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

Insured employers in California are combining high deductible plans with self-insured coverage underneath (MERP or Section 105 plans) to help employees with the sting of high deductible plans, while taking advantage of the too large discounts in rates for these High D plans given by the insurance companies. According to the Sacramento Business Journal, Blue Cross, Anthem, Health Net and Kaiser are threatening to terminate contracts of brokers and employers who employ this tactic. While insurers give large rate breaks for the high deductible programs, they say that having a self-funded plan underneath increases utilization. From our own experience this is incorrect.

A new Mercer survey of 3000 employers says health costs will go up by 5.7% for both workers and employers and that 59% of companies plan to raise deductibles and out of pocket amounts in order to control employer costs.

Gordian Health Solutions says enrollment rates in wellness plans vary significantly by industry. Health care industry workers enroll in wellness plans at 157% of the average rate with utilities enrolling people at 22% of the average rate.

Buck has released their own trend survey which does not show significant differences from the Aon trend survey we reported on last month and little change from last year. PPO-11.1%, HMO-11.1%, POS-10.8%, HDHP-10.7%.

The University of Quebec says that insurers recoup the cost of weight loss surgery within two to four years as obese patients become healthier and have fewer medical problems. The study was based on claims filed by 3,651 morbidly obese bariatric surgery patients compared to an equal number of obese patients who did not have the surgery.

Medicare Part A premium will go from $423 per month to $443 in 2009, but most beneficiaries do not pay the premium. The Part A deductible will rise from $1,024 to $1068. Coinsurance amounts will be $267 per day for the 61^st through 90^th day of hospitalization, $534 per day for lifetime reserve days and $133.50 for the 21^st through 100^th day of extended care services. Part B Premium will remain unchanged at $96.40 per month in 2009 and the Part B deductible will be unchanged at $135. Part B premiums do increase incrementally for those individuals who make more than $85,000 per year or couples who make more than $170,000. Medicare is expected to cost more than $500 Billion next year.

According to a new Hewitt survey, the Annual Health care cost per employee per year is $8,331 in 2008 and going to $8,863 in 2009. Employee contributions to premium average $1,806 PEPY in 2008 and are going to $1,946 in 2009. Employee deductible and coinsurance are going from $1,707 PEPY in 2008 to $1,880 in 2009. The average increase in costs in 2008-2009 is 6.4%. The survey covered 300 employers with and average of 16,000 employees per employer for a total of about 13 million members. Meanwhile, Tower Perrin says the average corporate health benefit expenditure will be $9,660 PEPY in 2009. The single employee only cost is $4,860 with Family coverage cost at $14,244 per year. Employers will pay 78% of next year’s premium costs, with employees picking up an average of 22% plus deductibles, copays and coinsurance. The survey covered 321 of the nation’s largest employers.

The annual Kaiser survey was also released and the survey of over 3000 employers showed a difference from the survey of only the largest employers. Single costs in that survey were $4,704 and family costs were $12,680. While the Towers survey showed that cost had increased 33% since 2004, the Kaiser survey showed a 27% increase since 2004, but the difference is relatively minor in statistical significance. Kaiser does show that employees contribute 16% of premium for single coverage and 27% of premium for family coverage ($60 per month single and $280 per month family in 2008).

The WSJ reports UnitedHealthcare came out with a survey of its customers that showed 86% of people opened an HSA if their employer offered a contribution. That's compared to 27% when the employers did not, according to United. About two thirds of employers contribute to the accounts with UHC.

Before November 15^th it’s time to make sure that Medicare eligibles receive their notice as to whether or not their employer plan drug coverage counts as creditable coverage under Medicare part D.