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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,

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

Volume 2 Issue 10-Street Talk October, 2000 Issue

Please note a new Email address to contact us, soon to be accompanied by a web site.

Aetna has named John Rowe, president and CEO of Mount Sinai NYU Health as president and CEO of Aetna U.S. Healthcare effective September 15. This comes just a short time after Aetna was out telling brokers it was going to change itís way. Putting another HMO exec in charge doesnít give us any confidence things will be different from the U.S. Healthcare people who messed up Aetna to begin with.

A study in the journal, Health Affairs says that 62% of the decline in indemnity enrollment reflects employee choices while 38% is the result of employers discontinuing the option. The same study of employers (200 employees and up) found that indemnity enrollment overall dropped from 46% to 25% between 1995 and 1998. The same study does not reflect on the fact that for the non-self funded market, few insurance companies even offer indemnity plans or that employee choice is largely driven by contribution levels.

Same sex benefits and domestic partner benefits, which seem to be the rage, have a consequence few talk about. When such benefits are offered, the W-2 needs to reflect the employer contribution for those benefits as income to the employee. Also, such benefits provided are Not tax deductible for the employer.

The RICO class action lawsuit against Aetna has been dismissed by the Third Circuit U.S.Court of Appeals. The suit alleged that Aetna violated RICO by failing to disclose its internal policies regarding physician incentives and other practices. This one should have never gotten that far. These people didnít know they joined an HMO?

Medical trend figures are up. A recent survey puts HMOs at 8.6%, PPOs at 11.2%, POS at 9.9%, Rx at 19% and indemnity at 13.7%.

Now Connecticut is suing 4 HMOs because they say the industry forces patients to accept less-effective care "simply so they can increase their profits." And the patients have no choice but to join the HMO? Weíre not HMO fans, but this is ridiculous!

Legal woes affected 7 out of 8 employees last year according to a Harris poll. Family related legal problems affected 38%, personal financial 52%, personal property for 56% and personal disputes were noted by 32%. The related cost to an employer in productivity was estimated to be $1,625 per employee earning $50,000 per year.

Average rates as reported by Ceridian for June: HMO-$193.82-single$536.23 family. Non HMO-$212.60 single and $580.11 family. Dental-$21.72 single and $62.74 family.

A Hewitt survey says average salary increases for 2001 will be 4.4% for salaried exempt, 4.3% salaried non-exempt, 4.1% nonunion hourly and 4.5% for executives. Variable comp plans were offered by 78% of those surveyed.

Another Marsh survey says that for firms from 10 to 49 employees, costs went up 13.8% to an average of $3,779 per employee for medical/dental. For those companies up to 999 employees the average was $3,836 (up 8.5%) and for companies with over 1000 employees, cost was up 7.2% to $4,357.

The NCQA reports that "quality" of healthcare was up in 1999. Quality measures included increases in immunizations, screenings for cholesterol, diabetic eye exams, etc. Of course, the majority of choice in HMO offerings is still made on cost, which is also up.

Letís talk HMO internet auctions. Hewitt has press releases all over saying that they saved $3,570,000 by conducting an auction for 9 employers representing 50,000 employees. Big deal! That was a saving of 2% for an employer with an average size of 5,555 employees and an average premium of over $20 million! Quite frankly, for all the hoopla and that size of employer and that amount of premium, we think the employers would have done much better negotiating through the normal bid process. If the quoted figure is gross savings of 2%, what were the net savings after Hewitt fees? In the auction, each of the bidders (health plans) knew what the other one was bidding! You canít even do that on E-Bay. So why go any lower than they have to to get the business? Itís a nice fad.