mroberts

What I am basically saying is that a $500 deductible PPO plan and an HRA that gives individuals a $1000 per year which can roll over is going to pretty much be the same in the long run, especially for a group your size. If you would like to discuss further, shoot me an email with your number and I'll give you a call. It's hard presenting everything in a message board without spending hours typing.

I like the idea that if you've been healthy for several years it will come back and help you as well. The only thing about some of the major catastrophic claims is that even with several years of rolling your bank over, an employee is still going to hit that corridor deductible regardless. For example, a cancer claim could run $70,000 plus. So even if we were talking about a single employee given a $1000 for his bank each year, it would take him 70 years of savings to avoid that deductible. Obviously that's an extreme example, however, that concept is somewhat embedded in the managed care system we have today, especially for companies that have a PPO. I think a strong wellness program could be a lot less confusing and a lot more beneficial in the long run. Everyone knows that going to the gym is a good health initiative. Everyone knows smoking is bad. Therefore, it's not hard for employees to understand why you would give them a free gym membership or invite a nurse out to counsel any smokers. If companies can focus on making their employees healthier without focusing solely on preventive care, since that only goes so far, I think both companies and their employees will be more satisfied in the long run.

The main caveat is communicating the plan to your employees. It's not a very easy concept to grasp and I even see people in the consulting area having a tough time with the concept. And these are the people that deal with benefits! The bottom line is that 15% of people make up 78% of the medical claims. Most of these claims dollars go towards catastrophic illnesses or injuries such as AIDS, cancer, transplants...... There just isn't going to be any consumerism when it comes to these types of claims. If I have cancer, the last thing I'm going to be thinking about is which hospital is going to be the least expensive overall. Therefore, what you're really looking at these HRA plans to do is control the other 22% of claims that have a chance to be geared towards consumerism. For a group your size, even if all 22% of these claims can be reduced, which definitely won't happen, what kind of savings will you be achieving?

Carma - have you explored any of the caveats in the HRA plans you've looked at? At first I was on the HRA band wagon, however, upon really reviewing them, I'm not so high on them. How many employees is your company? Are you looking at a full takeover plan for the HRA or are you going to offer it side by side with a conventional managed care product. What are the advantages that you feel and HRA provides?

She's obviously electing COBRA for the 16 days that she was not qualified under her husband's plan. Since she has 60 days in which to make her decision as to whether or not she wanted COBRA, this is perfectly acceptable. Sounds like she's only going to be on your plan 1 month, so it shouldn't be too much of a burden for you going forward.

A lot of this is going to be determined in the agreement itself. Since we don't have a copy of it, we can only make assumptions. As far as whether or not EXACT coverage has to be offered, the answer is no, unless otherwise stated in the agreement. If companies change their medical benefits, then COBRA employees get offered the same benefits as the active employees. As far as credits for deductibles and limits, it would make sense that these should transfer over to the new carrier as well. A lot of times, the old carrier forwards this information on to the new carrier, which updates its systems with the info. The other way to handle it is to allow employees to submit past EOBs indicating how much of the deductible and limit they have met so far in the calendar year.

No, it's not discriminatory. More and more companies are setting up their health care contributions exactly the way you described.

Do employees have the choice of whether or not they want to participate in each plan independently? Or are employees automatically enrolled in the Rx plan upon electing medical? If the plans are bundled (must be taken together), then just add the medical premium rates and the Rx equivalency rates together and this is the amount that is charged to the employee (+2% for admin if you wish).

How can an employee be participating under 2 different medical plans? I can see if one is comprehensive coverage and one is prescription, but if they are both regular medical plans, I must be missing something.

I must be missing something. Why would that be a status change? I'm sure the eligibility definition wasn't meant to read all employees working only 30 hours per week are eligible. It's all employees working at least 30 hours per week. Now if the employee fell below 30 hours per week, that would necessitate a change since he is no longer eligible for the benefit.

I don't know all the intracacies of each, however, I do know that MSA's are going to only be for groups less than 50 lives and have to have a certain plan design with respect to the deductible and out-of-pocket maximum. HRA's, on the other hand, can have a lot more options for plan designs and can be rolled out to any employer regardless of size.

You could prorate it by class. If you know expenses are going to be $15,000 and the union premium is twice as much, then the expenses for the union group should be $10K. It's not going to be perfect, but remember, 5500 information doesn't have to be exact.

Yes, you're probably stuck. Insurance carriers provide 5500s based on policy number, not by sub codes or whatever other groupings are out there. Can you internally determine how much premium was paid by class?

The $300K is an average number. This doesn't mean your group isn't running at $500K per year in claims. Think how much one cancer claim or one premature baby costs. Additionally, for smaller groups, carriers aren't going to look for the same loss ratio when determining premium rates. The smaller the group, the lower the loss ratio a carrier looks for simply because one shock claim could take 5 years of additional premium to recover from. The larger the group, the more credible the experience.

These are kind of stupid examples to use since the poster indicated that his or her company had 100 employees. Obviously anytime you give examples of companies with thousands of employees on COBRA, the dollars are going to look high. In order to really say these numbers mean anything, we need to compare them to aggregate claims for the group. Based on my experience dealing with claims, per 100 employees, on average there's going to be about $300,000 in claims. Example #1 - 7,500,000/(2000)(300,000) = 1.25% (Annualized) Example #2 - 1,600,000/(500)(300,000) = 1% Example #3 - 5,700,000/(3000)(300,000) = 0.6% As you can see, the 1% that I gave in my previous example seems to be in line. For a company of 100 lives, of course, $1.6 million is going to seem like a lot of money. For a company of 50,000 employees, I won't go as far as to say that $1.6 million is pocket change, but take a look at their annual report and you tell me what $1.6 million means to them.

With a group your size, I wouldn't hold fast to the example I gave. My numbers were generalized. On average, COBRA participants utilize benefits 50% more than regular employees. If all 10 COBRA eligibles elect the coverage, there could be no claims experience. Additionally, while your active employees will have coverage for 12 months, COBRA participants may initially elect coverage and only have it for a month or two since they would most likely pick it up at their new job. The point I was trying to make was that all in all, it impacts your claims experience very little. Now, if you had 100 employees and had to lay off 50, that would be a different story. COBRA participants could damage your claims experience.

Probably very little. First of all, if 10 employees will be terminated, only 2.3 of them are going to be electing COBRA (based on a recent survey). The main reason 77% of ex-employees do not elect COBRA is due to cost. And a secondary reason is that healthy COBRA eligibles will take a chance that nothing will come up while they are looking for another job. Secondly, even if COBRA participants utilize benefits 50% more than regular employees, in your scenario, that would mean about 3 people out of 103 would be utilizing benefits at a higher level. Therefore, by using a simple example of averaging 100 100's and 3 150's, what do you come up with? 101. Therefore, ex-employees on COBRA do not really impact claims that adversely. Obviously this is a simple example since there's no saying that one of your COBRA electors isn't going to get cancer. But all in all, it's a true tale.

Yes, send a notice late and see if he/she wants coverage. Chances are, the employee is not going to elect coverage since only a handful of COBRA eligible actually make the election. If the employee decides to elect medical continuation, you then must decide on how you want to handle the premium payments. How long past 60 days are you? If it's anything significant, I would suggest allowing the employee to split the costs over an extended period of time or to actually eat some of costs yourself since the problem was on your end. The $110 fine per day could be levied for each day you were out of compliance, however, I wouldn't worry about it too much. Most courts aren't going to enforce the maximum unless you wontonly disregarded an employee's rights. Additionally, as long as you and the employee come to an agreeable resolution, you probably won't get fined at all since there really aren't any ERISA police out there. Where the fines start coming in is when an employee takes you to court.

Again, if a student is enrolled full-time in a Winter/Spring semester, he or she should be considered a full-time student through the summer whether or not he or she is attending classes during that time, whether or not he or she is going to be a full-time student in the fall, or whether or not the dependent has any intention of going back to school or not.

There are two reasons as to why employees sometimes have double coverage. First, some medical and dental plans that act as a secondary plan will actually pick up a portion (or all) of the out-of-pocket expense that employees incur after the primary plan has determined what it will be reimbursing. Second, with some medical and dental plans, if the employer pays 100% of the cost, employees have to be enrolled in the coverage. Therefore, while one plan may be distinctly better, employees are still forced to be enrolled in the other plan. Since less and less employers are paying 100% of the cost for either coverage, the number of people with double coverage should be reducing.

I would just terminate the student as of the date you were notified that he or she is not going back to college. If you term the dependent retroactively, it opens up a can of worms. It could have been the dependent child's true intentions to go back to school, however, something came up and they just couldn't. Most carriers request student verification twice - once in the fall and once before the spring semester. Therefore, the carrier would continue the student through the summer.

As with the others, I agree that you are way too small to be self-funded. I really don't recommend it to groups of any less than 300 lives, unless the demographics are extremely favorable. A couple options that might work are a high deductible plan and possibly going with a carrier like Great West. Now, Great West is not usually my #1 recommendation, however, if the network is good and you feel that the cash flow advantage would be worthwhile for you, you might want to give it a shot.

I'm not familiar with Aetna Navigator, however, when it comes to most insurance carrier on-line systems, you need to fill out some sort of paper registration. The insurance carrier will then set you up and give you a log-in ID and password. Just touch base with your insurance representative. I'm sure he can guide you.

The big question I have is why is this employee paying less than everyone else? You're probably going to have a problem unless this employee is in a class all by himself.

Copayments are not usually applied to the deductible or out-of-pocket maximums for medical plans.