Two Points of the Compass and How They’ll Transform Compensation Strategy

Our review of over 350 CHROME Compass analyses reveals that your average client’s plan is currently more affordable and covers more than health care reform will require. Let’s take a look at how employer-sponsored coverage will change as the result of these two points of the Compass.

3.63%

That is the percentage of adjusted gross household income that your client’s average employee contributes to his health premiums, based on the CHROME Compass analysis of 345 employer plans.

About three and a half percent, as opposed to the mandated nine and a half percent of modified adjusted gross household income that PPACA requires to make plans “affordable.”

80.52%

That is the average actuarial value of covered benefits for of all employer-sponsored plans, based on the CHROME Compass analysis.

Eighty percent, as opposed to the required sixty percent of actuarial value imposed by health care reform mandates in order for a plan to have “acceptable” coverage.

The Interplay of PPACA



Long term consequences

The new government standard allows higher contribution from employees than we’ve found on average by analyzing the plans of many of your client’s.  It also requires less coverage on an actuarial value basis than the averages we’ve found.  In fact, data generated with CHROME Compass, our leading predictive modeling tool, shows that 95.7% of employees are already in “affordable” coverage.

We’re on the brink of a major revolution in how businesses allocate compensation toward benefits.  Over the next few years, we’ll probably see a swing towards higher premium contributions from employees and a lower actuarial value of covered benefits as a result of two of the CHROME Compass points, the affordable cost and acceptable benefits requirements. The key will be the restructuring of compensation dollars in other areas to keep packages appealing to top talent.

With these significant changes only two plan renewals away, it is vital that your clients begin to reshape their business strategy in light of this massive legislation.  Let us partner with you as you navigate these changes with them.

For more information on how CHROME Compass identified these averages, reach out to your ContinuousHealth CHROME Compass Consultant.

This article was first featured in the February 28th edition of our newsletter. If you'd like to receive the weekly newsletter Directions, email directions@continuoushealth.com.  (Your email will never be shared, sold, or otherwise distributed, and you will receive only the type of content for which you sign up.)

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