Two employers shared how they've gotten creative with the Patient Protection and Affordable Care Act at a National Business Group on Health conference in Washington. One moved to Aon Hewitt's private exchange and while the other considered this option, instead chose to enhance its consumer-driven health plan's delivery system and quality of care for employees.
"Have the courage to look at your situation and choose a strategy grounded in data and relevance," said Craig Dolezal, a large market consultant at Aon Hewitt. He added that employers have a lot to balance these days, including the declining health of employees, rising health care costs and of course, PPACA. So how did these two employers do it?
Darden Restaurants owns Olive Garden, Red Lobster, Yardhouse and other national restaurant chains. "We're one of the least likely companies to do something like leading this path," said Lynda Walker, employee benefits vice president of Darden, about the company's move to Aon Hewitt's private exchange that opened at the start of this year. She explained that the organization's prior insurance program, a PPO through United Healthcare, hadn't been updated since at least the mid- '90s. And, since many employees were barely reaching their deductible of $250, the company was probably over-insuring the population. "With costs increasing and health reform [compliance] in 2014, making sure plans were compliant enabled us to take a giant leap forward," Walker said.
Walker noted that the PPO was mostly managed in-house, which meant the company had to worry about a lot of rules. "Now, we don't worry about essential benefits," she said. "Aon Hewitt worries about that." Through the private exchange, Walker said the company was able to provide more choices, plans and insurance carriers and more price points for a true "benefits shopping experience." She added that during an internal employee survey, employees said that they wanted control "like I have in my 401(k) plan."
Walker and her team heard about Aon Hewitt's exchange at an American Benefits Council meeting. While the company has a total of 190,000 employees, only 17,000 enrolled in health care with Darden in 2013. Because of the large part-time, young and uninsured workforce in the restaurant business, Walker said they've made a commitment to educating the rest of the employees about the public exchanges.
Jill Olds is the director of benefits at Cummins Inc. in Columbus, Ind. She told the audience that a private exchange, "didn't feel right... to [what] Cummins is as an organization." The company makes diesel engines for large 18-wheelers or trucks and has about 17,000 U.S.-based employees.
While the company hasn't rolled out any changes to its health plans yet, it does have plans to make its total replacement CDHP more effective and user-friendly.
After ruling out an exchange or any further changes to deductibles, the company settled on changes to the delivery system. Olds said the conclusion was supported by the fact that half of the overall health care spend comes from spouses of its predominantly male workforce. "We want to make health and well-being part of everything we do, in all aspects of [employees'] lives," Olds said.
The key elements are a high-quality delivery system, engaging employees with programs about healthy behaviors and providing employees with the same level of service provided to customers. For example, her team is working on a deal to ensure employees can see specialty doctors within 72 hours of being referred. Olds said the company is also working hard to keep costs manageable and to not trigger Cadillac taxes.
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