S&S Benefits.....Opinion,
Hearsay & News Review
A
survey by SHRM of benefit managers of the changes in health plans in 2005 showed
that the top four changes were increased coinsurance and co-pays (66%),
increased participant cost (59%), increased deductibles (56%) and increased Rx
copays (55%). Significant other changes include increased reimbursement for
fitness center use (37% reimburse this cost) and weight loss programs were up
from 25% to 29% of those surveyed offering reimbursement.
The
International Society of Employee Benefits surveyed 430 employers and 28%
offered a CDHP, up from 22% last year. 53% were contributing to the HSA
accounts. HRA use appears to be switching to HSA use.
BenefitNews.com’s
quick survey gave an interesting result. 32% of those surveyed indicated that
employee resistance and entitlement mentalities were the biggest barrier to cost
containment. 29% cited insurer and provider pricing while 17% said there was an
increasing prevalence of certain illnesses and 22% believed it was the high cost
catastrophic claims that were the largest barrier.
Out
of a population of 297,000,000 in the
USA
, the Privacy Rights Clearinghouse believes that a minimum of 100,000,000 people
have had their identity compromised in the last 483 days.
Spending
for Rx drugs was $188.5 billion in 2004, over 4.5 times more than the $40.3
billion spent in 1990. The rate of increase has declined from 20% in 1999 to 8%
in 2004. The share of Rx paid by health plans has increased dramatically from
26% in 1990 to 48% in 2004, while the share paid by people has declined from 56%
in 1990 to 25% in 2004. During that time utilization increased 71%. We said back
in the 1980’s that HMO’s adding Rx paid as copays would increase utilization
and it did. When PPOs added copays to compete with HMO benefits, it just made
the problem worse.
Dental
is offered by 71% of all employers surveyed by Forrester Research in 2005. The
figures are at an 89% offering rate or higher for group sizes from 500 and up
and go as low as a 40% offering rate for employers with 6 to 24 employees.
According
to Milliman, the average annual medical
cost for a family of 4 in 2006 is $13,382. That figure contains both the
costs for the employer’s benefit plan and the portion paid by the consumer in
the form of cost sharing. Of the $13,382, a family averages $2,210 out of pocket
in cost sharing plus $2,810 in payroll deductions. The balance of $8,362 (62%)
is paid by the employer. Milliman is also predicting 9.7% increases for HMO’s
and 10.7% PPO increases for 2007.
According
to MetLife, 47% of employees currently live paycheck to paycheck, up from 42% in
2004. Met uses these figures to show the importance of having employer provided
disability coverage.
A
poll of 74,000 employers showed that 47% did not file required Form 5500 as
required by the feds in 2003. Penalties for non-compliance include DOL fines of
up to $1,100 per day for each plan.
HRH
has purchased
Chicago
based Thilman and Fillippini brokerage. Allianz has announced that their health stop loss business is for
sale. The nation’s Blues plans
continued to be profitable with a 15% jump in net income in 2005 after a 24%
earnings increase in 2004. Net profit margin was 3.3% in 2005 with 94.4 million
members, a 2% increase).
A
U.S. District judge citing ERISA has struck
down Maryland’s Fair Share Health Care Act which would have required large
employers (over 10,000 employees) to spend a certain amount (8% of payroll) on
employee health care.
On
September 1st, Humana will switch from Walgreen’s Mail Service to
their own facility which will be known as RightSource, meaning Human gets to
keep more of the profit. Surprising, isn’t it?
Be
aware that more hospital sponsored outpatient treatment centers are being billed as ER facilities. Employees may
think they are not using the ER (and avoiding the special ER copay) only to find
out that the hospital bills the separate facility as an ER. A prime example is
Northwest
Community
Hospital
’s treatment centers in places like
Schaumburg
.
Blue
Cross is upsetting doctors and hospitals in the
Chicago
area according to an article in Crains (7/31/06). The Blues are requiring
providers to get a reference number from them before approving medical imaging
(such as MRI tests, CT scans). Since the program took effect in April, 5% of
requested referrals ended up dropping their request after talking with the firm
the Blues hired to conduct the review. Somehow we don’t think we’ll be
hearing those docs on the latest Blues radio commercials.
