers, unions and local governments, and approximately 35 million employees and dependents across the United States. NBCH and its members are dedicated to value-based purchasing of health care services through the collective action of public and private purchasers. NBCH seeks to accelerate the nation’s progress toward safe, efficient, high-quality health care and the improved health status of the American population. Follow on Twitter: @NBCH

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David Lansky Addresses Pacific Business Group on Health's State-of-the-Art Travel Surgery Program

David Lansky, President and CEO of Pacific Business Group on Health, was recently interviewed by U.S. Domestic Medical Travel in regards to the coalition’s Employers Centers of Excellence Network (ECEN) which offers a state-of-the-art travel surgery program, and serves to provide patients with high quality, affordable healthcare. You can access the full interview here.

Choosing Wisely® Employer Toolkit now available

To make it easier for employers to educate their employees about the importance of talking with their physicians about their medical care, the National Business Coalition on Health (NBCH) and Pacific Business Group on Health (PBGH) released the Choosing Wisely® Employer Toolkit. 

Developed in collaboration with Consumer Reports and with participation from the Midwest Business Group on Health and the Minnesota Health Action Group, the Toolkit was developed to assist employers in educating their employees about Choosing Wisely®. The program is the ABIM Foundation’s initiative to encourage physicians, patients and other health care stakeholders to think and talk about medical tests and procedures that may be unnecessary, and in some instances can cause harm. 

More than 25 leading medical specialty societies are working with the ABIM Foundation to create recommendations for physician/patient discussion. Consumer Reports leads the consumer-facing communication of the ABIM Foundation’s multi-year initiative by translating the clinical recommendations gathered into insightful tips and free resources for the general public.

The new Toolkit will also distribute a broad array of consumer-focused health resources available from Consumer Reports including patient-education materials based on dozens of topics identified by medical specialty societies for the Choosing Wisely® initiative.