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

Why be like everyone else?

S&S Benefits Consulting 219 Darien, Dundee, IL 60118 Phone: 847-428-5353, Fax:847-428-9876,

Email: jseiler@ssbenefits.net IF YOU WOULD RATHER RECEIVE THIS VIA E-MAIL !!!!

Volume 3 Issue 1-Street Talk January, 2001 Issue


We hope the New Year finds you healthy and happy!

WellPoint Health Networks (Unicare/ BC of California) bid too high for Georgia based Blue Cross/ Cerulean according to Trigon Healthcare. Trigon is basically the Virginia Blue Cross organization. They wish they had more to bid.

According to a new Mercer study of 3300 employers, health plan increases of 11% on average are predicted for next year. That number will be much higher for stop loss, as those insurers attempt to move beyond break-even to a profit. In 2000, 40% of employers said they would shift some of the cost increase for 2001 through employee contributions while 17% will increase deductibles, copays and coinsurance. The average cost per employee/year for health has increased to $4,430 in 2000. Drugs are trending at 17.5% with Rx accounting for about 14% of medical plan costs. HMO costs rose 9.6% compared to 7.7% for PPOs and 10.1% for POS. Dental is offered by 51% of employers surveyed and the cost of dental averaged $470 per ee/year.

Obesity Treatment will become tax deductible in 2001 under revised IRS policy. Treatments covered include behavioral and nutritional counseling, pharmacology and surgery, but Not health club dues, over the counter products or nutritional supplements.

According to news reports, United HealthCare has failed to reach agreement with Rush-Presbyterian St. Luke’s Medical Center and it’s four affiliates including Oak Park Hospital, Rush-Copley Medical Center in Aurora, Rush North Shore in Skokie and Riverside Medical Center in Kankakee. Rush was apparently asking for a 70% increase in fees.

The long planned merger of the Health Insurance Association of America and the American Association of Health Plans was called off. They say they will continue to work together on major policy issues. The AAHP represents more than 1000 HMOs and PPOs. The HIAA represents 300 insurance companies.

It wouldn’t be a newsletter without more Aetna bad news. A major restructuring will cost some 5,000 jobs at Aetna. They are also officially dropping the US Healthcare portion of their name. That’s the good news. US Healthcare probably did more to ruin Aetna’s reputation than their ill-advised purchases of NylCare or Prudential Health Plans.

Prudential’s board has approved an IPO for the company’s stock, so we will have one more company catering to the quarterly returns market. However, Met Life’s recent success with an IPO makes it hard to argue that Pru’s choice is wrong. With the decline of the mutual insurance company we have seen the decline in a the number of markets available to bid on corporate insurance plans, since stock companies are easier to sell.

The EEOC has basically ruled that if a plan covers preventive medicine it must also cover the cost of contraceptives. The case was brought before the EEOC by women’s groups and although there was no court ruling in this case, subsequent litigation on this subject could further raise the cost of healthcare for those plans not currently covering contraceptives.

The IRS has announced that employers can exclude up to $180 per month for the value of transportation benefits provided to an employee for qualified parking in 2001 (a giant $5 increase). The $65 per month combined transit pass and vanpooling expense limit has not increased, in spite of the increase in fuel costs.

If anyone cares, Congress has extended MSAs for two years pending signature from the President. We would expect him to sign the bill after the recent large number of Presidential pardons for more serious concerns.

In a recent SHRM survey, 74% of HR people say their organizations monitor Internet activities of employees. 70% monitor e-mail and conduct employee drug testing. George Orwell or 2001 or just good business?

A survey of 400 dentists during the recent ADA convention resulted in 48% of dentists reporting an increase in tooth decay in adults. This is interesting because the 2000 EBN-Hay Benefits survey says that 99% of 1,100 employers surveyed offer dental benefits and most plans pay 100% for preventative coverage. (You can lead a horse to water, but……..) Dental indemnity plans account for 43% of the market with PPOs representing 31% and DMOs 18%. That adds up to 92%. The survey didn’t say what other kind of plans the other 8% use. Any guesses?

Interstudy Publications reports that capitation agreements with HMOs continue to decrease, but capitation still covers 43 million U.S. HMO members. We extend our sympathy to these people since it has been our experience that capitation is a major cause of HMO claim problems in addition to being an expense without accounting for employers.