Benicomp Advantage

[Guest Ira Hayes]

This firm's joint venture with UnitedHealthcare being rolled out nationwide (feature article in yesterday's USA Today) allows employers sponsoring $2,500 high single annual deductible plans to roll back same to $500 provided consumers pass four tests.

How does the fact that employer cost is insured through supplemental coverage obviate fact that it constitutes illegal discrimination based on health status?

[Jacmo]

Is the employer paying the premium, or does the employee pay all?

[Don Levit]

Would this be considered a "wellness program?"

If so, would the 20% maximum discount apply?

If it is employee-pay-all, then I would think the discrimination rules would not apply.

Don Levit

[LRDG]

Here's a link to the article:

http://www.usatoday.com/printedition/money...ealth11.art.htm

QUOTE

"Because of that, the amount workers pay in premiums has not increased in three years, he says. Part of the drop came from switching to the high deductible, says Martin, who also credits better health among employees for the rest.

Starting this month, that type of insurance policy is being offered by the nation's largest health insurer, UnitedHealthcare, in a move seen as part of a growing effort by employers to both shift additional medical costs to workers and provide incentives for workers to pay more attention to their own health.

Under a typical scenario highlighted by United in its marketing materials, an employer would offer workers a high-deductible health plan, such as one with an annual deductible of $2,500 for a single worker and $5,000 for a family.

Workers who want to offset the deductible can volunteer to be tested once a year at a workplace clinic run by a benefits administrator called BeniComp, of Fort Wayne, Ind. BeniComp provides the testing, which checks for nicotine use, blood pressure and cholesterol levels and height/weight ratio.

Workers who don't smoke or meet specific target levels for the other conditions can earn up to four $500 credits toward the annual deductible.

Those who don't meet the standards can sign up for weight loss and other health management classes through United."

AND

""A key protection in the Americans with Disabilities Act is that your employer can't discriminate against you based on health status," says Karen Pollitz at the Georgetown University Health Policy Institute. "They can't even ask about your health, with the only exception being if they ask through a voluntary program. You could argue that this program is not voluntary."

Doug Short, president and CEO Of BeniComp, likens the program to a "good driver" discount for auto insurance. Results of the individual employees' tests are not sent to the employer, he says.

Short says the supplemental plan, which his company has offered separately from United since 2004, is licensed in 37 states and meets federal standards under both the Americans with Disabilities Act and the Health Insurance Portability and Accountability Act because it is voluntary and separate from the health insurance policy. United is offering the policies to midsize employers in Rhode Island, Pennsylvania, Ohio and Colorado and may go nationwide next year.

"We're not grading or penalizing or rewarding anything that is a health factor," Short says. "If a person comes in with cancer, that's not in the grading scheme. We're only looking at things the employee personally controls."

UnitedHealthcare says the policies would cut costs for employers, initially by switching workers into high-deductible policies: Just changing from a policy with a $500 annual deductible to one with $2,500 could save up to 25% on the premium, says Tom Beauregard, who oversees the program for United."

END QUOTE

[Jacmo]

Now for the $64,000 question: What do the rates look like? Are they based on the level of deductible you qualify for?

If this is legal from all standpoints (and I doubt a large carrier would be careless enough to endorse something shady), then it has the potential to blow away HRAs and HSAs. Depending on the rates.

[Don Levit]

If this plan is voluntary and separate, this seems to be a group-type program that is not an ERISA plan.

In addition, this plan is available to the public, which is another indication it is not an ERISA plan.

I think, then, this is perfectly legitimate.

Yeah, what are the rates?

Don Levit

[LRDG]

Some comments in the article aren't clear. "and meets federal standards under both the Americans with Disabilities Act and the Health Insurance Portability and Accountability Act because it is voluntary and separate from the health insurance policy. "

Quoting BeniComp President and CEO here.

UHC is a big player in HRA and HSA markets.

[Jacmo]

"UHC is a big player in HRA and HSA markets"

Yeah, and they've just created/cornered a new niche.

I assume AFLAC and COLONIAL won't be far behind.