Jean Moore, Managing Director with Exchange Solutions for Full-Time Active Employees on OneExchange

For highlights of my perspectives, articles I’ve contributed to and other forums where I’ve shared my thoughts, see me on Twitter at #TWJeanMoore

This post is part of our Exchange Innovator Series featuring leading private exchange, health care reform and Medicare experts from Towers Watson.

I’m Jean Moore, managing director with Exchange Solutions for Towers Watson, overseeing our offerings for full-time active employees on OneExchange.

My overarching responsibility is to meet the needs of the market. Today that means I make sure the exchange works the way it was designed to and I help employers understand how our exchange paradigm can serve their needs – how OneExchange is calibrated to reduce health spend as well as how our model is built on a best-in-class experience for employees.

My health insurance roots

I’m a Fellow of the Society of Actuaries and stay current through ongoing work and analysis within the industry, both for OneExchange and our clients. I’ve spent my career assessing risk and calculating the associated costs for large employers. I started out in our retirement line of business and learned a lot about how to predict the financial impact of future events. When I moved to the health care side of the business I was able to use those skills to help employers predict their future health care costs and then identify solutions to manage them.

Jean More riding Smart Little Laredo

I’m a cowgirl at heart, and I love to spend my weekends on my horses chasing cattle

I had a close-up view of employers’ need to get health costs under control and the increasing difficulty of the challenge. Despite many attempts to manage costs over the years – strategies like self-funding, wellness programs, account-based health plans, prescription drug management, network management and more – it’s been like swimming upstream. The odds have been heavily stacked against them. Now that I’m in the Exchange Solutions business, instead of determining the financial impact for a single employer, we’re doing that for an entire group of employers. So much of the exchange business is tied to financials and my roots as an actuary are really helpful.

Outside of the exchange, our largest employers, the ones who could invest in a whole host of health and cost management strategies, have been more successful at bending the cost curve. But employers who aren’t resourced to throw everything but the kitchen sink at the challenge face crippling cost inflation.

That’s where we came in with our private exchange philosophy. We’ve taken the health and cost management strategies that have helped our best performing clients outperform health coverage cost inflation and built them into OneExchange. And we’ve developed a graded runway to the full model so employers can bring new elements and features on line in a way that works best for their organizations.

We’ve invested over a billion dollars in bringing those strategies into OneExchange so employers don’t have to build it on their own anymore.

That sounds like a story that belongs in the health care start-up space – and it is. I’ve had the best of both worlds by getting to run a start-up business inside a well-established company – I get to be incredibly responsive to the market and to do it with the support of a large, long-standing organization.

Jean Moore hiking in Arizona

My husband, Tom, and I love hiking the peaks and canyons of Arizona.

Where I see health insurance going

I think that the private exchange market for active employees is going to open a lot of eyes and a lot of minds in the next few years.

I believe we’ll see benefits available in more of an individual purchasing environment – and not necessarily in a public marketplace. I’m still talking about a private market that’s employer-supported. The makings are there already with the degree of choice and control and competition we’re turning on with exchanges. The differences between how group and individual plans work are going away. Group used to mean one-size-fits-all. As consumer-centric personalization becomes the norm even in the group space, it won’t feel like that much of a leap to actual individual plans, like what we see with Medicare.

That bodes well for our industry professionals because the benefits that younger workers value and their comfort-level with technology and personal choice are going to have a big impact on how HR and benefits departments work. It’s going to be harder to keep up with the expectations of younger workers in the model where employers hand-select and control benefits for everyone. Private exchanges are engineered to deal with the kind of diverse, personalized environment that millennial workers expect.

I also think we’ll start to see the philosophy of greater choice move beyond medical and insurance coverage to other benefits – even those in work-life areas, like paid time off, flexible working arrangements and learning and development.

Employers will need their benefits professionals to focus more on these new types of benefits, which will allow them to distinguish their employee value proposition better than in the health care space where companies are being regulated into a narrower band of options.

By getting on board with the efficiencies of the private exchange model now, benefits professionals will be putting themselves and their companies in a very sustainable position for the rapid evolution we can expect in years to come.

Every year Towers Watson customer support staff receives thousands of calls from people using OneExchange to find and enroll in health plans. The questions they ask us — and their employers –tell us a lot about what’s important to them and the information and guidance they need to make the best decisions they can.

With a growing number of full-time employees using OneExchange to find health coverage, we decided to compile the top 10 questions asked during the recent fall enrollment period for the plan year 2015. The questions underscore the obligation that employers and exchange providers have to help employees become more informed consumers and more active participants in their own health care.

Earlier this month, we issued a press release with a list of the top 10 questions and what they reveal about employees’ concerns.

Click here to read the full release.

Last month, both the House of Representatives and the new Republican-controlled Senate introduced legislation that would change the definition of a full-time employee under the Patient Protection and Affordable Care Act (ACA) from 30 to 40 hours per week. The House version of the bill passed on January 8, 2015. The Senate version has been referred the Finance Committee.

The stakes are high. The ACA’s employer mandate now requires employers with 100 or more full-time employees to provide health insurance that includes a set collection of benefits laid out in the ACA, or pay a penalty. This “pay or play” employer mandate goes into effect for employers with 50 to 100 full-time employees in 2016.

President Obama has promised to veto any bill that walks back provisions of the ACA and this bill in particular. It is unclear that either the House or the Senate could muster the two-thirds vote required in both chambers to override his veto.

Proponents of the bill argue that raising the cutoff for full-time work to 40 hours per week would take pressure off employers and lessen the chances they would cut workers’ hours to under 30 per week to avoid having to provide health insurance.

Opponents argue that employers are more likely to cut hours if the threshold is 40 hours per week, putting many workers in the 35 to 39 hours per week range at risk of becoming part time under the law.

The debate will no doubt continue.

However, the 2014 Towers Watson Health Care Changes Ahead Survey offers insight into the focus of U.S. employers’ planned response to the ACA’s employer mandate. Completed in July 2014 by 379 employers that collectively employ 8.7 million people, the survey revealed that 75% of employers plan no changes to their workforce strategy or mix of part-time employees in 2015 or 2016. Moreover, 91% of employers that offer health plans to part-time employees are “not at all likely” to discontinue them in that timeframe.

Ben Lupin, senior regulatory advisor for Towers Watson Health and Group Benefits, cautions employers not to count on the passage of a bill redefining full-time work as 40 hours a week. “The stakes are too high,” says Lupin. “Better to act as if the 30-hour cutoff is set in stone and move forward accordingly. When the option is to ‘pay or play,’ paying a penalty is simply too onerous to consider.”

For additional insights from Lupin on the “pay or play” option, see our blog post on the ACA reporting requirements that went into effect on January 1, 2015, here.

In 2014, nearly three-quarters of employers offered their employees one or more account-based health plans (ABHPs). Another 9 percent expected to add an ABHP to their plan options for the plan year 2015. In addition, 16 percent of employers now offer ABHPs as the only plan option, more than double the rate in 2012. No other plan types saw such positive growth in 2014.

This is according to data from the 19th Annual Towers Watson/NBGH Employer Survey on Purchasing Value in Health Care, fielded in late 2013/early 2014. Respondents included 595 employers that collectively employ 11.3 million full-time employees, have 7.8 million employees enrolled in their health care programs and represent all major industry sectors.

An ABHP is an employer-sponsored health plan that combines a high deductible with either a Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA) – tax-advantaged accounts that employees can use to pay eligible health care expenses. ABHPs help employees increase their understanding of the value of the benefits that their employers provide.

The survey further revealed that in 2014, employee enrollment in ABHPs increased from 15 percent to nearly 33 percent. When offered on a private exchange, uptake was even higher, with 40 to 60 percent of employees enrolling in ADHPs. To make ABHP adoption even more attractive, 79 percent of companies that offer them contribute subsidies for their employees into the tax-advantaged savings accounts the plans are connected to.

However, there is a learning curve that comes with being a newly empowered health care consumer. And the first year of implementing an ABHP can be difficult on employees because it takes time to accumulate funds in the accounts the plans are attached to. In the meantime, employees might have medical expenses that are not covered and exceed the funds in their accounts. Employers looking to adopt ABHPs need to help their employees take a long-term view of these types of plans, beyond year one.

To aid their employees in making the transition to ABHPs, a majority of companies emphasize communication and education throughout the process. For example, 52 percent of employers offering ABHPs have implemented year-long communication strategies on the value and responsibilities of ABHPs. Another 20 percent plan to implement such communications strategies in 2015.

We’re still in the early stages of fitness wearables. For proof, look no further than the new wearables introduced at the Consumer Electronics Show (CES), the tech industry’s biggest trade show held every January in Las Vegas.

Put bluntly, as it was in a recent Bloomberg BusinessWeek article about two of the worst offenders: “The Smart Ring and the Smart Belt Are Actually Kind of Stupid.”

The so-called smart ring, called… wait for it… “Ring,” allows the wearer to turn lights on and off and open and close curtains with a flick of a finger. Kind of like Mary Poppins cleaning the childrens’ bedroom in the song, “A Spoonful of Sugar.”

Belty, the other wearable lampooned in the Bloomberg BusinessWeek article, is a belt that tightens and loosens depending on whether the wearer is sitting or standing. It also vibrates if the wearer has been sitting for too long.

While we might not rush to judgment that these products are “stupid,” they do reflect a basic theme of recent wearable unveilings: The technology is here; the utility, not so much. For those old enough to remember, or fans of old TV, just think the 1960s TV show “The Jetsons.”

For those unfamiliar with it, The Jetsons featured a decidedly-retro futuristic family: George and Jane, their children, Judy and Elmo, and of course, Astro, the family dog. The technology in the show is kitschy and entertaining — outlandish by design. Remember the auto-hygiene machines and treadmills floating in space?

But if fitness wearables are going to become widely accepted as key components of employer-sponsored wellness programs, they’re going to have to stay fun while getting a whole lot more functional. As we wrote in our previous posts on fitness apps and the challenge of pinning down ROI for wellness programs, there are still many obstacles to successfully implementing wellness programs and getting the most out of wearable health devices.

Screen Shot 2015-02-09 at 3.13.44 PM

Towers Watson announced today that Time Inc. has chosen Towers Watson’s OneExchange to deliver medical, prescription drug, dental, and vision benefits to its full-time active employees and their dependents for the 2015 plan year.

Time Inc. also added a new voluntary wellness program to give employees and dependents the opportunity to earn “well-being dollars.” Plan participants will have options in medical plans, as well as medical, dental, and vision insurers to choose from.

Said Jim Foreman, managing director, Exchange Solutions, Towers Watson, “Time Inc. is at the vanguard of a movement among the country’s leading employers to give their employees more choice and control over their health and wellness benefits. By using a private exchange to administer and deliver these benefits, Time Inc. is bringing the same spirit of innovation it demonstrates in its media business to helping its employees become better and more responsible consumers of health care.”

For the full release, click here.

Accountable Care Organizations (ACOs) have been making headlines as a relatively new option for reducing health care costs. ACOs do this by forming regional or local groups of medical providers — doctors, hospitals, clinics — who provide coordinated health care.

This coordination is designed to result in higher quality of care for patients by increasing communication between specialists, primary care providers, and other caregivers. It also can lower the cost of care by reducing duplicate tests and catching conditions early that, if left untreated, could develop into more costly chronic diseases.

As an incentive to form ACOs, the Centers for Medicare and Medicaid Services (CMS) shares the savings achieved for the Medicare program with ACOs that succeed in delivering high-quality care at a lower cost.

Since ACOs were authorized in 2010, nearly 400 have been formed. However, in the only analysis of results by CMS thus far, just 29 ACOs qualified for the bonus pay. Still, the payouts are impressive. As a chart published in CFO Magazine in December 2014 shows, the top bonus was $57.8 million with bonuses paid to the second- through fifteenth-ranked ACOs ranging from $39.6 million to $15.1 million.


These figures underscore both how difficult it is to improve health outcomes while reducing costs and the promise of ACOs as one method for doing so.

ACOs are not the only new policies Medicare has introduced to encourage coordinated care, however. In October 2014, Medicare introduced a policy that would reimburse doctors for providing coordinated care to Medicare-recipients with chronic conditions. In January 2015, the Obama administration announced its goals of having 30 percent of payments for traditional Medicare benefits tied to alternative payment models such as ACOs by the end of 2016 and 50 percent by the end of 2018.

It’s a brand new year, but before we’re too deep into 2015, let’s look back at the posts that attracted the most readers last year. With topics ranging from wellness to private exchanges to the primary care physician shortage, here are the most popular OneExchange blog posts from 2014:

  1. Wellness Programs and the Challenge of Pinning Down ROI

Preventative care costs employers significantly less than treatment for medical conditions and as a result, employers are looking increasingly to employee wellness programs to keep costs down. However, measuring the effectiveness of wellness programs is difficult. In this post, we explored some of the challenges of measuring wellness program ROI — and offered some advice on best practices for employers determined to crack the code.

  1. Towers Watson Survey Reveals Employers’ New Year’s Resolution: Employee Wellness

Wellness was top of mind for employers heading into 2014, according to Towers Watson survey data. Nearly half of survey respondents said health and productivity programs are essential to their overall organizational health strategy. However, they acknowledged a disconnect between the efforts of employers (often high) and the level of engagement amongst employees (low). This widely read post offered perspectives on what employers are doing to address this issue and increase the chances that their programs will be successful.

  1. The Times They Are A Changin’… Or Should We Say “Churning?”

The term “churn” used to refer to low-income Americans under the age of 65 fluctuating back and forth between qualifying for Medicaid and not qualifying. With the passage of the ACA, it now encompasses shifting eligibility between Medicaid and being able to buy health plans on private exchanges with a federal subsidy based on income levels. In this post, we broke down the concept of “churn” in health insurance as it was expanded to include overage on the public exchanges and expanded Medicaid eligibility in some states.

  1. Survey: 70% of Retirees Reevaluated Their Private Medicare Plans for 2014

Towers Watson survey data revealed that retirees did not take their health care costs lightly back in the fall of 2013 when they enrolled in plans for the plan 2014. Towers Watson data showed that 70 percent of Medicare retirees who purchased plans on the Towers Watson OneExchange Medicare exchange reevaluated their plans to ensure that they have the best coverage to meet their needs and their budget.

  1. The Primary Care Physician Shortage [Part III]: Is The Answer Telemedicine?

In part three of this three-part series, we explored advances in telemedicine and its unique application for reaching individuals in remote areas without access to care. Technological advances allow doctors and specialists to treat their patients regardless of how far away they live from providers of the care they need. We also examined telemedicine as a means to address the primary care physician shortage that has resulted from increased enrollment in health insurance nationwide.

Like what you’ve been reading?

Keep coming back to the OneExchange blog for more compelling posts on relevant topics in 2015.


For highlights of my perspectives, articles I’ve contributed to and other forums where I’ve shared my thoughts, see me on Twitter at #TWJohnBarkett.

This post is part of our Exchange Innovator Series featuring leading private exchange, health care reform and Medicare experts from Towers Watson.

I’m John Barkett, director of health policy affairs for Exchange Solutions, Towers Watson’s private exchange business segment.

It’s my mission to stay on top of the ever-changing regulatory landscape of today’s health insurance market. My focus is on how health care reform and changes in Medicare impact employers’ needs and options when it comes to private exchanges. As our development teams engineer new private exchange tools and services, I advise them on how to extend and improve the exchange experience for workforces, active and retired. My goal is to make the most of new technologies and new consumerism sensibilities – like being able to see and quantify differences between health plans and how they would work for the individual consumers considering them – to shop like you would for any other major consumer purchase.

My health insurance roots

John Barkett, Musician

In addition to his Medicare expertise, John Barkett is a musician and irrepressible crooner

When I first got into health insurance, I had the idea that if people could truly shop for health coverage, like they did for other important life purchases, they could make better health coverage choices for themselves and have real influence back on the industry.

It sounds simple, but shopping for insurance has been mind-bogglingly hard to do for generations of Americans. In years past, the marketplace really wasn’t set up with individual consumers in mind.

Employers play a huge role in providing Americans with health coverage, and that has meant employers acting on behalf of employees and retirees – with the mantle of choice, accessibility and cost on employers – not the people who ultimately would use the coverage.

The growth of private exchanges and online public marketplaces has meant that Americans are finally getting consumer choice and leverage in their health insurance options – and that’s makes this a very exciting time to be in this field.

I studied economics back when the other social sciences – psychology, sociology, political science – were starting to apply economic models to their fields.  I remember reading a psychology paper called “the Tyranny of Choice,” which described how people do not make rational decisions when faced with overwhelming choice.  I think about his every time we extol the benefits of competition in a health insurance marketplace. My take-away:

– Consumers can’t benefit from competition if we don’t provide tools to simplify their options. –

And that’s what we do as a private exchange – provide people with the tools and services they need to really have influence as consumers – over their own health insurance decisions and as purchasers in the market.

Eventually I staffed the House Ways and Means Health Subcommittee when Congress was writing the Affordable Care Act. The policy debate centered on how to create a competitive health insurance marketplace. It turns out the attributes of such a marketplace – affordable plans, a simple shopping experience and market rules that protect consumers as well as insurers – are necessary for any type of exchange – public or private – to attract consumers.

Where I see health insurance going

John Barkett

John at the Chiang Mai Thai Cookery School in Thailand

In the years to come – and we are well on the way there – I see exchanges driving insurers to become more consumer-friendly.

Right now insurers operate as B2B companies. In an exchange environment, they must operate as B2C companies. As exchange adoption grows, insurers will compete over how they treat their customer, not just their customer’s employer. My belief is this will lead to some new thinking on the old frustrations that plague our health care system.

I also see the other groups that have been involved in health insurance purchasing, such as employers, becoming more consumer-oriented themselves – for example making more health consumerism tools available to employees and retirees.

A key consideration for this consumerism sea-change is the question: If we all got to choose our own health insurance plan, would we all pick the same one?

The answer is “Of course not!” Yet most people with traditional employer-sponsored insurance only have one or two options for coverage.

In an exchange or marketplace setting, the exchange can innovate by tailoring insurance products to individual consumer preference and consumers can enroll in products that are a better fit for their needs, budgets and lifestyles.

Overtime, this should lead to consumers and employer sponsors getting much better value for their health care dollars.

The ACA’s requirement that large employers report the health coverage status of their employees was strictly voluntary for 2014. Not so for 2015. Copies of the forms must be provided to employees by January 31, 2016 for the calendar year 2015 and filed with the IRS shortly thereafter. That means recordkeeping must begin now.

The type of reporting an employer is required to do depends on which category the employer falls into:

  • Section 6055 reporting is required of self-insured employers and multiemployer plans employers. The IRS will use the information in these reports to enforce the individual mandate.
  • Section 6056 reporting is required of large employers, defined as those with 50 or more employees. The IRS will use this information to enforce the employer mandate.

Employers are already required to report on the value of the health coverage they offer employees on W-2 forms, which are wage and tax statements. Ben Lupin, senior regulatory advisor for Towers Watson Health and Group Benefits, calls these forms the “new health care W-2.”

According to Lupin, despite a year-long delay in the employer and individual mandates, prevailing opinion among experts is that there will be no further delays unless Congress passes legislation and President Obama signs it into law, which is unlikely.

“Pay or Play”

The employer mandate to provide health coverage for full-time employees, defined by the ACA as employees who work 30 or more hours per week, creates a “pay or play” decision, which most employers have made already. “Play” meaning to provide health coverage for full-time, active employees – which the vast majority of large employers are doing, and “pay” meaning to not provide coverage.

For employers who “pay,” there are two penalties:

  • The big penalty will be applied when an employer does not cover enough of its full-time employees. “Enough” is defined in 2015 as 70 percent and will increase to 95 percent in 2016. Employers subject to the big penalty will have a fine assessed for every employee under 70 percent.
  • The small penalty will be applied based on an employer’s failure to provide health coverage for a full-time employee. For every full-time person who receives a subsidy from a public exchange, an employer will be required to pay $3,000.

Lupin advises employers not to count on a bill passed by the House earlier this month raising the threshold for full-time employees to 40 hours a week from the current 30 hours. Even if the Senate also passes the bill, President Obama has vowed to veto it.

For more information on employer obligations for reporting, see the IRS website.


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