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

MERRY CHRISTMAS and HAPPY NEW YEAR!

An Aon Hewitt cost survey shows that medical cost increases were 4.4% in 2014 (up from 3.3% in 2013) after plan design changes and are expected to rise 5.5% in 2015. The average cost per employee per year was $10,717 in 2014 and employees were asked to contribute 23% of the cost. The average total out of pocket costs paid by employees was $2,295 in 2014, up from $2,005 in 2013. The average cost by plan PEPY was as follows: HMO-$10,762, POS-$11,711 and PPO-$10,570.

A Mercer survey was slightly different than Aon. Mercer said health benefit costs rose 3.9% in 2014 to an average cost of $11,204. The expected increase in 2015 for the surveyed is 4.6%. The survey put 2014 PEPY costs for PPO at $10,664 with $11,052 the cost PEPY for HMO. Enrollment in CDHP plans jumped from 18% to 23% of employees. Thirty-eight percent of employers expected their costs to grow exponentially due to the requirement to cover employees working 30 or more hours per week.

UBA surveyed 9,950 employers in the small to mid-size range and had different results. The average plan costs for all types of plans was lower at $9,504 PEPY with employers paying $6,276 and employees paying the other 34%. Average costs increases over the prior year was 5.6%, but there was a 322% increase in delayed renewals which delayed the effects of Obamacare for a year. The average deductible for single coverage was $1,901 with an out of pocket average maximum of $3,500 single and $8,000 family.

The DHS and CMS have issued final regulations that amend HIPAA so that HIPAA Certificates of Credible Coverage are no longer necessary as of  December 31, 2014, since pre-existing conditions can no longer be excluded.

A survey of 1,000 insurance brokers by health benefits tech company Benefitter shows that 75% of brokers had at least one client that decided to end health coverage. Almost 75% of brokers surveyed saw premium increases for small and mid-sized businesses in double-digits and more than 1/3 saw rate increases of at least 60%.

According to the BLS, in 2011, 59% of the population under age 65 was covered by employer provided health insurance while 23% had some form of public insurance and 18% had no insurance coverage. Health insurance constitutes the largest share of non-cash compensation for private sector workers and rose from 32% of non-cash compensation in 1991 to 39% in 2012.

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House Republicans filed a lawsuit against the Obama administration over unilateral actions on the health care law that they say abuse the president’s executive authority. The suit focuses on the postponement of the requirement that larger employers offer health coverage to their full-time employees or pay penalties. The suit also challenges what it says is an unlawful giveaway of $175 billion to insurance companies under the law through funds not appropriated by Congress.

Bloomberg reports that HHS Secretary Burwell has said it is unacceptable that HHS misstated Obamacare enrollment numbers by double-counting 393,000 people in dental plans. Enrollment in Obamacare plans is thus reportedly reduced from 7.3 million to 6.9 million Americans in August and down further to 6.7 million in October.

The Government Accounting Office studied the insurance markets from 2010 to 2013 using payer self-reports to the NAIC and discovered that the three largest insurers held at least 80% of the market in 37 states. In more than half of those states, one payer had more than 50% of the enrollment pie. In 5 states, one insurer had at least 90% of those enrolled. The Blues were the largest insurer in 44 states in the individual market, 38 states in small group and 40 states in large group. That is probably the reason more and more employers are going self funded with an independent TPA and using Cost Plus payment methods. There is no reason why a carrier would need to be transparent in a market it dominates and where the brokers and large consulting firms don’t want to give up their overrides. With costs continually increasing while each large insurance carrier claims better discounts, increasingly it is apparent there is no value added for the employer in the carrier proposition. Some have figured it out.