Fully-insured group health insurance plans in Texas are subject to the laws of Texas, as well as federal ERISA laws. As such, fully-insured Texas group medical insurance plans are required to have benefits that have been mandated by the Texas legislature in addition to following federal rules. This includes benefits that the employer and employees may never need or use but must pay for so that other non-employee Texans can be assisted by the mandated benefit.
Fully insured Texas group health insurance plans group, or "pool" the employees of one company with the employees of many other employers in Texas. This is a basic principle of insurance that allows Texas group health insurance companies to spread the risk of major medical claims across a statistically greater number of individuals and companies.
This "pooling" allows businesses, especially small businesses in Texas, to eliminate the catastrophic financial risk of a major medical insurance claim by an employee.
Because of this spreading of risk, a health insurance premiums for a company with a fully insured group health plan will be affected by not only the health and age factors of their own employees, but also by those of other employees and employers in the Texas group insurance carriers pool of members.
Employers with fully-insured group medical insurance plan can partially influence their rates by encouraging employees and dependents to have healthy lifestyles, such as exercising, maintaining a healthy weight, and avoid tobacco and alcohol use. But there is very little at all that a company with a fully-insured health insurance plan can do to reduce the impact of health insurance claims from other employees and companies in the same group health insurance carriers pool of members.
This is why some Texas businesses may decide to self-insure, or self-fund medical claims of their employees. They can more readily determine which benefits that they want to include in their group health insurance plan, with fewer government mandates.
The company that self funds their insurance often contract with a third party administrator or use a Texas health insurance carrier for administrative services only to reimburse health care providers for their employee's medical expenses.
But the overall cost of insuring employees with a self-funded group health insurance plan in Texas is often (but not necessarily) less expensive than the cost of insuring employees with a fully insured group health plan.
Companies with self-funded health insurance plans in Dallas are more in control of their own health costs, as their rates will not be directly impacted by the "pooling" effect of other companies and employees in the area.
Self funded health insurance plans in Texas statistically have more risk of major catastrophic health insurance claims, which makes them more appropriate for larger companies with several hundred employees. But there are examples of "risk-taking" companies with fifty employees that offer self-funded group medical insurance plans for their employees.
Companies with Texas self-funded group health insurance plans can reduce their risk of major medical insurance claims by purchasing reinsurance from a reinsurance carrier in order to reduce their risk of overall medical insurance claims in any one year.
For example, a Plano Texas company with 200 employees could self-insure, but purchase reinsurance that protects the company from the risk of any additional medical expenses after the company paid, say, $250,000 in medical claims in any one year. The cost of that reinsurance policy and the total costs associated with administering the self-funded plan would likely (but not necessarily) be less than the cost of a fully-insured health insurance plan in Plano, Texas.
There is actually a new opportunity for CEOs to consider that could possibility benefit Dallas area companies with either self-funded or fully insured health plans. Within the last two years, group health insurance carriers in Texas have introduced a tremendous number of fully insured group health plans with high deductibles and without Rx or doctor visit copay benefits. Many of these plans have been priced very low on a per employee basis by the group medical insurance companies in Texas.
At Group Benefits Advisors, we have shown client companies how they can reduce the cost of health insurance and lower their risk from a self funded group health plans by purchasing one of these low cost, fully insured high deductible group health plans with deductibles of $5,000 to $10,000 per employee.
By implementing a no cost health reimbursement arrangement (HRA) to reimburse employees employees after they meet the same deductible as they had with their self-funded plan, then "bolting on" to the employee benefits plans such items as a Rx card benefit from lower cost third party resources, the employee has the same benefits as they had before.
But because of the way that some of the Texas high deductible group health insurance plans have been priced by insurance companies, it is now possible that a company could spend less money to cover their employees with one of these fully insured plans and with much less risk to the business than if they had a Texas self-insured plan or partially self-funded plan in Texas with reinsurance.
To determine which strategy works best for your Texas company and for your employees, and for a no-obligation employee benefits consultation, contact Mike Chapman at Group Benefits Advisors, (214) 764-6315 or (888) 398-6246.
Filed under Contact Group Benefits Advisors, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Group Benefits Advisors, Group Health Insurance Quote, Group Health Insurance Rate Texas, Group Health Insurance Texas, Self Funded (Self-Funded) Health Insurance Plans, Texas Group Health Insurance, Texas large group health insurance plans by on Aug 1st, 2007. Comment. 
If your Dallas company's open enrollment period for your Texas group health insurance plan is at the end of the year, you will soon be facing tough economic decisions. Your Dallas group health insurance broker will soon be delivering the bad news to you: Your rates will likely be somewhere between nine to fifteen percent higher next year for the same level of coverage.
If you are have a Texas small group health insurance plan (with fifty or less employees), by law, Texas group health insurance carriers cannot raise your premiums by more than fifteen percent. If your company has more than fifty employees in your Texas group health insurance plan, there is no limit to the potential increase.
The most obvious budget options are for you to reduce the coverage offered to employees by raising deductibles and reducing benefits, hold employees accountable for a greater portion of their group health insurance premium, charge more for your company's products or services to recoup the cost increases, or perhaps budget to sell more of your company's products and services, or show a lower profit.
Perhaps to deflect part of the criticism, some group health insurance brokers in Dallas Texas may also recommend changing insurance carriers. Be cautious if your broker recommends to you that you change group health insurance carriers in Texas because of rate differences alone.
Our experience is that this is a very competitive market, and group health insurance rates in Dallas usually do not vary much from one company to another for comparable coverage, so unless your company or employees have have received poor service, a rate increase is usually not a good reason alone to change group health insuarace companies.
Group health insurance carrier changes can cause frustration and disruption among employees and dependents who must at times change their doctors to ones that accept the plan's PPO, and any rate difference between companies is usually short lived.
So what can a budget-challenged company administrator to do to reduce the impact of inflationary Dallas group health insurance rates?
First, consider asking your employees. Employee input into budget choices at this time of year can be an empowering and a motivating force. Employees are smart, they read the newspaper and watch television and they know that providing group health insurance for employees is expensive. Let them know how much the rates will increase for the next year, both overall to the company, and per employee. Get their input on some of the options that your company has to cover the cost increase.
Second, ask your Dallas group health insurance broker for recommendations. Any broker can deliver the bad news, and show comparison rates from other Texas group health insurance companies. A smart broker can show you group health care insurance solutions that you can implement without changing group health insurance companies. Often, a smart broker can recommend strategies that allow an employer to provide similar or possibly even better benefits to employees at a reduced rate.
Keep in mind that a broker earns a commission on the premiums you pay, and a broker who has put their own self-interest over your company's best interests may not want to recommend strategies that could reduce your group health insurance premiums, as that reduces their income.
Some possible strategies for you is first to consider implementing a Texas consumer driven health plan as an option for employees. These plans are very inexpensive because they have high deductibles and many plans also do not have Rx or doctor visit copay benefits until the employee meets their high deductible. The premium that the employer and employee pay for coverage in one of these plans is much lower than a traditional plan.
Since most employees (over two thirds) never meet their deductible, a consumer driven health plan can be a good option for healthy employees who rarely go to the doctor. An employee with one of these plans can then set up a health savings account (HSA) that works like an IRA to save money tax-free for future health dental and vision care expenses. The employee or the employer can choose to make periodic contributions into the HSA so that the cmployee has funds available to meet out of pocket expenses from the occasional doctor visit.
Another option for your company may be to couple a high deductible health plan with a health reimbursement arrangement, or HRA for employees. Since the deductible is high, the premiums are low. You set up the HRA to reimburse employees for eligible medical expenses after they pay for a set amount of expenses, say $1,000 to $1,500. The group health insurance plan then pays after the higher deductible is finally met. But unlike HSA plans above, the health insurance plan can have Rx and doctor visit copay benefits before the deductible is met.
Both the HRA and the HSA are great devices to lower insurance premiums, and give employees incentives to be careful about their own health and spending the health care benefits wisely. And because over time the insurance carrier pays fewer claims, future inflationary rate increases will be less.
Another strategy in controlling the cost of health insurance for your employees is to give them the tools and the incentives to improve their own health.
Tobacco, poor nutrition and sedentary lifestyles among employees leads to chronic, debilitating, and expensive diseases such as diabetes, cancer, heart attack and stroke to name a few. Encouraging and rewarding employees to maintain healthier lifestyles can have a direct impact on the cost of your company's group health insurance rates in Texas and can improve employee productivity by lowering absenteeism.
Ultimately, the only way for a company to control their group health insurance costs is to improve the health of their employees. A smart broker can show you how you can implement a corporate wellness plan for free that can be paid for out of savings from implementation of a consumer driven health plan.
So if your Dallas group health insurance broker has never recommended or discussed in detail solutions that your company can use to help control group health insurance rates, and if your broker has recommended changing insurance carriers for the sake of a minor insurance rate difference, then you should discuss the above suggestions with your broker and get their input. If the suggestions are rejected out of hand, then perhaps it is time to put your interestes ahead of your broker's.
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If you would like a no-obligation consultation for your company's dalllas employee benefits plan, including Texas group health insurance quotes, contact Mike Chapman at GroupBenefitsAdvisors.com, 214-764-6315 or (888) 398-6246.
Filed under Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Employee Wellness, Group Benefits Advisors, Group Health Insurance Quote, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance, Texas large group health insurance plans by on Aug 7th, 2007. Comment.
As Dallas group health insurance rates have doubled in the last five years, employers have had to pass on more of the Texas health insurance premium expense increases to their employees. Many Dallas Fort Worth Texas employers have also been forced to offset the rising Texas group health insurance rates by raising the plan deductibles and coinsurance of the plans that they offer to employees.
Studies have shown that the majority of Americans have savings of less than three months of living expenses. The typical Dallas employee has credit card debt, car loans or leases, and mortgage, rent or lease obligations that consume most of their paycheck.
The result is that the typical Dallas area employee who contracts a serious illness or has a serious accident can be financially devastated even if their employer offers a Texas group health insurance plan as part of the employee benefits of the firm. A family of four could easily have a group health insurance plan that leaves the family responsible for out of pocket expenses of between five to fifteen thousand dollars.
For many employees, a major medical expense could be the cause of financial ruin, even if they have a group health insurance plan. In fact, medical expenses are the leading cause of bankruptcy in this country.
Medical gap plans in Texas have recently been introduced by forward thinking insurance companies as a way for employees to take the "ouch" out of the out of pocket risk of their health insurance plan. What medical gap plans do is pay the employee cash to help them pay for major medical insurance expenses.
Colonial Life and Accident, also known as Colonial Voluntary Insurance, introduced in July a very affordable medical gap plan in Texas. with a number of innovative features that take away much of the risk for Dallas area employees with high deductible group health plans. Like other Colonial products, their medical gap plan can be a voluntary benefit that the employer can make available to their employees to purchase and have the premium taken out of their pay check.
Texas employers may also want to purchase Colonial's medical gap plan for their employees. A quick check of Colonial's new medical gap plan rates have shown that a Dallas employer will actually spend less money if they combine Colonial's medical gap plan with a higher deductible group health plan than if they purchased a lower deductible group health plan from their group health insurance company.
This medical gap plan and high deductible health plan strategy can also help lower a company's future rate increases, since the group health insurance carrier bases rate increases partially on the number and size of group health insurance claims. A higher group health insurance plan means fewer claims will paid by the insurance company.
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For more information about medical gap plans in Texas and how Group Benefits Advisors can help your Dallas Fort Worth Texas business save money and offer your employees better employee benefits such as group health insurance, life insurance, dental vision and disability insurance, contact Mike Chapman at
Filed under Consumer Driven Health Plans, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Group Benefits Advisors, Group Health Insurance Quote, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance, Texas large group health insurance plans by on Aug 16th, 2007. Comment.
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."