S&S Benefits.....Opinion,
Hearsay & News Review
It’s
time to Sping forward. Turn your clocks ahead one hour on Saturday night. Enjoy
the extended daylight!
A
confirmed (from several credible sources, not to be revealed) rumor says that
Private Health Care Systems (PHCS) is up for sale and that bid requests went out
to over 30 potential buyers. The most frightening thought from the TPA market is
the rumor (unconfirmed) that UHC is the lead bidder. A recent article on UHC’s
long term strategy said that UHC was not planning any mergers in the near
future. In the meantime, one of the PHCS owner companies (Trustmark) sold their
stop loss business to
Aetna
. As owner of the CoreSource TPA, they also acquired another TPA, NGS America,
out of
Detroit
.
The
GAO did a study for Chappaquiddick Teddy and found that inflation adjusted total
compensation costs for private employers grew by 12% from 1991 to 2005. Benefits
costs, which represent about a quarter of total compensation, jumped by 18%
while wages grew by 10%. Health insurance costs rose by 28% (just?) since 1991,
causing health benefit expenditures in 2005 to actually equal (a first in
GAO history) costs for paid leave, which grew by only 5% since 1991.
About
83% of CEOs, 78% of CFOs, 72% of HR execs and 65% of benefit managers say CDH
will help contain medical costs according to an Online Benefits survey of 283
companies from 41 states. However, only 27% of managers think CDH will”
improve employee health and wellness.” Also, 18% of benefit managers were skeptical
CDH plans would improve healthcare management, while 14% thought CDH plans could
actually improve healthcare management. More are likely to consider HSAs
in the future (31%) than HRAs (17%).
According
to a Principal survey of 1,374 full-time employees, 44% estimated their
anticipated medical expenses for 2005 to within $100 for their FSA set-aside. Of
those who missed the mark by more than $100, 39% underestimated and 16%
overestimated. We are not sure what happened to the other 1%, but figure they
are somewhere within a decimal point of cyberspace.
A
BI article says that stop loss premiums are increasing from 11% to 26% on
average, with a Tillinghast survey pointing to 15% as the average increase for a
$50,000 specific. The survey was based on responses from 28 insurers and MGUs
and health plans in 50 metropolitan areas. The property/casualty market is
hardening and those who use health stop loss from those markets may see more
significant increases.
The
Segal Co. did a survey that says that 24% of vendors incorrectly processed 5% or
more of health claims last year, down from 35% doing the same thing in 2004. The
numbers seem extremely high, but what one must remember is that Segal deals
heavily in the union market where many unions process their own claims. Such
statistics would not be tolerated in the normal private sector for performance
purposes.
Cancer
is the leading cause of LTD claims (12%) according to Unum. Pregnancy
complications are in second place.
Lincoln
National and Jefferson Pilot shareholders have stamped their approval on the
merger of the two for $17.5B in cash and stock being the price to “merge”
JP. Expected closure is in April.
The
HIPAA Security compliance deadline is on April 20th. Thank the
federal government for the waste of your time and money. Given the complexity of
the regs, 100% of those we surveyed (sic) hate unnecessary government intrusion.
A
Mercer study of 2,999 employers says that health costs rose an average of 6.1%
in 2005, down from 7.5% in 2004. Rx costs were up 11.5%, but a reduction from a
14.3% increase in 2004. Roughly 22% of employers offered CDH in 2005, up from
12% in 2004. DM grew from 32% to 41% and Health Risk Assessment use was up from
14% to 18%. About 25% of employers offer some form of health insurance for
part-timers and 7% apply a surcharge to coverage for any spouses who have access
to coverage elsewhere or who refuse coverage in that situation.
The
WSJ and Harris Interactive poll recently conducted said that just 14% of
U.S.
adults would be willing to pay significantly higher premiums for access to
better quality healthcare, while 55% said they would not do so. In showing their
total lack of knowledge that all costs are eventually paid by the
consumer/employee, 33% said that insurance companies should pay more for quality
(even though they themselves wouldn’t?). There is some hope in that 55% said
that they weren’t sure what to think about the issue.
