DEATH SPIRAL?

[Guest benefitsnerd]

Client has roughly 350 employees, most of which are covered under an HMO. In addition, employer is a non-profit (church) with a very generous employer contribution (i.e. after 5 years of service, church pays 100% for employee and dependents).

Problem: The average age of this group is 55, and a large percentage of the older employees are at the 100% employer contribution level. Group is hesitant to modify the employer contribution due to the negative impact politically and affect to moral. Incumbent's rates continue to sky-rocket with competing carriers declining to even bid on business. Possible incentive to seniors to go on MediCare with MediCare Supp plan is desired.

Feedback???????

[GBurns]

If a change in order to survive would cause "negative impact politically and affect to moral[e]" I would question the integrity and loyalty of these employees.

Would they prefer to see everone lose everything rather than make a contribution for the welfare of all?

I suggest that the first thing is to make all Medicare eligibles go on Medicare.Then you can change plan design. The incentive is "Go or lose everything".

If you do not want to change the employer contribution, see if changing the co-pays, limiting the coverage of some items and having a limited formulary helps.

An analysis of the claims experience should show whether better pre-authorization is needed, and whether disease management might help. A look at coverage availble through a spouse's employer's plan might show some duplicate coverage etc.

There are many things that could possible be done to reduce premiums, employer cost and reduce utilization without affecting quality.

[Guest benefitsnerd]

Is there any discriminatory issue with employer mandating the MediCare eligibles to move off of group plan?

[Larry M]

As usual, GBurns has provided good advice on how to determine what is causing the incumbent's rates to skyrocket. Presumably, the basic reason for the skyrocketing premium is a skyrocketing claim cost.

Therefore, in addition to wishing (or praying) for things to get better, the church should redesign its plan to where it can afford the costs.

Although it is paying 100% of the premium for those with longer service, its health plan is not required to pay 100% of the medical expenses.

If the church feels it can not amend its contribution practices, it should be able to amend its plan to require its employees to pay a larger share of the claims - higher deductibles, increased copays; lower limits on certain items; ... the list goes on.

No entity can continue to provide a benefit it can not afford.... not the church nor even the federal govt.

[GBurns]

I do not think that an employer is allowed to dictate that an employee must go on Medicare, but there is more than 1 way to skin a cat. In any case, if taking Medicare instead is in the best interests of the group, I would think that the group would not look kindly on those who would not help especially if the coverage is equivalent or better even if there was an employer subsidy needed. The subsidiy would cost less than full employer provided coverage.

The employer might even be eligible for a subsidy from the government as explained in this article:

http://www.nytimes.com/2005/01/31/politics...ner=rssuserland

In any case redesign of the plan is needed urgently.