In the Trenches! Small Business & Employee Benefits

Obama Lauds Healthcare Industry Move to Reduce Costs

 NAHU - Newswire

Obama hails industry's move toward reducing healthcare costs.

The CBS Evening News (5/11, story 3, 2:35, Plante) reported that on Monday "healthcare providers, joined by the Service Employees Union, made broad promises to simplify healthcare administration, deliver healthcare more efficiently, reduce hospitalization, which they say will save $2 trillion over 10 years and save the average family $2,500 a year." However, "the pledges are vague, with no guarantee they'll be carried out. Health and Human Services Secretary Kathleen Sebelius expects specifics in a few weeks."

        ABC World News (5/11, story 3, 2:50, Gibson) reported, "America's healthcare bill is $2.5 trillion a year. That's $8,200 for every American. So you might have done a double take when you saw who was talking today at the White House about bringing down healthcare costs. Some of the same people who helped defeat healthcare reform 15 years ago." ABC added that Obama "believes this move today is an indication of all of the momentum there is that healthcare reform will happen this year."

        Bloomberg News (5/12, Chipman, Marcus) reports that Obama referred to a "watershed event," adding that the President "said any healthcare legislation that the Democratic-controlled Congress sends him must reduce healthcare costs, give Americans a choice of doctors and medical coverage, and provide affordable care for everyone. The cost-cutting pledges announced [Monday] will be compatible with what lawmakers craft on Capitol Hill, the Democratic president said." White House press secretary Robert Gibbs, "when asked whether the cuts might be made mandatory, said Obama made clear to the industry representatives [Monday] that he expects results."

        More skeptical were the reports in the New York Times (5/12, A1, Pear) and Washington Post (5/12, Connolly, Hilzenrath). On its front page, the Times reports that "if history is a guide, their commitments may not produce the promised savings. Their proposals are vague," and "none...are enforceable." Moreover, "none of the savings are guaranteed. Without such a guarantee, budget rules would normally prevent Congress from using the savings to pay for new initiatives to cover the uninsured. At this point, cost control is little more than a shared aspiration." The Post adds that Obama "appeared yesterday to put his faith in pledges from some of the interest groups that helped scuttle reform 15 years ago, but the industry's promises fell well short of the White House's expansive claims." While "Administration allies cheered the news that the once-recalcitrant health lobby is eager to join reform negotiations...many offered a cautionary note that warm words from the industry cannot be mistaken for enforceable policy changes."

        The Los Angeles Times (5/12, Levey) reports, "Welcoming leaders of the hospital, drug, and insurance industries to the White House on Monday, President Obama trumpeted their pledge to work together to contain the nation's skyrocketing healthcare tab. But as the president was celebrating the collaboration among industry groups responsible for derailing previous healthcare reform campaigns, it became apparent that the carefully tended effort was about to face its biggest test."

        In an analysis, the AP (5/12, Alonso-Zaldivar) also cautions, "A reality check for the nation's 50 million uninsured. Medical providers have a long track record of avoiding fiscal constraints, as witnessed by the government's efforts to tamp down Medicare costs." Moreover, "none of the groups that went to the White House can actually dictate prices to their members. Doctors in New York or hospitals in Los Angeles are free to charge what the market can bear." There is "one more catch: Even if every penny of the promised savings shows up, not all of it would be used to help cover uninsured Americans. Actual savings to the government are all that can be counted as Congress tries to pay for subsidies that will be needed to help make health insurance affordable for everyone."

        The Wall Street Journal (5/12, Adamy, subscription required), the Washington Times (5/12, Haberkorn), CQ Today (5/11, Armstrong, subscription required), the Financial Times (5/12, Ward, subscription required), the Christian Science Monitor (5/11, Scherer), AFP (5/12), The Hill (5/12, Young), The Politico (5/12, Gerstein), NPR (5/12, Tedford), Reuters (5/12), CNN (5/12), BusinessWeek (5/12, Arnst), and Roll Call (5/12, Koffler) also cover the story.

We Don't Need Another Department of Education!

Health Insurance Reform

By Victoria J. Braden

The United States does not need another Department of Education!  We do not need Washington to collect our tax dollars, decide where these dollars are to be spent and send them back to the States. 

We need healthcare reform, NOT a new government agency!

Before we re-work the entire U.S. Healthcare system, let’s look at what the issues really are – let’s not throw the preverbal baby out with the bathwater.

1. We have approximately 47 million American’s uninsured

Why?

1. They have a condition that makes them uninsurable for individual healthcare
2. The condition drives up their premiums therefore making healthcare too expensive
3. They work for a small business where the group is rated unfavorably when this person is included on the plan making it unaffordable to both the employer and employee
4. The person is eligible for public assistance but cannot work through the system to obtain the coverage
5. The individual is does not value healthcare and is not going to pay a dime toward coverage, even if their employer pays most of the cost

2. We have an industry that does not adhere to the rules of capitalism

Why?

1. Employees do not pay for their healthcare and are therefore unaware of the cost of services
2. Employers in small groups are not able to obtain loss ratios, large claim reports, demographic changes, etc. to understand the reasoning behind the premiums they are being charged or the increases they may have, they have no recourse to these increases
3. Employees believe healthcare in the form of health insurance is the responsibility of the employer and is therefore part of their compensation thus they use the system liberally
4. Employees in small groups have no incentive to participate in healthy lifestyles and in most cases they are not feed information regularly that would educate them on the physical risks of their current lifestyle decisions (there is no HR department and the employer/employees are trying to work in the company; the agent generally is not going to provide this.)
5. We talk about transparency for healthcare providers but do not talk about transparency for the actual insurance companies.  If we are going to understand what a consumer is going to pay for a service, we also have to know what the insurance company is paying and what their discounts are
6. Small employers do not know what their agent is being paid and therefore cannot determine if they are getting a value
7. Healthcare providers do not know and have no way of checking if a person has insurance.  When someone comes to the Emergency Room and has a high deductible plan, they may not tell the hospital they have insurance making the hospital file for indigent payment
8. Employees with high deductibles will try to negotiate with the healthcare providers to reduce their liability on the deductible.  What these employees are missing is the fact that the price has already been discounted and this is their portion.  Their savings came in the form of premium reduction.

Given this information, the solutions are easy – Take small steps, adjust the specific items addressed above

1. Tax incentives for individuals purchasing health insurance outside of an employer, self-employed or unemployed
2. Create an viable opportunity for uninsurable individuals to obtain quality coverage at a reasonable price on the open market
3. Provide small businesses who have an employee where the medical condition drives up the rates, a viable option – outlet
4. Double the tax savings to small businesses offering health insurance
   1. Any small business offering health insurance coverage to their employees is taking money directly from the bottom line.  It prevents a company from reinvesting this money in growth or for the employer to pay back the risk incurred in creating the business
5. Make public program eligibility known among the general public, employers and agents.  Create the ability to easily register individuals online, whether covered by a group or seeking an individual policy easier
6. Work with insurance companies to educate the population on the real cost of healthcare.  Create transparency on all fronts of the equation including the insurance companies and the agents
7. Require insurance companies to provide detailed renewal information to the employers (insurance is not hard, claims paid versus premium collected)
8. Educate individuals and create rewards relative to healthy lifestyles
9. Make healthcare accessible including moving government funded clinics into or close to hospitals so our ERs are not overrun with minor medical problems

By Victoria J Braden                                    All Rights Reserved

President/CEO

Braden Benefit Strategies, Inc.

Pandemic Planning - Protect Your Business!

Preparation for Pandemic Flu (or any other disaster!)

Is your business ready?

What if you had to close for an entire week?  Two weeks?

What would happen to your business?

Here is a link to the CDC’s Business Planning Checklist. 

Now is the time to think this over, make plans and be prepared. 

            Don’t put your business in jeopardy because you did not take a little time now.  We have made it easy for you.  Pull your management team together and in a short afternoon you can have the outline of your plan.

Two Days Left to Meet Stimulus

Stimulus Package COBRA

 

Employers - Two days left to meet COBRA Stimulus package Requirements

 

It is the Employers Job to contact all employees who might be eligible for the stimulus package COBRA subsidy by midnight Thursday April 30^th!

 

Subsidy benefits begin on March 1, 2009.  A person who has been terminated between 9/1/2008 and 3/1/2009 has to be on COBRA on 3/1/09 to qualify and take advantage of this subsidy.  Employees will quality for the subsidy if they are laid-off on or before 12/31/2009 and elect the COBRA coverage.

 

Any one eligible for COBRA benefits 9/1/2008 or after who declined the initial COBRA coverage must get a new COBRA letter from the employer explaining their rights under the stimulus package. COBRA subsidy benefits will begin on 3/1/2009 and will not be retroactive.  However, the COBRA notification timeline is in effect - thus the reason for the 4/30/2009 deadline for employer notification.

 

This information is available as well as the 941 form that must be completed for employers to retain the 65% subsidy at http://www.irs.gov/pub/irs-pdf/i941.pdf

 

 

Stimulus Package COBRA

Everyone who has employees and has or will have a ‘lay-off’ due to the economic conditions will be affected by this bill!

Laid-off workers will receive 65% of their COBRA or State Continuation[1] premium for up to 9 months if:

Ø      They are or were laid-off between 9/1/2008 and 12/31/2009

Ø      Their annual household income did not exceed $125,000 for individuals and $250,000 for families

Ø      They were not terminated for cause

Ø      They do not have another job with benefits

Subsidy benefits begin on March 1, 2009.  A person who has been terminated between 9/1/2008 and 3/1/2009 has to be on

                           

COBRA on 3/1/09 to qualify and take advantage of this subsidy.  Employees will quality for the subsidy if they are laid-off on or before 12/31/2009 and elect the COBRA coverage.

Any one eligible for COBRA benefits 9/1/2008 or after who declined the initial COBRA coverage can go back to their employer and request the benefits.  This must be done timely – we would recommend by March 31, 2009.  COBRA subsidy benefits will begin on 3/1/2009 and will not be retroactive.  (This means a person could have a pre-existing condition under HIPAA if you were not covered under a medical insurance policy for more than 90-days in Georgia, 63-days in the remainder of the country.)

COBRA payments made prior to 3/1/2009 will not be subsidized.

Employers or their plan administrator will bill the former employee for 35% of the COBRA premium.  When the former employee pays the 35%, within the current COBRA guidelines, to the employer, the employer will add the remaining 65%, paying 100% of the monthly premium to the insurance carrier.

The employer then subtracts the 65% they paid from their FICA expenses with documentation still to be determined.

If a person was terminated in August 2008 or before, they are not eligible for the subsidy.

If a person quit or was fired for cause (excessive absences, etc.) they are not eligible for the subsidy.

These same guidelines apply to State Continuation for employers with less than 20 employees who are exempt from COBRA.  However, the benefits will last only 3-months per the Georgia State Continuation law.

IT IS THE EMPLOYERS JOB TO CONTACT EMPLOYEES CONCERNING THIS CHANGE

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[1] State Continuation  employees would be entitled to 3-months subsidy

The Conflict between Employers and Employees - Health Care or Health Insurance

By Victoria J. Braden
President/CEO
Braden Benefit Strategies, Inc.

An employee or spouse looks at a health insurance policy and expects to pay very little out-of-pocket.  Said another way, when an employee goes to the doctor, dentist or has a hospital stay, they expect their insurance to cover the cost.  The reason for this expectation is the belief that has developed over the years that, by paying a monthly premium to a health insurance carrier, there should be no additional cost at the time of use.

This scenario has now become cost prohibitive.  Increasingly, employers are asking their employees to participate in the cost of their health insurance.  This cost can be either by paying part of the premium or by paying a co-pay at the time of service.  In the last few years, as health insurance premiums have continued to escalate, the employers are often asking employees to contribute towards both the premium and the co-pays.

As our nation continues to work their way through the funding of health care, we can see many disconnects.  Naturally, if there were a simple fix to the issue, it would have already been done. 

The biggest disconnect is the triangle the system is in.  We have a third party paying for services performed by one person and delivered to another.  Think about this, the patient expects and at times demands care from a doctor who is paid by an insurance company.  The patient has no measurement of the cost of the service and has no incentive to make a value decision as to whether this is a good or bad expenditure of funds. 

The second disconnect in my opinion is the cost of the insurance for the value gained.  As a prudent person making a financial decision, you would look at the cost of your medical expenses in an average year and compare this to the cost of the insurance premium.  In most years, you would find you are paying a great deal more for the insurance premium than you are benefiting from the medical care you require.

This begs the question, why would you continue to “over insure” yourself or your family? 

Convenience?  When you go to the doctor, the cost is minimal.  You do not have to be concerned with cost, just co-pays.  And once you have adjusted to the amount taken out of your paycheck for the health insurance premium, you no longer need to be concerned.

It’s easy?  You don’t have to think, question the services or their costs; you can let the third party insurance company have this responsibility.

You are not paying the majority of the premium so why should you be concerned?  You want quality healthcare at low co-pays, after all isn’t that one of the benefits of working here?

Stop – Stop – Stop!

Why would anyone intentionally overpay an insurance company?  That is my definition of insanity!

As an employer, how can you provide quality healthcare to your employees at a cost you can afford while protecting your employees from financial devastation?  After all, aren’t the statistics that 80% of most American households are 1 paycheck away from bankruptcy?

There are several different options to create the protection you desire while keeping as much money as possible in the company rather than paying a health insurance company too much to insure your employees. . .  . More to come.

Educated Employees Equals Lower Premiums!

By Victoria J. Braden
President/CEO
Braden Benefit Strategies, Inc.

Controlling health insurance premiums is a function of educating employees, having employees put some skin in the game and putting corporate emphasis on developing a culture of health and wellness.

Let’s start with education.  Employees need to know what drives health insurance premium increases.  Not just at renewal but all year long.  When they understand that over utilization, going to the doctor unnecessarily, requesting tests that the doctor does not deem necessary, drives rates, they may begin to reconsider.

Employees also need to understand that their health and that of their dependents drives health insurance premiums.  The company cannot be responsible for an employee’s health.  However, it is in the company’s best interest to make sure the employee has the proper healthcare when they need it and are held responsible to consistently taking good care of themselves.

Example – if an individual has diabetes yet is not following the diet or taking their meds as directed, should the company be responsible for the resulting medical claim or is this the responsibility of the employee?  Diabetics are at greater risk of heart attack, stroke and a myriad of other medical conditions, whether with or without proper medical care.

Talking about the company’s loss ratio, this means one employee could blow out your entire loss ratio, thus raising the rates for everyone.  It is illegal to punish this employee – that would be discrimination.  How do you get this employee and others like him or her to engage in the solution?  Answer this and you have the answer to long-term control of future health insurance premium increases.

Another example - the stay at home parent who worries a little too much and often runs their children to the pediatrician unnecessarily.  The family is paying a $20.00 co-pay for these visits but the insurance company is paying another $50.  The $50 the insurance company is paying then goes towards the company’s loss ratio, again driving up the cost.

Yet another example - your loss ratio is 50% or below, per our example in a previous article.  Why would you afford the insurance company a 40% profit?  Is the amount of coverage you are providing really necessary or prudent?  Are you buying too much insurance?

These are all considerations that cannot be determined in one conversation, 60 days before your renewal.  These are on-going discussions between the company and their trusted advisors and hopefully their insurance agent.  There are solutions. It’s just that every solution is specific to the particular company.  There is no one size fits all.

Wellness – Steps to Creating Your Wellness Program

By Victoria J. Braden
President/CEO
Braden Benefit Strategies, Inc.

Logic tells us, controlling health insurance premiums long-term is a function of the health of your employees and their dependents.

So much has been written about wellness programs, the question becomes – do they really work?  The answer is – that depends on your company culture, employee base and corporate approach.  Try these steps for a successful wellness program.

1. Determine what situations currently exist among your employee and dependent population.  How will you know this?  HIPAA – baloney – one person in every company has the right to know medical conditions as long as this person does not also have hiring and firing capabilities.  It would be this person’s responsibility to create programs designed in the best interest of the population to address current and future medical conditions.

2. Health Risk Assessment – this is a form the employee completes, usually on-line and directly feeds into the wellness department of the insurance company.  The insurance company then evaluates the information to determine current and future risks.  If a risk is identified, the employee will be contacted individually and options discussed.  No PHI (Personal Health Information) is disclosed to the employer without employee authorization.

Interesting statistic; 60% of next year’s large claims are not currently diagnosed!  What this means to the employer is that early detection will most likely curb future costs of both health care and time away from work.  Plus the employee will be best served by early detection.

Most major health insurance companies are now offering health risk assessments to all size companies as part of your premium.  The challenge is getting employees to participate and actually complete the assessment.  Many employers are using incentives, such as gift certificates, to increase employee involvement.

3. Ask your employees!  They know the problem, either intuitively or because you have been forthright in communicating to them.  They have watched their healthcare cost increase, either in the form of increased premiums or increased co-pays or both.  Educate them!  Teach them about loss ratios, over insuring some employees, the direct correlation between a person’s physical fitness and the cost of their healthcare.  Then ask them for solutions.  You will be amazed and pleased with what you learn.

4. Look at your personal behavior and that of your management team.  Are they consistent with the actions of healthy employees?  Height and weight are in check?  Exercise is part of the daily routine?  Stress is kept to a minimum or addressed when it is out of control?  Leading by example is critical to the success of your organization.

5. Look around your work place.  Is it a fat person’s hell?  Is it easier to grab a candy bar than an apple?  Is quality water readily available or is it diet soda?  Is there candy everywhere, the good kind with chocolate?  Are there regularly donuts and other gooey, tempting sweets?  When you have company lunches or even potluck events, are wellness and good eating habits encouraged or is it a weight watcher’s nightmare?  Remember, if a person had the self-discipline to control what they ate, they would not have the issues they do.  Tempting them is counter-productive to your wellness objective.

6. Once a plan is determined, get on your current health insurance website to determine the available services and products included with your premium.

7. You will find discounts to local area gyms, discount for Weight Watchers and other weight loss programs, menus, health risk assessments and other suggestions.  You do not have to hire a Wellness company – just look and listen to your employee base and then make it easy, profitable and fun for them to get and stay healthy.

By now, you are probably wondering why the health insurance company does not do this – why it is your company’s job to educate and offer programs to the employees.

Remember, health insurance companies are in the claims management business.  They manage a condition after it is diagnosed.  Your goal is to keep your employee population healthy, give them the tools to manage their health before developing a catastrophic diagnosis and avoid the large claims.  Your job starts before the health insurance company becomes involved!

Asking Employees to Put some "Skin-in-the-Game"

By Victoria J. Braden
President/CEO
Braden Benefit Strategies, Inc.

Right now your employees pay a small percentage of the monthly health insurance premium, maybe a larger premium for the dependents they ask the company to cover.  Then they have co-pays when they go to the doctor or fill a prescription.  In addition, there might be a deductible and co-insurance for the ‘big stuff’ services that take place outside the doctor’s office.

Over the past few years, as health insurance premiums for your company have continued to outpace inflation, you have increased the co-pay, increased the deductible and finally even asked employees to pay more of the premium.  What else can you do?  How else can you cost-share with your employees? 

How can your employees relate to the increased costs as being a function of how they use the services when they pay only a nominal percent of the actual cost?  In fact, your employees really do not know what it costs to go to the doctor, fill a prescription, have an MRI or be hospitalized.

The real key to protecting your employees in today’s healthcare environment is to consider the total out-of-pocket charges limit in the health insurance policy selected for your company.  It may not matter if there is only a $10 co-pay for doctor’s visits or $5.00 generic drugs if the maximum out-of-pocket for any one year is $10,000, an amount completely out of reach for your employee population.  Worse yet, the co-pays are not included in the maximum dollars out-of-pocket.

How do you get employees to put some skin in the game and still value their health insurance benefits?  Education is a good start, but educate them about what and how?  You should look to your insurance agent for guidance here.  They should be able to offer you suggestions of what they have done in other companies and what has and has not worked.  If they cannot offer this, fire them!  Remember they are paid a percentage of your insurance premium and as such every time your premium increases, they get a raise.

Here are some ideas that have worked in our practice.

In evaluating their numbers with one of our clients, we realized a very small percentage of the population was actually hitting the $500 annual deductible.  The cost of such a low deductible in today’s environment was quickly becoming prohibitive.  So we worked the mathematics – what would the company exposure be if they raised the deductible to $1,000 and paid the second $500 for any employee or their dependent that exceeded the original $500 deductible?  When we realized that in the worst-case scenario, the client would break-even, it became an easy decision and transition.  The company simply put in an HRA – Health Reimbursement Arrangement, spelling out the specifics of the reimbursement program.

Insurance companies have their biggest exposure in first dollar expenses.  This means when an employee only pays a co-pay (said another way, has very little skin in the game), the potential cost to the insurance company can be very high. 

The solution, eliminate first dollar benefits!

How do you do this when the norm is to provide co-pays, keep the employee’s cost low and keep use of the system simple?  Oh, it’s not that hard.  Consider this.  Without some type of control, will you someday need to drop a bomb on your employees in the form of a rate increase or other plan adjustments?  Yes, you are just hoping this will be later rather than sooner.

What about this – look at your numbers, your loss ratio, number of employees who hit their deductible last year, the year before?  Number of visits to the doctor and specialist by your employee base and the number of prescription co-pays, sorted by generic and brand name?  Now look at your premium costs, compare this to the premium cost of insurance without doctor visit co-pays or asking employees to pay a percentage of the actual prescription costs.  It is our experience that you will find substantial savings here. 

How do you sell this to your employee population – isn’t this a huge decrease in their benefit package?  The answer is that depends.  Remember our objective here is to help our employees engage in the actual cost of their healthcare.  What if you took some of the savings the company received from the change in benefits and provided each employee with an HRA account that pays for the first $500 of their annual care?  The company picks up the tab for the first $500 then the employee pays for the rest of the deductible.  Do you know how closely employees will watch what they are spending on medical care?  Yet, because of the incentive the company has provided, paying for the first $500, there is no reason for employees not to visit the doctor, obtain annual physicals and preventive wellness tests.

We recently had a company of 86 employees implement this scenario only to learn that 22 of their employees never went to the doctor that year!  In using the HRA instead of HSA (Health Savings Account) product, employees can also maintain an FSA (Flexible Spending Account) to pay for medical and dental costs not covered by the health insurance.

Even better, for the past three years, annual premium increases have been only 5.5% to 8% for companies that have been using this program.

Engaged employees mean a financially healthy company.

Putting Your Health Insurance Renewal in the Drawer?

By Victoria J. Braden
President/CEO
Braden Benefit Strategies, Inc.

As we once again look at a new year, we hope we do not have to think about our corporate health insurance until 2 months before renewal.  That’s a 10-month reprieve!  Yes!  Why would CEO, the CFO, Human Resource person or I want to deal with this unpleasant subject before I have to?  Let me breathe for 10 months – please.

If this is your attitude – plan to continue to have large, double-digit, annual increases in your health insurance premiums.  Health Insurance premiums are rising faster than the rate of inflation.

Health insurance is not a once-a-year event.  For most companies it is the second largest budget item right behind payroll.  Why would you only think about it annually?  Because you don’t know what else to do?  Possibly – let’s work through this.

What drives your health insurance premium?  Oh, you are under 100 employees so the insurance company does not have to share this information.  That’s crazy!  How can any businessperson manage their second biggest line item and not know what they are managing?

Or, you are under 1,000 employees and, while you know where your healthcare dollars are being spent, you have no idea if your percentages are good or bad or what can be done about it.  On top of that, your broker is suggesting shifting plan designs to put more and more onto the employees but not really suggesting anything that would curb future increases.

Oh – to be big enough and rich enough to afford a good consulting firm. 

How about knowing how your agent gets paid?  A percent of your premiums.  Is it really in your agent’s best interest to hold the cost of your health insurance down?  Yes, you have checked other brokers and they shop the different insurance companies then offer you the same plan options as your current agent.  So what are you supposed to do?

Ask some basic questions.  What is your loss ratio for the past year?  (How much premium did you pay the insurance company and how much in claims did the insurance company pay for your employees?)  Is that good or bad?  What percent was spent on prescriptions?  Is there any one category or medical condition that shows up among your employees and their dependents?  Armed with this information, you can begin to understand the needs of your employee population and what the financial impact will be.

We have recently been asked to help a company who first called us in 2004 because they were unhappy with their consistent 10% rate increases.  Sure, 10% per year means your premium cost will double in approximately 7 years.   If you have $8.00 to $10.00 an hour employees, how can you or they afford this?  We talked to them in 2004 and had not heard from them again until this year – December 15th, 2007.  Why do I remember the date? They have a 1/1/08 renewal and asked for help just 15 days out.  Sound familiar?

This year the company received a 45% increase which they were able to whittle down to 43%.  Same agent they had in 2004.  No idea why the huge increase.  When we asked about their loss ratio, we were told it was 110% this year as opposed to 40 – 50% in the previous years.  In actuality, the loss ratio was 155%.  We asked them who had been sick?  They had no idea.  When we asked what condition was driving the rates, they did not have an answer.  When we continued to push, asking if they had anyone who had been out of work for any number of days or who had a sick family member – no one came to mind.  In fact, they have no idea how their loss ratio is calculated and were concerned that the insurance company had made up the ratio to allow a huge rate increase.

It doesn’t work that way.  The government is too involved with insurance regulation to allow an insurance company to falsely report a loss ratio.

So here we are 1/1/08 and a 43% increase and nowhere to go.

This is not how you want to manage your group health insurance.  Stop putting the entire subject in the drawer for 10 months and begin to ask some hard questions.  Make your insurance agent earn the commission or at least hire a consultant to give you some help.

Without this type of intervention, you too will be in for a huge jump one of these renewals.  Even without the huge jump why would you idly sit by and allow your insurance premiums to double every 7 years?