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Today, September 23rd brings with it major new new federal healthcare mandates for Texans:

  • Guaranteed issue of all health insurance plans covering children until age 18, regardless of their health.  (However, Texas insurance carriers have stopped issuing child-only policies, so a parent must be covered on the policy.)
  • Adult Dependent Children on Parents’ Plan until 26th birthday. (So dependent children with serious chronic health conditions or pregnant children can stay on their parents' group health plans until their 26th birthday.)
  • No Lifetime Maximum Benefits to insurance policies. (Prior to today, a typical lifetime maximum benefit for a major medical insurance plan is $1 to $5 million.)
  • No Recission of Coverage. (this means that insurance companies can't cancel polices of insureds with high health claims.)

The above list of mandates will occur for new plans purchased beginning today, and for existing plans upon their next renewal date.

And for all new health plans purchased begininning today, or for group plans in which the benefits have been materially changed, the following list of benefits are added:

  • 100% coverage for evidence-based preventive services in network.  (These preventative "wellness" benefits are paid 100% by the insurance plan with no out of pocket cost by the policyholder.)
  • No prior authorization for emergency services or higher cost-sharing for out-of-network emergency services.

Plans that have not been materially altered have been tagged as "grandfathered," and do not have to include these last two new benefits.  Even a slight reduction in benefits, for example a change in drug copays, would mean the plan would lose its "grandfather" status and must then include the last two benefits.

For more advice and clarification on Healthcare Reform impact on Texas employers and employees, contact Group Benefits Advisors at 214-764-6315 office, or 888-398-6346.

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The Healthcare Reform Act implemented these changes effective 3/23/2010:

  • Small Business Healthcare Tax Credit
  • Early Retiree Reinsurance Program
  • Federal High Risk Pool

If your Texas small business (or non-profit) has less than 50 employees with a group health plan, and the average annual income for non-owner employees is less than $50,000 per year, your company "may" be eligible for up to a 35% (30% if a non-profit) healthcare tax credit on the portion of the health insurance premiums that the company pays for employers.  The owner's portion and the owner's family or relative portion of the premium does not qualify for the tax credit.  I emphasize "may" because the actual tax credit drops off substantially if your company has more than 25 employees or the average wage is above $25,000 per year.

 There's a quick and dirty way I use to help you estimate the tax credit.  Chances are your accountant or tax lawyer won't tell you about it because they have either ignored the legislation or don't want to spend the time.  Yet, if you file quarterly, you can already claim three quarters of  tax credit since it is retroactive to 1/1/2010.  If you are a Texas business, call Group Benefits Advisors toll-free at (888)-398-6246 and I'll help you estimate your company's tax credit for you at no charge.

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Here's a first-person example of what can go wrong with the PPO model and why more than ever you must "manage" your own care and not trust your doctor or insurance company to do what is in your best interest.  If you are an employer, you should print out this article, and pass it on to your employees so that they and you as the employer don't get ripped off.

During the holiday season, I contracted the dreaded fever/runnynose/sore throat condition.  Nothing serious, but after a week the sore throat and fever had persisted and I decided to do something about it on a Sunday rather than face another work week of misery right before the Christmas holiday.   Even if I had strep throat, a generic antibiotic prescription was a quick $4.00 solution to fix what ailed me.  Unfortunately, I first had to find, visit and pay a doctor who worked on Sundays to write me the script that the pharmacy would accept along with my $4.00 before I could get the generic antibiotics I needed ro shake the fever and sore throat.

I first drove to two 24 hour urgent care clinics located a few miles from my home.  At both locations,  I walked up to the front desk, explained what ailed me, and asked if the clinic was in my insurance carrier's PPO network.  And at both locations, the receptionists had been well-trained to avoid my question. They stated that yes, their clinic would be happy to submit my paperwork to my insurance company.  But only after a third time, when I asked to give me either a yes or no answer if they were in my PPO network did I get the truth, that they were not a network provider.

Because the clinics were not in my PPO network, they did not have a contract with my insurance company and could charge whatever they wanted.  And since my health insurance is a high deductible health plan, I pay out of pocket for any medical expenses at the negotiated network discount until I meet my (high) deductible.  So in theory, I should pay less for my care if I went to a doctor that was in my insurance company's network.

I walked out of both clinics, disgusted with answers from medical providers that bordered on dishonesty just to take my money. I decided not to waste any more time with walk-in visits and went home to search my insurance carrier's online PPO directory for walk-in clinics that were in the network.  Fortunately, I found one clinic that was still open on the Sunday afternnon.  I called for an appointment and drove to the clinic, walked to the front desk, presented my insurance card, filled out the paperwork at the front desk and then sat down to wait to see the doctor.

When my time came to meet with the doctor he briefly examined me to satisfy for himself that I indeed had a fever and runny nose, and he then had an assistant take a throat culture to test for strep throat.

Another trip back to the waiting room and fifteen minutes later it was confirmed that I did not have strep throat, and another fifteen minutes later the assistant then handed me the script for the generic antibiotic.  The clinic would bill my insurance carrier and I finally could drive to the closest discount store and pick up my $4.00 generic prescription, paying for it out of mr health savings account discount card.  Two days later and the fever was gone, and a week later the sore throat and runny nose were gone as well.

But when the bill arrived in the mail I found that the doctor had charged a higher "discounted" rate than either of the out of network clinics would have charged.  I then called the doctor's office the and asked the receptionist what it would cost for a visit if I didn't have insurance and found out that the rate given was substantially less than the rate he charged me.  I asked if I could speak to the doctor and that I had a problem his bill.

After a short wait, I spoke to the doctor who justified his higher price for patients who had insurance because he had to employee three people on his staff to submit paperwork and the insurance companies were slow-payers.  I explained that that was violating his contract with my insurance carrier's PPO by charging more, and refused to pay one cent until he agreed to charge his cash price.  He agreed to do this if I paid the bill promptly, which I did.

Was this doctor right to charge me more because it cost him more to deal with insured patients than cash paying customers?  Probably not.  A PPO network discount from having health insurance coverage should always cost less, not more.  Does it happen?  All the time.

The moral of the story?  Patient beware: Never answer the question "do you have insurance?" without first asking the question, "Do you have a cash discount?" Once you know whether the doctor or clinic is playing games with billing rates, then and only then should you ask whether the doctor or clinic is in your insurance carrier's PPO network.

The other moral of the story: Obtaining generic meds  to treat minor illnesses such as a routine fever shouldn't be this hard or complicated.  Many pharmacists administer blood tests and vaccines; allowing them to administer generic meds without a prescription from a doctor for minor routine illnesses if customers test positive for something like a fever or sore throat seems like an easy way to reduce healthcare and insurance expenses.

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Urgent announcement to Employers and HR professionals in Dallas Fort Worth, Texas.   GroupBenefitsAdvisors.com is holding a special teleseminar for  employers and HR Professionals only on February 25, from 2 to 3 pm to discuss and ask questions about the impact of the Economic Recovery and Reinvestment ACT of 2009  on employers.  Employers and HR professionals can get the details for this teleseminar by signing up for the GroupBenefitsAdvisors.com newsletter at upper right.

Employers are now required by law to subsidize COBRA and State of Texas Continuation payments by 65% for any employees and their dependents who were terminated between September 1, 2008 through December 31, 2009.  Dallas Fort Worth employers will also be required to give notice of this subsidization option to terminated employees, as well as provide emplyees with an additional 60 days to select COBRA.  The mechanics and the paperwork that will be required of employers in order to comply with this law and attain reimbursement for the subsidization will also be discussed.

Please forward information about this teleseminar and how to sign up to the appropriate person at your company, and any Dallas Fort Worth Texas HR professionals that you know .  There is much lack of detail and clarity in this legislation, and it is to everyone’s benefit to understand how this legislation impacts their company or former company and the new immediate requirements that this legislation places on employers.

The teleseminar line for employers and HR professionals only holds 100 callers, but the call will be recorded and posted for download and to listen to afterwards at GroupBenefitsAdvisors.com.  Again, sign up details for this urgent telesminar will be sent automatically to all subscribers of the GroupBenefitsAdvisors.com newsletter, so sign up above right if you are interested in participating.

For further information about this new legislation and its impact on your company, contact Mike Chapman at GroupBenefitsAdvisors.com, (888) 398-6246.

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Dallas Fort Worth Texas employers should watch closely that they don't become liable for offering 401K employee benefits to their employees.  In an unanimous ruling on February 21, LaRue vs. DeWolff Boberg and Associates, the Supreme Court ruled that employers can be held liable if employees lose money in their 401K employee benefits plan.  The Supreme Court ruled that LaRue, who lives in Texas, could sue to recover losses as well as profits he could have earned on that money.

The court's rationale in the ruling apparently was that employers are the ultimately fiduciaries of their 401K employee benefits plan, and that they must take their responsibilities seriously to make sure that plan administrative processes and procedures protect their employees' investments.  The ruling delineates losses due to negligence on the part of the employer as opposed to market declines.  But it may well take several followup court rulings on future lawsuits to make it clear as mud to determine when employers are negligent and when they are not.

Other recent court rulings have also made 401K plans legal quagmires for financial advisors.  The time, administrative cost and  added legal risks of 401K plans make them much less rewarding for employee benefits advisors to recommend to their client companies.  What advisor in his or her right mind wants to recommend a retirement plan that could subject their clients as well as themselves to an expensive lawsuit from a disgruntled employee?

As DFW and Texas employers slice up their employee benefits budget to attract and retain valuable employees, they must decide where they spend their benefits dollars.  As it is, the double digit inflationary increases in group health insurance plans and workers compensation costs aren't going to diminish, no matter who is in the White House or Governor's Mansioon.  A change in parties controlling the White House and Congress could lead to a less business-friendly Supreme Court, and possibly increase the likelihood that lawyers will take up these type of cases.

The fallout from the ruling: Fewer advisors recommending 401K plans to their clients and fewer companies offering 401k plans to their employees.  What employee benefit advisor wants to recommend an employee benefit to their client companies that could get their client, and themself, tangled up in a court test case lawsuit?

The 401K is one of very few federal programs where the government gives average employed Americans a tax benefit to encourage saving for retirement.  And it is the only federal program we can think of where the average American working person actually gets paid by their employer to learn, ask questions and get one on one professional financial education and get sound advice from a financial advisor during the open enrollment period and the periodic 401K plan update meetings conducted by the advisor.

At a time when federal Medicare and Medicaid programs are close to insovency and the cost of healthcare at retirement and the cost of long term care is astronomical and climbing, one would think that any progam that encourages and educates Americans on the need for saving would be good public policy.

Unfortunately, the LaRue ruling puts a wet blanket on 401K plans, and in so doing, discourages Dallas and Texas employers from providing a great employee benefits program that gives employees basic financial education and an incentive to save for their retirement.

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For many in Dallas, Fort Worth, Texas, shopping and eating are contact sports.  Retailers and restaurants often test new store concepts here to see if the they can handle the stiff competition before rolling out into other markets.  For example, about  twenty years ago a retailer by the name of Wal-Mart introduced its first mega food and discount combination store, and a restaurant by the name of Chili's first opened its doors in Dallas. 

Health care and retail observers should therefore take notice of a new specialty hospital that recently opened in the Dallas Fort Worth suburb of Plano, TX, and is applying discount retail concepts to health care. The hospital clinic is promoting lap band surgery at a hot $9,995 price point that it is promoting in newspaper ads. 

It seems like a "can't miss" proposition.  The hospital's location is in one of the most obese markets in the country, and its 75093 zip code places it in one of the most affluent markets in the country.  And it has priced the extremely popular and controversial lap band weight loss surgery at less than two thirds below the price of competition from area general hospital competitors.  We fully expect the hospital to be extremely successful,  and it is probably poised to book its availability of surgeries for months in advance.  A chain or copy cat hospitals cannot be far behind.

We are not going to comment on the ethics or safety of the clinic or of lap band surgery.  And we don't intend to to debate whether insurance companies should cover the surgery.  (In spite of what you may hear, most insurance companies will not cover it no matter what, even if patients get a "note from their doctor" stating that the lap band surgery is medically necessary.)  Lap band surgery is simply not something offered by Texas employers as an employee benefit.

The facts are, obesity is a growing public health problem, and lap band surgery is a popular way that individuals who can afford to pay can lose weight.  There are no less than ten general hospitals within ten miles of the new specialty hospital offering the lap band surgery at prices much higher than $9,995.  Four of these hospital have been open less than three years, and three others have had major expansions. 

This not only represents a lot of fat shed in Plano, but a lot of higly profitable surgeries by the GH's that are now under price pressure from the startup hospital.  Insurance generally doesn't pay for these surgeries so insurance carriers cannot control what hospitals get reimbursed for this surgery.  This new specialty hospital stands to siphon off much of this very profitable lap band surgery business from the general hospitals, just as several area cosmetic and orthopedic surgery specialty hospitals have done.

And this specialty hospital will siphon off more than local patients.  At $9,995, many individuals who may have been reluctant to become medical tourists and travel to a foreign country like India, Mexico or South America for cut rate lap band surgery can now take a short and safe flight into Dallas Fort Worth Airport, drive a half hour to the hospital and then fly home a few days later and lighter.

Employees with Flexible Spending Accounts, Health Savings Accounts, or Health Reimbursement Arrangements won't get any break from Uncle Sam for lap band surgeries either.  Section 213d of the IRS code specifically disallows cosmetic surgery, and you can be almost guaranteed that if you hand your CPA a note from your doctor stating that the surgery is medically necessary, he or she will advise against writing off the expense or of using qualified health funds.

A possible strategy would be for a weight loss clinic to give away the lap band surgery but charge extra for weight loss counseling, because therapy is a Section 213d deductible medical expense and is also often covered under group health insurance plans.  But the "Usual and Customary" rule would likely close this loophole for individuals hoping that insurance or Uncle Sam will defray the cost of lap band surgery.

Yes, diet, exercise and wellness initiatives are more cost effective, safer, and can be often be claimed on insurance and/or on your income tax.  But to the growing numbers of morbidly obese in this country, the monthy payments on a $9,995 procedure now make this a viable option.

So for the present time, the $9,995 blue light special  for lap band surgery is flashing in Plano, Texas.  And those that can afford to pay and  who are willing to take the risks will be keeping this clinic very busy, for some time to come.

For more information and strategies of how Texas employers and employees can lower the cost of health care and find affordable health insurance and employee benefits, subscribe to the newsletter at GroupBenefitsAdvisors.com or contact Mike Chapman at Group Benefits Advisors, (888) 398-6246.

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Professional employment organizations, or PEOs, are a convenient way for small to mid size businesses to handle their human resources requirements.  Most PEOs will offer employers a wide range of back office support services, including payroll and benefits, such as group health insurance.  Other PEO services may include legal, tax, administrative, and outsourcing of the entire HR and accounting function.

PEOs often base their rates for their services on a modest percentage of billings, plus various charges for services rendered.  For growing businesses, Professional employment organizations may allow companies to hire more "front office" positions such as in sales or marketing, which could help the company secure the talent they need to grow faster.

There is a hidden cost to PEOs which is usually not discussed  prospective business clients in Dallas Fort Worth, Texas.  These costs could add significantly to the actual cost of a company joining a PEO.

When a company joins a PEO, the business's employees legally and technically become employees of the PEO, and not the business entity.  Employees then are paid a salary or wage by the PEO, enroll in benefits provided by the PEO, and then the PEO bills the business entity.

Because the PEO usually has thousands of employees in under their Texas group benefits program, one would think that the PEO could offer more affordable group health insurance than if the company offered benefits to its own employees. 

This could in fact be the case if the Texas business has unhealthy employees, as insurance carriers would "rate up" (charge higher rates) to unhealthy companies.  In fact, according to Texas insurance laws, insurance companies can rate up the group health insurance premiums to a texas small business by up to 66% over standard rates if the company has unhealthy employees.

Because of this, PEOs may tend to attract companies with unhealthy employees.  And over time, companies with healthy companies may tend to leave PEOs as they could qualify for lower group health insurance rates on their own.

And group health insurance carriers, knowing this tendency of PEOs, often rate up PEOs vs. other business industrial classifications.  So the rates may start higher for employees of PEOs, and may climb at a higher rate over time.

So a Dallas Fort Worth small to mid size business that starts out thinking a PEO is a good deal vs. staffing up for back office positions should know all of the hidden costs of PEOs. 

Any such staffing savings could easily be negated by the higher rates for benefits through a PEO.  For example, since the current annual cost of health insurance for an employee in Texas is about $4500 to $5,000 (less the portion that the employee pays), if there is a premium of 20% in the cost of group health insurance through a PEO, that could mean an employer with employees of average age and health would pay perhaps $1,000 more for purchasing group health insurance benefits per employee per year through a PEO.

Knowing this, before signing a contract with a professional employer organization, a North Texas business should first get an independent assessment of their company's employee health and obtain quotes for employee benefits and group health insurance for their company from a Dallas group benefits advisor or texas group health insurance broker.   And any Texas business currently contracted with a PEO should annually check the cost of obtaining group health insurance and other employee benefits as a stand alone company.

If your Texas business is  contracted with or is considering contracting with a PEO , you can receive a a no obligation assessment of your group health insurance and employee benefits and receive recommendations for alternate employee benefits solutions by contacting Mike Chapman of Group Benefits Advisors, Dallas Fort Worth, Texas, (888) 398-6246.

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Dallas group health insurance brokers  and Dallas employee benefits agencies as well as others throughout Texas will start this month to contact their client companies about next year's increases for employee benefits and group health insurance plans that renew January 1st. 

The ninth annual nationwide survey that was released yesterday from the Henry J. Kaiser Henry J. Kaiser Family Foundation/Health Research and Eductional Trust gives Dallas employers a glimpse of what they can expect in 2008, but already painfully know:  the cost of group health insurance continues to outpace the rate of inflation and the rate increase of employee wages.

Some of the highlights of the report include that nationally, the group health insurance premiums increased an average of 6.1% last year, the lowest increase in eight years.  The report goes on to indicate however, that the increase in medical expenses was higher than this, so insurers will likely increase rates faster than this to maintain profit margins.

The Kaiser report also points out that the average nationwide cost of group health insurance coverage wass $4,700 per employee, and over $12,500 per family in 2006.  Since most employers cover a portion of the coverage cost for employee only, this means the average family of four is paying about $10,000 per year for their family's coverage.

The report makes the relative comparison that the employee family coverage cost is about the same as buying a new small car for the employee every year, say a small Hyundai or Kia.

What the report fails to highlight are the regional differences and differences among employee group size.  For example, Dallas has one of the highest uninsured population in the state, approaching 50% of the population.  There are lots of reasons for this, including the high nonresident population and the high quality of public health care available at Parkland.

The other area that the report glosses over is the disparity in employer size.  Large employers who self-insure can better control the health claims cost from employees, and have lower rate increases.  Fully insured employers that tend to be small to mid-sized companies have much higher rate increases than the national average. 

And the group health insurance rate increases to small businesses with 50 or fewer employees have increased so much that only about 50% of Dallas small employers today can afford to offer a group health plan to their employees.  Rate increases of double the national average is not untypical for small employers in the Dallas area.

So while nationally the "average employee" is buying the equivalent of a Hyundai every year for their family's group health insurance coverage, here in the city of Dallas, long reknowned for big hair and pickups, we can probably claim that the average employee is paying the equivalent of a leased Hummer every year to insure their family.

So what's a Dallas employer to do to buck this trend?  If an employer gives up and stops offering group health insurance, the company not only contributes to the community's huge uninsured problem, but they are then at a competitive disadvantage.  It's tough for a small Dallas company to recruit the best and brightest employees without offering employee benefits.

Here's some suggestions for Dallas area employers who are fighting employee benefits inflation:

  1. Hire employees who are motivated to not only improve the company, but are also motivated to improve their own health.  Employees (and spouses) who take care of themselves, watch their weight, don't smoke and exercise are much less likely to have a catastrophic health insurance claim.
  2. Institute a high deductible health plan with a health reimbursement arrangement (HRA) for employees.  With this arrangement, a typical company that raises their deductible from $1,500 to $3,000 per employee will save so much more by raising the deductibles that they can afford to "partially self-insure" by reimbursing employees for any medical expenses from $2,000 to $3,000 after the employees pays the first  $2,000 in expenses.  The savings come from the fact that fewer than 20% of employees will ever meet their deductible in any given year, so the employer funds the HRA reimbursements from the smaller premium checks that they write to their insurance company.
  3. Purchase a "medical gap plan" that reimburses employees up to $3,000 for hosital confinement.  Employers will save enough in insurance premiums to pay for this supplemental plan, and then some.  Gap plan coverage is much cheaper for an employer than the extra cost of a lower deductible plan.
  4. With a small portion of the insurance premium savings, implement a corporate wellness program that rewards employees for maintaining or improving weight, maintaining or stopping tobacco use, or for exercise.  New HIPAA regulations now allow employers to "reward" employees monetarily up to 20% of the portion of the health insurance premium that employees pay.  Employees (and spouses) who do not enroll in the wellness plan will not get rewarded, so they end up paying more for their group health insurance.  And since these employees are more likely to have catastrophic health claims, a wellness plan adds an extra element of fairness to the employer's employee benefits plan

With these four steps, Dallas employers will reduce their premiums, plus reduce their employee health insurance claims, which will lower rate increases in future years.  And by encouraging healthy employees/discouraging unhealthy employees through the rewards system of an employee wellness plan, employers will have a healthier, more productive workforce with higher productivity and less lost time and disability due to illness.

The days of a business owner or president letting a lower level employee pick a couple of plans once a year from their Dallas group health insurance broker are over. The potential cost consequences of this passive approach for even a small employer is hundreds of thousands of dollars per year.  Today, presidents, CEOs and CFOs in Dallas must get actively involved in controlling employee benefits costs.  Failing to do so will result in continuing to handing out Hummers to employees every year, or to wondering why their company can no longer attract quality employees to their company.

For more information about how your Texas company can control the cost of group health care and still attract quality employees, contact Mike Chapman at Group Benefits Advisors, (214) 764-6315, or (888) 398-6246

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Ed Housewright, the Collin County columnist for the Dallas Morning News published a jewel of a column on August 5th in the Dallas News about the "shape" of  local city government employees in Plano, Richardson, Dallas, and especially in the Collin County government. 

Mr. Housewright reported on the unbelievably generous group health benefits offered to employees of these cities, and the truly unbelievably poor health condition of the city and county workers. 

Some of the highlights of his column: Collin county employees have a group health insurance plan with no deductible!  And a worker for the city of Plano has a $500 deductible, Richardson a $350 deductible, and Dallas workers a deductible of $300. 

What's even more astounding is that these local governments are picking up almost all of the cost for the group health insurance plan.  A Collin county worker pays only $30 bucks a month for "double platinum" group health insurance coverage, a Dallas worker only $137. 

This makes me so glad to know that I have a $5,200 family deductible consumer driven health plan with no copay benefits so I can afford to pay taxes to my city that offers a no deductible health plan for government workers.

Of course, no tax paying business in these communities could ever afford the premiums for this type of plan for its employees.  But somehow local governments see nothing wrong about offering unheard of level of benefits to municipal employees, and are fatalistic and almost acceptant about the expense.  Mr. Housewright reported that Collin county spent almost as much to run its entire judicial system as it did on medical claims last year.

The result of local government largesse?  Government employee largeness, and runaway medical expenses, much of which is obesity related,  and all paid for by the tax paying public. 

United Healthcare, the second largest health insurance company in the country, cited Collin county as having 104% more cases of congestive heart failure than other governement bodies insured by the insurer.

Not only that, but Collin county had 81 percent more cases of coronary disease, and 127 percent more cases of digestive problems. 

To make matters worse, up until 2006, Collin County  picked up the entire tab for lap band or stomach staple surgery; now the employee has to try a year's worth of doctor-supervised dieting before getting the free $10,000 surgery.  In 2005, the county spent about $600,000 in surgery cost (plus  lost wages and productivity of at least that much.)  The lap band and stomach staple surgery procedure just is not covered in 99% fully insured private sector group health insurance plans.

There is no doubt that obesity is a rampant epidemic among adults and children of Texas.  The Texas Comptroller estimated that obesity cost Texas employers $3.3 billion in 2005, and no doubt that number is now about $4 billion per year.  Now, it appears that this number was greatly underestimated, as obesity among Texas municipal workers is totally off the charts, and guess who picks up the tab?  Yup, taxpaying businesses.

The only defense in Housewright's article for the poor health of the county's employees was from Judge Self, who heads the Collin County Commissioner's Court and took office in January.  Self was quoted as saying "We have a bunch of sedentary jobs."  EXCUSE ME???  What Texas business in non-agriculture and non-manufacturing does not have mostly sedentary jobs!

However, Collin county taxpayers should not worry; the new County Court building is hoping to open up a workout room, and the County now pays each employee $125 to go get an annual physical.  Now that's progressive thinking from government officials with bold plans on how to stem a health epidemic among their own employees!

Several problems occur in many government and non-profit organizations that don't occur in profit businesses.  First,  there is no true measure of a government organization's profitability nor of employee productivity, and there is principle of "tenure," in which employees can often expect to have a job for life, regardless of how great a job they do, or how much they cost their employer.

Second, there is no market-driven force to balance what the organization can afford to spend for benefits on a cost per employee basis, so whatever it costs is okay with public officials. City and county employees get fatter each year, city and county budgets in Texas go up every year, homeowner's get higher assessments every year, and taxpayers get taxed more every year.

Imagine what type of response you get if you asked a Texas small business owner or a self-employed person if they felt that it was fair that their municipality's employees get $30 per month health insurance with no deductible, that they get free lap band surgery with sick pay, that they can accumulate weeks and months of vacation, and they get a better and lower cost retirement deal than social security which they don't have to pay for. 

Let's not even consider the retirement benefits issue.  Half of all small businesses in Texas can no longer afford to offer any group health insurance plan at all for their employees, and if they do, you can be sure that the employee is paying their fair share, and is grateful to have the benefit.

Perhaps the main difference between public and private sector that is causing this unprecedented employee health crisis is the organizational culture.  In a for-profit business, the cost per employee, revenue per employee, and profitability per employee are key measures for every department and every employee. 

And in a right to work, "at will" state like Texas, any employee working for a Texas business can pretty much be terminated at a moment's notice, even if they are doing their job.   "Profitability correctness" is a known fact among the employee and management culture.  

Public sector employees are much more likely to get terminated for "political correctness" errors than "profitability correctness."  Thus an obese, "tenured" public employee who knows his or her "rights" knows that a manager is fairly powerless to do anything about it, since obesity is a "protected" condition under the American Disabilities Act. 

A well-intended municipal manager can't use the "shape up or ship out" approach with an obese employee without incurring discipline, temination and/or a possible lawsuit. 

Instead, public sector managers can only offerup weak initiatives like workout centers and free checkups that end up costing taxpayers more money.  Frankly, I doubt many obese Collin county employees would want to go to the gym to work out, though they might want visit a doctor for a checkup  if they get time off and a chance to pocket $125.

So we have a public sector employee health crisis and group health insurance conundrum that is costing taxpayers and businesses in North Texas communities like Dallas, Plano, Richardson, Allen, Frisco and Collin County and Dallas County hundreds of millions of dollars, and no public sector manager can really do anything about it.

Here's a suggestion that will cause change:  First, a taxpayer-lead initiative that limits each government to spend no more in municipal employee benefits than the average of what comparable taxpaying companies located in the same municipality pay for employee benefits. 

In North Texas, this would mean that for group health insurance, the government would pay no more than 60 to 75% of group health premiums that would cost about $400 per month for each employee.  Of course, that wouldn't buy a very good plan since the municipality's employees are so obese the rates would be much higher.

I'd bet my tax dollars to their donuts that if municipal employees in Texas were held responsible to "real world" healthcare costs, there would be such peer pressure for employees to take care of themselves, that personal health accountability would soon become the new political correctness. Fewer donuts, fewer lap band surgeries, and lower health insurance and healthcare costs.

Once North Texas municipal employees are forced to "get it" that there is no more public sector health care gravy train, managers could then implement programs that are proven to lower the cost of healthcare if employees engage in them.  Presently, there is no incentive for employees to change, and it is apparent that self initiative isn't working.

For example, HIPAA regulation changes that took effect in July of this year now allow employers to reward employees monetarily on a tax-free basis, up to 20% of the cost of group health insurance premiums for engaging in wellness programs that encourage employees to exercise, reduce weight, and stop smoking.  So a municipal employer in Texas with a $400 per employee premium that an employee must pay 35%, or $140, but could be offered incentives of up to $80 per month if they enrolled in the wellness program, and lost some pounds, exercised, and stopped smoking. 

As a taxpayer, I'd rather be shelling out tax dollars for a wellness plan knowing that municipal employees had some skin in the game, and that they are now accountable for improving their own health, rather than have my tax dollars go toward free lap band surgery with paid sick leave for grossly obese workers.

This approach would then be a tremendous carrot for  managers to change behavior among municipal employees.  Employees would now have a "real world" health plan with a "real world" high deductible and monthly premium payments. 

And since each municipal employee's monthly premiums would then be tied to the overall health of the employee group, employees might even urge their self-indulgent fellow employees to improve their health because it costs them money, without the need for managers to intervene.

It might be a taxpayer's wishful thinking, but I could envision a day when the office cubicles of local municipalities have embroidered signs on the desks that read, "Thank You for Not Eating Donuts."

 

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