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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                                              http://www.ssbenefits.net/   September 2011 Issue


Under new Obamacare regulations for non-grandfathered plans, birth control must be covered as preventive care for women with no copays. Also to be covered with no copays are breast pumps for nursing mothers, an annual well woman physical for the virus which causes cervical cancer, tests for diabetes during pregnancy and counseling on domestic violence. The new requirements will take effect for non-grandfathered plans on the first plan year that begins on or after August 1st, 2012.

According to a Mercer survey of 900 employers, PPACA’s rule requiring employers to cover dependents up to age 26 has resulted in a 2% increase in enrollment. Employers expect enrollment to grow by another 2% in 2014 when companies with over 200 employees are required to automatically enroll newly hired, or newly eligible full-time employees into a health plan. Most employers will use their lowest cost plan as the default plan for automatic enrollment of those employees who work more than 30 hours per week.

Aetna is pulling out of Indiana for individual medical coverage since they only have 700 members covered in the state. Coverage will be cancelled on December 1st.  Pekin, Cigna, Guardian and American Community Mutual have also announced they are leaving the individual market in Indiana that is dominated by Anthem. Currently there are 200,000 people covered under individual policies in Indiana. PPACA rules on medical loss ratios have prompted the exits.

Medicare has announced that premiums for prescription drug programs will not increase in 2012. Premiums averaged $30.76 a month in 2011. PPACA will provide consumers a 50% discount on brand name drugs and a 7% discount on generic drugs in the “donut- hole.”

An investment firm that specializes in HSA investments says that the number of HSA accounts rose to 6.3 million, an increase of 28% from the year before. Devenir’s survey of the top 50 account custodians said that investment assets reached $860 million in June, a 60% increase. The average account balance in 2011 grew to $1,845 (including zero balance accounts). UBA’s benefits survey of mostly smaller employers says that CDHPs grew at a rate of 13.9% in the past year and now cover more employees (17.3%) than HMOs (11.9%). The average renewal increase for all 16,421 plans (10,744 employers) survey was 8.2% and the average monthly employee contribution was $117 for single coverage and $467 for family coverage.

The COBRA 65% premium assistance subsidies that were available for those enrolling in COBRA before May 31, 2010, end on August 31st, 2011 for those that have received the subsidy for the full 15 months of that time frame.

If you wish to be added or removed from the distribution of this newsletter, please email jseiler@ssbenefits.net

The Detroit Free Press reports that the state legislature has passed a law limiting cities and school districts to paying no more than $15,000 for employee health insurance, or, alternatively, to paying no more than 80% of premiums for more expensive coverage.

Michigan also passed a law to increase all employer plan costs by charging a 1% tax on paid claims under both fully-insured and self-funded plans. Michigan currently imposes a 6% use tax on Medicaid HMOs and plans providing Medicaid mental health services, but the federal government has said it would no longer allow that approach. Therefore, Michigan created this new tax, which will undoubtedly be challenged by self-funded plans as a violation of ERISA.

Federal grants have gone to states that have passed legislation to create exchanges under Obamacare. A total of about $182 million tax dollars have been doled out to CA, CO, CT, HI, MY, NV, OR, WA and WV.

Remember the $5 Billion that was passed out to plans for early retiree expenses? AT&T-$141.5M, Verizon-$91.7M, UAW-$220.7M, CALPERS-$98.7M, State of NY-$88.4M, State of NJ Treasury-$77.6M, TRS of TX-$70.6M, Public EE’s of OH-$70.6M. Not surprisingly, the list appears to be mostly plans with large numbers of union employees getting bailed out.

BCBS-IL has a 48.1% market share in Illinois. The next largest insurance carrier was UHC with a 9.2% share. Want to know who owns the Illinois Department of Insurance? Look no further.

How many employers will be dropping coverage under Obamacare after 2014 when the employer mandate goes into effect? McKinsey & Co. survey said 30% would definitely or probably drop coverage. Buck’s survey said 8% seriously would consider dropping coverage and another 20% said they would consider dropping coverage. Mercer’s survey says that 6% of employer with at least 500 employees and 20% of employers with 10-499 employees said they would likely drop coverage. Towers says that 9% of mid to large size companies plan to end their health plans after the exchanges are launched.