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

Why be like everyone else?

MArch Madness is striking in the group business as well as the basketball world. There are at least three bills in Congress that would significantly erode ERISA by permitting lawsuits involving benefit plans in state courts. This is coming at a time when another study referenced in a Trustmark newsletter says that state mandates cost employers at least 13% in benefits dollars. Some of the ERISA erosion bills seems to be headed in the direction of not only being able to sue benefit plans, but also the employer sponsoring the plan for medical decisions.

MYths seem to abound in the health and welfare benefits business. The number one myth we hear seems to be that once renewal is too close or has passed, that there is no reason to investigate costs or make a change. This is a self- perpetuating myth when your representative only shows up with data in hand one month before renewal. If a change is cost effective and you need the same renewal date, you can always go with a short year for a further rate decrease. You can make a mid year plan change even if you don’t change the carrier or administrator. Another Myth is that there is no monthly experience information available when a group is over 100 employees. There is data available. Some companies don’t pass it out, so it is important to choose a company that does. Some representatives don’t pass it on to their clients for fear they will move the plan to a different broker/consultant. Some don’t know how to get it. Some wouldn’t know what to do with it if they got it. Any good insurance company or administrator has the data and is willing to share it. So, where is it? We believe a well-informed customer is a happy customer who will make good decisions. Data should be presented to you at least quarterly and well prior to renewal presentation so that you can make plans to make necessary changes. Another myth is that it is too early to start evaluating the plan. This myth is shown to be incorrect by the first myth of self- perpetuation. It’s never too early to save money! It does take a long time to gather the necessary data and evaluate the data and decide if there is a need for change. The earlier in the year you have an expert start doing the gathering, the better off you are. This is especially true if you only like to make changes on renewal.

UNicare has formed an alliance with CCN for their group business. CCN covers about 43 states and the Dist. of Columbia. Some of the CCN networks are leased and Unicare will continue to offer several local and regional PPOs.

KAiser Permanente was reported in BI as having a $288M net loss for 1998. This was always the model of HMO’s. One Associated Press article had HMO rates going up as much as 7% in 1998 and 9% in 1999. Of course, these are only averages. If you have a large increase, it’s time to look at that experience data. It’s the old story, once you siphon off the healthy group; a claim is a claim is a claim. Another survey has overall costs up 6.1% in 1998. PPO costs in the Midwest are down 1.4% and HMO costs in the Midwest are up 8.7%. Nationally, enrollment is rising fastest in PPOs while HMO growth declined in 1998 according to the same survey. That trend may increase if the assault on HMOs in Congress continues.

SUrvey says!! It’s very hard to quantify wellness savings. Mercer surveyed 248 plans of 100 or more employees and found that about half offered wellness benefits according to a Business Insurance (BI) article. However 53% said there was an inability to measure results and 41% said their high-risk workers don’t participate. 38% reported lack of employee interest. Who said it? "You can lead a horse to water, but you can’t make him drink."

SOrry to those of you who received some of our information twice. We screwed up the fax programming and punched the same button twice. Yes we are human and do make mistakes.

DOn’t you love all these congressman who can’t control Medicare telling you what you need to cover or be liable for as an employer? If we have three bills now to erode ERISA, imagine what will happen if Hillary runs in New York and wins. Will we have more rich quotes from Ira Magaziner or will Kennedy cosponsor all benefits legislation?

ACcording to a Hewitt survey in BI, of the top 100 companies to work for, 52% offer stress reduction programs and 57% offer subsidized or discounted health club membership. One in the same (?), or a different means to the same end? 63% had an on site immunization program. The study found that the 100 best companies had lower voluntary turnover rates.