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

Why be like everyone else?

With all the election coverage on what the two Presidential candidates don’t know about healthcare, it was easy to miss the story that in 1999 the number of people without health insurance declined 3.8% to 42.6 million, leaving the uninsured percentage at 15.5%. Harris reports that 61% of 200 benefit managers surveyed said the press was not fair in coverage of employee benefit issues. Only 1% said reporting was accurate. Any surprise our candidates exhibit little knowledge of how the system really works?

The Chicago Tribune reports that BC/BS of IL is buying the insurance licenses of GenAm (the old General American of St. Louis that sold their group life business to Met and group health business to Great West last year after getting in financial trouble). With licenses in more than 40 states, the Blues are positioning to go national.

Meanwhile, the attorney general in Minnesota is suing BC/BS MN for denying mental health benefits for children and young adults. Thoughts from local health professionals we talked to ranged from, "They deserve to be sued regardless of justification, just because they are such an atrocious carrier," to "It is political posturing by an attorney general that wants to run for Governor in this socialist state." The two viewpoints are not mutually exclusive.

Sing along now…"Oh where, oh where did my TPA go, oh where, oh where can it be?" Harrington has been sold again, this time from Health Plan Services in Florida to Trewit in Minneapolis.

Failures anyone? In Milwaukee, Family Health Plan says goodbye and Compcare Blue has agreed to offer steep renewals to companies now insured by Family Health Plan which has 70,000 members. Wonder why the rates were so cheap? Now we know. In St. Louis, another failure by docs and hospitals to run a health plan. Health Partners of the Midwest (Barnes Hospital & Washington University) is selling its 83,000 members to Group Health Plan for $4.5M or about $54.22 per member! Prices for HMO sales have toppled! We’ll guess they had market leader rates too.

It couldn’t be a newsletter without something about Aetna. They reached an $82.5M settlement of a securities class-action suit filed in connection with the U.S. Healthcare merger. The charge was that the company misled investors over the state of medical claim reserves and integration issues. We’ll interpret that to mean, "pay me cause you caused my stock price to go down by buying a crummy company who’s culture and finances screwed up Aetna." Another news item says that Aetna is decentralizing medical decision making by requiring its seven regional medical directors to report to non-physician regional managers instead of the national medical director. What is up with that? Reviews are mixed from docs. Also, Aetna says they are rolling out a new line of non-gatekeeper health plans at a marginally higher cost than HMOs. And to think all this time we were sure they had a PPO option(sic).

Survey projections from M&R and Hewitt. 10%-13% increases for HMO’s, PPO’s- 10%, Indemnity-12%.

The IRS has issued a private letter ruling allowing 401(k) plan sponsors to offer as a plan benefit LTD insurance that would make contributions for employees who become disabled. Participants would use salary deferrals to pay for LTD coverage purchased by the plan. The LTD would pay contributions to the 401(k) when an insured is disabled. Contributions would be taxable upon distribution.

SHRM has joined the U.S. Chamber and LPA to file suit over proposed FMLA regulations that would allow unemployment insurance trust funds to pay for paid FMLA leave for birth or child care. The estimated cost is $13.2 Billion for 12 weeks of leave and $28.4 Billion for 26 weeks that would be paid for by larger unemployment taxes!

New company Definity Health says they allow employers to define their contributions and employees will define how to spend those contributions for healthcare and allow for rollover of unused money from high deductible plans (similar to MSAs that are only allowed for groups of less than 50 employees). Despite the press on this item, the law is very unclear and unfavorable on rollovers of contributions to new plan years. Who wants to volunteer to be the first IRS test case? By the way, nobody has announced who is taking the risk by underwriting this plan that exists in press releases.