S&S Benefits.....Opinion, Hearsay & News Review

An SHRM member study found that the number of employers offering life insurance dipped from 92% in 2009 to 87% in 2010. LTD insurance was offered by 76% of employers and STD was offered by 71% of those surveyed. Disability figures were not surveyed the year before. There has been no appreciable change in the number of employers offering medical and dental insurance. A Principal study of workplace wellness found that 43% of employees surveyed said that participating in a wellness program inspires them to perform better at work. Seventy-eight percent of employers surveyed by the BLS said they believe their employees are either very happy or somewhat happy with the benefits they provided.

Maine has received a 3 year waiver from PPACA that required insurers to spend at least 80% of premiums on patient care. Maine said the rule would destabilize the market for individual insurance after one carrier (Mega Life-which has 37% of the market) threatened to pull out of Maine if the rules were enforced. Mega Life is 77% owned by the Blackstone Group and Goldman Sachs, so you can read just about anything into the decision. KY, NV and NH have also applied for waivers. The irony of Harry Reid’s state application is not lost upon us.

Workers have apparently responded to the recession by filing less disability claims. STD claims declined by 17.3% and LTD claims dropped 26%. While the cost per claim for STD also declined by 15.9%, the cost per claim for LTD jumped by more than 25%.

PPACA puts new restrictions on terminations of employees. Retroactive terminations are not allowed if the member was covered through plan error and paid premium towards the cost. However, retroactive terminations are allowed if the employee didn’t contribute towards the cost of coverage.

A fall 2010 SHRM survey is bleak. Employee wages were frozen by 39% of employers. Thirty-eight percent cut employee bonuses, 20% reduced benefits and 36% implemented layoffs. A Towers/NBGH survey says that employers expect employee health benefit costs to increase 7% this year (after plan design changes) with PPACA exacerbating the cost trend. In fact, 81% of employers reported PPACA has already increased the burden on their HR departments. Although 53% of those surveyed had CDHPs in place, 27% plan to begin offering CDHPs in 2012. The GAO found that RX prices for a basket of the most commonly used brand and generic drugs increased by 6.6% each year between 2006 and 2010. Brand drugs alone increased by 8.3% annually.

Walgreens is selling their PBM to Catalyst Health Solutions for $525M.

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WSJ reports more unintended consequences of PPACA. Since over the counter RX is not allowed in Flex Spending plans without a doctor’s prescription, employees are making unnecessary doctor appointments to get their prescriptions for over the counter drugs. A reminder that this is the same law that was supposed to save money, which has now been dubbed the Medicine Cabinet Tax.

Major health insurers saw mixed results in 2010. Wellpoint, Aetna, Health Net and Coventry all had revenues go down. UHC, Kaiser, Humana, Cigna and BCBSIL-TX-NM-OK (HCSC) saw revenue increases. Net income increased for all except Wellpoint and Kaiser. Those” non-profit” HCSC plans saw the greatest increase by a long shot-112.6%, while they shed 2.4 million members. Meanwhile, one of the greatest enablers of the Blues to run roughshod over the market, Illinois Insurance Director Michael McRaith, was chosen to head the new Federal Insurance Office created by the Dodd-Frank law for Wall Street Reform and Consumer Protection Act. (which will do neither). The Obama administration apparently thought he was the perfect candidate after watching the non-protection of Illinois consumers.

The Joint Committee on taxation measured the cost of the COBRA premium subsidy to the federal government at $34 Billion!

The U.S. Supreme Court on April 15 will convene a private conference to consider an appeal by Virginia for an expedited review of a federal judge’s ruling that PPACA was unconstitutional. Virginia is protesting that the ruling did not invalidate the law or block its implementation.

Congressman John Fleming of LA. notes the following regarding the effects of PPACA: In 19 states, parents can no longer buy child only policies. 51% of American workers will lose their current coverage by 2013. 6,578 new pages of regulations for implementation so far. 1,270 new IRS bureaucrats requested this year for implementation. CBO estimated 800,000 jobs that will be lost. $2,100 increase in individual insurance premiums according to CBO vs. $2,500 in premium reductions promised by candidate Obama.7.4Million reduction in Medicare Advantage enrollment (raising costs). $118B new costs imposed on states. $310.8B projected medical cost increases. $552.2 B in higher taxes if the law remains in place. $1.39 Trillion in federal spending on new entitlements from 2012-2021 according to CBO.

Note: the Early Retiree Reinsurance Program will run out of the $5 B allocated in 2011 of 2012.