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

Why be like everyone else?

The Daily Southtown reports that United Healthcare is terminating its relationship with Meyer Medical Physicians Group August 21. Blue Cross is also ending its contract with the group according to the report. Meyer says it is filing for bankruptcy in part due to it’s dependence on BC/BS’s HMO IL which was paying the group too little to treat it’s 18,000 out of 28,000 Meyer patients. HMO IL says the money was mis-spent. The UHC withdrawal affects 2,000 patients.

Cigna Dental is now allowing patients to test drive their products by switching between plans it offers (DMO, DPPO and Indemnity) at any time. That is nice, but most plans are restricted by cafeteria guidelines and employees can only switch once a year.

First Health has agreed to pay $20M to buy CNA’s 400,000 members of the Mail Handler’s Union Plan and take over administration on July1st.

UHC is buying AmeriChoice for $560M to strengthen its offering for Medicaid beneficiaries.

The IRS has ruled that employees don’t have to forfeit unused balances in their health care FSAs when they are transferred to another company as part of a corporate asset sale. Either the seller or purchaser can continue the FSA until the end of the plan year.

Hershey Foods union workers gave up a portion of their pay raise demands so that they could keep paying the same percentage (6%) for their healthcare. Six out of 10 employers of 1000 or more workers require their employees to pay 25% of the cost of health benefits according to Compdata. Less than one in 10 companies picks up 90% or more of health benefit costs.

Standard Insurance is paying about $75M to acquire 650,000 lives in the group disability and life plans of TIAA-CREF if New York approves the sale.

Met Life reports that average assisted living costs $25,908 a year as opposed to nursing home costs averaging $61,000 per year.

A Kaiser –NPR survey of 1,200 people says that 78% of respondents believe purchasing health insurance on their own would make it harder to get a good price and 65% say it would be harder to find a high quality plan. 75% believe it would be harder to find and keep good insurance on their own when they are sick and 66% say it would be harder to take care of administrative issues.

The Supreme Court ruled 5-4 that patients in Illinois and 42 other states with similar laws can demand a second opinion when their HMO says no to a surgery or treatment. The ruling does not affect self-insured plans.

Printed in the April 9 Federal Register and effective October 9,2002 the DOL says employers will be allowed to send SPDs and other benefits information to employees home computers (and those who have regular access to company computers) as long as the worker consents to it. Kiosks will not qualify and paper disclosure will still have to be used for those who don’t have computers or who don’t consent.

CalPers is getting HMO rate increases of 25% and self-funded plan increases of 25%. It is hard to tell, but this group is usually a bellwether plan. In this case the group may be a follower since they used to have negotiating power and plan designs have been rich, so they have lagged in getting increases, until now.

Aon has announced trend increases expected from a carrier survey: HMO (with Rx)-16.2%, PPO & POS with Rx-16% (without Rx-14.6%); Indemnity Medical –18.3% with Rx and 17.1% without. DHMO-4.4%, DPPO-7.6%, Indemnity Dental-8.4%, Vision-3.2%.

Consumer driven health plans (CDHP) have a new acronym for reimbursement accounts. It is HRA (Health Reimbursement Account). As you may recall, HRAs are what are set up to reimburse employees and their families for future health expenses. The IRS has ruled that if the EMPLOYER funds the HRA (under certain circumstances), it is tax-free and may rollover and accumulate from year to year. The HRA (or whatever each company calls it) CANNOT be funded by salary reduction from employees as some have been doing. The HRA does not qualify for tax exclusion if it can be reimbursed in cash or other benefits at any time (even after employment ends). The HRA does qualify for COBRA and must pass non-discrimination testing under section 105(h) if the plan is self-funded.