Home Up Services About The Truth Useful Links Accomplishments Creative-Cost Plus OBAMACARE Newsletter Archive


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

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

Email: jseiler@ssbenefits.net www.ssbenefits.net September 2004 Issue

One change over the last decade to note is that 86% of all health plans now offer a full range of contraceptive benefit choices compared to 28% in 1993.

What are HR pros asked to do? According to SHRM, the top five strategic functions they are asked to perform are: Recruit and retain (77.2%), Develop employee skills (55.8%), Address health care costs (50.9%), Engage and motivate employees (50.9%) and Keep costs down (48.7%).

Destiny Health Care is now writing their business on Guardian Life paper effective 9/1/04. Destiny’s non-rated status has discouraged brokers since even if they believed in the company, their E&O policies wouldn’t cover non-rated paper.

A Segal survey from the WorldatWork conference ranked concerns about medical and prescription drug costs as an extremely important priority (76%). To address the problem, strategies included investing in health promotion and wellness programs (60%), increasing patient cost sharing (58%) and reviewing data to identify key cost drivers (51%).

According to the Employment Policy Foundation, medical coverage payouts exceeded paid time off costs for the first time in 2003, with medical costs accounting for 23% of compensation ($3.80 per hour) compared to 22.6% for paid leaves (including vacations and sick time). The Hay Group says that health benefits now eat up 8.75% of payroll.

A Met Life study places workers compensation at a direct cost of 2.5% of payroll compared to sick pay at 1.7%, STD at 1.5% and LTD at .6% for a total of 6.3% in direct costs. Indirect costs including overtime; replacement employees and workstation/job accommodation totaled 8% of payroll. Unum reports that short- term disability claims jumped tenfold in the last decade. They say the claims were in large part caused by obesity.

The Council for Affordable Health Insurance says that there are over 1,800 state mandates for health insurance, compared to 7 mandates in the 1960s. There’s nothing like government regulation to really make a difference in the confusion and cost levels of the country!

Two TPAs, Coresource, which is owned by Trustmark and Wausau, which is owned by Fiserv, have both announced agreements to sell Aetna’s PPO network and stop loss product. Sources tell us that the reasons for these agreements are various. Aetna’s network is not well renowned for its coverage in certain areas, and they may need to add bodies to retain provider discounts they have been able to negotiate, or to expand their coverage areas. The difficulty is that in order to use the network, the TPAs must also use Aetna stop loss coverage, which is apparently quite expensive by market standards. It’ll be an interesting date/marriage.

An Emory University study says that the five most expensive medical conditions (heart disease, pulmonary disorders, cancer, trauma and mental disorders) account for almost 31% of the change in health spending over the last 13 years. People keep wondering why health costs rise. We used to just die, then the rest of us living just complained about the life insurance rates.

The Commonwealth Fund recently reported that consumer-driven health plans might worsen health outcomes and fail to reduce costs in the long run since patients may avoid seeking necessary care.

A Mercer study shows that small employers (<50 ees) are keeping their health plan costs down ($5,795 PEPY) compared to mid-sized employers (1000 to 2000 ees at $6,472) who led over large employers ($6,324). Small employers have been less reluctant to shift costs, with employees paying an average payment of 64% of the family premium. The percentage of employers having an in-network PPO deductible of $1,000 or more jumped from 22% to 34% of employers surveyed.

There was an interesting article in the June 2004 Employee Benefit News where Richard Quinn advocated the possibility of returning to 1960’s and early 70’s style of health care plan with scheduled benefits. He may not be too far from the eventual solution (which we began predicting as part of the evolution of managed care back when HMO’s first started giving away prescriptions and doctor’s visits for $5.) On the meaning of discounts a priceless line: "Can I go to a participating gas station and get my $2.00 gas for a $1.01?" In other words, how much does a doctor visit really cost? Or an appendectomy? Who has the better discount? It depends on the starting price. We’ve been watching the trial lawyers argue with doctors in letters to Crains about malpractice costs in Illinois. Needless to say, the trial lawyers will be largely behind Swift Boat Medal Toss and Swift Talking Lawer Veep candidate come November.

If you know someone in your organization or another company that would find this newsletter useful, please send us their name and email address and we will forward them a copy at your request.