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

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

Email :jseiler@ssbenefits.net                                              http://www.ssbenefits.net/     July 2014 Issue



HCSC (Blues IL,TX, NM, OK and MT parent) has a surplus of $10.3 billion and stands at more than 12 times the state statutory minimum. The growth from the $4.2 billion they held in 2005 has largely occurred in the last two years as the country’s fourth largest health insurer posted annual net income of over $1 billion a year. HCSC is a mutual and is supposed to act in the best interests of its members (policyholders). The company claimed it needed the reserves to account for the many previously uninsured joining their plans as part of PPACA. The company did post a net loss of $48.3 million in the first quarter.


Sun Life’s data shows the number of claims exceeding $1 million  rose by 1,000% from 2010 to 2013. The three most common conditions causing these claims were premature babies (29.3% of claims), transplants (12.2%) and leukemia (7.3%). Seventy-one percent of claims over $1 million were on dependent children.


The NYT reports that charges for the most common inpatient hospital procedures went up at more than 4 times the rate of inflation in the past year. Chest pain average charges rose 10% from $16,815 to $18,505 and digestive disorder charges rose from an average of $20,278 to $22,000.


The House Energy and Commerce Committee released documents that said that as of May 27, there are at least 4 million applications with inconsistencies that were approved in the federal exchange. The CBO has given up trying to score the PPACA effects on the budget. In Illinois, Land Of Lincoln Health, which was funded by our taxes to the tune of $160 million, lost more than $4 million and enrolled fewer than 2,500 people in the first quarter.


HealthPocket has released a study which shows that off exchange plans in the most populous areas of 39 states were over 40% more expensive than the plans on the exchanges. The study involved UHC, Aetna, Cigna and Assurant. I think we know what that means for future exchange premiums.



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The CBO now projects that 4 million people will pay a penalty for not carrying health care coverage. Since Obama claims 8 million people enrolled in the exchange, what happened to the other 36 million uninsured that everyone was so worried about? It is also estimated that of the 8 million that signed up, only 3.4 million did not previously have insurance. Further , so far it is estimated that 15% of the 8 million didn’t pay their premium. In addition, another study shows that the number of sick people who saw a doctor in the past year who were enrolled in exchange health plans, increased by 11%.


However, we do know that the sales tax on health insurance coverage is $8 billion this year and will increase by 41% to $11.3 billion in 2015 and add up to over $100 billion over the next decade. Reuters reports that Aetna has submitted premium rates to regulators for 2015 plans that are “generally less than 20%.” Meanwhile, the Manhattan Institute studied individual policy rates in 3,137 counties and found that rates increased by an average of 49% over the last year.


To top off the disaster that is Obamacare, HHS has now decided that people will be automatically re-enrolled in their plans, unless they make a change. It will be self-reporting for whether they get a subsidy. As if there wasn’t fraud involved in that before, imagine this scenario: $400 current premium. $300 subsidy (your taxes). Rate goes up 20% to $480. Subsidy stays the same. Same person goes from paying $100 a month to $180 a month, an 80% increase. Do you think they will howl?


PwC estimated that group health plan costs will increase by an average of 5.3% this year (after plan changes) in their survey of 1,200 employers.


Just a word of warning for employers. I-9 audits are increasing. Be sure your records are up to date well before the audit. Civil penalties for errant I-9 forms range from $110 to $1,100 per violation. Penalties for willfully hiring and continuing to employ unauthorized workers rage from $375 to $3,200 per violation.