Lockheed Martin Continues to Offer Competitive Benefits in Evolving Healthcare Market
Lockheed Martin is committed to providing employees and their families with comprehensive health insurance coverage and wellness programs. This won’t change as key components of health care reform – the opening of health insurance marketplaces and the requirement that all Americans have health insurance in 2014 or pay a penalty tax – are implemented in the U.S.
Navigating the costs associated with health insurance can be overwhelming with so much to understand, from copays to deductibles to coinsurance and out-of-pocket costs. What you really want to know is how much it will cost you if your child breaks his arm or your spouse is hospitalized for several days.
Lockheed Martin continues to pay the majority of health care costs for employees, family members and retirees. As aspects of Health Care Reform continue to roll out in the next several years, Lockheed Martin will continue to take steps to comply with the law.
Beginning in 2015, under the new health care reform law, at least one employer-offered plan must meet two requirements: minimum value and affordability.
To meet the minimum value requirement, the plan must pay for at least 60 percent of plan costs. The remaining costs are paid for by the covered individuals in the form of co-pays, deductibles, co-insurance and other cost-sharing features. On average, Lockheed Martin pays more than 80 percent of plan costs for employees.
To meet the affordability requirement, the cost of the plan for employee-only coverage must not exceed 9.5 percent of the employee’s household income. It is Lockheed Martin’s intention to offer all eligible employees at least one medical plan that meets the minimum value and affordability standards.
The average per employee national health care expenditure in 2012 was $11,457 and is expected to reach $12,136 in 2013, according to the Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care.
The “Cadillac Tax,” the most distant but significant component of Health Care Reform, will go into effect in 2018. Essentially, this 40 percent excise tax will be imposed on employer health plans, including retiree plans, with annual values exceeding the limits determined by health care reform regulations.
Lockheed Martin could pay millions in “Cadillac Taxes” starting in 2018 if plan changes are not made to avoid the excise tax. Most employers are taking steps now to avoid the excise tax in 2018 and beyond.
It’s important for you to understand what health care reform means for you and to understand the LM HealthWorks Plan and the HealthFund associated with it because it can offset the cost of a bill.
Our Commitment to Employee Health Care
- Lockheed Martin pays the majority of your health coverage costs, which amounts to more than $1.2 billion annually for employees, family members and retirees.
- Lockheed Martin spends more on employee health care than the national average.
- Lockheed Martin reduces administration costs by self-funding the LM HealthWorks Plan, and is able to spend more than 90 percent of health care costs directly on member claim payments against a national average of 85 percent.
- Lockheed Martin continues to pay the majority of health care premiums for employees; the average employee contributes less than the national average towards health care premiums.
- Employees can also play a role in controlling their own health care costs by taking advantage of free preventive care, using Lockheed Martin on-site wellness centers (where applicable), and participating in programs such as free flu shots, health coaching and Virgin Pulse (formerly Virgin Health Miles).
What Does Health Care Reform Mean to You?
- Beginning in 2014, every American must have health insurance coverage or pay a penalty tax.
- For most Americans, they will simply continue to receive coverage through their employer, Medicaid, Medicare or veteran coverage.
- The purpose of Health Care Reform is to improve access to affordable health coverage for all Americans.