Broad Reach Benefits

According to A.M. Best, an insurance rating company, less than 50% of U.S. households have life insurance outside of what’s provided by their employer. This statistic begs the question – why have so many individuals abandoned their life insurance needs? There’s not a one-size-fits-all answer to such a question, but there are a couple of common contributing factors.

One factor is the alleged product misrepresentations cited in class-action lawsuits against several life insurance companies. Another factor is that much of the media focus today is centered around individuals living much longer than previous generations and the resulting need to adequately prepare for the retirement years. This focus has caused many Americans to redirect their attention toward saving for their retirement years and to start placing their money into tax-favored accounts. Consumer trending hasn’t gone unnoticed by life insurance companies. Despite the fact that most individuals don’t consider life insurance a good investment option, many insurers have been heavily marketing the investment side of life insurance policies instead of the death benefit aspect of it.

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The main objective of many HR professionals today is to temper costs by getting employees more involved in their medical care decisions, expenses and overall health. This may be at least partially attributed to the fact that many experts expect health care costs to increase in 2011.

Health Care Cost Projections for 2011

Cost trends are now available for 2011 from various research organizations. The following health insurance cost predictions are based on recent employer surveys.

Hewitt Associates reports that health care cost increases will be the highest levels in the last five years due to rising medical claim costs, the aging population and the changing health care reform landscape. The organization projects an 8.8 percent average premium increase for employers in 2011, up from 6.9 percent in 2010 and 6.0 in 2009. Also, the average health care premium for an employee at a large organization is expected to be $9,821 in 2011, up from $9,028 in 2010. Employees will be asked to contribute $2,209 (22.5 percent) of their total health care premium, which is up 12.4 percent from 2010, when employees contributed $1,966. Employee out-of-pocket costs are also projected to increase to $2,177 in 2011 from $1,934 in 2010.

Hewitt also reports that employers were able to mitigate costs in this difficult economy by cost shifting, negotiating costs with health plans and increasing their efforts to promote preventive care. Of respondents, 95 percent indicate that managing costs is a top business concern. They will reduce these costs by increasing employee cost sharing, conducting dependent eligibility audits, encouraging spouses to enroll in their own employer’s plans when available, consolidating vendors and taking measures to improve their employees’ health.

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Although hordes of consumers use the Internet as a tool for seeking out medical information, new studies show that only a scarce few are using physician ratings sites to choose their doctor. More than 80% of California based adults say they use the Internet for health-related information, such as medical symptoms and diagnoses, according to a Harris Interactive poll commissioned by the California HealthCare Foundation. However, only a handful of adults are visiting and using the information from physician ratings sites.

As a matter of fact, less than 25% of those surveyed say they have visited physician ratings sites, and only 2% of those actually made a physician change based on the information they found. Even fewer, less than 1%, say they made a hospital or health plan switch based on online ratings.

Will ratings sites ever take off?

Some experts say these statistics prove it will be a long while before physician ratings sites grow in popularity—and that they may never catch on at all. However, other industry professionals believe that few patients visit these sites because the market is still in its infancy. They believe that as the ratings information becomes more in-depth, more consumers will flock to the sites.

Additionally, some insurers are encouraging members to use their own ratings sites. In these types of networks, members pay less out of pocket if they visit a physician that meets the insurer’s “quality criteria.” However, many doctors claim this system is flawed.

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From the beginning, the United States has been a multi-cultural nation.  As immigrants streamed into the U.S. through the gates of Ellis Island, they brought their culture and languages along with them, earning America the nickname, The Melting Pot.  This demographic reality has continued to the present day, as people of different cultures, religions, races, and languages live in our multi-ethnic, multi-linguistic society.

Recent statistics reflect the linguistic diversity of this country. For example, according to a 2007 U.S. Census Bureau American Community Survey, 19.5% of the U.S. population over the age of 5 speaks a foreign language.  Of those speaking a language other than English, more than 60% speak Spanish/Creole; 19% Indo-European; 15% Asian Languages; and 1% other.  Nearly 68% of foreign language speakers in the U.S. are between the ages of 18 and 64, and many of these individuals are part of the American workforce.  Language diversity among employees can present a variety of challenges related to (among other things) the communication of employee benefits.

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In an effort to reduce benefit costs, many employers are of course implementing cost-containment strategies.  Below are some examples:

-    Rewards For Good Health

• Offer financial incentives to employees who have healthy habits and lifestyles or those who participate in wellness programs at work. Penalize workers with higher premiums for engaging in unhealthy activities, such as smoking.
• Offer discounted rates for those who participate in wellness programs and maintain good health.

-    Preventive Care Benefits

• Offer full coverage for employees who seek preventive medical care and preventative drugs without a deductible, including vaccinations, exams and screenings for diseases such as breast, colon and cervical cancer, blood pressure and cholesterol. Starting on the first plan year on or after Sept. 23, 2010, certain plans are required to cover preventive care services at no cost-sharing to the employee under PPACA.

-    On-site Health Centers

• Offer on-site health centers and staff health coaches to provide advice on personal health needs.

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A recent report from a leading pharmacy benefit manager suggests behavioral factors are a cause of hidden costs in prescription drugs. According to Express Scripts’ Drug Trend Report approximately $163 billion dollars is needlessly spent on health care because of the bad habits of the American consumer.

Express Scripts released its findings during a two-day conference hosted by the St. Louis pharmaceutical manager. Express Scripts, one of the largest pharmacy benefits management (PBM) companies in the United States, handles an estimated 750 million prescriptions a year through a network of over 60,000 retail pharmacies.

Their latest findings disclosed that Americans would save a tremendous amount of money if they took their drugs as prescribed, chose generic over brand name prescriptions and ordered their prescriptions by mail.

Dr. Steven Miller, the company’s chief medical officer stated that Americans spend almost twice as much as other countries on health care and if patients would follow the guidelines offered by Express Scripts, the savings would be in the neighborhood of $163 billion.

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There is a growing awareness and concern surrounding steadily rising long-term care costs and the fact that our population is living longer, thereby creating an increased demand for inventive solutions. Many employers have heard this demand loud and clear and are seeking methods that will provide their employees with the financial protection they need in the event that they should need long-term care.

One such solution is offering employees group long-term care insurance programs. Adding this new addition to an existing employee benefit plan is quickly gaining esteem from employers and employees alike, as these long-term care insurance products are reasonably priced, while still being offered through highly rated insurance companies.

Four Ways The Employer Benefits In Offering Group Long-Term Care Insurance

1. One of the most frequently complained about aspects of the employer to employee relationship is that the employer doesn’t care about their overall welfare and that of their dependents. Offering a long-term care insurance program can build and strengthen employee morale and loyalty, as it directly shows that the employer is considering the welfare of their employees and employee dependents.

2. Adding an additional benefit, such as a long-term care product, enhances company attractiveness. In doing so, the employer is more likely to obtain and retain highly skilled and highly qualified employees. Read the rest of this entry

The Patient Protection and Affordable Care Act (PPACA) enacted this year has many titles and subtitles that don’t actually have much to do with how health care coverage is provided or delivered by health plans. One such provision includes a requirement for employers to use employee W-2 forms to report the value of whatever health insurance is provided to an employee. This provision was originally set to become effective in 2011, but the IRS has since followed up and made the reporting optional for 2011. So all W-2 Forms issued in January 2013 must include the health insurance value information, and employers can optionally report the values on the 2011 W-2s.

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