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 NH Healthcare Purchaser Partnership A new group has formed to combat spiraling insurance rates. The NH Health Trust (funded by tobacco money) initiated discussions with a handful of public and private enterprises. All agreed that only fundamental change in the health care market could impact inflation. The apparent failure of Managed Care to control health care cost increases has inspired the group to look at the cost of care is the source of the problem. The central issue is to align market incentives to modify consumer and provider behavior. The idea is to give consumers an incentive to select efficient and high quality providers, to give providers incentive to continuously improve the quality of their services, and, to provide 'report cards' so that consumers can be educated about their options for medical services. The group now includes public and private sector employers (including The New Hampshire Municipal Association), organized labor, 50 employers representing 150,000 employees, and brokers/consultants. The group now has a 14 member steering committee and 12 working groups, each assessing different parts of the problem. For more information, visit Health Trust or call New England Medical Insurance Agency, LLC, at 1 800 443 4977 IRS Rules on Consumer-driven Health Care Consumer Driven Health Care (CDHC) is a new model of health care delivery that puts the consumer of health care services in a position to know what the cost of their care will be before they actually receive services. The theory behind the development of CDHC is that consumers will become better shoppers for services and have an impact on the cost of those services. There are many models of these plans, but, fundamentally, the plans provide for an employer contribution of 100% of the first level of costs, the employee would be responsible for the next level, and then the insurance company pays the rest. An example would be an employer paying the first $1000 of expenses the employee the next $1000, then the insurance company pays the rest. This kind of structure would significantly reduce premiums. The IRS has ruled that HRA's (Healthcare Reimbursement Arrangements), which would be the employer's contribution, will not be taxable when paid out. The ruling also allows for a rollover to the next year of unused employer contributions. The ruling is expected to increase the interest in such plans. Insurance companies are likely to become more involved in designing plans for their subscribers to be offered concurrently with existing HMO style plans during the next calendar year. This is good news for employer groups hoping for relief from continuing double digit medical premium increases. While CDHC plans will help slow the pace of inflation, the fact that 50% to 60% of health care costs are technology related will probably mitigate the impact. New England Medical Insurance Agency, LLC (NEMIA) Announces tele-benefits center NEMIA has begun rolling out their new dedicated call center for employees who have questions about their insurance benefits. The program has been in development for six months and is now available to all of their clients on the renewal of their health plans. The service provides employees with access to the two NEMIA personnel responsible for each account. The employees receive a Tele-Benefits laminated card with the names and phone numbers of their advocates. Each client has both a Client Manager and a Service Representative and employees can call either. Services available include help with form completion, benefits explanations, help with accessing providers, assistance with appeals, and troubleshooting claims issues. The new service is designed to relieve HR personnel of the need to address routine issues and to provide experts in solving big problems for their employees. The service has a dedicated toll-free numbers and is available to employees from 7:30 AM to 5 PM. The service complements the custom designed web sites also available from NEMIA to mid size and large employer groups. Oxford to Reenter NH Market. In May of 2002, Bob Bergan and Jim Better of NEMIA, LLC, met with Bradley Kreik of Oxford Health and Donna Linsky of Choice Linx. The purpose of this meeting was to explore the opportunities Oxford Health and Choice Linx (a provider of web based insurance services) would have in the New Hampshire health insurance market place. Oxford, a provider of health insurance in the metropolitan New York area and a former New Hampshire carrier, says that they have received positive responses from many providers throughout the state. As a result of this and other meetings, Oxford has decided to begin offering health insurance in New Hampshire as of 1/1/2003. They will begin marketing efforts in September. Their primary focus will be in the Concord, Salem, and Nashua triangle. New Law Allows Carriers Back to New Hampshire Market Up until now, if an insurance company stopped providing insurance to new subscribers or if they entirely withdrew from the state leaving subscribers to find new coverage, there was a 5 year period before they could reenter the market. As the result of the passage of SB 56, may now petition the Commissioner of Insurance for re-entry. This could affect Aetna, Principal, and, of course, Tufts. Lawmakers, reacting to the publics wish to have more competition in the insurance market, passed the law hoping to remove one roadblock to re-entry into the market. Consultants Announce Inflation Forecast In its semi-annual review of the country's largest medical, dental, pharmacy and vision vendors, Major consultants have concluded that HMO prices will go up by an average of 16.2 % in 2003. Another consultant, after collecting data from 140 employer groups, predicts that the rate increase will be 22%. The study found that Rx increases will be 17.8%, dental will be about 10% and vision plans about 3%. The entire study may be found on their web site. Results of Annual HR Survey After interviewing 1800 workers nationwide, the survey found that employees ranked benefits in the following order of importance:
Employee Benefit News Employee Caregivers Need Benefit Programs A recent Metlife study found that businesses lose between $11 and $29 billion annually as employees take time off to care for aging parents and other family members. Caregivers themselves sacrifice thousands in lost wages, pension contributions and career opportunities. In 2000, The Society for Human Resource Management (SHRM) found that 15% of its member employers offered eldercare referral services as an employee benefit. In 2001, that number rose to 19% and is already over 21% for 2002. Long Term Care Insurance increased its presence in benefit plans from 36% to 48% over the same period. Providing 'caregivers' with such benefits, however, requires precise communications. Most people have difficulty identifying themselves as care givers. Helping an aging parent seems like a natural event with the consequences being obscured by human reflex. A caregiver is one who helps with 'activities of daily living.' Employees do recognize such things as providing transportation, assisting with healthcare issues, meals planning, shopping, etc. Evolving benefit programs include lunch and learn brown bag sessions, communications about local agencies, appropriate questions in annual benefit surveys, and Employee Assistance Plans (EAP's). Later on employees will need to rely on Flex Time, FMLA, and formal referral services. Employers will need to increasingly focus on the needs of employees if they are to remain focused and productive at work. Formalizing these resources as part of the benefit plans adds little cost and is in the best interest of the business enterprise. Employee Benefit News Metlife Study Shows LTC Insurance Becoming Popular Employees caring for elderly or sick relatives who have LTC policies are twice as likely to stay in the work force according to a 2001 study by Metlife Mature Market Institute. Employees approaching retirement and who have seen the financial struggles of elderly parents are beginning to recognize that financing future care with an LTC policy is critically important. LTC policies pick up most or all expenses for skilled and custodial care for people at home, in adult day care centers, those in assisted living facilities and in nursing homes. The typical policy covers medically prescribed diagnostic, preventive, therapeutic and rehabilitative services for patients suffering from chronic illnesses and cognitive impairment (Alzheimer's). The cost to employers is minimal as they simply sponsor the plans and provide payroll deductions for the employee pay all plans. This normally entitles the employee to discounts as high as 15% off of the cost of individual policies. Some employers provide basic policies and give the employee the option of 'buying up'. The policies are available to employees, spouses, adult children, parents-in-law, and grandparents. Most policies are portable. Most policies begin to pay when the insured person suffers the loss of two 'activities of daily living (bathing, dressing, meals preparation, etc). Group policies are on the rise. According to LIMRA International, 17% more employers offered plans in 2001 than in 2000. The Society for Human Resource Management (SHRM) reported that nearly 50% of it's membership will offer some aspect of Long Term Care this year. Indeed, the mother of all employers, the Federal Government recently rolled out a group sponsored LTC plan to all of it's 20 million employees. NH Magazine Leapfrog Group Seeks to Save Lives and Lower Cost The Business Roundtable, an association of CEO's of leading corporations representing 10 million workers, is tackling a specific area of healthcare. Focusing on The Institute of Medicine's report that nearly 100,000 people die in the hospital due to preventable mistakes, the Roundtable has established The Leapfrog Group whose purpose is to reduce the number of such tragedies. The intent is to save lives and millions of dollars in healthcare costs. The group has identified three specific areas of concern and is beginning to monitor and hold hospitals accountable for errors. Specifically, the group is working to change hospital practices in the following areas: Computer Physician Order Entry (CPOE) - Prescriptions should be computerized. Not only will this reduce the number of in-hospital errors due to illegible handwriting by physicians, but the prescriptions can be automatically checked for interaction with other drugs or to see if the patient is likely to have an allergic reaction. Evidence-based Hospital Referral (EHR) - Patients do better if their condition is treated in a hospital that has experience and a good track record for treating such specific conditions. Although this is obvious, there is little information available to patients upon which to make decisions about the best settings for their particular malady. The Leapfrog Group's intent is to establish a reporting mechanism so physicians and patients will be able to make judgments based on facts. ICU Physician Staffing (IPS) - More than 4 million patients are admitted to Intensive Care Units every year and many die because of the lack of physicians trained to care for critically ill patients. Studies reveal that at least one in ten patients who die in ICUs would have an increased chance to survive if care was given by an appropriate physician. While the efforts are currently limited to select urban hospitals, employers in every state are being urged to join The Leap Frog Group and begin to review the agenda with hospitals in their own areas. Debit Cards Make FSA's More User Friendly Flexible Spending Accounts are enjoying increased usage by employees as more of the cost of healthcare is shifted as deductibles and co-pays increase. Flexible Spending Accounts allow employees to pay for un-reimbursed medical and dental expenses on a pre tax basis. Benefit Strategies of Manchester, NH, one of New England's largest administrators of Flexible Spending Accounts, is now providing "FlexExpress Cards" to their clients upon enrollment. These cards provide the user with the ability to simply debit their accounts at the point of transaction. They can be used to pay the co pays for prescriptions and doctor visits. The card is used similarly to any other debit card and the employee's account is debited the amount of the purchase. Employees will also receive an instant report showing their current balance in the account. These cards should eliminate the dreaded 'use it or lose it rule' and the drudgery of submitting claims. The expectation is that enrollment in Flexible Spending Accounts will increase dramatically. Getting ready for the 2nd Phase of HIPAA Phase two of the Health Insurance Portability Act of 1996 (HIPAA) is coming into view and will have varying effects on employee benefit programs. The first phase of HIPAA, generally effective July 1, 1997, provided health care portability by protecting health care coverage for individuals changing jobs. Phase two of HIPAA has two components: administrative simplification and privacy. Administrative simplification establishes and mandates national standards for electronic health care transactions utilizing specific data standards and identifiers. Administration simplification generally applies to all health plans, health clearinghouses and health care providers who exchange information electronically. The overall goal of administrative simplification is the reduction of overall costs. Privacy imposes stringent security and privacy requirements on the use and storage on all types of health information - electronic, spoken or written. The key acronym in privacy is PHI - Protected Health Information. PHI is any individually identifiable health information that is maintained or transmitted in any form or medium. It includes any past, present or future health information where there could be a reasonable basis to believe could be used to identify a specific individual. The intent of privacy for employees is clear - to make sure that PHI is not used by the employer for employment related decisions or any other purpose not related to the employee benefit plan(s). Privacy regulations apply to health, dental, vision and long term care programs. Compliance is required by April 14, 2003 for most affected plans and will have different implementation effects depending on whether programs are fully insured or self funded. Fully insured plans have limited responsibilities so long as they do not create or receive PHI other than summary plan data or enrollment data. Self funded plans bear greater responsibility and must comply with all aspects of the rules. Some of these responsibilities include amending the plan document(s) and establishing security procedures to assure that sufficient firewalls exist between PHI and other plan functions. Regardless of the type of plan, every affected employer needs to understand the rules, understand how the plan and the plan sponsor (employer) use information protected under the rules, and how to come in compliance with the rules. Additional information can be obtained at the Department of Health and Human Service's website: HIPAA NHLabornet Topics in July 2002 The NHLabornet is an e0mail list server for people interested in Human Resource issues. There are more than 250 active members who regularly ask questions and share suggestions. In existence since 1996, the NHLabornet has an e er-increasing searchable database of more than 8,000 messages. These include insights on basic and complex employment law and human resource issues, HR job postings, sample policies and forms and legislative updates and alerts. While the site is geared toward the New Hampshire market, many of the topics are universal in scope. For further information about joining the group, go to the creators of the site, Sheehan.com and click on the Links button. By way of example of the value of the list serve, the following topics were discussed during the month of July 2002:
Newsletter Note: The above information is offered to our clients and prospective clients as a service. It is a compilation of pertinent articles we have read, information we have collected from seminars attended and general trend information. It is not to be taken as legal or tax advice. If you have any questions about the information contained in this newsletter, please feel free to call us. Before acting on any legislative or law changes you should consult your legal and or tax advisor. View the Current NEMIA Newsletter View the January 2003 NEMIA Newsletter View the August 2002 NEMIA Newsletter |
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