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

Why be like everyone else?

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

New Email: ssbenefits@interaccess.com

Volume 1 Issue 6-Street Talk May 1,1999

.Mental Health parity is back along with baseball. Montana recently signed a law. So did Virginia. New Jersey has one on the table to be signed. And a push is on in Congress to cover mental health SAAOI (same as any other illness). These bills are for full parity and eliminate the loopholes we all found to keep costs down.

July 1st renewals are just around the corner. If you havenít heard what your renewal will be, donít wait too long to negotiate. The underwriters will be very busy next month. We at S&S try to have at least a pre-renewal(for experience rated plans) on your desk 60 days in advance. Remember, if you are negotiating at the last minute when the underwriters are swamped with other renewals, you may not get the best of hearings, especially if your experience is running poorly. Many larger clients are all but done with their July renewals now.

ANother apparently unhappy group has filed a federal racketeering suit in Philly. According to BI, the suit was filed by a consumer group and three members of Aetna alleging Aetna US Healthcare falsely advertised quality healthcare.


NEw York Lifeís board of directors has voted to keep the company a mutual company after unloading the unprofitable NYLCare operation to Aetna U.S. Healthcare.This was announced by Sy Sternberg who is New York Lifeís chairman, president and chief executive officer. You may recall that Sy is the "genius" that left the now defunct Mass Mutual group operation to head the New York Life group operation. He was instrumental in forming the now defunct NYLCare and apparently has been rewarded handsomely.

STandard Insurance Company recently went the opposite direction. They demutualized and had an IPO earlier this month to raise capital.

BLue Cross/BS of Colorado was bid on by Anthem Inc., but is now considering a rival bid by Wellpoint. Anthem is a Blue Cross licensee out of Indiana while Wellpoint is a product of the California Blues. Why are all these Blues companies adopting different names?

TIp for those of you who have a long waiting period in your health plan and periodically make exceptions to cover new employees immediately on your self Ėfunded plans (a no-no for stop loss and ERISA). If your new employee wants to make sure they have coverage during the waiting period (many times due to a pre-ex condition) and you value the person that much, donít stick your plan with the bill or violation exceptions. Consider offering to pay for their COBRA during the waiting period. If that is too expensive and there is no pre-ex, try a short term medical policy. The coverage is usually very inexpensive and we can obtain it easily.

Be aware of new taxes in Illinois on insurance premiums (these are in your retention). As of Jan 1, 1999 the tax is .4 of 1 percent for all HMOs. The tax is the same but effective 7/1/98 (thatís right, 1998) for all other health insurance and the tax will be .5 of 1 percent for all other insurance on other lines of coverage. There is also a retaliatory tax to be imposed on those companies whose home states tax Illinois insurance companies at higher rates.

UNited HealthCare of Illinois has a new CEO and president, William Whitely, age 34. He replaces Marshall Rozzi, who was apparently kicked upstairs. The new CEO comes over from Andersen Consultingís Chicago office. Andersen is not exactly known as a healthcare consultant from an employer perspective, so chances of understanding of the employer/employee perspective are? UHC lost $166M in 1998 including $20.2 for itís Chicago HMO amid a 20% membership loss according to Crains. The same source mentions lost contracts with docs at Alexian, Rush-Pres, Catholic Health Partners, Little Co. of Mary Hospital and some large customers.

NAtionally KPMG reports HMO membership is down from itís peak to 30%. According the Mercer, since 1993 enrollment in PPOs has increased at a rate twice that of traditional HMOs.

HCFA is stepping up oversight of Medicare HMOs. According to BI, the GAO has released findings that many of these plans provide inaccurate information on benefit packages and sometimes the information contradicts Medicareís regulations. Employers who encourage retirees to enroll in this type of coverage should beware.

THe Cardin-Portman bill for pension reform is getting lots of employer backing. No wonder with higher deferral amounts, 401(k) and 403(b) transfers allowed and easier safe harbors. Itís about time!

S&S Benefits Consulting is a partnership of benefits professionals with over 50 years in the health and welfare business. We specialize in the group business and donít try to sell you services where we have no expertise. If we canít help you, chances are, we know who can.