Week 2: Health Plan Management and Benefit Design

  1. For your Massachusetts contracts, identify the number covered in each of the following markets as of January 1 for each of the past 3 years:
    1. Medicare 1
      1. Number of subscriber contracts.
    2. Medicaid 2
      1. Number of subscriber contracts; and
      2. Number of covered lives (subscribers plus dependents).
    3. Individual
      1. Number of subscriber contracts; and
      2. Number of covered lives (subscribers plus dependents).
    4. Small employer (50 or fewer eligible employees) insured plans
      1. Number of contracted employer groups;
      2. Number of subscribers in employer groups; and
      3. Number of covered lives (subscribes plus dependents).
    5. Large employer (over 50 eligible employees) insured plans
      1. Number of contracted employer groups;
      2. Number of subscribers in employer groups; and
      3. Number of covered lives (subscribes plus dependents).
    6. Administration of self-funded plans
      1. Number of contracted employer groups;
      2. Number of subscribers in employer groups; and
      3. Number of covered lives (subscribes plus dependents).

  2. Explain how many groups/members were newly enrolled with your plan during calendar year 2008? How many groups/members were disenrolled during calendar year 2008? How many groups/members renewed their coverage without any disenrollment during calendar year 2008? Provide the response for each of the following:
    1. Medicare/Medicaid;
    2. Individual/small employer (50 or fewer eligible employees) insured plans;
    3. Large employer (over 50 eligible employees ) insured plans; and
    4. Self-funded plans administered by your company.

  3. What proportion of your health plan's membership has been continuously enrolled with your company for less than 1 year? Between 1 and 3 years? Between 3 and 10 years? Over 10 years?

  4. What are the most frequent reasons for the termination of coverage with an employer group? What are the most frequent reasons for the termination of members' coverage?

Health Plan Administration Expenses

  1. Over the past five years, what is the average percentage of your annual expenses (not including claims paid) that are devoted to each of the following health plan administration activities:
    1. development of new products, including rating and underwriting;
    2. marketing of products;
    3. sales of products, including commissions; and
    4. management of employer group accounts.

  2. Explain how the above-noted expenses may differ among the products that you offer, identifying the different health plan administration costs for the following types of products:
    1. Medicare/Medicaid;
    2. Individual/small employer (50 or fewer eligible employees) insured plans;
    3. Large employer (over 50 eligible employees) insured plans; and
    4. Administration of self-funded plans.

  3. Highlight what your company has done over the past five years to change your health plan administrative activities and explain for each of these changes how it has improved service and/or reduced your health plan administrative expenses.

  4. Explain how your company allocates the above-noted expenses among each of its product lines, identifying whether the health plan administrative costs are allocated for premium development purposes among each of the four noted types of products (e.g., are certain health plan administrative expenses pooled and allocated across all types of products or are some tied directly to the products that apply to the expenses).

  5. Does your health plan use non-employee producers (also referred to as agents or brokers) in the sale or marketing of individual/small employer health plans? Does your health plan use non-employee producers in the sale or marketing of large employer health plans? If your plan does use non-employee producers, explain the following:
    1. Over the past three calendar years, identify the proportion of small employer groups/individuals and separately of large employer groups who obtain coverage through a non-employee producer?
    2. Is the cost of the non-employee producer included in the premiums charged to the group/individual?
    3. Is the cost of non-employee producers excluded from premiums for those groups/individuals that do not use non-employee producers?

  6. Does your health plan require any employers or individuals to obtain coverage through intermediaries? If yes, please explain the following:
    1. Which intermediaries does your plan use?
    2. How does an employer/individual obtain coverage through each of the intermediaries?
    3. Is the overall cost of obtaining coverage through an intermediary the same as it would be if you sold the coverage directly to the small group/individual? If different, why is it different?
    4. If you offer small group coverage through intermediaries, what is the small group intermediary discount (identified in 211 CMR 66.00) that you apply to the rates to account for your health plan's administrative savings for coverage obtained through intermediaries?

Product Development

  1. Identify the number of products your plan offers in the following markets:
    1. Medicare;
    2. Medicaid;
    3. Individual/small employer;
    4. Large employer; and
    5. Administration of self-funded plans.
  2. Explain the reasons that your company may or may not participate in a particular market (of the five above markets) and the process that your company uses to determine to offer or not offer products in a market.

  3. Explain the process that your company uses to develop products
    1. How the product opportunity was identified;
    2. The product types that were considered to meet the market need;
    3. The non-cost criteria used when considering new products;
    4. The reasons that a new product was decided upon;
    5. The upfront cost in staff and other resources to implement a new product; and
    6. The additional cost or savings of implementing the new product; and
    7. Whether targets are set that must be met in order to consider the new product successful and to continue to market the product.

  4. Explain the reasons that your company offers more than one product in any particular market.
    1. Estimate the proportion of health plan administrative costs that are associated with offering more than one or two types of products in any one market.
    2. Identify the other administrative costs that are higher because your company offers more than one product option in a market.
    3. Explain what you believe would happen if your company were required to reduce your options in any market to one or two types of products.

  5. Explain whether your company offers non-Medicare products with different provider networks
    1. If your company does not offer products with different provider networks, please explain whether there are any administrative, contractual or other barriers that you believe may exist that may prevent your company from offering products with different provider networks.
    2. If your company does offer products with different provider networks:
    1. Estimate the relative savings and administrative costs to offer a product with a provider network that is more limited than the health plan's major network.
    2. Explain how many groups/members have chosen the products with a provider network that is more limited than that of the health plan's major network and any surveys your plan has done to identify general satisfaction/dissatisfaction with these products.

  6. Explain whether your company offers non-Medicare products with "benefit tiers" or lower cost-sharing for benefits when the covered person receives care from those identified by the health plan as being in its "top tier" of providers.
    1. If your company does not offer products with "benefit tiers," please explain whether there are any administrative, contractual or other barriers that you believe may exist that may prevent your company from offering products with "benefit tiers."
    2. If your company does offer products with "benefit tiers":
      1. Estimate the relative savings and administrative costs to offer a product with "benefit tiers" when the covered person receives care from those providers identified by the health plan as being in its "top tier" of providers.
      2. Explain how many groups/members have chosen the products with "benefit tiers" and any surveys your plan has done to identify general satisfaction/dissatisfaction with these products.

  7. Explain whether your company offers a product that does not meet Minimum Creditable Coverage standards as established by the Connector.
    1. If your company does not offer products with benefits that do not satisfy Minimum Creditable Coverage, please explain whether there are any administrative, contractual or other barriers that you believe may exist that may prevent your company from offering products that do not satisfy Minimum Creditable Coverage standards.
    2. If your company does offer products that do not satisfy Minimum Creditable Coverage standards:
    1. Estimate the relative savings and administrative costs to offer a product that does not meet Minimum Creditable Coverage standards.
    2. Explain how many groups/members have chosen the products that do not meet Minimum Creditable Coverage standards..

  8. How does your plan identify the eligibility conditions for coverage, especially regarding dependent eligibility and continuation of coverage? Does your plan permit groups to provide coverage beyond what is required by law?
    1. Explain the process that your company uses to identify the eligibility rules for coverage; and
    2. Which staff are involved in deciding and ensuring compliance with eligibility rules.

  9. In Massachusetts, there are certain benefits mandated to be included in insured health plans by law. Explain the following regarding mandated benefits:
    1. What proportion of premium dollars are associated with all mandated benefits;
    2. Which are the top five most expensive mandated benefits;
    3. Self-funded employer plans that you administer are not subject to insurance laws:
    1. Which mandated benefits are commonly excluded from employer self-funded plans; and
    2. What proportion of employer self-funded plans that you administer cover each of the listed top five most expensive mandated benefits.

  10. Which categories of services do you specifically exclude from coverage and why? Explain the process that your company uses to identify which services are excluded from coverage:
    1. Which staff are involved in identifying which services are excluded;
    2. The cost criteria used when deciding to exclude specific services;
    3. The non-cost criteria used when considering to exclude specific services;
    4. How do you decide and communicate which services are excluded; and
    5. Whether there is a process in place to reconsider a service that has been excluded.

Sales and Marketing

  1. Explain who is responsible for your company's process to contact employers, offer health plan options and either obtain coverage contracts with new employers or maintain coverage contracts with existing employers. Identify the number of staff and proportion of health plan administration expenses devoted on an annual average to such marketing and sales activities over the past five years.
    1. Explain the process needed to obtain or renew an account. Present your company's timetable to present products, obtain premium quotations for employers, secure commitments from an employer to offer products to employees and hold open enrollment so that employees may choose coverage. Explain the amount of time necessary prior to coverage being effective that each of these functions must be complete in order to ensure that there are not any interruptions in covered persons obtaining covered health services.
    2. Explain the different practices and expenses in marketing to small versus large employers.
    3. c. Explain steps your company has taken to reduce the cost of selling and marketing to employers.

  2. Explain who is responsible for determining the level of resources and expense to devote to the marketing of your health plan and its product through print, electronic or other marketing media. Identify the number of staff and proportion of health plan administration expenses that have been devoted on an annual average to such marketing and sales activities over the past five years.
    1. Explain the process needed to obtain or renew an account. Present your company's timetable to present products, obtain premium quotations for employers, secure commitments from an employer to offer products to employees and hold open enrollment so that employees may choose coverage. Explain the amount of time necessary prior to coverage being effective that each of these functions must be complete in order to ensure that there are not any interruptions in covered persons obtaining covered health services.
    2. Explain the different practices and expenses in marketing to small versus large employers.
    3. Explain steps your company has taken to reduce the cost of selling and marketing to employers.

  3. Explain who is responsible for administering day-to-day relations with individual employer accounts? Identify the number of staff and proportion of health plan administration expenses devoted to managing accounts, including for example the enrolling of covered persons, the publishing and distribution of health benefit documents and identification cards, the collection of premiums, and responding to questions about plan benefits or other features. Explain the process that your company uses to identify ways to improve and streamline such administration
    1. How many staff and what proportion of health plan administration expenses are devoted to health plan management activities.
    2. Explain the separate staff, resources and administrative expenses by market.


1 Only include individual Medicare, group Medicare coverage should be included in the group counts.
2 For the purpose of this question, please include Commonwealth Care with the Medicaid counts.