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

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

Email: jseiler@ssbenefits.net IF YOU WOULD RATHER RECEIVE THIS VIA E-MAIL !!!!

Volume 3 Issue 5-Street Talk May, 2001 Issue

The HIPAA privacy regulations were passed. The final rule took effect on April 14,2001 and most covered entities have until April 14, 2003 to comply. Criminal penalties are up to $50,000 and one year in prison for obtaining or disclosing protected health information. The penalty is $100,000 and up to five years in prison for obtaining protected health information under false pretenses. The penalty rises up to $250,000 in fines and up to 10 years in prison for obtaining or disclosing protected health information with the intent to use it or sell it for malicious harm, personal gain or commercial advantage. There is a fact sheet on the regulations at www.hhs.gov/news/press/2001pres/01fsprivacy.html.

There has been a major court ruling in federal court in Pennsylvania that says that employers who offer different benefits to early retirees than they do to Medicare eligible retirees are in violation of ADEA and are discriminating. Previously ADEA was thought to apply only to active employees. If other courts follow this ruling, look for even more companies to drop their retiree coverage.

Congressional budget analysts say the latest plan for giving patients rights to sue their health plans (and consequently, their employers) could increase the typical yearly insurance premium by 4.2%. Senator Edward Kennedy, once again proving he has totally lost touch with reality, said the estimate proves the price of the legislation he backs is not astronomical. However he fails to understand that healthcare costs are already on the rise and really donít need another push. Kennedyís expert staff has come to the erroneous conclusion that healthcare costs are $2,000 per worker including workerís compensation. Apparently they are citing figures from back in Tedís Chappaquidic diving days. Kennedy co-sponsored the legislation with Senator McCain (who apparently needs air conditioning installed in his Arizona home to keep his brain from frying out). The White House is opposing the bill.

According to a survey from Blue Cross and Blue Shield Association, consumers do not consider the right to sue health insurers over coverage a top healthcare priority. What they are probably more concerned about is that benefits costs rose 4.7% for the year ending March 2001. Health insurance premiums which are rising much faster, made up 5% of those costs, which include Social Security, retirement benefits, vacation and sick leave pay. Figures come from the Bureau of Labor Statistics.

Open enrollment changes are made via paper 66% of the time. 12% use the internet/intranet and 8% use interactive voice response. Other methods or a combination of the above comprise the final 14% according to a survey by BenefitNews.com.

Blue Cross of Illinois says they are projecting a six- percent increase in medical renewals for 2001. Drug costs are projected to increase by 20%. HMO Illinois added 35,000 new members and Blue Advantage HMO added 10,000 new members in 2000, giving the Blues total HMO membership of about 850,000members(not employees). Effective July1st, Alexian Brothers is leaving Blue Cross.

Aetna has announced a profit warning as a result of increased medical costs above previous projections. The higher than anticipated costs rose out of Aetnaís commercial HMO and Medicare HMO risk products. In other bad Aetna news (is there any other kind these days?), the CFO, Alan Weber resigned.

Humana has agreed to acquire a unit of Anthem Inc. that provides health benefits to just over a million military employees, retirees and their families in nine states (including Illinois). While Humana is adding membership that they say is cost neutral, itís doubtful Anthem was selling the business because of itís profitability.

UHC has been awarded management of AARPís pharmacy business as of June 1, 2001.They have subcontracted with Express Scripts for the network and mail order fulfillment portions of the program.

MSA accounts may be expanded to all size employers with no limit on the number of participants as part of the White House budget proposals. The accounts are currently available to groups of less than 50 employees and allow deductibility of money contributed to those accounts. The "all accounts" proposal would allow participants to deduct up to 100% of the money contributed to pay for expenses under the high deductible medical plans. The accounts have not taken off in popularity due to pricing and the lack of interest in saving the deductible amounts by most Americans.

If you enjoy this newsletter we hope you keep us in mind for your group benefits needs. Choosing to use S&S Benefits Consulting will not disrupt current arrangements in place for your employees, but our services will most likely save you money and help reduce your legal exposure on your health and welfare plans.