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.
Filed under Consumer Driven Health Plans by on Feb 14th, 2010. Comment. 
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.
Filed under 401K, Group Benefits Advisors by on Mar 11th, 2008. Comment.
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.
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.
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:
- 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.
- 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.
- 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.
- 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
Filed under Contact Group Benefits Advisors, Dallas Fort Worth Group Health Insurance, Employee Benefits Solutions, Group Benefits Advisors, Group Health Insurance Rate Texas, Group Health Insurance Texas, Health Insurance: Texas Small Group, Texas Group Health Insurance by on Sep 12th, 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."
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.
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.
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.
Businesses in Dallas Fort Worth Texas walk a fine line between having a group health plan that will attract and retain valuable employees, and one that the employer and employees can afford. Businesses have fought the rise in group health insurance premiums by increasing deductibles and dropping payment for coverage of dependents.
In spite of these moves, most Texas businesses can no longer realistically increase deductibles and the amount that employees must contribute to pay for their group health insurance. This is is most often the case with small businesses in Dallas Fort Worth.
Yet, there is one very powerful tool that employers and employees can use that will reduce the long term cost of group health insurance. A corporate wellness plan added to a company's employee benefits program can save a company four dollars in lower group health insurance premiums and lower absenteeism for every dollar spent by the employer. And the up front costs for a wellness plan are minimal, and can usually be offset by changes in the group health insurance plan.
The Wellness Driven Health Plan designed by Group Benefits Advisors for Texas businesses is simple to implement, requires no additional personnel or specialized ttraining, and rewards employees and dependent spouses for maintaining or iinitiating healthy lifestyles. Healthy employees and dependents have fewer health care expenses, and have lower absenteeism. This translates directly into lower health insurance premiums and reduced lost wages to to illness the employer.
Unlike more complex and expensive employee wellness plans, Group Benefits Advisors' Wellness Driven Health Plan concentrates solely on weight loss, tobacco cessation, and exercise. Under this plan, employees and dependent spouses that abstain from tobacco, who maintain an acceptable weight and body mass index, and who exercise are rewarded monetarily and are recognized; those employees who don't are not.
Ultimately, employees who do maintain an acceptable weight and BMI, who exercise, and who refrain from tobacco will cost the employer less by having fewer health claims and and costly diseases such as diabetes, heart and circulatory conditions, stroke, and cancer.
Ultimately, those employees who do not maintain an acceptable weight and BMI, who exercise, and who refrain from tobacco will cost their employer more by having more health claims and and costly diseases such as diabetes, heart and circulatory conditions, stroke, and cancer.
Since those employees who do not maintain an acceptable weight and BMI, who exercise, and who refrain from tobacco also cost the their fellow employees more by having more health claims and and costly diseases such as diabetes, heart and circulatory conditions, stroke, and cancer. This is because a single major health claim from one employee or dependent for a preventable disease can amount to hundreds of thousands or millions of dollars in health insurance claims and lost wages.
A single preventable health insurance claim can result in major increases in health insurance premiums that can haunt the employer and healthy employees for years to come. It seems unfair that a single employee that does not feel accountable for maintaining a healthy lifestyle can have this impact on their fellwo employees' and their employer's health insurance premiums, but that is the reality.
Group Benefits Advisors' Wellness Driven Health Plan helps add back accountability and fairness to group health plans by rewarding (and thereby lowering the cost) to employees who hold themselves accountable for maintaining a healthy lifestyle, and to not rewarding (and therefore increasing the cost) to employees who do not maintain a healthy lifestyle.
For more information about Group Benefits Advisors' Wellness Driven Health Plan and for a no-obligation employee benefits consultation, employers are encouraged to contact Mike Chapman at Group Benefits Advisors, or (888) 398-6246.