S&S
Benefits.....Opinion, Hearsay & News Review
At the end of the 2012 tax
year employers with over 250 employees will be required to report the cost of
health care on employee W-2 forms (Box 12) as part of Obamacare. Those with less
than 250 employees are not required to comply until the IRS issues further
guidance. For self-funded plans, employers can use the COBRA premium rates. Both
employer and employee contributions are included for all family members covered.
The amount does not include amounts contributed to an HSA account.
Health Care Service
Corporation (Blue Cross IL, TX, NM, OK) is poised to post $1Billion in profits
for 2011. The company writes nearly 55% of the health insurance in Illinois. The
profits become despite a 28% decline in net income to $212 million in the third
quarter.
Guardian Insurance will no
longer be selling Long Term Care insurance after 2011.
Kaiser Health News reports
that even if insurer's loss ratios are greater than the 80%- 85% thresholds as
part of Obamacare, they still must explain to consumers and policyholders as to
how their premium dollars are spent. Insurers who have loss ratios better than
the thresholds must issue rebates to policyholders and explain why. HHS is also
phasing out allowances for mini-med plans and by 2014, those plans will have to
meet the same standards as comprehensive plans, basically insuring their demise.
Fourteen disability insurers
participated in the 2011Council for Disability Awareness Long Term Disability
survey. They paid $8.3 billion in disability claims on approximately 587,000
disabled individuals (or $14,140 a
year per disabled person). Seventy-two percent of those who were disabled
qualified for Social Security Disability payments. The top five causes of
disability in order were: Musculoskeletal system and connective tissue diseases
(27.5%), cancer (14.6%), injuries or poisoning (10.3%), cardiovascular or
circulatory disease (9.1%) and mental disorders (9.1%).
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Aetna has sued Blue Cross Blue
Shield of Michigan for allegedly paying hospitals to charge other insurers up to
39% more for services than they charged Blue Cross. It is reported that the
lawsuit is a piggyback on the fall 2010 suit by the US Justice Department and
former Michigan Attorney Mike Cox that accuses the Blues of using special
hospital contracts and most favored nation clauses to stifle competition and
drive up rates. The Blues have 60% of the health insurance market in Michigan.
Delphi Financial Group that
owns Reliance Standard Life Insurance Company has been purchased by Japan based
Tokio Marine Holdings, a leading global insurer.
In the next 14 months, seven
of the world's 20 best selling drugs will be going generic, including the top 2,
Lipitor and Plavix. Between now and 2016, $255 billion dollars in drugs will go
off patent. Last year the average generic prescription cost $72, versus $198 for
the average brand name drug.
The Self insurance Institute
of America (SIIA) has announced it has filed a complaint in Federal Court in
Detroit that Michigan's recently passed Health Insurance Claims Assessment Act
is preempted by ERISA. That act creates a 1% medical claims assessment,
effective January 1, 2012, imposed on claims paid for Michigan employees.