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Greetings!
Currently we are working on third quarter health insurance renewals. The majority of these renewals have been less than 10%. In fact many have averaged from 2 to 6%. As usual the demographics of the group will impact renewal rates. But, for the most part, both Large Group and Small Group renewals have provided some relief to employers.
On a national level, the Supreme Court has finished listening to ObamaCare arguments and a decision will be out by the end of June. Regardless of what happens at the national level, it will not impact employers in Massachusetts.
This newsletter will just recap the types of plans that are available in today's marketplace. We also hear and see the ads extolling the virtues Limited and Tiered Networks. It is important to fully understand how these plans work and to communicate that to your employees, if you embark on that path.
Still a little stunned by the passing of Junior Seau. Click on picture for USC tribute. If you have a question, send an email to Bill or Vanessa today.
Bill Randell CLU,CHFC,
Vanessa Costa CLU,CHFC,
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Tiered Networks | |
A Tiered Network plans allows you to see any doctor or hospital you choose. However, the co-payments and/or deductibles will vary depending on how the Insurance Carrier has the doctor/hospital classified. An example of this product is the Blue Cross Options plan. All doctors and hospitals are divided into typically 3 categories. The most important item to note is what hospital you choose to have services. An example of the different copayment levels are as follows:
- High Co-payment (2,000)
- Mid Co-payment (500)
- Low Co-payment (150)
Again these vary, but the co-payments reflect the underlying amounts charged by the hospitals to the health insurance plan. This is all about the negotiated contracts between the hosital and the insurance carrier. So, if the hospital you prefer charges what the insurance company deems as "high" then you will pay a higher copayment than a hospital deemed as more "cost effective.
For example, in Worcester, UMASS is classified at the highest co-payment while MedCity (Saint Vincent's) is at the lowest co-payment. Using the above sample prices, a "hernia" operation at Umass will cost an additional $2,000 while the same procedure at St. Vincent's will be $150!
The burden has now shifted to the consumer to ask these questions in advance and fully understand the financial exposure with their choice. |
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Limited Networks | |
Limited Network plans do not provide flexibility or choice. The provider list of doctors and hospitals is clearly defined and is smaller than your conventional HMO plan. Examples of Limited network plans are Fallon's Direct Care Network, and Harvard Pilgrim's Focus Network.
Depending on the insurance carrier, and the size of your group, in some cases you can offer two plans to your employees. One may be the limited network, to save money, and then the traditional HMO to those employees who are not comfortable with the limited network.
Typically we see a premium reduction around 12% for those employers who opt for the Limited Network plans. Please keep in mind that Limited Network plans will note there may be "access" outside the plan ,if there is no provider that can handle a particular specialty treatment. Again, this is not something to plan on, access outside the network is not easy to secure.
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High Deductible with an HRA | |
Despite all the advertising with the Tiered and Limited Network plans by the carriers, employers are still treading very cautiously. Some of the feedback we get is that employers fear employees will not fully understand how those plans work and ultimately make the wrong choice. This choice may result in a hefty copayment/surcharge on top of an already high deductible then complaints and blame on the employer!
As a result, we see more employers sticking with the conventional network plans and making adjustments with deductibles and co-payments. A deductible plan where the employer agrees to fund a portion of the deductible (technical term is called Health Reimbursement Account/HRA), continues to be our most common plan design.
Deductible plan highlights include:
- annual preventive/wellness exames are covered with NO co-payment
- emergency room covered with a co-payment
- prescriptions covered with a co-payment
- all other services (MRI-CAT-PET scans, hospitalization and day surgeries) have an annual or plan year deductible, which is capped at two times the deductible for families
The employer has complete discretion to cover a portion of the deductible through an HRA (Heath Reimbursement Account). Right now the majority of our clients have either the 1,000 or 2,000 deductible. |
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Old Commercials | |
"Tastes Great-Less Filling"
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