Gary Insurance Group

Now, The Stick

- Washington Post, Beth Baker
November 13, 2007

Workers Pay for Poor Health Habits

Employers frustrated with mounting health-care costs for their workers have tried dangling a carrot to discourage bad habits such as smoking as well as behaviors that can lead to obesity, uncontrolled diabetes or high blood pressure. Now some employers are beginning to brandish a stick, docking pay, hiking insurance premiums or even banning employees from the workplace if they don't comply with off-site smoking bans.

So far Midwestern companies have taken the lead; only a few Washington area employers have followed. Starting in January, Tribune Co. will require its employees, including 1,200 at the Baltimore Sun, to pay $100 a month more in insurance premiums if they or any of their covered family members smoke.

But implementing such policies might be tough in the Washington area, said Jeff Munn, a health management staffer at Hewitt Associates, a human resources consulting practice in Falls Church, "because the job market is so tight." Plus, labor leaders say, the area's unionized employees, including many in the public sector, would have some protection from changes in benefits.

The Washington-Baltimore Newspaper Guild has filed a grievance over the Baltimore Sun smoking penalty. The case will likely go to arbitration, said Cet Parks, executive director of the Guild local.

But it's only a matter of time before other local programs penalize unhealthful behaviors, according to Lynn Argenbright, a health-care consultant with PSA Financial Center in Hunt Valley, Md. "More and more clients are considering it," she says.

A national survey of 450 major employers, released in April by Hewitt, found that two-thirds were moving toward more-aggressive wellness and disease management programs for employees. Almost half were offering employees incentives to participate in health initiatives, compared with just 38 percent a year ago. "The majority of the companies have been focusing on positive incentives, but the employers that have been starting mandatory programs are clearly getting a lot of attention," Munn said.

"You've got one-third of your life spent in the workplace," said attorney Garry Mathiason, whose San Francisco law firm, Littler Mendelson, recently released a report on employer-mandated wellness initiatives. "It's an incredible opportunity to take advantage of that time and look at the tie between wellness, absenteeism and medical costs. That's why the employer is so focused on this."

Rising health costs are providing impetus. Health insurance expenses are the fastest-growing cost of doing business, according to the nonprofit National Coalition on Health Care. Employers spend an additional $226 billion a year -- an average of $1,685 per employee -- on absenteeism, low productivity and other indirect costs of individual and family health problems, according to the nonprofit Partnership for Prevention.

Mathiason said his firm has been contacted by hundreds of employers that are adopting mandatory wellness measures, including "one very large employer" in the Washington area that Mathiason said he was not at liberty to name.

Smoking is perhaps the behavior targeted most often by employers. A handful of employers not only ban smoking on their property, they're also banning smokers from their workforce -- in states that permit such actions. (Thirty states, including Virginia, protect employees from being penalized for lawful activity, such as smoking, outside work. The District explicitly protects smokers from employment discrimination.)

In September, the Cleveland Clinic started mandatory nicotine testing for new hires. While it will not hire smokers, it does not fire current employees who smoke.

In 2005, the Okemos, Mich., office of Meritain Health, a provider of self-funded health plans, stopped employing smokers. Employees and their spouses undergo annual health assessments, including being tested for nicotine. Employees were given one year to quit smoking before the policy went into effect. Four who did not stop smoking lost their jobs. The company also announced it would dock $50 per paycheck from any employee whose spouse smoked and refused to take part in a smoking-cessation program. According to the company, all spouses affected have enrolled in such a program and no one has yet been docked.

This year, Scotts Miracle-Gro, the Ohio-based lawn and garden company that has six work sites in Maryland and Virginia, announced it would no longer employ smokers and would conduct random urine tests for nicotine. The announcement marked a change in tactics for Scotts, which has invested millions of dollars in an on-site fitness center at its headquarters and other employee wellness programs.

At least one worker, Scott Rodrigues of Buzzards Bay, Mass., has sued Scotts over the off-site smoking ban. Rodrigues began working for the company in 2006 but was let go after an initial urine test was positive for nicotine.

"There's almost no protection from intrusions of private corporations into your private life," said Harvey A. Schwartz, a Boston civil rights attorney who represents Rodrigues. "The argument we've made in this case is that what companies do to smokers could be done to people who are overweight or have high cholesterol, or ride motorcycles or sky-dive."

Scotts spokeswoman Su Lok would not comment on the suit or on how many employees have lost their jobs as a result of the no-smoking policy. "Our intent was to have a culture of wellness for our associates, but also to address the issue of rising medical costs," Lok said. She added that it was too early to assess the cost-effectiveness of the company's wellness program.

Other unhealthful behaviors also have come under scrutiny by employers.

Clarian Health, an Indianapolis-based hospital system, drew media attention this summer when it announced that by 2009, employees whose body-mass index (a fatness indicator measured by a person's weight relative to height) was too high could expect deductions from their paychecks. The company recently backpedaled and said that weight loss would be voluntary and that a worker's pay would not be influenced by his failure to drop pounds.

Scotts employees who are covered by the company's insurance must complete a health-risk assessment that looks at family history, lifestyle and health habits or forfeit $40 from their paychecks each month as a surcharge to their insurance premium. If the assessment shows an employee to be at high risk of medical problems, he also faces a monthly penalty of about $65 unless he works with a company-hired coach to improve his health.

"I would be the first to admit when Scotts introduced this, I thought, 'Are they being Big Brother, poking their noses into something they shouldn't?' " said Bonnie Hohlbein, vice president of finance, global technology and operations for Scotts. But Hohlbein submitted to the assessment, and what she learned led her to make changes.

"It was sort of shocking to see you're not in the normal [weight] range," she said. She now works out at the corporate fitness center and eats smaller portions. Today, two years later and 35 pounds lighter, she supports her employer's carrot-and-stick approach. "It depends on what motivates people, but having the money [penalty] and the nice facility right there helped get me started," she said.

A similar health-risk assessment, developed by Principal Financial Group of Des Moines, is being used by some companies in Iowa and Michigan. Workers at those firms must complete the exam, which records weight, blood sugar, blood pressure, cholesterol and tobacco use, to qualify for health insurance. Those with a poor score must work with a coach and improve -- or face higher deductibles and co-pays.

"We attempt to position this as more of an incentive-based program," said Jerry Ripperger, director of consumer health for Principal Financial. "But the people who elect not to participate in the wellness activities may have a different term to describe it."

Is it legal for your boss to look into your off-the-job behavior? Within limits, experts say. The Littler Mendelson study on employer-mandated wellness notes, "While it is questionable whether testing for nicotine (a lawful substance) will receive legal approval, employer-sponsored programs prohibiting smoking in the workplace and discouraging smoking in the workforce are already sanctioned."

Employers who want to use the stick need to navigate a legal minefield, including the federal Americans with Disabilities Act. Each jurisdiction also has its own set of labor laws: The District, for example, bans discrimination against employees for their physical appearance, which arguably could include obesity, according to Karla Grossenbacher, a D.C. labor lawyer with Seyfarth Shaw.

But experts generally prefer voluntary wellness initiatives to those that are coerced.

Karen Nussbam, executive director of Working America, the education and advocacy organization of the AFL-CIO aimed at people not affiliated with unions, said the group opposes mandatory wellness programs. "The money spent on those kinds of schemes would be far better spent on lobbying for universal health care or giving workers paid sick days; 50 percent of employees in the private sector don't have any paid sick days," she said.

Also unproven is whether the stick works any better than the carrot to change behavior.

"A lot of these approaches are making the assumption that all of these behaviors are completely in someone's control," said David Ballard, who heads up health and well-being in the workplace for the American Psychological Association. "But it can be exceedingly difficult to change those behaviors. A simple punishment isn't enough to make that kind of thing happen."

What may work better is a workplace environment that encourages wellness throughout the organization, said Ballard and many other wellness experts. Top management needs to model the desired change and offer employees such things as healthful food choices, attractive places to walk and exercise, and a culture that is supportive rather than stressful for employees.

"We've treated it only as a person's problem: blaming the victim because you're too fat, you don't exercise and you drink too much," said Dee Eddington, director of the University of Michigan's Health Management Research Center, who has studied workplace health costs for 30 years. "What our modeling shows is that we've got to start thinking holistically and have wellness as part of the overall mission -- health management as a serious business strategy." ¿

Want A Job? You May Have To Quit Smoking

- The Orlando Sentinel, Harry Wessel
January 02, 2008

As health-care costs rise, companies are getting tough 

Alex Silva remembers the day well. He was a pack-a-day smoker in the fall of 2002 when his boss told him the news: One year hence, Silva and every other CFI Westgate Resort employee in Florida would be prohibited from smoking -- not just on the job or on Westgate property, but anywhere, any time.

Silva, a manager in the time-share company's marketing department, loved his job and had a family to support. He immediately started working out more and smoking less.

Shortly before the Westgate smoking ban took effect on Sept. 1, 2003, Silva smoked his last ultra light.

Quitting cigarettes "was very hard," recalled Silva, 33, who doubts he would have made the effort if he hadn't been forced into it. "It was the company's decision. I knew I had no more options, and this will be good for me."

Westgate's hard-line policy on smoking is unusual only in its reach. While the Florida Clean Indoor Act already has all but banished smoking from the immediate workplace, more and more employers are extending the ban to anywhere on their property while also aggressively promoting smoking-cessation programs.

Local examples include Florida Hospital, Orlando Regional Healthcare and Health Central, which together employ roughly 38,000 employees. They jointly announced last month they would ban smoking anywhere on their properties beginning next summer. Lockheed Martin (NYSE:LMT) , with 7,500 workers in Central Florida, imposed a campus-wide ban at its facilities at the beginning of this year.

Bans aren't the only anti-smoking weapons available to employers. With irrefutable evidence that smokers as a group have higher health costs, more employers are considering the idea of charging higher health-insurance premiums to their workers who smoke.

It's legal, and at least two large employers in Central Florida have already taken that step.

Financial-services giant JPMorgan Chase (NYSE:JPM PRH) (NYSE:JPM PRX) (NYSE:JPM PRK) (NYSE:JPM PRJ) (NYSE:JPT) (NYSE:JPM) , which has more than 1,700 employees in Central Florida, this year imposed an additional health-insurance premium on workers who smoke -- reportedly $30 a pay period.

And starting in January, Tribune Co., owner of the Orlando Sentinel, will charge employees who use tobacco products an extra $100 a month for their health insurance.

Penalizing smokers with higher insurance premiums is still viewed by most employers as too much of a morale-buster, but that's going to change, predicted Becky Cherney, who speaks for many of the region's largest employers as president of the Florida Health Care Coalition.

"Employers are saying they can no longer afford to subsidize bad behavior," Cherney said. "We've known for a long time that smoking is hazardous to health, and people are still smoking. Education hasn't worked; (smoking-)cessation programs haven't worked. You have to make the individual pay for the bad habit."

Even a leading critic of hard-line employer smoking policies accepts that logic. Smokers do have higher health-care costs, and "it's not unfair to make you pay for the extra costs you've created," said Lewis Maltby, president of the National Workrights Institute in Princeton, N.J.

But it's still a dangerous road, Maltby said, noting that obesity is rapidly overtaking smoking as America's most costly health-care problem. "Are you going to make fat people pay more, or those of us who have dangerous hobbies like skiing or hang gliding? It goes on and on. Pretty soon, your employer knows everything about your private life in order to save on health-care costs."

Maltby's bigger concern is the total smoking ban, which he views as a fundamental civil- rights issue, since it extends beyond the workplace into an individual's home. He notes that 29 states and the District of Columbia have so-called lifestyle-rights laws that protect employees' rights to smoke when they're not at work.

But not Florida. "When I found out it was legal to discriminate against smokers (in 2002), those were my marching orders," said Westgate's chief executive, David Siegel, who gave his tobacco-using employees a year's notice before the total ban went into effect.

Siegel said he had tried everything else -- banning smoking from sales rooms, offering a host of smoking-cessation programs, lecturing just about any smoker he encountered on the wisdom of quitting. The most effective previous move, he said, was in 2000, when Westgate doubled employees' share of health-insurance premiums but gave non-smokers a 50 percent credit.

"It meant smokers would pay twice as much for their health insurance as non-smokers. Immediately, 40 people stopped smoking," he said, shaking his head at what he views as foolishness. "People stop for monetary reasons. Why isn't health enough of a reason?"

But not all of his employees stopped, even with the higher premiums. Westgate's total smoking ban, now more than 4 years old, "has been a win-win for everybody," Siegel said. Since 2003, health-insurance premiums for the company and its employees have been going up by 5 percent or less a year, far below the rate increases of most other employers, and this year premiums will rise by less than 3 percent.

Siegel, who says his brief flirtation with cigarettes ended in 1959, is so strongly opposed to the habit that he would like to see smoking banned completely. Short of that, he hopes his company's smoking ban -- effective in Florida and every other Westgate location where it's allowed by state law -- becomes a model for other employers.

"I'm shocked we're the only ones," he said. "Probably 90 percent of companies don't know you can do this."

One notable exception is Weyco Inc., a small Michigan health-benefits company that gained national attention when it imposed a total smoking ban on its employees in 2005.

But it's not just ignorance that keeps companies from emulating Westgate and Weyco. Employers are increasingly offering their workers smoking-cessation programs, but regulating a legal off-duty behavior is too far a stretch for most companies, said Kay Wolf, a labor-and-employment lawyer with Ford & Harrison in Orlando.

"Employers realize it's a morale problem for the 20 to 25 percent of people who smoke," she said. "Once you get past all the (positive) ways to get them to stop, employers look at (smoking bans) and say, 'We're not going there.' "

CSX Transportation (NYSE:CSX) , which has nearly 4,000 workers in Jacksonville and roughly 200 in Central Florida, is giving the positive approach as aggressive a push as it can.

In-house surveys show that more than a third of its employees use tobacco products and 27 percent smoke cigarettes. "The national average is 20 percent -- we're about 7 percent high," said Kenneth Glover, the company's director of health and wellness.

This year, the company moved its smoking areas further from employee walkways, but it has not considered harsher measures such as higher health-care premiums or outright bans, Glover said.

Instead, the company has been offering free health screenings to workers for the past two years and has identified thousands of smokers. Those who express an interest in quitting are given an array of options, typically starting with a visit to a doctor, and the company helps pay for smoking-cessation drugs and nicotine-replacement therapies.

"It takes the average smoker six to nine attempts to stop. We subsidize up to six quit attempts," said Glover, adding that each attempt may cost the company as much as $400.

It's a big investment, he acknowledges, "but we've looked at one cost model, and the potential saving for us is about $2.3 million a year."

Maltby, of the National Workrights Institute, said only one of four U.S. companies pays for smoking-cessation programs. Most "won't pay for classes; they won't give employees time to go to classes; they won't even pay for the (nicotine) patch. They haven't tried the voluntary approach," he said.

And while few companies have gone the punitive route, Maltby said, "If you talk to people in the corporate health business, they'll tell you it's coming."

Dale Maloney, a Maitland health-insurance broker, thinks so. "Fifty to 70 percent of health-care costs are predicated on poor behavior," he said. "All employers are looking at what they can do to assist their employees in behavioral changes to bring down the cost of health-care."

That may mean higher health premiums for smokers, or even the Westgate model, which worked for Tania Cachia.

Cachia, 23, joined Westgate a couple of years ago, after the total ban had been imposed. She had heard about an opening in the company's marketing department that sounded right for her. Then she heard about the smoking ban.

"I quit the day before my interview," Cachia recalled. "I was nervous; I was still in withdrawal. I told the recruiter, 'I'm sorry, but I just quit smoking,' and he said, 'OK, you're hired.' "

Quitting was tough, she said, "but it really helped working in an environment where nobody smokes."

New study ties lower health costs to employee health, not network procurement

by Bruce Shutan

Why do some employers pay more for health benefits than others?

The 2007 SHPS Health Practices Study revealed that employers with the lowest comparative health costs have strong clinical programs to improve employee health outcomes and manage clinical risk. By contrast, employers who rely on traditional health benefit procurement strategies have the highest comparative health costs.

SHPS researchers examined the experiences of 115 large and midsize companies with at least 1,000 benefit-eligible employees — a survey sample representing a total of 3.7 million members.

"The study reveals that the use or absence of a few core best practices in employee health management could explain cost differences of up to 50% between two otherwise comparable employers," observes Chris Ryan, chief strategy officer for SHPS, a leading provider of health advocacy and health benefits solutions. "In essence, every self-insured employer is managing its own health plan. The employers who succeed at managing health costs do a better job of managing employee health."

Re-evaluating procurement strategies

Ryan was also surprised to find that certain common benefit practices, including effective enrollment and eligibility and health communications, had a strong correlation to lower health costs.

While poor eligibility controls alone can explain major cost differences among firms, he believes that effective administrative practices also facilitate better health analytics and employee awareness. "It's hard to implement health programs that change employee behavior on a foundation of sloppy administrative practices." Ryan noted.

But some common health practices were also associated with higher costs. "We discovered a troubling pattern whereby employers use financial models and network procurement strategies to manage health costs instead of addressing the underlying clinical risks driving the demand for health care," says Rishabh Mehrotra, SHPS' president and CEO. "The implications of these findings are significant. It explains why so many employers churn between health plans and cut coverage, but still can't get relief from long-term health cost trends."

"Employers must re-evaluate their health and procurement strategies, while the industry — health and benefit vendors, brokers and consultants — should consider repositioning traditional health and benefit solutions to focus on employee health," he adds.

What works and what doesn't

Among the five key findings highlighted in the 28-page report:

1) Employers that focus on targeted, clinically based care management programs customized to the needs of their covered population reported an average of 18.2 % lower health care costs, or $1,400 per benefit-eligible employee in annual spending over an unmanaged trend. This includes a comprehensive mix of case management for catastrophic illness, disease management for chronic illness, biometric testing, employee assistance programs and the use on-site physicians.

2) Cash incentives that reward desirable health behaviors strongly correlated to lower health care costs by an average of 15.1%, while consumer-directed health plans, pay-for-performance networks and premium cost-sharing had an insignificant impact. In addition, the study showed that employers using deductibles and co-pay levels as their primary strategy to drive employee health behaviors actually faced 29% higher costs on average.

3) Excellence in benefits administration, including centralized recordkeeping and accurate eligibility management, along with targeted communication, lowered health care costs by 12.7% per benefit-eligible employee when integrated with the delivery of health programs.

4) Wellness promotion and education increased health care costs by 16.9% or $1,300 per benefit-eligible employee when Web-based health portals and telephonic coaching for lifestyle management were used as the primary strategy and substitute for a comprehensive care-management program.

5) Five practices were found to substantially increase health care costs: over-relying on networks to manage cost and quality, leveraging multiple plan design options, using deductibles and co-pays to drive health behavior, using health care benefits to become an "employer of choice" and experiencing undesirable turnover. The presence of just one such practice correlated to an average 21% increase, while all five practices doubled those expenses.

Health and productivity advantages

In his forward to the study, Mehrotra suggests that objective health analytics be used in conjunction with administrative, clinical and financial programs to create a culture that promotes behavioral change and allows covered populations to improve their health.

"The results of our study show that employers already navigating this path have reaped an enormous competitive advantage through improved health and productivity at lower cost," he writes. "In companies where employee health is valued, the employer and employee both benefit."

The 2007 SHPS Health Practices Study can be downloaded in its entirety online at www.shps.com/2007healthstudy.

About the author
Bruce Shutan, former managing editor of Employee Benefit News, is a freelance writer based in Los Angeles.

Focus on health plan design paying off for employers

By Chris Silva 

September 25, 2007

Health care costs are projected to rise more in 2008 than they did this year, but some employers are making progress with cost-containment strategies, according to two studies released yesterday by Hewitt Associates and Towers Perrin.

Although U.S. companies enjoyed a nine-year low in health care inflation in 2007, they should not expect that trend to continue in 2008, Hewitt reports. Average health care inflation was 5.3% this year, down from 7.9% in 2006. However, Hewitt projects an 8.7% average increase for employers in 2008. The average health care cost per person for companies will increase from $7,982 in 2007 to $8,676 in 2008.

Towers Perrin is reporting an even higher dollar amount, predicting the average corporate health expenditure in 2008 will be $9,312 per employee – an increase of 7% over 2007. Towers Perrin says companies with a proactive, successful approach in managing costs – or “high-performing companies” – will pay about $1,500 less per employee compared to the low performers in 2008.

High-performing companies show a deep commitment to managing their health benefits, provide rigorous and effective communications and form transparent benefit designs that allow employees to make sound medical decisions, Towers Perrin notes.

Many employers are mitigating costs and enabling employees to make smarter medical decisions by adopting best practices in benefits, creating more stringent requirements around vendor selection, pinpointing cost drivers, offering new health plan choices and changing prescription drug coverage, Hewitt finds.

Average health care costs for employees – including the employee premium contribution and out-of-pocket costs – are projected to reach $3,597 in 2008, up 10.1% from $3,266 in 2007, according to Hewitt. On average, employee premium contributions will reach $2,040 per year in 2008, an 8% increase that is roughly more than twice that of employees’ annual merit increases, Towers Perrin reports.

Employers need to ensure that their health plans are still attractive to workers, consultants say. “While some cost-shifting is appropriate, it’s critical that companies design their health care programs in a way that encourages employees to use them – and use them wisely,” says Jim Winkler, practice leader of Hewitt’s health management consulting business.

Mini-Med Health Plans to the Rescue!

Wednesday, September 19, 2007 8:30 AM
by Jay Schleifer

If traditional health insurance plan costs have skyrocketed out of sight but you still want to help your workers, mini-med plans may be the answer. Here’s what you need to know about them.

Perhaps you’ve seen the TV ad where the actor on-screen says, “I’m thinking of a number. Can you guess what it is?”

Well, if he wasn’t talking about credit rating reports, that number might well be “45 million.” That’s the number on the mind of America these days. It’s the number of Americans estimated to have no health insurance coverage of any kind.

There’s pretty strong agreement that the reason isn’t the unwillingness of employers to provide it. After all, employers started the idea of insuring their workers, back in the 1960s, when it was cheaper to serve up this shiny new benefit than another raise in pay.

To say that’s no longer the case is an understatement. Health plan costs are estimated to skyrocket another 14 percent this year, against a background of under 3 percent inflation for prices in general.

One slightly positive note has been that the dilemma has generated a number of solutions. One is a new class of limited-benefit healthcare cost assistance plans, known generically as “mini-meds,” (Note that there’s also a specific-type plan known as a mini-med.) If you can’t offer full medical coverage to your employees or parts of your workforce, such as low-paid workers, contractors, or part-timers, a mini-med plan may fit the bill.

Several types are available:

--Discount Plan. These plans are not insurance, as they neither offer full coverage nor reimburse expenses. They are simply negotiated agreements with healthcare providers, often including drug retailers, to offer a discounted price. Show the plan card and your prescription might cost $75 instead of $100, or a participating doctor may do an office exam for 35 percent off. The key here is careful shopping to get the best deal with providers your workers are most likely to use. It does no good to get discounts at a drugstore chain in California when you’re in Ohio.

--Mini-Med Plans. These are insurance plans to the extent that they pay the medical care providers directly or reimburse employees’ out-of-pocket expenses. Like traditional plans, they require copays, but coverage is severely limited at the high end. You can use any provider you like, but if you use Preferred Provider Organizations (PPOs) that many plans are linked to, a discount price will make the most of the coverage you’ve got.

--Gap Plans. If you are able to offer catastrophic coverage to handle high-end costs, a gap plan will help cover more mundane medical expenses. It’s different from a mini-med in that it doesn’t duplicate coverages, such as hospitalization, offered in the catastrophic plan. That makes it cheaper.

Big insurers offer them, but "smoke and mirrors" are a problem

Once limited to small insurers, mini-meds are now offered by some of the largest, including United and Aetna, sometimes through subsidiary companies. But it’s essential that employees understand the plans’ limitations and differences from traditional employer-provided medical. And it’s not unusual to have limited participation in your organization.

“This group of workers takes a lot of hand-holding,” says a report on mini-meds in Managed Care magazine. “One-on-one sessions are needed to carefully explain the limits of the plans. At best, only about 20 percent of the employees offered a mini-med plan take it.” Among those who don’t, says Managed Care, are young men and workers with access to better insurance through spouses or a second job.

Another reason the plans must be carefully explained: Some are deceptively advertised. “There are a lot of smoke–and-mirror plans,” says Merrill Matthews of the Council for Affordable Healthcare, “designed to prey upon the unsophisticated employee. It’s the Wild West out there.”

Health costs edge, but don’t jump, higher

September 11, 2007

Health insurance costs are expected to grow by nearly 9% on average in 2008, according to a new Mercer survey of 1,557 employers. However, the majority of companies expect to achieve a lower increase by changing health plans, adding lower-cost options or altering benefit plan designs. Taking into account these changes, the actual increase is expected to be just 6.7% for 2008.

“It’s only a slight uptick, but we’d rather see cost growth trending down,” says Blaine Bos, a senior Mercer consultant based in

Minneapolis

. “Organizations will find innovative ways to hold down cost growth through gains in health care quality and efficiency, or else pay for these outsize increases each year by shifting cost to employees or investing less in other opportunities.” 

Survey results suggest that employers will continue shifting costs to workers. At least 56% of firms say that they will require employees to pay a bigger share of health costs in 2008 through a higher premium contribution (36%) or higher deductibles, copays or out-of-pocket maximums (29%). 

“Employer thinking on what constitutes a ‛fair share’ for employees has definitely changed over the past few years,” Bos observes. “But in many cases we’re seeing employers providing more choice, rather than just shifting cost, so that employees have the opportunity to save money by selecting lower levels of coverage.” 

Some cost savings will be accomplished through growing enrollment in consumer-directed health plans, which tend to be less expensive than PPOs and HMOs. Last year, 16% of employers said they were “very likely” to implement a CDHP in 2008, Mercer reports. In addition, employers will continue to promote greater consumer engagement through incentives for healthy lifestyles and participation in disease management programs.

Gary Insurance Group Announces an Addition to the Services it Provides, a Pro-active Identity Theft Prevention Services

Gary Insurance Group Announces an Addition to the Services it Provides, a Pro-active Identity Theft Prevention Services

As the incident of Identity theft continues to increase and the problems that are associated with this issue become more difficult to deal with. The ability to proactivity protect your personal information is extremely beneficial. Now with LifeLock there is an affordable solution and Gary Insurance Group is making it available to its clientele.

Phoenix, Arizona (PRWEB) July 25, 2007 -- Gary Insurance Group, a local Benefits broker is pleased to announce the addition of a new service from LifeLock a leader in the identity theft prevention field. The company developed the nation's first and only proactive identity theft solution designed to help prevent crimes before they occur. Unlike any other company in the industry, LifeLock backs their service with a $1 million guarantee. LifeLock has been featured on CNBC, Wall Street Journal, CNN, Money Magazine, ABC News Now, MSNBC, and many others.

Fast facts:
• Per the FTC, Identity Theft is the fastest growing crime in America.
• Over 100 million identities have been stolen in the last 16 months either personally or through a computer breach.
• You are 25 times more likely to have your identity stolen than to have your car broken into.
• You are 40 times more likely to have your identity stolen than your home broken into.
• It takes consumers an average of 177 hours & 2 yrs to restore their identities after they have been stolen.

By making this service available to its client's employee's Gary Insurance Group can add another layer of protection for an employer's most valuable asset. LifeLock's services and position within the marketplace are both unique and compelling on many fronts. With the exception of LifeLock, virtually every other product within this space is either a credit monitoring service; an insurance product for victims; or a restoration service for victims. They are all reactionary and do nothing to prevent the crime; they are designed to help consumers after they have become victims. LifeLock is preventative and proactive so that the crime doesn't happen to begin with.

Gary Insurance Group is always looking for ways to enhance the benefits they provide to their clients and to foster a better workplace environment. Gary Insurance Group can provide a full range of services for employer's in Phoenix, AZ and regionally. From Group health, life and disability plans,401k, funding of buy/sell agreements, key man coverage, 125 plans HSA and HRA plans. Outsource Cobra services to simplify compliance. Outsource for HR services to create employee manuals and assurance of compliance with local and federal regulations. Personalized benefit statements to enhance employer/employee communication. For more information on how we can be of service to your organization please visit us at www.GaryInsuranceGroup.com

###

Press Contact: Jack Alspaugh
Company Name: Gary Insurance Group
Email: Email Us Here: http://www.prweb.com/emailmember.php?prid=540910
Phone: 480-443-3249
Website: www.GaryInsuranceGroup.com 

More Information: http://www.prweb.com//releases/2007/7/prweb540910.htm

States moving on health care without feds

The economic circumstances are ripe for states to expand access to health insurance in light of inaction by the federal government, experts said last week at a forum hosted by America’s Health Insurance Plans. 

Although national health care reform will require the combined strength of federal and state governments, states can no longer wait on an unpredictable and unreliable administration, experts noted. “The federal government is not going to do much, it looks like,” remarked Matt Salo, director of the health and human services committee at the National Governors Association. Positive conditions, such as increased state revenues and reigning in Medicaid costs, have created a “healthy breeding ground” for states to act, he adds.

Massachusetts is racing to ensure all state residents aged 18 and older are insured by July 1. Former Governor Mitt Romney (R) signed legislation last year mandating universal health coverage, which requires employers with more than 10 employees to provide insurance or face a $295 penalty.

“We have a robust outreach program, and we’re building on a highly regulated market,” remarks Jon Kingsdale, executive director of the Commonwealth of Massachusetts Health Connector Authority, the independent entity created to implement the law’s provisions.

Massachusetts recently announced the approval of a wide assortment of affordable health care products provided by seven insurers. For the typical 37-year-old in the most expensive eastern region, monthly premiums for plans that include prescription drug coverage range from $175 to $288 per month.

Kingsdale called the $295 fine on employers “a fig leaf.” The real pressure to provide health benefits will come from a desire to recruit and retain talented workers, especially in a state where fewer companies are likely to operate without covering their workers.

Employees happy with health benefits

Although most individuals resist change, research findings released today by the National Business Group on Health show employees are most resistant to changing anything about their health benefits.

Despite rising costs, a majority of U.S. workers say they are very satisfied with their employer-provided health care benefits, consider the health plan to be their most important benefit and have little interest in purchasing coverage on their own.

About 75% of employees value their health benefits as most important, and 67% of employees consider their health plan to be excellent or very good. Workers also place high value on having a health plan that is easy to manage, allows freedom to choose doctors and limits their cost when they visit a doctor or get a prescription.

So highly do employees covet health coverage, they are not willing to make trade-offs or changes to other aspects of total compensation if it would affect their health coverage. About six in ten workers are not too willing to reduce their health benefits in order to improve their retirement benefits. Further, most 83% would rather see their salary or retirement benefit reduced in order to preserve health benefits.

“This is the highest that employees have ever valued health benefits, and they should because it’s never been more costly,” says Helen Darling, NBGH president. For employers considering changes to their health plans next year, “communication has never been more important. Employers need to communicate effectively exactly what employees are gaining and giving up, and how much of health cost increases employers actually are absorbing,” she adds.

The Shape of Things to Come

Story by Mike Werling

Debacle,Conundrum, Crisis, Broken, Not Working

What do all these have in comon? They've been used to discribe the health care system in the United States( and thet are the ones fit to print). And the rhetoric is heating up. Calls for change ring out from every affected constituency, which is to sayeveryone. The doomsday prophecies have been issued.

According to more than one veteran politician, the cost to employers is threatening American companies' ability to compete globally. The shape of things to come is bound to be different than the shape of the current system.>>

The circumstances are well documented:

The United States spends more money overall and per capita on health care than any other country, even those with health care for all - pick your term, universal, nationalized, socialized. The Organization for Economic Cooperation and Develop­ment says the United States, as a propor­tion of GDP, spends 49 percent more on health care than the Swiss (the next highest spender) and 150 percent more than Great Britain.

U.S. health outcomes are no better than those in other industrialized countries. America ranks 22nd among industrialized nations in average life expectancy and 25th in infant mortality.

More than 45 million people spend all or part of each year without coverage. And even those with jobs are not immune to the health care cost emergencies, as 81 percent of the uninsured are employees or family members of employees, and 69 percent of Americans who have faced problems paying for care actually have health insurance.

Starbucks now spends more on health care than coffee. Auto manufacturers spend nearly as much on health care as they do on steel.

The list continues. What can the country do about it? Policymakers have been debating that question for the last 20 years. One thing remains certain: the flurry of proposals has increased in recent weeks- and months, with a changing of the guard in Washington and emerging con­tenders for the 2008 presidential nomina­tions. Both major parties offer several competing proposals.

"Everyone has their own opinion," says Jim Cosares, president of Brooklyn, N.Y.-

based JimCo Associates Inc. "It's a very tough situation. Unfortunately, you can't walk away with a solution without hurting someone."

IMPETUS FOR CHANGE

Mounting evidence pointing to a need for change is piled everywhere. State gover­nors cry poverty as state budgets tilt fur­ther out of balance because of health care spending. Advocacy groups demand better coverage for more people. Employers insist on changes to the system as they see their premiums jump by double digits year after year. And health care experts and opinion leaders rate positive changes to the system a; a top priority for the new Congress.

According to a Commonwealth Fund Survey of health care opinion leaders, 88 percent of respondents place covering the uninsured at the top of Congress' to-do l.sr, listing it as absolutely essential or very important.

A Kaiser Family Foundation survey, "Health Care in America 2006," found that most Americans consider providing health insurance for all a priority. When asked this question - "Which of these do you think is more important: providing health care coverage for all Americans, even if it means raising taxes, or holding down taxes, even if it means some Americans do not have health insurance coverage?" - 69 percent said providing health care for all Americans was more important.

Numbers like that are difficult, if not im­possible, to ignore. Especially for men and 'women whose livelihoods depend on the votes of the people affected the most. There are .uninsured and underinsured Democrats, Republicans, Independents, and - most valuable to politicians - swing voters.

"Starbucks now spends more on health care than coffee. Auto man­ufacturers spend nearly as much on health care as they do on steel. "

The Kaiser survey also found that Americans are dissatisfied with the cost and quality of health care. Fifty-eight percent are very dissatisfied with the cost and another 22 percent are somewhat dissatisfied. That's compared to only 18 percent who say they are somewhat or very satisfied. Fifty-four percent say they are somewhat or very dissatisfied with the quality of care. While quality could be a perception, the cost of care hits people where it counts most - in the checkbook.

When asked about the number of people without health insurance, only 4 percent responded that it isn't much of a problem, while 52 percent call it a critical problem, 36 percent say it is serious and 7 percent say it's a problem.

Elected officials can look at the Kaiser

The Schwarzenegger plan would mandate '"universal health care for very California resident.

               

Benefits BASICS

Single-PAYER SYSTEM

A centralized method of financ­ing health care delivery through public funds. With the govern· men actIng as tbe eruv payer for health care services.

poll to discover what Americans think of the problem. They can look at the Com­monwealth survey, which polled opinion leaders instead of the general populace, to see some possible solutions. When pre­sented with a list of 15 possible options for reforming the system as it stands, opinion leaders chose which strategies they con­sider extremely or very effective.

The top five methods for expanding coverage for the uninsured are:

•                     Mandating that all individuals buy coverage, combined with subsidies and a pooling mechanism, 57 percent.

•                     Providing states with federal matching funds to expand Medicaid and/or State Children's Health In­surance Program coverage for poor children and adults. 57 percent.

•                     Creating a single-payer insurance system, 54 percent.

•                     Covering everyone under Medicare, 53 percent.

•                     Letting near-elderly adults buy into Medicare, 46 percent.

One of the methods being pushed right now - promoting tax-free savings ac­counts - ranked poorly, garnering just 14 percent support. Some of the other sugges­tions, however, just might catch on.

PLANS, PLANS, PLANS

Brokers need to pay attention as the debate gains momentum in Washington, and they must fight to influence the final decision, especially if they want to keep their jobs. A reformation that cuts out brokers altogeth­er could have consequences those outside the broker community might not foresee.

"Anything that would reduce the role of the broker in the process would be a dis­service to the business community," says

.Jack Gary Alspaugh, principal of Gary Insurance Group in Scottsdale, Ariz.

Brokers who concur - and have solu­tions to avoid that - have the chance to find out what elected officials are proposing and exert some influence. Here is a look at some of the most prominent proposals, starting at the top.

President Bush's plan

In his State of the Union address in late January, President George W. Bush an­nounced his plan to expand coverage. The president's plan keeps the system private and uses tax benefits for individuals along with federal help for states.

On the individual front - which will affect brokers most - Bush's plan offers individuals who have health insurance a tax benefit by exempting the first S7,500 of income from payroll and income taxes. Families covered by health insurance get to exempt the first S15, 000 of income.

The biggest change would be for those who boast employer-funded coverage. They still get to exempt either $7,500 or $15,000, depending on their situation, but the employer-covered portion of their health insurance will be taxed as income.

Even with a tax on employer-sponsored

"Some of my clients say they can't wait for national health care. What they don't realize is that instead of writing a check to the Cignas and Aetnas of the world, they'll just write checks to the IRS. The money has to come from somewhere. "

The Bush plan argues for income tax credits for the self-insured, along with a push toward transparency.

           

portions of health care, the administration says this proposal will result in lower taxes for 80 percent of employer-provided poli­cies, making health insurance more afford­able for nearly 100 million people who get insurance on the job. That leaves 20 per­cent with a higher tax bill, but the plan offers them the option to adjust their com­pensation, raising wages and lowering premiums, to offset any tax change.

While other Bush proposals ­increasing cost and quality transparency, improving health information technology, promoting wellness and disease prevention - are in tune with what average Ameri­cans and health opinion leaders say is important, the thrust of his plan isn't highly regarded, at least as a means to get more people covered. Only 25 percent of those polled by Commonwealth found providing tax credits and other subsidies to low-wage workers an effective strategy.

"Medicare for All"

U.S. Sen. Ted Kennedy, D- Mass., serves as the new chairman of the Health, Education, Labor and Pensions Committee. Last November, shortly after the 2006 elections, Kennedy made clear that health care would be a top issue.

"The time is long overdue to address the crisis in health care," Kennedy said back then.

He calls his plan to address the issue, "Medicare for AIL"

Kennedy doesn't shy away from the term universal health care. He wants all Ameri­cans covered. His proposal calls for a phased-in plan that eventually offers every citizen access to Medicare and the same coverage enjoyed by members of Congress, the president and federal employees.

In addition, enrollees will have access to the doctor, hospital or other provider of their choice. There will be no out-of network charges because every provider will be in-network.

The public would be largely responsible for funding such a program, but the system itself would remain private. Doctors, hos­pitals and other providers would remain private entities, while private carriers and their intermediaries would continue ad­ministration. Plus, maintenance costs would fall by billions of dollars, as the administrative expense to run Medicare accounts for only 3 percent of Medicare spending, while private insurance company costs for marketing, administration and profit is 14 percent.

Financing for the program would come from employers and employees. Employers would bear a 7 percent payroll tax while workers would be taxed 1.7 percent, ac­cording to preliminary estimates. For busi­nesses, that is far less than the nearly 13 percent of payroll they spend now, according to Kennedy's proposal.

Kennedy's plan features some of the same components as the president's: trans­parency, better information technology and improved quality of care. It differs in that it calls for larger government involvement in a: Private system. What it doesn't call for, at least in its early form, are some things health care experts say will reduce costs. If Kennedy wants a plan that truly reduces

Health care costs, it should establish evi­dence-based guidelines for care, increase the use of disease and care management strategies for chronically ill Americans, and reduce inappropriate care. All of those are important, according to the Common­wealth Fund survey.

The Kennedy plan Would Initiate a gradual shift toward putting every citizen on Medicare.

              

Resources

RESOURCES FOR RESEARCH The intricacies of the various plans for health care system change are 'far too detailed to cover here. Funding mechanisms remain compli­cated. Subsidies vary widely. Private coverage's place in each plan is different. Many other details enter into the equation.

To find out more about some of the plans discussed here Visit these Web sites:

Commonwealth Fund: www.cmwt.org

Kaiser Family Foundation: www.ldf.org

For the full transcript President Bush's State of the Union address, visit www.whltehouse.gov. Issues addressed in the speech can be accessed individually.

To read more of U.S. Sen.

Kennedy's proposed "Medicare for All" plan, visit http://kennedy.senate.gov/newsroom.

Details of Gov.

Schwarzenegger's plan can be accessed at www.gov.ca.gov.

For a detailed look at what a single-payer universal system might look like, "visit the Physicians for a National Health Program at www, pnhp.org.

Many elected officials are looking for ways to improve Americans' access to health Insurance without unfairly burdening small-business owners. One proposed solu­tion is small-business health plans that allow owners to band together across state lines to find affordable plans for employees. Visit www.ahpsnow.com for more on this.

                                                                                                                                                                              The National Health Insurance act

Introduced in the U House of Repre­sentatives as H.R. 676, the US National Health Insurance Act Health Insurance Act s sounds much like Sen. Kennedy's plan, but calls for more sweeping changes in the health care system. The publicly financed, privately delivered system would use the existing Medicare program to cover all US. Citizens.

Sponsored by US. Reps. John Conyers, D-Mich., Dennis Kucinich, D-Ohio, Jim McDermott, D-Wash., H.R. 676 would:

•                     Convert the US. health care system to a nonprofit program.

•                     Cover every person living in or vis­iting the United States and US. territories with a national health insurance card and ID number.

•                     Cover all medically necessary serv­ices, including long term care, eye care, chiropractic, substance abuse treatment and much more.

•                     Provide patients their choice of providers.

•                     Carry no co-pays or deductibles.

•                     Prohibit private health insurers from selling coverage that duplicates the national program.

•                     Hire and retrain workers displaced by the transition to a nonprofit program.

•                     Set reimbursement rates annually for physicians and allow for global budgets for health care providers.

•                     Take 15 years to implement fully.

To pay for the program, the bill calls for a 3.3 percent payroll tax on all employers, a 5 percent health tax on the top 5 percent of income earners, a small tax on stock and bond transfers, closing corporate tax loop­holes, and repealing the Bush tax cut.

The plan itself is likely to meet resist-

from many corners of the political establishment it’s method of financing also will draw fire, as public support for uni­versal health care diminishes when new taxes are part of the plan.

State level

Many state residents won't have to wait for the federal government to take action on the health care front. Governors across the country are stepping up to the micro­phones and offering proposals of their own. Last year, Massachusetts took action, with Gov. Mitt Romney signing legislation that provides nearly universal health care coverage to residents.

The Massachusetts plan mandates that every state resident purchase insurance and emphasizes shared responsibility, as does Gov. Arnold Schwarzenegger's plan in California. Schwarzenegger's plan goes a step further by requiring insurers to pro­vide coverage - access to affordable plans cannot be denied residents. Employers that do not provide coverage options for em­ployees would be charged assessments that would go into a state fund.

Illinois Gov. Rod Blagojevich has a plan to provide universal coverage in his state, as well. Again, it mandates that individuals purchase coverage, either through an em­ployer or on their own, or face a penalty; and employers have to provide coverage or pay an assessment. In Connecticut, law­makers are pushing private insurers to offer basic, low-cost health insurance plans to uninsured adults. Several other states are nudging toward health care reform with proposed coverage for all children.

While many of the broad proposals

boast the same elements, the intricacies of how each plan would work differs by state. »

The Romney plan ­already in place mandates universal health care for every Massachusetts resident.

'REUTERSIBrian Snyder, Newscom

“Illinois Gov: Rod

Blagojevich has a plan to provide universal coverage

In his state, as well."

Some would 'tax employers, employees, doctors and hospitals. Others would use federal funds differently. Some would subsidize insurance providers for discounted plans.

Employers already have questions and concerns. Brokers who keep abreast of possible changes will be in the best posi­tion to provide employers with the infor­mation they need to make the best choices.

Cosares says he's heard from some of his clients that they would embrace a switch to universal coverage, but he insists they can't see the bigger picture.

"Some of my clients say they can't wait for national health care," he says. "What they don't realize is that instead of writing a check to the Cignas and Aetnas of the world, they'll just write checks to the IRS. The money has to come from somewhere."

Change is coming. Finding a solution that balances the needs of businesses, employees, the unemployed, the uninsured, carriers, state and local governments, and brokers will be difficult. Get to know the possibilities and take the available steps to bring about a system that benefits both brokers and the people they serve. iii

ON THE WEB:

To learn more about proposed changes to the U.S. health care system, President Bush's plan can be found in his Stale of the Union address at www.whilllhouse.gov, Sen. Kennedy's plan can be found at kennedy.senate.gov and details of H.R. 676 can be found at www.house.gov/conyers.