Homeless Issues Committee - Regular Meeting

Everybody, thank you for joining us for another special IAC meeting. We're gonna call the meeting to order here at 08:31. Linda, could you do roll, please?

Okay. Can you hear

me? Yes.

K. Christy Kobowski.

Here. Joshua

Cotillier.

Here.

Carrie Meyer. Carrie Meyer.

I

do see her on. But

Is that you, Shannon? Oh.

Are you on the Zoom? Not yet.

I hope. Meyer. Go back to her. Marissa Burak? Here. Angela Tabato is excused today. Misha Dancing Waters? Misha Dancing Waters? Scott Crook? Scott Crook?

Travis Thomas. Here. Tanan Knights.

Here. I don't know if you heard me.

Scott Drummond is excused. He might show up later on. Brian Tischer?

Here.

Patrick Schellenberger? Patrick Schellenberger? We see him on. Go back. John Baumann?

Yep. I'm here.

Arlen Halverson?

Here.

Jeffrey Glazer? Jeffrey Glazer? Matt Valdron?

He's not able to make it.

Okay.

Dean Julian is excused. Heidi Fogo? Here.

Kathy Andrews? Kathy Andrews? Derek Wallace.

Wallace here.

Kate Gravel.

Gravel here.

Cassandra Riley.

Right.

Cassandra Riley. Connor Stone. Connor Stone. Brandon Macbeth?

Here.

David Kaneep? David Kaneep. Carrie Meyer. Here. Patrick Schellenberger.

I see him on, but great. We have exactly 10 out of 18. You do have a quorum, but if anyone leaves, you will not have a quorum. So just keep that in mind.

Okay. Thank you very much, Linda. Are the 10 including

One second. Have 11 because Derek will take Nisha's spot. You have 11 Okay.

Are you including I just wanna know that we I think we had two people who never answered who are online.

Carrie did respond. I am not including Patrick. If you do include him, it'll be twelve, but he's not responding. So

Okay. Alright. Well, we'll see. Hopefully, he turns up. Thank you very much. So please, if anybody's leaving who is being counted, please alert us. Thank you. Earl okay. Alright. So we are gonna begin this meeting.

I do wanna note, at the top of the agenda, they were able to resurrect the IAC feedback email. So thank you to the folks in employee relations and DOA who were able to help make that happen. So that is a email address that's available. If you have members who have, lots that they wanna get to the entire committee, they can use that email address. And then those comments would be forwarded to the committee prior to the next meeting.

We don't have minutes. We're gonna include the minutes for the special meetings in the June meeting. I think we will dive into these presentations so we can hopefully get get through them before we lose anybody. So I'm gonna turn it over to our, the folks here at m three for, take it away, please.

Thank you so much. So we're pleased to have two special guests join us today in mid mister Sam McIntyre and miss Natalie Damro joining us remotely, and they are here to talk about the ACA marketplace and individual health covered reimbursement arrangements or ICRUs respectively. We can set this up to do the ICR first then the ACA, but I think it's totally fine if you wanna talk about the marketplace and then circle back to how the ICR works within that. So let me go ahead and share that presentation.

And, Nate, I don't think we got the presentations ahead of time. Will we get them after? Yep. Okay. Thank you.

I was having some some fun with formatting trying to get it to the way we wanted it to to go here. So, Natalie, I think I saw you on.

Yep. I'm here.

Alrighty.

Good morning, everyone. My name is Natalie Domroe. I'm our individual health client executive here at m three. I'm just gonna touch on the ACA market and the coverage options. The ACA plans that are available to employees or anyone out there looking for health coverage are based on several factors, which includes your ZIP code, your family size, and potential tobacco use if there is any.

Because of that, plan availability and pricing can vary from person to person or even family to family. One of the biggest advantages of the ACA coverage is that these policies are guaranteed issue, meaning individuals can be cannot be denied for coverage due to any preexisting conditions or any of their health history. Another key benefit, of the ACA market is the freedom of choice. So they do have the ability to choose the plan that best fits their needs, whether that be individually or family health care needs, a plan that, you know, fits their budget, provider preferences rather than being limited to the one or two options that they get through an employer. The plans are organized into metal tiers, featuring bronze, silver, gold, and sometimes a platinum level option depending on the carrier and the market availability.

These tiers, do help individuals balance monthly premium costs with their out of pocket expenses and coverage levels. So for example, bronze plans typically have a lower monthly premium with higher out of pocket costs, while the the gold or the platinum level plans generally have a higher premium but a lower out of pocket cost. While the ACA does provide some strong coverage options and flexibility for employees or people who are looking for individual coverage, it's also important to acknowledge how the plans compare to the group the group coverage and the coverage that you guys have in place today. Nate, if you wanna go to the next slide. So the current plan design is is pretty rich from a a benefits perspective.

And in many cases, the ACA plans, they they don't fully replicate this level of coverage. So as you can see, as we kinda go through these next couple of slides, you guys currently have in place a very low deductible, low out of pocket costs compared to some of the best plans that are out there on the marketplace.

So if you go to

the next slide here real quick.

That was the year where your plan falls into that platinum category.

Yes. Yep. So here are some some of the best plans that Dean specifically offers. As you can see, the deductible and the max out of pocket are significantly increased from what you're currently offering. And that also is true for courts as well on the next slide.

And, Natalie, real quick, before we move up, Dean, we made some assumptions for that monthly premium, as far as the age of the member and the family composition. Sure. It was, 35 because we used

It was 35. Yep.

So

For the sing

for the single. And then for the family, it was 35, 35, and then, I believe, two kids that we ran that off.

So I was, you know, kinda looking at your demographics and and, you

know,

using an example there, but it's just worth calling out that folks that are older than than 35 will be paying fair amount more on a monthly basis than the other rates that are listed here. Absolutely.

Yeah. So as you can see, courts is even a higher deductible, higher max out of pocket for both single and family. And then that will also hold true to GHC on the next slide. However, GHC does offer a platinum level option. On the right hand side there, you'll see that where they have a $0 deductible, but the max out of pocket is still 3,300 per person.

To to expand on that a little bit, we're looking at these plans. These are some of the richest available in the marketplace in in Dane County for comparison. There's the gold plans from courts in Dean, and GHC does have that platinum offering where there is no deductible. Max out of pocket is, you know, significantly higher than we had today at 3,300. Then we also have, you know, the the co pays at at $15 for primary, 30 for specialist. Then you get into the drugs and other pieces there. $7,700 ER co pay, $30 urgent care is, you know, is quite significant. And then, you know, there's no deductible, but there is very significant coinsurance on that plan for hospital stays and other things.

And once we do send out the the presentations, you'll have them to take more of a comparison with. But, you know, again, as as Natalie and Native said, these are the best options out there within the ACA, you know, here locally based on a 35 year old individual family, and that's a quite a stark difference compared to, you know, with the platinum GHC's platinum plan compared to the county plan in place today as far as the levels of platinum.

And the and so just to clarify, so the you know, I see the cost for the emergency room and the hospital stay, but then we've got the max out of pocket. So once you reach that max out of pocket, those you wouldn't be. Correct?

Just just like today where you where you hit the the other 25500 or 515 on the pharmacy side. Sorry. My Zoom is disconnected for some reason. Just give it a second to

Alright. Let's this is perfect timing to give Heidi a chance for the question.

That was a perfect segue to my, question, Marissa. Our current plan, has two max out of pockets, one for health and one for pharmacy. In looking at the examples you just gave us with quartz and GHC, are those two buckets separate, or is it more traditional plan where max out of pocket includes both health and prescriptions?

It's normally more traditional. However, there are plans that do feature them separately. So the the pharmacy deductible could be separate at times. It just depends on the plan that you pick. Those are more featured in a bronze level plan, though, than a gold. Okay.

So when we're looking at what you just presented to us Mhmm. We can work under the assumption that the max out of pocket for, like, the platinum, includes one bucket of max out of pocket for both health and okay. Thank you so much for clarifying that.

Yep.

Other questions for Natalie about kind of the individual market in general, what the options are there, what that looks like for for employees?

I mean, I think who we would probably see turning to this the most currently are retirees between 55 and 65. So I understand, Natalie, I think you're probably meeting with some of those folks

Yes.

At this point. And how are you seeing their their experience? Because I understand they would probably be paying a different rate than what you've showed us so far. Is that correct?

Yeah. That is correct. I would say, you know, for the most part, it's been a positive experience, but I guess it kinda depends on what the the COBRA price is currently. Because, I mean, the COBRA has been beating out some of the marketplace prices. I guess it just kinda depends on income, if they have HRA dollars or if they if they don't. So a lot of factors go into their overall experience, I guess, if you will.

You know, it's hard to do a a true apples to apples comparison in really anything in this space. But is it fair to say, like, in in general, for plans on the marketplace, they are gonna be less rich than than they could be on the individual on for employer groups and tend to be more expensive for I guess it's hard to say more expensive because you have the different age brackets, but my understanding is generally, you're gonna need a small group space. It's more expensive for an ACA plan versus a employer group plan.

Correct.

Well, that also probably depends on utilization.

Right?

Because some of the premiums might like, right now but I understand this is for a 35 year old. You know? So the for the county plan, you're paying the higher premium, then lower, you know, kind of co pays. But if you're not using it, then this may be cheaper over the course of a year. Would that be?

So I guess I I wouldn't say that necessarily. So this sort of plan, you you're you've you've higher out of pocket exposure, so your risk is higher. And then the the premium from the the what the county is paying on, like, the HMO versus this, it certainly is higher on the county side on

the

member, but the member is not paying anything there, so it'd be hard to position it.

I guess I'm sorry. I'm referring more to somebody who's retired. So they're paying the whole thing.

Right. So, yeah, they're pay they're paying the whole thing. There's definitely a point there where because the the the county risk is expensive and premiums are very high where it could very well make sense to say, let's look at the total you know, take this this monthly premium, make it an annual number, and then factor in risk, and then make that decision absolutely.

Yep. Thank you.

Any other questions about the plans available on the marketplace before we kinda talk to you through this? Sure.

No. So just to sum up, it sounded like GHC was the only one with the platinum. Yep.

Currently, yes.

Yep. So I think that that's a good thing to call out where if you were to go kinda go the acre route and have folks be shopping there, you you know, looking at the upper echelon, You have the GAC as the platinum, Quartz as their achieved gold plan, which, you know, has a $4,000 deductible and an $8,000 max out of pocket. Dean also has their their their two gold plans with, you know, $2,000 deductible or $20,100 dollar deductible max out of pocket, it's significantly higher.

Did the so I understand that somebody's premium so let's just let's just use courts achieve gold as the example. I understand the premium could change depending on my age, but does the max out of pocket and the deductible remain stable across the Yes. Yep. So Thank you. Yeah.

So with that, maybe we probably jump to to Sam and talk a little about ICRAs and, kind of what what he sees there and what how how those work.

Sam? Perfect. Good morning, everyone. It's nice to meet you. My name is Sam McIntyre. I am the ICRA practice lead here at m three. What that means to you is I'm not a whole lot right now, but, really, my role is to support the firm, everyone within the firm, on doing ICRA education, holding the subject matter expertise, and then also doing some vendor vetting and getting involved from an implementation standpoint. I prefer these to be conversational. Questions come up, feel free to interrupt me. ICRA is a growing option in the marketplace.

What does it stand for? So ICRA is an acronym, which stands for individual coverage health reimbursement arrangement, which is a very big mouthful of words. So moving forward, I'm gonna just refer to it as Ipra, or I'm gonna become a little bit tongue tied. So it is an alternative method for providing health care benefits to employees, while really setting a a fixed budget and allowing the employees the freedom of choice. I think the best analogy to use when we start to think about what is an ICRA is kind of what we saw in the retirement space.

So if anybody remembers back in the seventies, eighties, kind of the gold standard in the retirement, space was what we call a pension. And under a pension plan, you work for x company or county for forty years, and you you retire, here's how much money you have. Great option. Something came up in the eighties and really took off like wildfire in the nineties, and it was a little thing called a four zero one k. So under a four zero one k model, what an employer is doing is they're giving tax free dollars to employees to invest in their retirement, how they see fit.

So really what stage of life are they at, what's their risk tolerance, etcetera. So if we zoom in on ICRA a little bit more, we can think about pensions and four zero one k in the retirement space. And then at the group benefit space, we can think of ICRA as very similar, not the same, but very similar to a four zero one k. And that us as an employer, we're setting a budget or an allowance model for our employees to go out on the exchange, on or off exchange, and select the health care plan that works right for them and their family. At the most basic level, an ICRA is a vehicle to provide tax free dollars to employees to go purchase health insurance that works right for them and their family.

Now we can bundle it all together with technology and make it a very seamless, process that operates from a billing perspective, very similar to what you're used to today under the group chassis where the employer gets one bill, you pay the bill to the health insurance carrier, and you deduct the employee's portion if there is one out of their monthly paycheck or biweekly paycheck, whatever your pay period is. Under the ICRA with the technology, you will get one monthly list bill. It'll show all of the employees different roles of coverage, what their allowance model is, and what their deduction should be on a monthly basis. You, as the sponsor, pay that monthly bill to the third party administrator. The third party administrator then sends all of those different payments, and they can be, you know, twenty, thirty, forty, fifty, sixty different carriers, whatever the case might be.

They send the payments to all of those carriers, and you start taking the deduction out of the employee's paycheck. I'm gonna pause there just in case there's a question, and then we can we're gonna skip the next slide, but we can go on to the one the third one.

Can you tell us a little more about the third party administrator?

Yep. So third party administrators, in the airspace, there are over 50 of them. So the third party administrator's job is to plan documents. Some of them will handle enrollments. That's on exchange or off exchange, and then they are paying the premiums.

Nate, if you go to the second slide, I have a what I call a industry standard, smiley face scale, which is a joke. I made this up to think about what is the employee experience and the employer burden with different, third party administrators. So as I mentioned, at the very basic level, ICRA is a vehicle to give tax free dollars employees to go purchase health insurance that works right for them and their family. But if we look at how that base model would be set up when ICRA's really launched, what was happening is an employer decides to move forward with an ICRA. The employees go out on healthcare.gov, which

is a

health plan that works right for them and their family. Then they come and substantiate coverage with human resources or finance to show proof that they enrolled in a plan, and then they're reimbursed, the r in ICRA, reimbursed on their next pay period. Problem with that model, the pure reimbursement model, is if employees have to choose between paying their health insurance premiums and putting food on the table, they're gonna choose putting food on the table a 110% of the time, which is where we start to see these technology firms come into play where they're integrating not only the enrollment process, but also handling the payments to all of the different carriers. So there are 50 plus Ichra third party administrators. There are some that I think work better than others.

If you'd like a list of Ichra third party administrators, I'm happy to provide one. The ones that you'll probably hear the most in the market is gonna be Remodel Health, Zoro, Thatch, Zizzle, Gravy, Abby are some of the bigger ones that are in the space. They all work a little bit differently. Some are better than others, but those are the third party administrators that we would typically look at when we start moving into an IGRA.

Our industry has sorry, Sam. Our industry has some very unique individual names. Kinda like, in my opinion, the prescription drugs you see on TV, don't know where they come up with them, but there you go. Sorry. Thank you.

Appreciate that, Jerry. So I think when we start to think about ICHRAs in general is Natalie actually kinda set us up for a really good discussion if if we wanna have it. Natalie was showing us some some different plan designs that are out there on the marketplace. And where we see ICRAS start to be a very big success is one from a financial standpoint, especially depending on what the demographics of, the employer sponsor looks like. And we start to think about the freedom to choose.

I know we're looking at gold and platinum plans to kinda do a side by side comparison of an individual plan to a group plan. I caution doing a a side by side comparison like that because the real selling points for ICRA is going to be the ability to set a financial budget, and we can lock that in and alter it, you know, the year over year if we want to. We can set an index while still maintaining our affordability. But when it comes to the employees, the employees now have the freedom to choose a health plan that works right for them and their family. And the example I like to use is, let's think about a 28 year old male, not married, single, mostly healthy.

They don't necessarily need a $0 deductible platinum level plan with GHC. They're gonna be able to select maybe, you know, a bronze level plan. And side note, as of 2026, all bronze level plans are HSA eligible and can have first dollar coverage depending on the plan design. So 28 year old's gonna go into that portal and say, wow. I can get health insurance for free.

I go to the doctor once a year, but I have some coverage if something catastrophic happens, like I crashed my dirt bike or I get in an accident. So I know that I'm covered, but for the most part, that employee is then gonna have $0 coming out of their paycheck for their health insurance premiums. On the flip side, a 39 year old male, married, four kids, all true things about Sam, is gonna probably select that with your plan. The reason being is I got some clumsy kids. My son is actually at an orthopedic walk in clinic right now because he crashed his electric scooter, and I know I'm gonna have some medical bills.

And instead of saving into the premiums, I wanna buy up to a richer plan, but I have the freedom to choose that. Even if it means I'm paying $200 out of my monthly income to buy that richer plan, I'm having the freedom to choose. If we look at the generation coming into the workforce and already in the workforce, so 25 to 45, that subset of employees really like the ICRA model. And the reason is is they don't wanna be told, here's the health plan. Take it or leave it.

Why do I have to have a really rich plan if that doesn't fit my needs? Can I just take the money you're already paying for my health insurance and go apply a plan that works right for me and and my family, that also fits my budget? That's where the conversation starts to shift. And when I start to think about it, I'll give him credit. There's a gentleman, named Alan Silver who works at Centene or Ambetter, and he uses a good analogy.

If we let our employers choose our cell phones, we would all be walking around with BlackBerrys right now. And if we look down at the table or grab it out of our pocket, nobody in the room has a BlackBerry. If our employers would have chosen our cell phones, we'd all have BlackBerrys right now. You can go on to the next, slide here. I think it's important to talk about the pros and cons of ICRA.

On the left hand side, we're gonna have the pros. So we do have flexibility with 11 different employee classes. So we can strategically look at your demographics and census and how you currently class out employees and offer ICHRA to one subset of employees and group health insurance to another subset of employees. Now we do have some class rules that we have to abide by if we started to look down that path, but ICHRA does have a lot of flexibility in how we can set it up. We are seeing a shift with a lot of employers who are struggling with part time workers because one of the classes within an ICRA is part time employees.

So we're starting to see employers in certain industries offering a small allowance model, a couple $100 a month for their part time employees to offset some of their health care costs. What that does is part time employees typically, we have high turnover rate because it starts to stabilize that workforce, and allows you to continue recruiting and retaining top talent that maybe turn into a full time employee and they're no longer on the aircraft. The biggest one for companies, school districts, everybody kind of across the country right now is cost savings and control. We are no longer taking a health plan. We are no longer in the health care industry.

We are strictly setting a health care budget. And anybody who works in finance, their ears typically perk up when they hear, Sam, we can save money, and we can set a budget. Can that budget be year over year? Yes. It can. We'll still have to maintain our compliance obligations, and m three and the third party administrator work with you to maintain our affordability. But we can set this year over year including a potential increase. Say, we wanna increase the employer's contribution by 5% annually. If the employees no longer see the value in those richer plans, they're gonna have the freedom to swap their plan each year at their open enrollment. Another positive, employees' freedom of choice.

We're no longer telling employees, here's the plan option we have. They get to choose what works right for them and their family. Maybe switching from, you know I don't know all the health systems down there. Jerry's helped me. What are the two big ones? UW Health and UW and Dean, SSM. W and SSM. Maybe somebody who's currently on a SSM plan. They really like their doctors. But what if SSM is 30% more on a monthly premium?

It might be in their best interest for them to switch their doctors to go to UWF. And that's the choice that we're giving employees to start making informed decisions based on their health care needs. A stability and I'm gonna ask her this one, Natalie, you need to come off mute, feel free. Historically, in the individual market, rates have increased according to the Kaiser Family Foundation at about 8% a year, year over year. Now last year, there was a large increase in the individual market.

It was the largest that we've seen on record for the state of Wisconsin. The average overall increase in the individual market was about 23 a little over 23%. I will caution that that was anchored by two carriers in UnitedHealthcare and Anthem that were both over 30% increase in the individual market. Talking to industry leaders, do we think that that trend is gonna continue? Not at the pace we saw last year.

The reason is the individual market was a little underpriced. We had the rise in specialty medications and GLP ones. Obviously, there's medical trend, and then there was an unknown with the government shutdown. The expanded tax credits potentially going away, which they did. Now I do wanna note that there are still tax subsidies within the ACA. However, the expanded tax subsidies went away as of, January 2026. I'm not go ahead. Is there a question?

Yeah. With the ICRA We have

one question in the room, and then we have one question online.

With the ICRA, is it a use it or lose it, or does the employee keep money that's not spent?

It's use it or lose it. There's two ways to set up an ICRA. I am focusing mostly on the premium only. So if an for an employee to be eligible for the ICRA dollars, they have to enroll in an individual market plan. That's how they get access to the allowance model.

We can turn on a functionality within ICRA, which is might muddy the waters, to include what we call section two thirteen d qualifying medical expenses. So what that means is you as an employer could set a very rich budget. Maybe the employee enrolls in a silver mid tier level plan, and they have a remaining ICRA allowance of $2,000 for the year. They could use that $2,000 to offset any qualifying medical expenses, so they deductible, coinsurance, etcetera. Most companies do not turn on the section two thirteen d expenses, because they really want it to be a focus on premium only.

But I guess I then can you help me understand the incentive for somebody to choose a bronze plan as opposed to a higher level plan if it's use it or lose it?

So that would depend on how the allowance model would be set up. So depending on how we are structuring the budget, their buying power is going to change depending on what the budget is, and we didn't run a financial analysis. I'm happy to do so if we wanted to take a look on how that could operate and then what plans would be potentially free and which plans would have, you know, an employee contribution to it.

So it's in a different way. You could set the the contribution level that might be a 100% of a bronze plan, but only 60% of a gold plan. The employee is the ability to pick and choose how much they wanna have out of their pocket. Yeah.

Okay. Got it. Alright. Heidi in the oh, Jerry, did you have

some No.

I was

just gonna say so similar to the our our last few meetings we talked about, employer risk tolerance. Think of the ICR or the ACA as individual risk tolerance. Sure.

Okay. Thank you. Heidi, on Zoom, did you have a question?

Yes. I I have a couple. So when, I just need clarification on when the deductibles would come out of the, employee's paycheck. Is that gonna be the same amount every month, or could that vary?

So as long as they don't have a qualifying life event that changed, you know, their enrollment, it would be the same every month. They still can only enroll you know, they have to pick their plan at open enrollment, and they're locked into that plan throughout the year unless they have a qualifying life event or special enrollment period.

Okay. Thank you. And then, you know, your examples on cost or, choosing which level of plan, folks want included only men. So has there been comparison for women? Because women have very different health care needs than a 29 year old man does. And so my concern is is that there's going to be some inequities among cost. Right? Because women may need to get a higher premium. And

So the the premiums are not gonna be based on if you're male or female. The premiums are based on where you live.

Right. Sorry. I said the wrong thing. What I meant is what plan you choose. Right? So a 29 year old person might choose the level of bronze, but that's not gonna meet the needs of a 29 year old female. So they're gonna have to be they're not going to have to. But if they choose to, you know, they might have to choose a higher cost. And so my question really is, like, is there any research on, you know, like, men choosing a lower tier and women choosing a higher tier?

I can request some data to see if there's anything that's an outlier. I would say, again, the reason I use that example is because men tend to not go to the doctor, especially younger men. It's just the fact of of kind of the health insurance market.

Oh, trust me. I know.

That that example, Heidi, of that 28 year old male who buys that bonds plan. Let's say two or three years down the road, he meets a nice individual and they decide to get married, and maybe they just start deciding to start family planning. When they come up to that open enrollment period, they now have the freedom again to choose a different plan that works right for them and their family based on the stage they're at in life without changing the county's budget. So they're still having the freedom to choose. It's just what stage in life are they at and what is the needs of that employee.

And I I argue that health insurance and health care is a very, very personal issue, in what doctors we wanna see, what medications we're on, what are our health care needs, what facilities. So it's really putting the power back into the hands of the employee to make the best decision for them and their family regardless if they're male, female, old, or young.

Right.

The only caveat there is on ICRA, when we start to think about Medicare age, if we have Medicare age population, they have to enroll in Medicare Medicaid or Medicare. Sorry. Because they're not eligible to enroll in the individual market. However, those Medicare enrollees are eligible for the allowance model offered under the ICRA.

Okay. If there I would really be interested to see that differential that you said you could maybe pull from if it's not too much work.

Yeah. I can do that.

The very last question I have that I'm not so sure, like, you might not be able to answer this. But under, ICRA and, ACA plans, is gender affirming care covered?

Natalie, do you know if there was a plan design? Yeah.

Normally, it's not. They have to get it prior authorized. Okay. So Like, there there could they could have coverage for it, but the doctors need to submit prior authorization to get the approval. As of 2026, there normally isn't just included benefits on that where in the past there was.

Okay. And then is that potentially gonna cost employees more money so they they have a doctor put in for the prior authorization. And then will that impact the employee's cost, or it's just premium cost and they just need a prior authorization?

Right. They would just need the prior authorization, pay their premium. I mean, they might have, you know, their general co pay depending on how they bill it. So I Yeah. Well, that's a situation. So it might cost them more in that respect, but, otherwise, it normally should not just to get the prior authorization.

Great. Prior authorization is more of

a paperwork process. It doesn't trigger an additional, like, billing code from

that. Correct.

Alright. Thank thank you, all of you. Appreciate it.

I'll touch on the last two positives. So portability, because these are individual plans that are contract the contract is with the individual employee. If these employees leave your organization, they can continue on with the health care plan that they chose. They're just no longer eligible for the allowance model. So that would look like maybe they have to log in to the carrier's portal and update the billing information of of where the funds are being pulled pulled from.

And if they get a new job somewhere else and they offer an ICHRA, they don't have to switch their health plan because they've changed jobs. So there's a lot of talk about the portability within the ICHRA and the individual market that we could start to see some shifts where employees are asking employers that don't currently offer an ICRA to look at potentially having that as an option so they don't have to continue switching their health plan every time they switch a job. The last one is gonna be the ease of administration with the third party administrators. They're gonna handle plan selection, help assisting employees with enrollment. Natalie can also get involved in those conversations, as well as handling all the payments to all of the different carriers.

So what are the negatives? The big one is a mindset shift. This is a very different way of offering benefits. And to be honest, it scares, people. The change management in ICRA is probably the biggest hurdle to adoption because the HR team has never had this process and been this hands off.

The employees may have never had the freedom to choose, I don't know, upwards of eighty, ninety, 100 different health insurance plans. So that's where we start to see the complications with with evaluating this. And I think as we start to look at a comparison, it's very different than the group market and what we're used to looking at. It's just changing the mindset of what we're actually doing, and what we're actually doing is we're setting a health care budget. We're not selecting a plan.

Coverage options limited by location, depending on where you live within The United States. You could have different carriers or plan designs available to you, and maybe that are a little bit different than what you would see, historically. I'll also say Natalie alluded to this and pointed that out. The individual plans are structured significantly different than the group market. We tend to see higher max out of pockets and higher coinsurance amount.

I have another negative in here. It's a strict compliance rules. I put this in there because moving to an ICRA does not relieve us of our compliance obligations. Now m three and the third party administrator will handle the majority of the compliance work, but just know that it's still a part of of moving into an ICRA. Another negative, which I think you can see was also a positive, is dependency on the individual market.

The individual market rates start to continue to fluctuate and increase like we saw this past year. It could make ICRAs less attractive than than group health plans. I mentioned change management. It this last one is kind of if if applicable, if you're self funded, there's just some other considerations to keep in mind from stop loss and a claims run out perspective.

Looks like Lisa has a question on Zoom.

Hi. Thank you. Can you hear me okay?

Yep. It's good.

Yeah. A couple questions. So you mentioned that the third party administrators, what do you know about their use of AI and nonhuman agents for dealing with, employees and people who are going to be interacting with them?

So that would depend on the third party administrator. There is a really tout their AI capabilities. How about however, the AI is isolated in that it cannot give health care to see like, can't pick a plan for the employees, and it can't suggest the plan. The AI is really for comparing the plan designs. So scanning the SPCs and doing a side by side comparison, checking that doctors or medications are in network, but they're not allowed to actually enroll the employees or give them a suggestion or feedback on their health care.

When an employee does that within at least one of the systems that I'm aware of, if an employee says which plan design is right for me based on the information I shared, it flags that. And what pops up is a link to schedule a one on one consultation with a licensed individual benefits consultant to assist them in walking through what's gonna work right for them and their family.

Okay. That's a

great question.

The other question I have is time considerations. You mentioned that it's a shift in mindset because there's a lot less involvement by employee relations and and others who have traditionally been involved. As somebody who has guided a a family member through an illness, it was another full time job for me. So what has there been any any research or study done on what the extra time burden is for individual employees? You talk about freedom of choice in in selecting plans, but, I'm interested in the freedom of time and how what kind of a a load this adds to individual employees day to day.

Yes. So that's a great question. From a day to day throughout the year, there's not any data on that. What I do know is that the average individual, within these technology platforms, about 60% of them enroll in a plan without any interaction with an enrollment specialist, a consultant, and the other 40% are taking that one on one advisement. That one on one advisement to select the plan that works right for their them and their family, the average time they're on that call is about forty seven minutes depending on all the different questions they have.

I will say that those are year one statistics. Year two, we see the self selection increase. Year one is the biggest hurdle in in the in upper adoption because it's so new. Once employees get the feel and understand what the positives are for them, ICRAs tend to really boost employee morale. I think the data on retention within ICRA is about 95%, 90% maybe.

And where they see the biggest changes is they're switching TPAs. They're not necessarily going from ICRA back to group. I know that doesn't really answer the question, but the data is not gonna be available on an individual you know, how many how many times are they calling the carrier. I will say that the third party administrators can assist employees when issues come up, as can Natalie if she's handling enrollments. So there are peep there are guide guide rails there, to assist the employee if needed.

So, Lisa, maybe expand that a little bit. Think your point's well taken that today employees have two really three choices, the HMO, the POS plan, or, you know, not taking coverage. There is an increased cognitive load of picking between, dozens of plans potentially. The TPA and the software makes it much easier than that. And I think it's an important thing to call out that we show you rates on the ACA marketplace, and Natalie shared some slides.

You'd be buying those plans, but there's also an added cost involved for the TPA. Looking back at this slide about kind of the different models, there's no world where we recommend someone taking Ichro without partnering with the TPA. I think when the other so Sam and Natalie are more involved in this when it first launched. And the the employee experience has gotten a lot better as technology has improved because the admin burden of, you know, coordinating all the plan selections, the premiums, and, you know, kind of the the variety of deduction amounts is is a lot more than today where it's, you know, kind of the the checkbox of, you know, they take health insurance, which tier are they on. So there's that piece.

The TPA does add some value, but it it's it's a little different world.

Okay. And my final question quickly is you you mentioned the market rates, the dependency on the individual market and potential fluctuations. You know, the stock market doesn't seem to be connected right now to anything that's happening in the world, shockingly. But right now, we have a system that, in some ways, you could look at it as negative. It locks us into a contract and and some terms and criteria over a certain period of time. But with market rate fluctuation, these terms or, in other words, the terms of our individual plans could change on a dime. Is that am I understanding that correctly?

So the plans renew on January 1.

Mhmm.

Rates are submitted to the state for approval, the various states for approval. But, no, they don't change on a monthly or weekly basis. They're set annually. I will say that I do not have a crystal ball, and I cannot predict what the government will or won't do. I will say that ICRA has strong support from both sides of the aisle, including, the Department of Labor.

There have some ICRA legislation that's pending in congress. It's not necessary for them to codify it into law because this is policy driven. I was recently at the ICRA, the HRA council's inaugural event, and they actually had multiple government officials, as well as the Department of Labor there discussing what they're seeing and what they would like to do to help build out the ecosystem. If you search, there's a few different states that are either pending or already passed. A lot of states are actually starting to pass tax credits for small business owners that offer ICRA, usually on a a decreasing five year basis of a certain dollar amount to help encourage employers to start offering some type of coverage, that's offsetting employees' costs in the equity space.

So expand that a little bit. You know, right now with a group plan, we you have an annual renewal where rates are set for a year. That's kind of the same thing on the individual market where you have the annual, you know, rates are in for a year. Right now, we have the the ability to negotiate those three and five year agreements where we know kind of the worst case scenario for renewals from the from the carriers. You don't have that crystal ball with with the IPRA just because the ACA rates have to get approved and go through that process. The other thing that's worth calling out is the timing of that. Yeah. You know, right now, we're getting your renewals well in advance. It's in hand by July. You have an idea what that is, what that's gonna look like.

In the ICHRA space, and Sam, correct me if this has changed, it's you know, the rates aren't really set until, like, the end of October, early November. So it is a a later timeline and a and a it could be a tight turnaround.

Mhmm.

So so with that in mind, let's say that year is approaching and you get the rates in the in the fall and you publish them, employees could be in the position of changing who they're going with on a regular basis if if they choose based on rates. Correct? They could be changing Yes. Bi biannually if if the numbers change and they don't make sense for them anymore.

Correct. Well, what I also would say that, Lisa, let's it's taking price out of it. If we think about the cyclical nature of, you know, health, like, an employee's health. Let's say we know that we have some big surgeries that we have to do. Maybe it's a rotator cuff, hip replacement, knee replacement. As we approach open enrollment, maybe we purposely want to select the plan that's going to benefit you because you know you have these upcoming surgeries or family planning, etcetera, etcetera. So it's not just the price point. It's also what's going on in the employee's life and and the life cycle of the employee and their medical needs.

I wish cancer worked like that. Thank you. I won't take any more time.

Alright. But to Jerry's point on when our rates were released, they do they do submit for kind of preapproval, which is earlier in the year, but we really don't tend to see rates could finalize until end of October, November 1. Natalie, correct me if I'm wrong. We'll have some insight into where the carriers are coming in, but, really, it's end of October, November 1.

Correct. Sam, I'm gonna pause one second. I have Shannon in the room with a question and then Pat online with a question.

So my question is about the, the premiums and how they're paid. I mean, I'm assuming they're not payroll deduction, and the employee is responsible for paying these directly out of pocket? No. It's payroll deduction. It's payroll deduction? So the county is still involved in that piece of it then.

Correct. You're getting sorry. Same as Root.

And can you explain how that works? I mean, because we've been don't we have all these different wouldn't that be an entry nightmare for payroll? I mean, I gotta think of that. So and we get 2,200 employees or 20 you know, so if everyone picks out of the different plans that there are Mhmm. Every rate could be different.

And so

Hold on one question. Do you have a HRIS payroll system?

A what?

A do what? Your your payroll or your, like, ADP. I forget what you guys use. That Personality. Personality. Okay.

So every

entry has to be made at individually?

Not necessarily. So what you do what a lot of companies do is they download the Excel file CSV, and they can upload it into their payroll data so it's not a manual entry. Otherwise, they do have connectivity with some of the payroll vendors and that it's a direct sync, so it's not a administrative line by line kinda nightmare. But, again, that's more of a which TPA are we working with and how can we set it up from a the perspective of what's gonna work right for for you and your employees. Does that

Each of those things comes with a cost, doesn't that?

Yep. So third party administrators are not free. On the low end, we're talking probably $5 for EPM, maybe a little bit lower, but that's gonna be that pure reimbursement model. The most expensive third party administrator that I am aware of charges $65 per enrollee per month, and then there's kind of a a wide span in between those dollar amounts depending on the level of service, the quality of the product, the integrations with payroll administrators. So, yes, there is a an administrative fee to utilize the third party administrators.

I'm sorry. I guess I was referring to the, like, the connectivity to other payroll portals for some you know?

There could potentially be a file fee cost or something like that. But in general, it's part of why you're paying a TPA. So they're giving you a file versus trying to go through all every deduction, you know, line by line. But that is absolutely a consideration.

And would add more administration. Okay. Thank you.

Alright. I think Pat online for the question.

I wonder if their mic's not working.

We can't hear you if you're talking. I wonder if your audio is still an issue. Still can't.

You are on mute unmuted, though.

Yeah. We can see you're unmuted, but we still can't hear you. I'm sorry.

Patrick, maybe if you could email me your question, I could ask it.

So it's Patrick. Patrick Miles. No. Schallberg. Can I ask

my question? If somebody's thinking I have a question, this is Patrick Miles. I I I didn't raise my hand or anything. So

No. I'm fine.

Yep. No worries. We were

trying to little tech issue going on.

Patrick Schellenberger of the deputies was has his hand raised. Sorry for the confusion.

So while while we're working through that, if I could, I think that I look you know, Sam kicking it off with the four zero one k versus pension piece is a is a good way of talking about it. You know, we, of course, like to use our more technical terms sometimes in insurance of defined contribution versus defined benefit. And that is the the fundamental change you're talking about between an employer plan where today, county is saying you will get this benefit. You're going to get the HMO plan or POS plan, and you know what you're gonna get in terms of coverage. The shift to a NICRA is a defined contribution, so you know how much money you're going to get to then pick your coverage.

So it's a little bit different there. So I think that's a useful piece. We talked with the TPAs. Sam, I know I know I could probably go talk a little bit, but just what do you see in general picking the what what employers what's driving folks to make this choice? It is such a big shift.

Yes. So it's really all over the board. I would say the top industries are going to be, right now, senior living social services, distributed workforces, those that are struggling to contain cost contain the overall health of their population, to stabilize costs, manufacturing. And recently, surprisingly, it is going to be the education and government sector. A lot of school districts, not only in Wisconsin but across the country, are looking at ICRA as a way to kind of stabilize their finances.

We're also seeing that within, what I would call, rural, hospital systems, so health care settings, and then white collar. I would say that the biggest shock, to me this year, in all of these discussions that I'm having, across the nation is the amount of school districts that are considering this. I am involved with one in the state of Wisconsin right now who has chosen to move forward with this model, larger population. But the reason that they're doing it is we're looking at over 7 figures in potential savings. And when we start to think about that from a education and government perspective, that's probably 10 to 20 teacher salaries over the course of a a year, which is a big deal when we start to think about what is happening within the educational sector.

Does that help the question?

That does. So I guess what I I would say to distill it down, there's kind of three big reasons. We see it for kind of geographic carve outs, which ultimately apply to us, where folks have a population that's outside the core area that's a bad experience. We wanna give them choice and buy local plans. So there's that that that bucket. There is the kind of the the risk side of things where a plan is just running at an unsustainable cost level, and this is a way to try and kinda mitigate that. And it goes hand in hand with the the cost savings and the predictability and budgeting and being able to say, this is what we're gonna be able to pay. I don't if we know what that's gonna look like. I And guess that leads into the other pieces. Yeah.

You can talk to the high retention in ICHRAs. Maybe a little bit about kind of the process of if you go into an ICHRA and then try and go back into a group plan, what that might look and feel like.

Alright. Thank you. And I think Amy might have, Pat's question perhaps.

I do. I actually have Patrick's question, and I also have some information regarding the question about entering all of these premiums into our payroll system. According to Mike, our project manager, our payroll benefits package to where we can upload things through a CSV file. We would have to purchase that section from NeoGov. And so that would be a cost to us, and it would most likely require us to switch to the cloud.

And Mike said, would be a very large project. And I also know the NeoGov modules are quite expensive. So right now, we don't even have the ability to do that. We'd be keying by hand, every one of them.

You know, I asked a quick question just because I wanna make sure that I'm you don't necessarily need a benefits module to upload a payroll deduction. So when you do payroll deductions today with Dean, do you manually enter every employee, or do you

use

a template? Okay. Carol

Carol keys every single person in the HMO or POS.

Okay. And

then Patrick's question is, can you use the ICRA model to use the county money to purchase a spouse's plan and not just on the marketplace?

Meaning, can you use the ICRA allowance to purchase or to pay for a spouse's plan that's enrolled from another employer's plan? Is that is that what the question? Just to make sure.

Yes. That's my question. If you can hear me now. Yeah.

We can hear you.

Perfect. No. You cannot. Okay.

Okay. Thank you. Yep.

I have a question. Shannon has a question. Yeah. I'm sorry. Just how does COBRA play into this, or does it not?

Great question. So, COBRA is interesting when it comes to ICRA. So I mentioned those compliance obligations. Under an ICRA, it is considered a group health plan under ERISA. So you are still obligated to offer COBRA to employees who are coming off of your employer sponsored health plan even if it's an ICRA.

The interesting thing there is that COBRA doesn't make sense in ICRAs, and I'll tell you why. In an ICHRA, it's an individual contract between the employee and the health insurance carrier they choose. If they were to separate employment from the county, you still have to give them their COBRA notice, but they have the power to log in to Dean's website for their individual policy and update the payment information to start coming out of their bank account. So it really doesn't make sense for them to pay 2% more to pay for the health insurance premiums. They can just pay for it the same amount without adding 2%.

Does that does that make sense? There is some policy and legislation that's pending that they're looking at potentially taking COBRA out of the equation for ICRA, but there's some back and forth going on depending on how the ICRA is set up. Because if we set it up with those qualifying medical expenses, that changes how we'd have to calculate COBRA, from a from a simple calculation to an actuarial calculation. Meaning, if somebody didn't spend their entire allowance dollars, there could be funds available to them if they want a COBRA. So there's some moving parts, and ICRA is not perfect. But for the most part, COBRA, yes, you still have to offer it. Does it make sense for the employee? Typically, no.

It could for somebody who's retiring, though, because the retirees' expense I guess, wouldn't matter. Never mind. Because the the ICRID plans would all be separate, so never mind.

Under the ICRID, just one other note, is the funds, if we set it up as premium only, are owned by the county. So if employees don't utilize their full dollar allowance, that money is retained by the county. I've mentioned that because I talked a little bit about Medicare aged employees. Typically, they have the highest allowance model because they're the oldest, employees that are on the health insurance plan. However, they can rarely spend that full allowance amount because of where Medicare premiums and all of the bells and whistles, you know, the supplements that you can buy, typically would max out for an individual employee 400 to $500 on a monthly basis even though they might have $1,500 available to them.

So having said that, if we had, an employee that took the they run the, for example, and they so I totally lost my train of thought. Sorry.

It

happens. It'll come back to me in a second. Okay. This is age.

Josh.

Oh, Josh. Dash

full. So in the state of Wisconsin, who who comparable to Dane County has this or is currently using this type of,

setup? As far as ICRA options?

Yeah.

Is it comparable to a Dane County size?

Sam, do you have insight on that?

I can talk about ones that I know are okay with me mentioning. I will just note that they are not m three clients. These are people that I connect with at Professional Industries. So there is one that is, health care senior living, 3,500 employees in 49 states. They moved to Enikra about two years ago.

I spoke with her at a conference, actually, on a panel discussion on what led to her decision and how they set up the plan design to make it work best for their employees. There's also a large behavioral health facility, in the Minneapolis area that does have locations in Wisconsin and across the country that has about 4,000 enrolled employees. I would have to check with the m three clients within Wisconsin if they would be okay with me sharing, their name, if that's something you would want me to do. And then I can actually send over a, you know, invite Sam.

With them. Sam, is there

any municipal local governments that use this? I guess that was what

I meant by comparable. I was trying to get more of a I'm

So something that's public that. Something that's public record, you mean?

Yeah. So, like, say, a Rock County. As an example, no. They don't. What's the name now? I'm just gonna There's, like

Right now, there is no county that I'm aware of within m three's client base

Thank you.

That is on an.

And I think Sorry. Go ahead, Sam.

I will say that because it is public record, I feel like I I'm allowed to say this. There was a school board vote, in a school district very, very close to the Madison area, that has about 200 employees that are moving to this model for 09/01. And that would be, Adam's friendship.

Outside of that, what what we've seen so Nate and I have talked with a lot of our most of our clients over the last few years about Hikris just as an option. Primarily, what we're seeing and, you

know, Nate, you can speak

to as well, smaller employer groups, you know, maybe under 50 employees, 30 employees, 20 employees locally here. Obviously, from what Sam said, have some behemoth type groups throughout the country that are that are doing that as an option.

Sam, one of the other things you mentioned earlier was that there I think I heard you about it. They're you're seeing somewhat of a dual option available with the ICRA. Can you talk a little more about what that might look like?

Yes. So there are 11 eligible classes where we can offer ICHRA to one set of employees and a group traditional group plan to other subset. So those 11 classes are gonna be full time employees, part time employees, seasonal employees, salaried employees, hourly employees, collectively bargained employees, foreign based workers, geographic location, when they we start to think about, think, state based geographic location, temporary employees, those employees who are currently in a waiting period or a combination of any two or more of those 11 classes is how we're allowed to kind of isolate populations within your organization to offer separate benefits to to each individual.

So it's not a dual choice. It's slicing and dicing.

Oh, yeah.

Yes. But

Yeah. You've got to get it

between ICRA or group health plan. It's against the law.

K. Thanks.

Again, we've got a lot of conversations with our team for our groups that have, you know, PPO population or folks that aren't local and having a bad experience, so we're trying to look at that.

Alright. One thing no. Just on just on Jerry's comment is when Ikra came about, and Natalie can attest to this, it really was kind of seen more so in the smaller group space. That has shifted in the last, probably, two and a half, three years where it's moving up market, whether as a standalone strategy or offering it alongside a group plan depending on the population and what the health care ecosystem, where the individuals live is. So right now, what we're seeing based on the enrollment from the third party administrators is their average size employer has been steadily doubling.

So for 2026, their average enrolled per client that they work with is about a 120 employees total. So that gives you a little bit of information on size and scale. Yes. There's those really big clients. Yes. There's those really little clients. I would say the sweet spot right now is really gonna be 50 to a thousand ish employees depending on the makeup of the organization.

I I see no questions, so I think you're safe to move on. That

is all I have planned for today. If any questions come up, please don't hesitate to reach out to Jerry and the team, and I will get some of those takeaways on the data that was requested.

Thank you, Sam. Thanks much. And Natalie.

Did we have any other questions for Sam or Natalie before they scoot off? Shannon, my We got

our she had

our the same thought, but, it's a different one. So if and I'm going back to, like, these deductions from payroll. Because right now, we have the issue of we have somebody who's on a leave of absence. They don't have enough to cover their premiums. The county pays those and then bills the employee. Would there be that responsibility in this situation as well?

From an administrative

recovery issue there.

From an administrative standpoint, that would have to be a decision that you made organizationally.

So if they didn't pay it, they would technically be discontinued. The

plan is not if you're not paying the premiums, the plan will lapse.

Okay. And then how do you get back on?

So that would depend on the individual employees' reasoning They

just didn't pay us. There's still an employee. There's no qualifying event event. They just didn't pay their premium.

That that that's the end of it.

Then they can't get back on till open enrollment?

Yeah. Because, I mean, if not paying a premium, then the policy is going to lapse. But you as the as this employer sponsor, that's really if the employee is no longer working, right, if you're not paying the premium, the coverage would lapse, especially if the employee then doesn't pick up the premium. So that's what I mean by would really determine be determined by how you as the organization wanna pay and open those circumstances when it comes to leave of absence.

Okay. Thank you.

But, you know, that's a good call out in general with the shift to ICRAS. You know, right now, obviously, you know, Dean accept accepts the county's billing is, you know, willing to do that. We lose that flexibility with with an ICRAS. The same thing with the ability to, as we get exceptions, but, you know, work around unique situations. You're very much locked in a individual marketplace box, and there's not the flexibility to make the changes and and kind of work with the carrier that we have today. I mean, it is a much more a to b to c directed process, and there's not any, you know, off ramps or, you flexibility there, which is certainly an issue when you get into So

you don't, like, have a Heather or a Sharon or Right.

There there is at that point, there's no carrier to lean on. There's, you know, the TPA, but they don't have any special access. You know, they're kind of stupid. Same thing Natalie is, you know, look at the marketplace and say, well, we can call the carrier for these things. But you lose that that white glove assistance or ability to really, like, troubleshoot issues, which is certainly a concern. And then it is, messy to try and get back to a group health plan from a NICRA because you no longer have experience. So depending on, you know, the carriers, they would handle it differently, but, generally, it's also gonna pay a risk premium to try and reestablish a plan.

Thank you. I see Pat Schellenberger online with a question.

Yep. So as, this presentation is going, I'm doing my own research and stuff. And something that keeps popping up regarding related to the allowance is the three to one rule. Can you explain what that is and if there's any other rules or limitations when you're calculating allowances?

So, yeah, the three to one rule is really gonna be based on if you're taking so there's different ways to set up the allowance model. One of them is doing a percentage of the age rated, so each individual age. When that happens, you can't have the oldest employee and the the youngest employee have more than a three to one difference in what their allowance model is. That's the three to one ratio that's being talked about, but it is based on how you're setting up the allowance model, and there's multiple ways to do that knowing that that caveat exists. From a how what other rules are involved in setting up the allowance model, we still have to maintain our affordability calculations, which is gonna be that 9.96% of the lowest cost silver plan that's on exchange.

That isn't a big thing to note because the lowest cost silver plan on exchange tends to actually be a little bit more expensive than the lowest cost silver plan off exchange.

Yep. Thank you.

Any other questions for Sam or Natalie before we move on to the next topic? Any others? Seeing none, we will move on, Nate, to our next topic. Thank you, Sam and Natalie. We appreciate your time. Thank you so much.

Thank you.

Excellent. So next up, we have, some information on health reimbursement arrangements or a or HRAs. Fair warning. I got a little carried away make making slides for this. Sam and Natalie did a great job of really condensing their stuff to a couple things and having more talking points. Some of these I'll go through relatively quickly. Mhmm. Part of it is just, know, the HRA is a big overall topic, and we'll zoom in on what we're talking about. Everything that Sam talked about, it grows falls under the HRA bucket in general. But, you know, really high level, HRA is an employer funded benefit account.

Reimbursing members are qualified out of pocket expenses. It's funded by an employer, so it's IRS rules. HRAs can be pretty flexible in terms of what problem you're trying to solve. And then there's different HRA plans on the market. In general, you are partnering with, you know, the tasks, EBCs of the world, you know, kind of that type of of TPA or vendor to run these plans.

And there's, you know, an admin fee associated with that. In terms of, you know, why do employers offer an HRA, it's it's flexible about pretax reimbursement for employees for medical expenses. So and I'll get into, like, different examples of HRA types in a second here. It can be done to handle a specific situation or concern. So, you know, we put in an an HRA a couple years ago to help address travel and different expenses around abortion treatment in response to things that the the the federal government did.

As you can look at it that way, know we talked about it previously as maybe if we're doing it if we're doing something based on, you know, salary or the lowest earners in a population to try and make changes more fair. And your HRE funding is predictable in that, you know, what your worst case scenario is going into a plan year. And then it's not like when you get that that trend increase on medical costs, generally, you're not increasing the HRA allowance associated with that because it's the the HRA funding is based on if you're if you're doing a deductible based HRA, the deductible doesn't go up 10% that next year. It's we're gonna cover what whatever that number is. And then h the money in an HRA is employer dollars.

So I think, like, sort of like an FSA and that there's, you know, FSA is a deduction there. But is it if it's if it's unspent or unused, the employer retains that money versus, an HSA where you're giving people money that is then theirs and is out the door? And, again, please stop if have any questions or wanna chime in on anything here. You know, a big reason why HRAs are used is for cost control. And, you know, I had conversations with with with Brian who we we had in our last meeting about kind of what that looks and feels like.

And, fundamentally, when you're using an HRA in in most cases, you are making a bet that you're gonna come out better by essentially self funding a portion of those claims versus allowing and trusting the carrier's math

in that

space. So when you are putting an HRA in place that's, you know, reimbursement on out of pocket expenses, you're making a bet that we're going to perform better than the carrier thinks we will. So I think that that's a useful thing to call out because historically, we have run hotter than carriers. I thought we have, you know, have priced things at, and so that loss ratio has been over a 100%. That gives me a little bit of pause there.

The other thing is, you know, true apples to apples situation. Even if, you know, the claims are totally unchanged, you are adding an admin fee on a per employee or per member per month basis to pay an administrator to to run an HRA. And we'll get into some of the kind of what it looks like, a little bit the admin burden as we go forward. I would say just really high level. I'm a little skeptical of HRAs because they look really good on paper.

In a in a lot of cases, it makes sense, but it adds complexity to the member experience. Or if you're thinking of a deductible HRA, so you have a thousand dollar deductible, but the HRA covers $500 of that. The employee still gets an ID card. This is a thousand. And so and they have to to pay that and then get reimbursed, or there's some ways where if there's claims feeds back and forth between the TPA and the carrier where that reimbursement will happen behind the scenes, but it adds friction to the overall interaction in general.

Know, sort of like a flex plan where there's an administrator or a plan document, they have to to validate the expenses and substantiate them. So it adds another layer of complexity, but it can it it can result in savings. As I as I mentioned, a lot of different types of things that fall under the HRA buckets. You know, we just talked about the middle one, the ICHRAs. There's also, you know, some where you can do it specifically for retirees. There's accepted benefit HRAs. I cannot remember what the QSE HRA stands for. Qualified single and. Yeah. Again, many acronyms in

in the industry.

That's not that's not one that we use in kind of the large group space. For the most part, what I wanna talk about today is we call it integrated HRA, which requires an employee in order to be eligible for it to be covered under an employer's group health plan. So you have to be on on the medical insurance to be eligible for an HRA. And that's part of kind of the the tax free treatment or section one twenty five. So just calling out.

We're focusing on iterated HRAs. There's some some complexity in terms of what they reimburse. By far, the most common two options are first dollar HRAs or last dollar HRAs. First dollar is exactly it sounds like it's usually focused on a deductible saying we're gonna pay the first $500 in expenses incurred in a plan year. That certainly makes life easier on an employee.

It also is a direct cost to an employer. It's It pretty straightforward. The other way we see that is a last dollar where instead of being the deductible, you might be reimbursing the maximum out of pocket there. So you're kind of thinking of who you're protecting. First dollar HRA, it's basically everyone in a population that has claims.

On a last dollar HRA, it's that worst case scenario catastrophic claimant. I usually see a much higher maximum out of pocket. Oftentimes, there is you you know, we'll see employers pair adding an HRA with significant plan design changes, where you're saying we're gonna increase the deductible max out of pocket by, you know, a thousand dollars for deductible $2,000 for the max out of pocket. That results in immediate premium savings off of a renewal, but then you are kind of building some of that cost back in by making the the impact to an employee less via HRA. And then the the next four pieces here are some of the different kind of options you can pick.

There is the split or sandwich funding option where you might you were I mean, we see folks do, like, you'll do the first $2.50. You know, you'll do first dollar and last dollar, and the employee pays in the middle. You can also do where it's the whole deductible. You could do it since focused on coinsurance, or there are groups that put an HRA in place based on, you know, wellness engagement where if you're meeting certain criteria, you are locked you're able to be eligible for the HRA for the year. So it's it's a it's a pretty flexible vehicle, but fundamentally, you're reimbursing folks for some type of medical expense.

This next slide kinda lists out a really high level what they can cover. You know? So it's think, you know, anything that falls on the medical the medical benefits. So doctor visit, hospitals, prescription medications, you know, equipment and supplies. Depending on how the plan is written, you could you could incorporate some dental and vision expenses that's not normal.

And then your noncovered things are, like, cosmetic products, supplements, gym memberships. It's similar to, I think, the the the flex plan as far as what can be can be covered or reimbursed. In terms of, you know, how it works, you're you you go see a doctor like normal. You generally are gonna pay, you know, whatever your cost sharing is, and then you're submitting that for reimbursement. That reimbursement comes back it comes to you tax free.

And then there's options. You know, I you know, ideally, you're working with the TPA that has the relationship with your medical plan. So, you know, I the top of my head, I know EBC does, and I'm always positive that task does have real file fees essentially preloaded with with Dean and other local carriers where they're able to make it easier on the member, especially when it comes towards, like, deductible based HRAs. I I would again caution that it does add some friction there because that doesn't always work seamlessly. And, you know, in my eleven years in this industry, I've definitely spent a fair amount of time trying to troubleshoot and reconcile some of some of those situations because when the file feed does break or if there is an issue, it gets messy.

The next couple slides are a little bit in the weeds for stuff, but it's calling out needs to have a plan document. You need to be covered under a group health plan. They are COBRA eligible. HRAs are technically a self funded health plan. Typically, you're not getting PHI or significant information, but those compliance obligations do apply.

I don't think I listed it here, but PCORI fees, which is the Patient Centered Outcome Research Institute fees, which are applied to self fund health plans, do apply to HRAs, which adds an additional cost. And then I I hit on that they can be pretty flexible, but there are limitations to that specifically and that they can't discriminate in favor of highly compensated in individuals. There are some of those nondiscrimination testing pieces that you see for all section one twenty five plans by the IRS.

Nate, I see Pat Schallenberger online with a question, perhaps.

Yeah. So, Nate, so as it pertains to an HRA, so for something like this to benefit the county or make sense for the county to save money, this would be something where we went with a health plan or a group health plan that is considerably less than what we have now, and then additional funds are put into an HRA for employees. Is that correct? Am I thinking that correctly?

Yep. At a really high level, I I would say that that's absolutely correct. And it, you know, could be used to address the needs for a specific population or a specific class. But generally, in terms of for it to actually save money, it needs to be paired with plan design changes. You're putting some money in. And then the next step, as I call out before, is you're making that bet that you're going to, you know, run better and incur less expenses than the carrier estimated you would. Is when you make plan design changes, they give you credit or a decrement and saying, you know, your your current rate might be up is is a 100. We're gonna give you 5% of credit for changing your deductible. So you're kind of buying down that renewal.

K.

Thanks, Nate. Nate, can you go back to the slide that had the different types, please? No. The sorry. One you were on it. That one. Can you talk at all about that the last one, the incentive based?

So that's not one that I've done a ton with personally, but it it is an option where sometimes you're able to to structure a tier where and so we've seen kind of the industry in general go away from really incentive based pieces on wellness. But it's you know, you you can structure a wellness plan and a criteria of, you know, if you earn so many points or do certain things or, you know, you submit an HRA or or sorry. Using the the same term or multiple things. There's the health reimbursement arrangement, and we also use HRA for health risk assessment. We love our acronyms in insurance, and we're we're not creative people.

So forgive forgive us for that. So you you you can see it in in those circumstances where you're structuring the HRA as kind of a reward for specific subsets of a population.

A lot of times, employers would use that. So if you're paying, you know, 25% of the, monthly premium and based on your incentive, you know, if you do certain things and make a number of points, then you as the employee may might only pay 5% in that. So similar concepts to the HR, but, yeah, we we don't have any clients in our base that do that approach.

And then can you talk a little more about the catastrophic protection? Is that kinda purely linked to max out of pocket, or how does that work?

Very much so. So, you know, when we think of kind of benchmarks, I have some pieces when we get into the opt outs, looking at what the average plans look like. You know, there's the different layers of protection inside insurance plan. You have that first dollar cost sharing form deductibles and copays often followed by coinsurance once that deductible is satisfied up to the maximum out of pocket. Pocket.

Our plans today have that separate medical and pharmacy max out of pocket. And then those two are kind of they fit under an overall bucket of the ACA or all in max out of pocket where you're talking about just the absolute worst case scenario hits, how much could you be paying. An awful lot of plans, particularly from the national carriers, will structure that maximum out of pocket to be at the legal max where you're talking I I think it's $83.03 maybe $83.50, something like that for for a single. So you can get you can get a lot of underwriting credit for accepting that additional risk from from carriers where you're saying, you know, our employees each are on the hook for $8,000 if, you know, they get to buy a bus and have significant claims. And then you could put an HRA in to kind of back out or to cover the back end of that.

But, again, you're making that bet that the carrier is not giving you enough credit for that change. The one downside to that to that choice is you do restrict some of your ability to make to make changes to the plan in the future to buy down premiums. There was a vendor out there that, you know, had kind of their their whole deal was they would come in and say, hey. We're gonna we're gonna save you a bunch of money by making plan by working with you to make plan design changes. We're gonna give you a card that's gonna that's gonna kinda operate at as the HRA and make it feel to your employees as if you didn't go to a $5,000 deductible plan.

We've seen that, and it's something that, you know, there were some m three groups that did it. It wasn't a super great experience. We didn't have any we had some groups look at it. But the the concern there is once you're in that spot, it's incredibly expensive to buy your deductible back up. Once you're at a thousand dollar deductible, generally, benefits kind of go one way, unfortunately, that because the cost pressure is there. Folks are making choices to, you know, reduce premiums by making the plan less rich. It is not very common to see big swings in the other direction. We're accepting more premium to to increase the deductible.

Or say to

decrease the deductible.

I think that's ever that's a it's an a concern many of us have that once you start making changes, it becomes very hard to undo. Right. Of course. You. Are there other questions about HRA or Nate?

Maybe not for Nate, but maybe for Shannon or Amy. I think so if I recall correctly now, part of the it's infamous resolution one forty six was that there was gonna be an HRA for the lowest 10 like, the 10% the the lowest earners in the county. I was just kind of wondering how that would have worked in you know, had that come to pass, what would have how how how did that been implemented in along these lines if

Amy, I'll let you take that one.

Well, the answer is yes. There was one offered. How it got implemented, I don't have any clue.

Okay.

I wasn't involved in the discussions about creating the thousand dollar HRA. So

So just was it a is it thousand dollars for employees? Was that kind of the the premise?

I believe so.

It It was the 10 lowest 10% of the earners. Was that the

I'd have to go back and try to find that resolution and all that documentation. I don't have it off the top of my head. Thousand dollars is in my head. I could be wrong.

Yeah.

I remember being some spirit discussion in an IAC meeting. I'm trying I'm trying to figure out how you define that because the the hard part there is you're gonna you're creating a benefit cliff, essentially, where someone might be right on the edge and they get, you know, a a 25¢ raise that suddenly puts them up above and pulls them out of that threshold, and you can end up with some, you know, unfortunate and frustrating situations and incentives with that too.

Yeah. Because if you could go to the what? I think the next slide maybe or to the final slide. I guess it was the final slide. So can I just give you a favor of highly compensated individuals? Can you I'm just wondering how that relates to, for example, the what that that 10%, most percent of earnest proposal was at the part of that resolution. I think a lot

of that's gonna be similar to an FSA where, you know, you can't have it favor highly comped employees to put more dollars into a flexible spending account.

Okay. So But you could do it.

You can discriminate in favor of Yes. Of the the lower wage earners. You have you have that ability, but it's the IRS has a technical definition of, you know, highly compensated individuals, like, the dollar threshold as well as a percentage threshold of, like, overall salary. But you are able to, you know, create this plan in favor of folks that are not in that kind of top

tier. Okay.

Yeah. And so, I guess, with that benefits lift I mean, is that something that has been implemented elsewhere successfully or, in that model?

Or maybe not that that we're aware of in our clients, that specific approach. You know, HRAs definitely are very popular in that. And, you know, it's the one, slide it's showing, you know, first dollar, last dollar, you know, sandwich approach, but we don't have any place for that specific, you know, for, benefiting the lower, I'd say, 10% earnings. Okay. That sound right, Nate?

Yeah. I mean, some of the news. In terms of reporting, we we see this more of the the next topic of the opt out of cash in lieu. There's not always the best detailed data kind of breaking down all the different options you'd like to see in terms of what that looks like. You know, we have reporting on kind of average HRA amounts, but it's only it doesn't get into the nitty gritty of how are you how is it being structured? Is it first dollar? Is it last dollar? Is it, you know, incentive based? And getting into, you know, situation of that that 10. Jerry and I don't have any plans that that that do that today.

I'm not aware of an employer that does, but it is an option out in the marketplace. So might might be a conversation for you. We want to have a to talk with the vendor in that space that has experience. That'll be part of, you know, kind of that solicitation and that review to understand. Okay.

Just part of, I think, what we talked about too was, or last year was with the premium we're looking at premium changes, then you can't it has to be consistent premium, contribution across the board. I'm thinking again for, like, you know, the higher to lower paid earners, or in the county. So it has to be a fixed amount. It can't be. But you HRA is something, I I guess, there yeah. You can't there are limit there are different ways that you can function it, but there's also yeah. Practicality wise, something that might be challenging.

Right. And

that could vary from year to

year as well depending on which approach, you know, you take for the HRA. Okay.

So, Derek, you you talked about resolution one forty six.

Mhmm.

Was that when the county was contemplating or asking for plan design changes last year? That was one of the things that was offered, but that didn't pass.

Right. Correct.

It was discussed.

It was discussed. Okay. So it was never in I thought you said it was implemented. I'm like, oh my goodness. Yeah. Okay.

No. It was I know we discussed it in this setting.

Okay.

Thank you.

But I think my recollection also was the HRA that was discussed at that time was not individual accounts. Is that correct? That that was kind of like a county account that people could seek reimbursement from versus an individual account that each person would have.

Also, it's an HRA is a it's a group it's a group health plan. So it's a county bucket of of of money, but then each person that's, you know, enrolled in the HR and is eligible has their own individual amount towards it.

But can you see your amount? You know, I can see my flex spending balance.

Yeah. So you got so you yeah. You'd be able to see, you know Works really Depending on how much it it it's set up as, like, you'd be able to see your your current balance and remaining balance with

On the HR.

Yep. On the on the Does

that roll over year to year? No. Okay.

Is there a run out period?

There generally is where you have a little bit of time to submit claims. Oh, two and

half months similar to flex. Okay.

And are premiums something that are covered or no?

Not for active active employees. No. It's so you you have the ability to structure some of those things on on you know, by class and different things on the employer side when you're doing premium setups. Okay.

Thank you. Any other questions on the HRA before we move on to the next topic? Great. Seeing none. We'll let Nate and Jerry move on to another topic. Thank you.

So next up, we have opt out benefits or what we like to call cash in lieu. I wanna make make things complicated. You know, essentially, at conceptual level, it's it's pretty straightforward. You are giving employees money in order as a result of them waiving your your health insurance. And it can you know, circumstances where it can be a win win, the employee employer is gonna spend money to to to cover you.

And, you know, if you don't need it, but you're covered elsewhere, the employer can kinda pass on some of those savings to you, and, you know, reduce over overall spend. You know, why do folks do it? It generally comes down to the cost savings a little bit further on here. I took, you know, the the annual cost and showed, you know, what he what what Dane County spends on on members. And there is the potential for, you know, some savings for paying employees, you know, a percentage of of that in resulting in a net savings.

The the tipping point there is, you know, you when you have folks that are waiving the plan already, they're just getting a kind of a windfall on top of that. So you're trying to balance that out. There's the the fairness concerns that were folks that are kinda looking around saying, really, like, you know, benefits is the second highest cost outside of my direct pay, and I'm covered under my spouse's plan. So I'm not, getting that. So it kind of addresses that concern.

And then it also, you know, allows folks that have have other sources of coverage to to receive a benefit, whether it's, you know, folks 26 or so on their parents' plan or spouses. It kind of pushes the the cost and the pressure elsewhere. Part of it and we'll get into some of the the technical pieces, you know, in order to receive this incentive and we certainly way we'd recommend it be structured is what you call conditional opt out where you have to prove that you have other coverage in order to get the money. The big reason why is if you if the opt out is not conditional, the cash in lieu money gets added to employee premiums for purposes of affordability calculations. And if there is a large incentive, then suddenly that plan is considered unaffordable in the eye the IRS and could trigger penalties if you don't have that criteria of the opt out being conditional and make sure you have other coverage.

And then, you know, the employee is responsible for maintaining coverage. The employer is paying a a cash stipend, that we added to to a paycheck, and there's tax treatment concerns depending on on design.

And how are people showing that they have qualifying coverage?

Generally, it is you know, you're you're bringing bringing in proof, whether it's a letter or something from the other insurance company or or or a card. Yeah.

I mean, you're showing that annually then?

We like for Medicare, we have to fill out a form to provide proof of insurance for people all the time.

So you've there's there's admin concerns with with this approach. She would add add some, you know, a lift on Amy's team.

What would the liability be if somebody then dropped that coverage and we didn't know about it? I mean, is it is there any liability to the county for that?

I think if you have the documentation that they showed you they had the coverage, I don't believe the liability carries over there.

I don't really care, though. So would the

employee be responsible for paying that back? Potentially.

Could be. Yes. Yep.

Gotcha.

Because they're they're getting it due to the fact they are have other coverage outside of the county. Okay.

So this talks a little bit about the the tax status of these, you know, whether it's pretax versus post tax. Certainly, pretax is beneficial in terms of some tax savings. It does, you know, get into that that easy affordability piece and and affordability calculations, whereas post tax is a little bit cleaner. Part of you know, when we talk about pretax versus post tax, the biggest thing is pretax deductions under section 25 are irrevocable outside of select events through getting the qualifying event piece. So, generally, when we're talking about this, we wouldn't we wouldn't recommend an employer pay out a lump sum day one of the year.

It's gonna be it will be an ongoing on a per paycheck basis. So you are continual so you're continually funding that money in, kind of on on the regular timeline. I hit on this a little bit with the easy affordability where if it's unconditional, whether you just offer regards to other coverage, then it has to be factored into affordability, which can trigger penalties or if it's conditional when folks are proving that they have minimal essential coverage, then that is generally excluded from the affordability calculation. And, you know, and the affordability isn't something we talk about a whole lot because your plan has your on the HMO today, has $0 in premium. So it is it's it has the MEC benefits, so it it is affordable.

There's different safe harbors and tests to determine that. And we talked we opt out a little bit. There is kind of the unconditional, which is not the way route we would go. Conditional, it was someone is proving they have coverage. And then we also do see an approach with spousal carve outs where, and there's different degrees of aggressiveness here.

But you're able to you know, folks are are able to or employers take the stance of, you know, basically, if you're if you're how aggressive they wanna be. If your spouse has access to coverage elsewhere, you might say they're not eligible for for coverage or you have you have to pay additional money in order to take the plan if you have access to coverage through a spouse and don't take it.

Does anybody actually do that? Yeah.

It was pretty big for a while, you know, eight, ten years ago, but there are employers that do that. You know, they're looking at you know, they wanna save some risk, but a lot of times, the gamble there is, well, what if that spouse is a healthy spouse, you know, and you're taking away from the you know, safety numbers as far as population, you know, then all of sudden, you might be taking away a healthier spouse versus a nonhealthier kids go? It's gonna depend, you know, whichever one's that's yeah. But it's specific to

spouse. That. Okay. Right. Okay.

So that's when you are at, like, open enrollment every year. You sit down. Is it cheaper to go on your plan, my plan? Where should the kids go? I take a single. You have the employer yourself and the children. That'll I mean, people, I think, probably look at that annually if there are dual options available.

Jerry hit on one of the the biggest concerns and kind of points of emphasis with with an opt out arrangement is especially carve out, Sue's thinking about that risk pool because the people that are opting out of of coverage in order to take money are generally the healthiest risks in in your population. And so that makes the remaining population a little bit sicker. Talked about the failures your employer is saving some money upfront by not paying premiums for people that aren't taking the coverage. The downside is that money is then not in the in the pool of money that the insurance carrier uses to pay claims. And so you can end up in a situation where the plan keeps getting more expensive as a result of the good risk coming out and there's less money overall in the pot to pay claims.

So you get a higher increase. So we always think of that that medical loss ratio or the premium versus claims. If you drop the premium and the claims don't drop by the same amount, that that risk can increase. You end up getting getting higher increases. And specifically with spousal carve outs, that's always a big concern, because in in general, spouses are more expensive to cover than employees because you have no guarantee that they are healthy enough to be actively at work.

And then that is amplified when you go with the spousal carve out route because you are then ruling out the healthiest subsection of spouses, because folks that are that the spouse has coverage, they're healthy enough to be at work on their own. And so you're all kind of the only spouses that you're necessarily left with are the ones that do not work up outside the home, do not have access to coverage, and are are generally more expensive to cover.

So the spousal carve out like that, I mean, is there any look at what the plans are? It just doesn't matter. Their plan could have a $3,000 deductible. They have to take that plan.

Correct. There's no there's no flexibility or consideration there. So the only the only criteria is it has to meet the ACA definition of minimal essential coverage. Okay. So it has to be within kind of those guidelines of offering preventive care at no cost and then, you know, have maxed out and meet and offer the the key elements of a a group health plan.

Are there separate opt out that are kind of retiree or Medicare eligible focused? Like, maybe not opt out, but, you know, kind of any sort of incentive for retirees that are to take Medicare prior to ending employment.

So you can't incentivize them so I understand you can't incentivize employees to drop your plan to take Medicare when they are active. I don't know I know I know you that that rule doesn't apply to retirees because, generally, retirees don't just retiree plans aren't that common. But I don't know. I've never heard of an opt out at that point of paying

for The difference of that is requiring people who are 65 and still an active employee to take Medicare. We don't do that. We let them, you know, go till whenever they actually retire.

Question I for another time. So what happens when both employers or two employers have a spousal lockdown?

Mean, it's they it's it it

Yeah.

They but that's neither spouse can take the other one's coverage. So you can end up in some situations, especially based on tiering where, you know, one spouse might be paying for family coverage to to cover them and the kids and the other spouse is taking single. You know, there's different tier structures to a plan, which is, you know, how you're allocating that money. Dane County has the single versus family model two tier. You see plans that have you can get up to, I'd say, six tier, is crazy, but most common is four tier where you have employee, employee spouse, employee child, employee family.

And what you're doing there is reallocating the money within the overall bucket because the claims of the claim is for whoever's on on the population. It's just you're determining how to split that up. And it's it's a messy conversation to have transition tiers because there are you are always going to be creating winners and losers by doing that. And it's really hard to to accept that additional piece of friction. Now there's some folks that say, you know, we think four tier is the most equitable.

It's not fair for, you know, the employee spouse, two person family to be paying the same as the employee with eight kids. But it's it's really hard to to have that conversation and to to make that that change because there's always folks that are gonna hope by by that by making a tweak. So this slide talks about some of the the high level considerations. We've hit on some of these already. So plan document requirements that, you know, for the pretax piece got incorporated in your section one twenty five plan.

That second piece about the actuarial adverse selection risk is always a concern. It is hard to model because it's, you know, it is ultimately an individual decision of, you know, folks that that are leaving the the plan tend to be to be healthier. You also have kind of the to Shannon's point about folks making changes mid year. What does that that look like? You have to follow, you know, the the special enrollment rights and other other plan pieces.

And then the, you know, $64,000 question is, you know, what size of an incentive makes sense? It's generally set, you know, based on the employer's premium contribution to the lowest cost single plan to try and incentivize potential opt outs. As we get a little further here, I put in some some numbers to kind of contextualize the Dane County plan with overall cost versus kind of benchmark plans, the market. And then there is that determination of what you know, how much money would it take you to drop the plan. And I I think we've talked about that before as you guys have an amazing health plan that that is costly.

So there's some opportunity there for savings, but also it you have to give people a lot of money to drop a plan that's that value. Talked about this a little bit. The when I was going through our benchmarking and we do some different, we have a total reward survey that we do it all in three clients where we ask them how they're handling certain things. In the last year, we added in questions around, you know, opt out benefits and what amounts those look like. The output's a little bit messy just because it they are all conditional on different things.

It might be a different amount for singles versus families and and other things, but working with the risk management team and some reporting that other teams have done. I mean, the public sector, we see an annual incentive of around $4,000 is about what what we see for, you know, the payment to folks to to not take the plan. And that's not and that's a a smooth number. So it's not saying we're gonna give you $4,000 to not take single and $10,000 to not take family or anything like that. It's $4,000. It's based on the lowest cost single rate. Do you see a question online?

Carrie, did you have a question?

Yeah. I was just curious if I everything I've seen so far is, a cash stipend. I've seen some employers do, like, you know, let's say, a thousand dollars into an HSA account. Do you see much of that, or is that an older model? Or

You do see that. Now the there's the additional, like, complexity around that of an HSA, and you have to be have to have a qualified high deductible health plan. In this case, you know, county doesn't offer an HSA because your plan is too rich to compare with one. So you you can see that that model is just a little bit you know, that's essentially giving somebody money to a specific purpose versus just generally cutting a check.

Could the opt out go into it? I understand there's a difference between an HSA and an HRA. Could the opt out benefit go into an HRA? Is it normally just given it's in cash?

Generally separate things because it because if you're giving it to the HRA, the you can't be in an HRA unless you're already in a group health plan.

Right.

And so those two don't play nice together with that. You know, there's some very creative ways that folks use the different pretax accounts where you have high deductible health plans that are paired with an HSA on the the front end. And then after you meet the IRS minimum deductibles for an HSA, you're able to reintroduce co pays and other reimbursement vehicles, including HRAs on the back end. I think that's insanely complicated and just not something that employees are gonna understand or appreciate. I I don't particularly like that plan design.

We do see just on the HDHP side, of course, the national like to do that where they'll they'll add copays in afterwards. But, yeah, the the HSA, HRA combination is just too many acronyms.

So you mentioned the ACA requirements on portability or unaffordability. I can't remember what's going on. Portability. So with the Dane County plan then, you said because it is, you know, rich plan, then that's if we were to, for example, do something of 50 to 75%, we would still be in that under that threshold of affordability? Or

As long as it's a conditional opt out. Yeah. If it's an unconditional opt out, we're just saying you get this money for not taking the plan that would that could very likely make it unaffordable. There's three different safe harbors for affordability that employers use and can can use to determine whether a plan is affordable or not. But if it's if you're if it's a conditional if it's a conditional opt out that doesn't really change move the needle there, it was we just wanna mention that of the added burden of kind of the the why behind the what of proving the other coverage.

Because, you know, then that's where you get into the affordability is based on, you know, overall salary. There's different ways to do it. There's the federal poverty level piece where you're just saying, you know, you charge no more than it was, like, $1.28 35 Right. Something something like that for 2026 in terms of the lowest cost single plan. There's also looking on the individual basis of salary, and that gets into the penalty associated with the ACA because part of that requirement is you need to offer coverage that meets the the MAC or minimal central coverage criteria and then is considered affordable for 95% of your population.

And there's just different different employers look at that differently in terms of their overall structure. Sometimes it's well, you know, this population of, you know, full time employees that don't meet our regular affordability threshold, so we might pay them more to meet it. Or there's other employers that say, well, that's true, but that's only 3% of our population. We're still protected under the 95% threshold. We're okay taking the risk for individual penalties on those people if they go on the exchange and get a plan.

Because there's two sets of penalties under under the ACA for not offering affordable valuable coverage. There is the sledgehammer, which is calculated off of every member on the plan or every employee on the plan, and those fines add up really quickly. When you're multiplying by large numbers and then there's what they call the tack hammer, which is for individuals that go out and get get an exchange plan because their current coverage is unaffordable. We see more employers willing to accept some risk there.

Okay. Thank you.

So looking at at kind of Dane County, specifically, right now, you guys have an incredible uptake rate on your health insurance. You know, looks like ninety five percent of, you know, full time benefit eligible employees take the county's health insurance plan. For purposes of this, it didn't look at, like, the deep less than one FTEs out there, but you wouldn't you know, those folks have a lot more flexibility. You wouldn't want to offer them significant amounts of money to not take the plan. At a high level, it gets a little messy there. So roughly, that 5% who declined, I think, was up to a 116 employees, at least when we when we looked at

So it could be a spouse that's on the plan of and so two employees, and they're on one plan and not on the you know, not on the other. That would be one of the one sixteen. Right?

Potentially, yeah. And you wouldn't Very small. In in that circumstance, you wouldn't pay out if, you know, if

you got

two employees that work for the county, generally, they're covered under a family plan. You're not gonna pay you're not gonna pay the one employee because they're covered by their spouse on the housing plan already.

Right. Yeah. But the 116 employees does include those people. So let's say there's 30 employees on this plan, that would actually drop that number a little more. Right? Right. Amy, do you

I I I don't I don't have the document pull up here. I'm sharing my screen. It's that it's that one sixteen, can see those folks are not. I know it was a it was a list on there. Mhmm. I think I think that one sixteen did not did not include folks that were married.

I think those were taken off that.

Oh, okay.

So I think the

one sixteen is the truly, like, the the very low FTE.

That's yeah. That's what it was spelled out. Yes.

Okay. Because when we look when we ran the numbers in January, I think we had a 187 total, not on the plan. And but that would include even you know, all the folks at Badger Prairie were point two and point four. And so you're saying that the one sixteen out of the one eighty seven are the one point o FTEs? Yes. Yeah.

Oh, we got the married folks too.

All the ones that we know. Because I hear right.

So the the next thing that that we get into here is just looking at, you know, some plan costs. So for for your current pieces so starting out with the HMO plan, and this is just taking the monthly rates, multiplying it by 12, whereas the HMO single is a little over 14,000. HMO family is 33,000. POS single is 23. POS family is 55.

We then break that down into the employer employee split. HMO, there is no employee cost, and the POS piece is that 25% of of the difference between, the POS and HMO costs. So on the POS single, employees are paying $22.67 a year. POS family is $5,003.27. Just providing these numbers to kinda anchor, we start thinking about what might it take an employee to make that change.

We talked a little before about, you know, the percentage being based on the HMO, you know, the lowest cost single plan and a percentage of that. This next slide is is is showing a little bit more, kind of thinking about that first dollar cost and the the last dollar cost, whereas, you know, your plan today has that $100 single deductible, $200 family, $2.50 medical maximum out of pocket, plus that pharmacy of 500 per member or 1,500 on a family. When we get into benchmarks, again, the the average deductible I looked at twenty twenty six in force plans is $2,883 for a single or just under $6,000 for a family. Maximum out of pocket, you know, in round numbers is, you know, is $5,000 for a single, 10,000 for a family of forty eight eighty two and ninety eight forty one respectively. And then annual employee premium.

So what what the employee is paying on average across the board for, you know, those average plans is $2,688 for a single and then just under $10,000 at $9,009.84 for family premiums.

Is the benchmarking Dane County? Is it somewhat I looked

at that as the widest possible set on my when I when I ran it. So looking at, you know, probably through what's in force now and all the school plans are in, think I it was 1,800 ish plans throughout the state of Wisconsin. I didn't drill that down into, like, just Dane County or local HMOs or or or things there. Heidi, you you have your hand up.

Yes. Can can you go back to the previous slide, please? Nope. Next one. Forward. Okay. So when we're looking at the, current benefits that we have, there's once again these two, buckets for, max out of pocket. And then when we're looking at the benchmark folks, is it is my assumption correct that their max out of pocket has just one bucket?

So it is just one bucket. That is one thing within our data right now that is isn't super clean. So the way it pulls in, it's not looking at pharmacy plus medical and adding them together to get to that number. It is looking at, you know, whoever is listed as the overall maximum out of pocket, which often is just medical. So I think it is fair to say that potentially that maximum out of pocket number could be bumped up a little bit for plans that have a separate pharmacy piece if we added that in.

Locally, like, Quartz is is a carrier that at their standard plan design has a separate pharmacy maximum out of pocket bucket. And so there if we we kinda we went round and round and had a lot of conversations with our with our data team about how to handle it. And I know in future iterations, they're looking at potentially we're being able to report medical plus pharmacy versus overall, but it wasn't clean when we were looking at it earlier this year.

Right. And I completely understand why it's not clean. Thank you. I appreciate that.

Nope. That that that's a great call. I thought I glad you're thinking about it. So this next slide, I'm just trying to incorporate some of the numbers that, shared previously of kind of what's the what is the potential risk so that worst case scenario along with the annual employee employee cost per paycheck, into kind of that combined risk premium. That's how I looked at it.

You can look at this different ways. I like looking at it as the kind of worst case scenario last dollar. I thought that was probably the most fair. You could also argue, let's look at, you know, first at first dollars, you know, the deductible cost sharing. But under the HMO, you know, the most an employee could possibly pay out of pocket is $750 per person or $2,000 for an overall family unit.

On the HMO, POS is a little bit higher at $3,017 for a single person, $7,003.27 for the family. And then we take those benchmark numbers from the previous slide, add in the combined out of pocket risk and and employee premium, for single and family, we end up at $7,570 for the single and $19,008.25 for the the family. And kinda what that leads to is this next slide. I I regret making this the orange and red. That's a little too too aggressive.

Mhmm. I'm not gonna make us all I'll stare at that. But, you know, kind of the the the big question is what amount of money would move the needle for employees to drop the Dane County plan, in in favor of taking us a spouse's coverage. You have the added complexity of those 116 folks that are not that are already doing that, that would just be essentially getting a windfall and getting added added money. You're trying to balance the the trade offs of the short term of, well, how much money can we save by reducing the we're paying on premiums and shifting that into payments to employees.

And then there's also that long term risk of by giving that money directly to employees that aren't taking the medical insurance, we're making our our our risk pool a little bit worse. And the we're also depriving it of premium from from those people.

And there's nothing that would stop those same employees from at open enrollment changing and coming back on our plan.

Right. Right. So so it's an

for now, they find out they have a diagnosis that's gonna be severe, and then they would come back on our plan at open enrollment. That's right. Okay.

That's the question in my mind. I mean, that 5%. I mean, do we have a sense of why those folks aren't on the plan if they're this point? I mean, it's I don't think so.

It's somewhere on spouse's plans, I think, and and, some of them are the part time employees. Our our insurance really isn't affordable for part time people.

So what's the I I did find that spreadsheet that we ran that were all the employees in the payroll system who did not have insurance, and I pulled out all of the LTEs and all the people who aren't eligible. And if you include county board, the number including the county board and that's removing people who are married to each other that I know about, that's 219, and the number without the county board is one eighty three. And many of those employees are point fives, point six, point two, FTE, many of the CNAs and stuff. So, yeah, you got quite a big group here that are those very low FTE that just can't afford the premium.

So then, Amy, for the one sixteen, did that pull out the point fives and the point twos?

It may have. I don't know.

It it did. When I when I when I read that, I I read on on the one point o's.

Yeah.

Oh, wait. We might have, like, point eights that are on the insurance or could be. But they got pulled out or no?

I believe

it was They wouldn't be on this list. If they have insurance, they wouldn't have been on this list originally. K. The list we ran was people who had not signed up for our insurance.

Yep. And, I mean, I think, anecdotally, why people aren't tenant, there's a variety of reasons. I've heard folks that have, you know, a spouse who has GHC or something that they want, and so they're they stick with that.

It's probably a big one.

So definitely a lot of information, but hopefully, it's shed some light on.

And I think so the state of Wisconsin and UW both offer an opt out as I recall. I think it's $22,000 on their websites. So it's not

I'm sure.

I probably should know the HEXM. I'm covered in the state of Wisconsin plan, but it's it's it's much better than we get here at m three. So Yeah. That's been a pretty easy choice for for to to my wife's side of things.

On their their website, it just says you may be eligible to receive up to 2,000. UW as well, 2,000.

Wife I think my my biggest concern with this presentation was that it made it just like, oh, it's really easy. You just you're you you you put a percentage of difference, and you're gonna save money. And I think that story makes some level of sense, you know, because the uptake rate is so high. There's not that many people. There's that tipping point piece, but the the harder piece to quantify is the risk piece to the plan overall and the reduced premium into the pool to pay for that increased risk and what that looks like in year two, three, four, five, and in the future. And

wouldn't it also be safe to say that the people that you would see that would probably do this are the, ones that are on DHMO versus point of service? And the point of service people are already paying. So they're paying because they want that coverage. So those aren't the people that we're gonna lose. We would lose HMO covered people. Right?

Generally, most Again, you're that you're that's exactly right. That the healthier folks, the folks that have less intensive medical needs that are less concerned about their coverage would be the folks that will be dropping, and the more expensive people that are on the on the POS plan would not.

So young employees on h m basic. Yeah. Go ahead. So young employees on HMO. Young, bulletproof, and invincible. Yeah.

I mean I think that gets to some of what's, you know, what Sam was was hinting at with the ICRA. And I think the point about, you know, the the male versus female difference is is well taken because just in general, men don't go to the doctor, so they are cheaper to insure. Now we no longer do age gender rating on the ACA plans. But you could certainly say that a a 27 year old male that doesn't have a family and doesn't go to the doctor is not experiencing the true value of your plan. And so so that person is say, yeah.

Like, let's let's get an HDHP in here. Like, give give me an opt out benefit. Give me something that I can that I can do. I'll go off in exchange and buy the cheapest bronze plan and do that. But to some extent, that that population is, you know, subsidizing and is assisting the the less fortunate folks, you know, the older members on the population, the people that have that have medical needs. And that's largely what insurance is for, is you're you're trying to leverage your size in order to make it less punitive to people that are that are going through a horrible situation.

So I'm sorry if I missed this. Did we end up with kind of a ballpark of what you would say the county would need to offer in order to have people move? It did not. I didn't wanna wanna put that put a number out there and say here's

where where it needs to be, because it it is a tough balance to strike.

Wasn't this slide and it say, like, 50 to 75% of

the premium?

Yeah. So if you're going by kind of that benchmark of the employer premium, you're talking $7,000 on the the single end if we're just looking at a a pure ballpark where that would be. And then, yeah, that gets expensive pretty quick when you're talking about just that population that's already waived. That's, you know, $750,000 or more for them. And so that's a that's a big hill to overcome in terms of you need to get Right. More than two times that many people to drop the plan. Otherwise, you just end up spending more money.

Sure. Right. It's a breakeven. Yep. Okay. Thank you.

I'm just I'm still surprised that there's that I know it's, like, 5%, but I'm still surprised it's that that high of a number for.

Agree. Right? Insurance? Yeah.

I think that Marisa was right, though, that a lot of those people are GHC through a spouse. And since we are point of service, you can't go to GHC. It's a closed network. I think that's why they have to submit their other coverage with GHC. I do think that's a decent point part of this.

I think that was what we had.

Alright. Any other questions at this point for Nate and Carrie on that? Okay. Then moving on on the agenda. Our next discussion item, we're gonna circle back to, some correspondence. Our committee received, I believe, last in the last month or two from the county executive and from DOA. So we're gonna circle back to that discussion.

You don't have those handy to share, or you haven't want want to? Let me try to pull it off if we wanna go

Everybody has it, so I think they thank you. I wanna start out. I did get in touch with controller Hicklin this week about a question I had asked in our prior IAC meeting where one of the questions that we had was looking at resolution one forty six last year, which talked about the county's cost of health insurance being 86,000,000 for 2026 if we didn't make changes last year. And then subsequently, we saw that memo that came out in February that had the cost of the health insurance being 77,700,000. And so I had asked at the last meeting, you know, for help understanding the difference between those two numbers, account for the 9,000,000 ish difference.

And thank you, controller Hicklin. If I'm not sure if you're on here, but if you are, thank you for helping me understand that. It sounds like the 86,000,000 did include kind of the total payment Dean was expecting, basically. And so that did include, some costs that were, actually expenses by employees. So the retiree payments, which are a bit over 4,000,000, I believe, annually, and then the employee portion of the POS that they pay, which is a bit over 2,000,000.

And the rest of the difference is likely due to the shift of people off POS to HMO and then, the health insurance benefits that would have been budgeted for some of the positions that were frozen or cut. So just wanted to let people know that information in case other people had that question. Alright. I can open the floor if people had, comments. Know we've absorbed a lot of information over the last few weeks. So

What is our timeline? Do you know? Like, if we make recommendations or do we do we know?

I think we're we're doing the best we can with

I just didn't know if there were deadlines given.

Heidi?