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

Why be like everyone else?

.July Fourth is almost here. Happy Independence Day!

DOn’t forget that July 1 marks the day Table One rates change. This will have tax implications (favorable) on imputed income for life amounts of over $50,000. Be aware if you are renewing an optional life program of any rates straddling the new Table One. For more information, e-mail us for our outline of the implications of this change (which we told you about a few months ago if you were on our list).

FLexible Spending accounts can now be used to pay for smoking cessation programs according to the IRS. Isn’t it about time? Contributions cannot be changed to account for this change, but employees can begin using their accounts for this purpose immediately. It would be a good idea to notify your employees of the change in this 20 year old IRS ruling.

 A Union for doctors? In case you missed it, the AMA voted to form a union for only employed doctors…mostly those working at hospitals. That is about one in five docs in the U.S.A. This is the way the docs intend to fight back under the "crush" of managed care. Wait a second, wasn’t it mostly overcharging that brought about the "crush"?

IN another move by the courts, it has been ruled by a federal appeals court that the ADA doesn’t govern the content of insurance policies. The ruling was concerning an individual policy that limited AIDS coverage. The ruling probably would also cover group policies as far as ADA goes, but most employers seem to have found it counter productive to limit coverage and good case management usually controls the costs.

MOre mandates from the states as Nebraska and Missouri adopt mental health parity language which affects insured group plans. If you have an insured contract with employees in those states you will have to comply. Meantime, President Bill continues to push for parity for federal workers and retirees.

BIg differences in quality exist in HMO’s in New York according to a survey cited in a BI article. The article said that satisfaction rated highest with one(Capital District) at 75% of members being happy to a low of 41% for Prudential with an average of 59%. NYLCare was the only HMO not to score at average or above in any category. It looks like Aetna will have to work hard to raise the scores of their purchases (if the Pru one goes through).

Speaking of Aetna, Pru and NYLCare, a BI article reports the Dept. of Justice told Aetna to sell NYLCare units in TX if it expects to receive approval for purchasing Pru. It appears to be a monopoly issue if Aetna were to keep both. Providers are upset that unless Aetna divests itself of TX NYLCare plans, Aetna would control approximately 50% of the Dallas, Houston and San Antonio markets.

LEave it to New York to screw up your POS plan (if you have good experience and are insured). A new state regulation requires POS plans to use community rating. Prior to this, the in-network side was community rated while the out of network side could be experience rated. Employers will most likely be looking to go PPO. Just another reason to look at self-funded PPO options for larger employers.

WOrd on the street seems to be that reinsurers are losing money from unknowingly underpricing groups that are dumping their HMOs to go self-funded. With no experience usually available it has been tough to price the risks, forcing all reinsurance rates up.

CObra expansion is again being proposed by House Democratic (who else?) leadership. The legislation would require employers to extend healthcare coverage under COBRA for up to 13 years. Example: a widowed spouse who takes COBRA at age 52 would get the current three years of coverage and then be eligible for extended coverage being proposed for all beneficiaries age 55 and over until age 65 and Medicare eligibility.

The Clinton giveaway continues as his term comes to a close. He wants to have states use surplus in unemployment insurance funds (if any) to fund paid leave for new parents who cannot afford unpaid leave under FMLA. Employers would rather have their rates go down.

PRincipal Financial has purchased the local Principal PPO and made it part of their ADMAR network.

UNited Healthcare has a pact with the ProCare subsidiary of CVS for specialty mail order drugs for conditions such as HIV/AIDS, MS, transplants and cancer.

GEneral American plans to fully demutualize in the next 18 months according to Broker News. This has fueled speculation that the stock group insurance portion of the company will be sold sooner rather than later. .