Texas Employers Unite to Lower Costs

On Thursday a group of nine North Texas employers announced the creation of a three-year effort called the "Texas Health Strategy Project", aimed at creating high-value benefit packages for their employees. The employers involved are Archon Group, Brinker International, the cities of McKinney and Mesquite, Energy Future Holdings, the Federal Reserve Bank of Dallas, Haggar Clothing, Interstate Batteries and Triumph Aero-Structures.

By collecting more employee-level data and improving how they manage health benefits, the group hopes to keep workers healthy and out of doctors' offices. Additionally, by banding together, the employers hope to more efficiently comply with the health reform law's new requirements. National Business Coalition on Health President Andrew Webber is quoted in the article as quipping, "As health care costs continue to rise, more employers are recognizing the value of tailoring benefits to the health risks within their employee populations."

Click here to read the complete article from the Dallas News.

NYBGH Health Reform Event

Tomorrow, August 25th, NYBGH is hosting a breakfast club event titled, "Health Care Reform: Getting Through 2011 Open Enrollment and Framing Longer-Term Strategies".  The event is sponsored by Mercer and is open to HR professionals and fund administrators only (including non-NYBGH members) and is complimentary.

Two Mercer benefits professionals will be the featured speakers: Barry Schilmeister, FSA, MAAA and Ilse de Veer.

The event will be held from 8:00 - 10:00am at the University Club of New York, located at One West 54th Street (at Fifth Avenue) in Manhattan.

To register, please visit https://www.nybgh.org/calendar/index.html or email Jen Cole at jcole@nybgh.org.

Survey Indicates How Employers are Dealing with Health Reform

Complying with the new health reform law will force some employers to hike premiums and increase cost-sharing obligations, a new survey shows. On Wednesday, the National Business Group on Health (NBGH) released the results of its 2011 annual plan design survey, which indicate that employers will be making many plan design changes to comply with the requirements of the new law.

Of the 72 large employers - representing 3.7 million employees - that were surveyed, 70 percent said they will eliminate lifetime dollar caps on overall benefits and 63 percent expect to increase 2011 premium rates, up from 57 percent in 2010.

Other findings, as reported by The Hill, include:

• Twenty-five percent of large businesses plan to hike the co-pay or co-insurance costs for prescription drug benefits at retail pharmacies, while 21 percent have the same plan for mail-order pharmacy benefits.

• Twenty-six percent will remove annual caps on overall benefits.

• Thirty-seven percent plan to alter annual or lifetime limits on specific benefits, including dental, mental health and infertility benefits.

• Thirteen percent said they will eliminate pre-existing condition exclusions for youngsters.

The complete survey results can be accessed by clicking here.

A C-SPAN broadcast of the press briefing can be found by clicking here.

Flexibility More Important than Grandfathered Status

A recent Hewitt Associates survey has found that 90 percent of large employers expect to lose their plans' grandfathered status by 2014, with the majority doing so within the next two years. Under the "grandfather" provision of the new health reform law, health plans can maintain many of their current coverage provisions and are not required to comply with certain new mandates if they do not significantly reduce benefits, change insurance carriers, or increase cost-sharing obligations.

Of the 466 companies - representing 6.9 million employees - that were surveyed by Hewitt, 72 percent expect to lost grandfathered status because of health benefit plan design changes and/or changes in cost-sharing requirements. Additional reasons cited were consolidation of health plans, changes to insurance carriers, and union negotiations. The survey also found that most self-insured plans (51 percent) are expected to lose grandfather status in 2011 and another 21 percent will lose their status in 2012. This expectation is similar for fully-insured plans.

Click here for the complete press release.

New CDHP Report Available

The number of employers offering a consumer-directed health plan (CDHP) has increased in the period from 2005 to 2009, according to a new Employee Benefits Research Institute (EBRI) report.  While fewer small businesses are offering CDHPs as an option, increasing numbers of large employers are adding the cost-savings plan to their menu of health benefits.  Actual enrollment has increased too, with 19.1 million, or 11%, of individuals with private health insurance enrolled in a CDHP.  The study's author, Paul Fronstin, also found that enrollment in CDHPs results in 1.5% savings to the employer.

The complete set of findings are available in the August EBRI issue brief and can be found by clicking here.

Health Reform 2.0: Massachusetts Style

In the last day of the legislative session last Saturday, the Massachusetts state legislature passed a bill aimed at reigning in health insurance costs and enhancing small businesses' health insurance purchasing power.  Health insurers will now be required to spend at least 88 percent of the premiums they collect on services directly tied to medical care and quality improvement activities. The New York state legislature passed a similar bill in June requiring health insurers to spend 82% of premium dollars on medical care.  Federal regulators are expected to release in the coming weeks their definition of what activities can and cannot be counted towards the medical loss ratio (MLR) calculation.  Health plans, employer groups and other business advocates are advocating for federal regulators to include wellness and disease management programs, among other things, in the numerator.

The bill also includes a provision that will now allow Massachusetts small businesses to enhance their health insurance purchasing power by forming purchasing cooperatives. Businesses with fewer than 50 employees will be able to band together to exert greater purchasing clout and insurers will be required to offer plans that include low-cost providers in their networks.  To combat consumers signing up for health insurance only right when they actually need medical services, the bill also allows insurers to restrict plan enrollment to only two open enrollment periods in 2011 and one in years thereafter.

Click here to read more.