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Posted On: Sep. 27, 2010 6:00 AM CENTRAL
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Jerry Geisel

Group health care plan costs are expected to increase an average of 8.8% in 2011, the largest percentage gain since 2005, new research shows.
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The average group health plan cost per employee is projected to rise to $9,821 next year, according to an analysis released Monday by Lincolnshire, Ill.-based Hewitt Associates Inc. Costs include employer and employee premium contributions, but not employee out-of-pocket expenses, such as copayments and coinsurance.

The analysis is based on information from 325 large employers, which mainly self-fund their health care programs.

That 8.8% cost hike compares with a 6.9% increase this year and 6% increases in 2008 and 2007.

The spike in costs is driven in large part by the economy, said Jim Winkler, a managing principal in Hewitt’s Norwalk, Conn., office.

With the ongoing weak economy, employers have drastically reduced hiring. That has resulted in an aging workforce because new hires tend to be younger than existing employees, Mr. Winkler said. Older employees typically have more medical problems than younger workers, boosting the average health care costs per employee, he said.

In addition, employers have seen increased frequency of high-cost claims of $50,000 and up, which also could be related to aging workforces, Mr. Winkler said.

In addition, the new health care reform law is driving up costs. Provisions, such as eliminating lifetime dollar limits and expanding coverage to employees’ adult children up to age 26, begin on Jan. 1, 2011, for most employers.

By type, health maintenance organization plans are projected to have the largest percentage increase in 2011, a 9.4% rise to $10,254 per employee. Point-of-service and preferred provider organization plan costs each are projected to increase an average of 8.5%, rising to $10,575 and $9,408 per employee, respectively.

IBG president Lee Pierce with Paul Davit, Rich Krenek (Enzon Pharmaceuticals) and Curt Muller (Statue Cruises HR Director) at Battery Park on their way over to Governor’s Island for the Galla. IBG is a corporate supporter of the Governor’s Island Alliance as well as several other non-for profit organizations.

A great time was had by all! Work Hard-Play Hard

Posted On: Apr. 07, 2010 11:00 AM CENTRAL | Add a comment | Reprints

TALLAHASSEE, Fla. (Reuters)—Five more U.S. states will join a Florida-led group of states in a collective lawsuit challenging President Barack Obama’s overhaul of the U.S. health care system, Florida’s attorney general said Wednesday.

The joint lawsuit, led by Florida and now grouping 18 states, was filed March 23. It claims the sweeping reform of the $2.5 trillion health care system violates state-government rights in the U.S. Constitution and will force massive new spending on hard-pressed state governments.

Alabama, Colorado, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington previously had joined Florida’s lawsuit.

“We welcome the partnership of Indiana, North Dakota, Mississippi, Nevada and Arizona as we continue fighting to protect the constitutional rights of American citizens and the sovereignty of our states,” Florida Attorney General Bill McCollum said.

The lawsuit says the health care overhaul law—which expands government health plans for the poor, imposes new taxes on the wealthy and requires insurers to cover people with pre-existing medical conditions—violates the Constitution’s commerce clause by requiring nearly all Americans to buy health insurance.

“On behalf of the residents in Florida and the states joining our efforts, we are committed to aggressively pursuing this lawsuit to the U.S. Supreme Court if necessary to prevent this unprecedented expansion of federal powers, impact upon state sovereignty and encroachment on our freedom,” Mr. McCollum said in a statement released by his office.

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IBG president Lee Pierce, EVP Steven Austin and Manager Marcie Calhoun of Emerson Reid at Michael Jordon’s in NYC. A good time was had by all

Posted On: Jun. 26, 2009 1:51 PM CST
Joanne Wojcik
Most employers will see less than a 1% increase in medical costs from complying with federal mental health parity law, according to a survey by the Segal Co.

The Paul Wellstone and Pete Domenici Mental Health Benefits Parity and Addiction Equity Act requires that employers with 50 or more employees provide the same coverage for mental disorders—and in some cases, substance abuse treatment—as they do for other medical illnesses.

Because the law also amends the Employee Retirement Income Security Act, self-funded plans and fully insured plans are subject to the new parity rule.

The act, which was signed into law as part of the 2008 economic stimulus package, takes effect for 2010 plan years.

“For many plan sponsors, the mental health parity act will have a minimal impact,” said Ed Kaplan, senior vp and national health practice leader at Segal in New York, in a press release announcing the findings of the survey, which included cost projections from 21 national and regional health insurers.

Mr. Kaplan also noted that, on average, only about 5% of employer health plan costs are generated by treating behavioral health conditions.

The survey, which was conducted this month, yielded the following responses:

One health insurer reported the impact would be cost-neutral.

Seventeen insurers said parity would increase costs between 0.1% and 1.0%.

Two insurers expected a 1.1% to 2.0% increase.

One insurer projected a 2.1% to 3% increase in costs.

The 21 insurers surveyed included all of the major national health insurance companies and several prominent regional insurers representing approximately 80% of the total group market.

Posted On: May 26, 2009 3:58 PM CST
Jerry Geisel
As health care costs continue to rise, employers are boosting deductibles and other out-of-pocket payments made by employees, according to a survey released Tuesday.

The PricewaterhouseCoopers L.L.P. survey of 694 employers found that 20% of respondents this year imposed an in-network deductible between $400 and $999, up from 17% last year, while 11% imposed a deductible of at least $1,000, up from 8%.

At the same time, 14% of employers this year required employees to pay at least 34% of the premium for dependent coverage, up from 10% of employers last year.

Those increases came as respondents reported that group health care plan costs rose an average of 6.1% this year, a slightly lower increase than the 6.4% rise last year.

Boosting employee cost-sharing is a delicate balancing act, noted Michael Thompson, a PwC principal in New York.

On one hand, employees can become more careful consumers of health care services as more costs are shifted to them. On the other hand, health plan enrollees might delay getting needed medical services if their share is boosted too much, he noted.

The survey also found that while less than 40% of employees enroll in employer-provided wellness programs, participation rises when employers offer incentives such as cash or gift cards.

For example, when employers gave employees some type of financial incentive for employees to complete a health risk questionnaire, about 45% did so. By contrast, only about 30% of employees underwent the assessment among employers that did not provide such incentives.

Copies of the “2009 Health & Well-Being Touchstone Survey” will be available at www.pwc.com.

Posted On: May 15, 2009 3:40 PM CST
Joanne Wojcik
Only a few employers are considering dropping mental health coverage in response to new parity rules that take effect for plan years beginning after Oct. 3, according to a survey.

Meanwhile, nearly 38% of responding employers plan to increase the promotion and use of employee assistance program services to help them achieve mental health parity, which is required under a 2008 law, concludes the survey conducted by the Partnership for Workplace Mental Health, a program of the American Psychiatric Foundation in Arlington, Va.

The Paul Wellstone and Pete Domenici Mental Health Benefits Parity and Addiction Equity Act requires companies with 50 or more employees to provide the same coverage for mental disorders—and in some cases, substance abuse treatment—as they do for medical illnesses. The parity requirement applies to self-funded plans and fully insured plans.

The survey found 7.1% of employers are considering dropping mental health benefits and 7.8% are thinking about discontinuing coverage for substance abuse treatment.

However, 73.5% said they would not drop mental health coverage, while 76.7% said they don’t plan to discontinue coverage for substance abuse treatment. Another 19.5% said they do not know whether they plan to drop mental health coverage, while 15.5% are undecided about whether to discontinue coverage for substance abuse treatment.

In addition to the 38% of respondents who plan to step up EAP use and promotion, 26.1% plan to increase promotion and disease management to achieve mental health parity. In addition, 23.9% are considering adding or increasing use of case and/or disability management, while 21.7% plan to increase utilization management and/or prior authorization for mental health treatment.

A large proportion of respondents—35.7%—said they expected their health benefit costs to increase less than 2% as a result of instituting mental health parity; 23.8% said they anticipate costs will remain the same. Another 16.7% said they expect cost increases exceeding 2%, while 21.4% said they were uncertain what costs will do. An equal number—1.2%—said they expect costs to increase more than 2% or decrease less than 2%.

The survey results reflect 143 responses primarily from human resource and benefits managers.

For more information about the survey or the Partnership for Workplace Mental Health visit www.workplacementalhealth.org.

Posted On: May 13, 2009 1:19 PM CST
Jerry Geisel
Enrollment in health savings accounts linked to high-deductible health insurance plans continues to surge, with 8 million people covered by HSAs as of Jan. 1, a 31% increase in the past year, according to an annual census released Wednesday by an industry group.

HSA enrollment rose in all markets, according to the Washington-based America’s Health Insurance Plans, and posted the greatest percentage increase in the large-employer market. Employers with at least 51 employees had 3.8 million people enrolled in HSAs as of Jan. 1, a roughly 35% increase in the past year.

Enrollment also increased in other markets. In the small-employer market—or businesses with up to 50 employees—HSA enrollment increased to 2.4 million people, up about 34% from a year earlier, while enrollment in the individual market climbed to 1.8 million, an increase of about 22%.

HSAs, authorized under a 2003 federal law that added a prescription drug benefit to the Medicare program, became available on Jan. 1, 2004, and enrollment has been surging since then. For example, AHIP surveys found HSA enrollment of 1 million people in March 2005, 3.2 million as of January 2006, 4.5 million as of January 2007 and 6.1 million as of January 2008.

The key factor driving HSA growth is that premiums for high-deductible health insurance plans—to which HSAs must be linked by law—tend to be much lower than more traditional health plans, where enrollee cost-sharing is lower. In 2009, the minimum deductible of an HSA-linked health insurance plan is $1,150 for single coverage and $2,230 for family coverage.

The census is based on 96 insurers and their subsidiaries offering HSA-linked health insurance plans. AHIP said it believes its annual census covers virtually all people enrolled in plans linked to HSAs.

Copies of the 2009 census are available at www.ahipresearch.org.