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

Why be like everyone else?

This is a new one on us and apparently on the largest insurance carriers (we checked) and TPAs also. One company, Nippon Life has apparently decided that they are the IRS, INS and SSA. Nippon is unilaterally terminating employees from group plans when they believe the employee is using a false social security number. This is even after the employee provides copies of their SS card and alien registration to an employer and is paying their share of premiums as a full time employee under an employer’s ERISA plan.

FSA contributions are increasing according to a survey from Fidelity. 1^st Quarter results show FSA participation is up 15% for the same period in 2002 and contribution amounts grew by 7%. If the Bush administration is able to pass FSA rollovers through Congress, HRA plans will probably be a dead issue.

According to the Bureau of Labor Statistics, benefit costs for civilian workers (including gov’t ees) rose 5% in 2002 and overall compensation costs increased by 3.4%. Non-union figures were 4.5% and 3.2% respectively while unions increased 5.7% for benefits and 4.2% for pay.

In what appears to be a desperation push to market their CDH plans, Illinois based Destiny Health has partnered with Guardian Life and Tufts Health Plans to try to have their reps sell the Destiny program.

JHA’s recent disability market survey shows the number of people with LTD and STD increasing by 1% and 2% respectively with premiums growing by 5% for LTD and 6% for STD. Meanwhile, UnumProvident says that 10% of employees who file disability claims (occ and non-occ) drive 55% of medical costs. A Mercer survey reports LTD rates rising 26% over the last two years with STD up 33%. The survey said time off and disability program costs averaged 15% of payroll in 2001,up from 14.6% in 2000.

Employers are tightening the belt on 401(k) matches. A recent survey shows that matches are down from an average of 3.3% in 1999 to 2.5% on 2003.

In a private letter ruling, the IRS has said that employees can avoid taxes on LTD insurance benefits by including the value of employer paid premium in their income and further clarifies that this can be an annual election.

With insurance costs rising it is interesting to note that the average hospital stay was just 4.9 days in 2001. This is a decline from 7.8 days in 1970. Leading reasons for hospitalization were heart disease, psychoses, pneumonia, cancer and fractures.

The man who grabbed all the press for supposedly revolutionizing insurance with the triple option managed care program at Allied Signal is at it again. He is now touting the "empowerment" of employees to make wise decisions regarding their healthcare as part of the CDH model in a recent Agent’s Sales Journal. Joe Martingale, whose press enamored the public with 1^st dollar coverage after minimal copays, is on another press binge (this time working for Watson). He is now pushing the cost shifting to high deductible plans and patient education as the "empowerment" answer to the rising cost of health care. We’ll give the guy credit. He sure knows a press bandwagon to jump on when he sees it.

It’s only fair to report that Moody’s has changed the outlook to positive from stable for Aetna’s credit rating. Hewitt has bought the Northern Trust retirement consulting and administration business. The CPI increased by 1.7% in the first quarter with the medical component at a reduced 4.3% annual rate (down from 4.7%). A survey by the American Assoc. of Occupational Nurses says that employees rated stress management, health risk screenings and exercise programs as the most valuable workplace wellness options.

Some of the legislation introduced in Illinois for insured plans: Mandate coverage for eating disorders, mandates coverage for marriage and family counselors, mandates coverage for impotency and for pregnancy prevention, contraceptive drugs and devices, hearing aids and for low protein modified food products. A clue about costs anyone?