S&S Benefits.....Opinion,
Hearsay & News Review
A
study published in Health Affairs
showed that employers with one to nine workers pay an average of 18% more in
health premiums than those in firms of over 1000 employees. When the authors
adjusted premiums for the quality of benefits, ME, WV, WY and WI were the states
where employers and employees got the least value for their money.
According
to a Mercer survey of 3000 employers, health benefits costs are expected to
increase by 6.7% to $7,564 PEPY. Care management is the number one tool
employers are using to attempt to slow health cost increases.
According
to Medco, the increase in spending on Rx fell from 8.5% in 2004 to 5.4% in 2005.
However, spending for specialty drugs rose by 16.9% last year, following a 20.4%
increase in 2004. The top drivers in Rx spending were lipid lowering drugs,
asthma treatments, rheumatoid arthritis medications and anti-hypertensives.
Sleep aid usage grew by 31.5% last year, faster than any other drug class.
According to the American Institute for Preventive Medicine,
U.S.
consumers will spend $250 billion on Rx this year. If there was complete
generic substitution where available, it would save 11%, or $8.8 billion.
Increasing the brand name copay by just $10 can increase the generic fill rate
by 3% to 4%. Express Scripts reports that generics accounted for 56.3% of all
prescriptions, up from 42.1% in 2001. Generics are considered to be more safe
and a Medco survey indicated that 70% of physicians are “more concerned”
about safety and 27% are “significantly more concerned” about safety after
recent problems with COX-2 inhibitors and antidepressants. On June 23, Merck
lost patent protection on Zocor and the cost of the generic is supposed to
reduce by up to 90% in one year. Zocor had cost $3 per pill.
The
IRS is proposing new rules for dependent care spending accounts and clarifying
that tax credits are only available for the year in which expenses were paid and
in the year services were rendered.
A
survey of CFOs indicates that the rising cost of health insurance is the number
one concern, followed by cash flow management and debt/equity financing. Staff
recruitment and retention was third on the list. The top strategies to deal with
health costs were reducing costs in other company areas, followed by increasing
employee contributions or copayments.
A
new MetLife survey says that the majority of workers are dissatisfied with their
benefits. About 39% were satisfied with their benefits (29% at firms with less
than 50 employees). Only 30% of employees felt their benefits were well
communicated.
Wisconsin
has failed to pass tax breaks allowed under federal laws for HSA plans.
Meanwhile, a study of the federal employees plans reveals that those employees
enrolled in HSA plans tended to be younger, higher paid and enrolled as
individuals, according to a GAO report. According to the National Business Group
on Health, median employee enrollment in high deductible plans is just 7%.
However in a recent EBN Quickpoll, 19% indicated that HRA enrollment increased
at their company while 25% reported static enrollment. According to the American
Benefits Council, 60% of workers with HSA plans have opened an HSA bank account
which contains an average balance of $1,181. They also estimate that only 20% of
eligible employees participate in FSA accounts, for fear of losing dollars at
year end.
A
BenefitNews.com survey on the web showed that 33% of employers pay 90% or more
of the medical premiums. 27% pay 80% to 89%, 23% pay 70% to 79%, 8% pay 60% to
69% and 9% pay less than 60% of the premium charged.
Hewitt
reports that HMO rate hikes average 11.5% in the
Midwest
, 13.7% in the West, 13.5% in the Southwest, 11% in the Southeast and 9.9% in
the Northeast.
A
Florida
judge dismissed claims that UnitedHealth Group cheated doctors out of payments
for medical services. The suit was filed by 700,000 docs in the late 90’s and
Aetna
, Cigna and Wellpoint all settled out of court.
More
companies are self-insuring their health coverage. 71% of PPO plans and 68% of
POS plans are self-funded. Even 37% of HMOs are now self-funded.
A
new release from the BLS shows the average labor cost was $26.86 per hour, with
wages comprising $18.82 (70%). Benefits
cost $8.04, including mandated benefits such as worker’s comp, Medicare,
unemployment and Social Security and all other benefits. Of the $8.04, the cost
for health benefits was $2.05 (7.6% of the labor cost).
Have a
safe Independence Day!