Health care and nest eggs: insurance professionals react strongly to consumer-driven coverage options.Consumer-driven health care plans are a hot topic among employee benefit purchasers and providers, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a survey of Best's Review subscribers. They also weighed in on issues ranging from retirement plans to voluntary benefits. The question that garnered the most comments by far dealt with consumer-driven health care plans, offering a window into how Health Savings Accounts A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. (HSAs) and Health Reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. Arrangements (HRAs) are viewed. While 58% of benefit providers said their clients had asked about or begun to offer a consumer-driven health plan, 55% of purchasers said they do not offer one. "Everyone has been asking about them, but participation has been in the low teens," said Sam (1) (Security Accounts Manager) The part of Windows NT that manages the database of usernames, passwords and permissions. A SAM resides in each server as well as in each domain controller. See PDC and trust relationship. Fleet, president and chief executive officer of AmWINS Group Benefits, based in Warwick Warwick, town and district, England Warwick, town (1991 pop. 21,701) and district, county seat of Warwickshire, central England, on the Avon River. The town has some commerce and manufacturing. , R.I. He noted that consumer-driven health care plans are more commonly found in companies with more than 1,000 employees. About 35% of benefit purchasers surveyed said they offered a health savings account option to employees, while about 19% offered a health reimbursement arrangement. About 44% of purchasers said they give employees an option to choose between a consumer-driven health plan and a managed care plan. "There's a lot of interest in consumer-driven health plans right now," said Janice Rahm, senior vice president of product service and innovation at Buffalo, N.Y.-based Meritain Health, which provides services for self-funded health plans. "We are seeing predictions that by 2010, there'll be 10 million or even 20 million HSAs. That's less than two years away." Individual survey comments on consumer-driven health plans ranged from love letters to hate mail. "We have had a great experience," wrote one respondent In Equity practice, the party who answers a bill or other proceeding in equity. The party against whom an appeal or motion, an application for a court order, is instituted and who is required to answer in order to protect his or her interests. . "We have reinvested the premium savings into contributions to our employees' HSA HSA Health Savings Account (US) HSA Human Serum Albumin HSA Human Services Agency (Nevada) HSA Health Services Agency HSA Health and Safety Authority (Ireland) accounts, which has resulted in better acceptance by the employee group." "Lots of education is needed, but we have about 75% of our employees participating in it," wrote another benefits purchaser. On the other hand, one benefits provider noted consumer-driven health plans are "complex, difficult to understand." Another said, "They either hate it or love it." Fleet said he doesn't does·n't Contraction of does not. hate consumer-driven health plans, but said it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have "simply cost shifting. You're you're Contraction of you are. you're you are you're be not doing anything to manage the cost of care. If Joe Six-Pack can't afford a premium increase, how can he afford high-deductible health plans?" Rahm said those who don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. like consumer-driven health plans often don't understand them or have a "skewed skewed curve of a usually unimodal distribution with one tail drawn out more than the other and the median will lie above or below the mean. skewed Epidemiology adjective Referring to an asymmetrical distribution of a population or of data vision that it's all about cost shifting." "It isn't is·n't Contraction of is not. isn't is not isn't be about cost shifting, it's about creating savvy consumers of health care," she said. "The goal is to create savvy consumers who research the cost and quality of providers no different than if they were buying a new car." Comparison Shopping That's hard to do, Fleet said, because public information about health care providers is lacking. By comparison, it's relatively easy to research and then buy a TV. "You can be a good consumer of electronic goods, but there's just not enough information out there to be a good health care consumer. It's not in the best interest of providers to provide that info," Fleet said. Rahm disagreed, noting that consumers can use the Web to see if a surgeon surgeon /sur·geon/ (ser´jun) 1. a physician who specializes in surgery. 2. the senior medical officer of a military unit. sur·geon n. is board certified board certified, adj the status of a dental specialist such as an orthodontist who has become a board diplomate by successfully completing the certification program of the recognized certification board in that area of practice. , for instance. Also, consumer-driven health care can help patients seek out better care. "It helps encourage health care consumers to ask questions of their providers, to get a second opinion, or third opinion, to understand their options before making a decision," she said. New trends on the horizon include companies opting to add an HRA HRA Health Reimbursement Arrangement HRA Health Risk Assessment HRA Housing and Redevelopment Authority HRA Human Resources Administration HRA Health Reimbursement Account HRA Housing Revenue Account for their retirees, who can put the funds toward premiums, claims or prescription drugs prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, , Fleet said. Companies also are using HRAs as an incentive for employees to improve their health, such as by quitting smoking, losing weight or getting an annual physical, Rahm said. Other survey findings: * There was a disparity dis·par·i·ty n. pl. dis·par·i·ties 1. The condition or fact of being unequal, as in age, rank, or degree; difference: "narrow the economic disparities among regions and industries" between the amount of benefits that purchasers say they contribute to employee retirement plans and how much providers say their clients spend to fund their plans. Nearly 30% of purchasers said they fund 75 cents to a dollar-to-dollar match, while 32% of providers said their clients contribute 26 cents to 50 cents on the dollar. * Employers are virtually ignoring the Roth option for 401(k) plans and most haven't have·n't Contraction of have not. haven't have not haven't have changed their defined benefit plan Defined benefit plan A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan in the past year. * Flexible work scheduling is the most popular non-insurance benefit. Watch a video about this article on bestreview.com/videos Key Features of HSAs vs. HRAs HEALTH SAVINGS ACCOUNTS Can be funded by employees or employers. Contributions are limited by IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. rules. For 2008, contributions are capped at 52,900 for individuals and $5,800 for families. Money in accounts belongs to the employee, who can keep the funds if they leave the job. Account is funded up-front up-front or up·front Informal adj. 1. Straightforward; frank. 2. Paid or due in advance: up-front cash. adv. with money put in an interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid account. High-deductible health plans are required in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with HSAs. Current limits for deductibles are $1,100 for individuals and $2,200 for families. HEALTH REIMBURSEMENT ARRANGEMENTS Funded by employers only. No limit to contributions. Money in the account belongs to the employer, who keeps the money if the employee leaves the company. Account is notional no·tion·al adj. 1. Of, containing, or being a notion; mental or imaginary. 2. Speculative or theoretical. 3. ; the company doesn't have to set aside the money until it is spent. No specific health plans are required in conjunction with HRAs. Health and Retirement Benefit Trends Employers increasingly use benefits packages to gain a competitive edge in recruiting, but they also try to halt rising costs by giving employees more responsibility for choosing, managing and contributing to their benefits packages. Best's Review recently asked more than 1,000 employee benefits purchasers and providers about trends they are witnessing in the marketplace. Their answers may confirm what you are experiencing or give you some insight into trends.
Health Benefits
(bars = % of responses)
Employee Benefits Purchasers
How much does your company pay toward the employees'
total monthly managed-care health insurance bill?
None 3.6
1 % to 20% 6.0
21 % to 50% 15.9
51 % to 75% 25.5
75% to 100% 49.1
Does your company offer a consumer-driven health plan?
No 55.2
Health Savings Account (HSA) 35.2
Health Reimbursement 19.3
Arrangement (HRA)
If your company offers a consumer-driven health plan,
do employees have a choice between that and a
managed-care plan?
Yes, employees can select either one 44.2
Yes, but the managed-care plan 11.4
will likely be eliminated
No-just a consumer-driven health 16.2
plan is offered
No consumer-driven health plan, 14.2
but one is in the works
No plans to offer a consumer-driven 34.0
health plan
Employee Benefits Providers
On average, how much do clients pay toward their
employees' total monthly managed-care health
insurance bill?
None 4.7
1 % to 20% 8.5
21 % to 50% 17.8
51 % to 75% 38.5
75% to 100% 30.5
What consumer-driven health plans have clients asked
about or begun to offer?
None 31.8
Health Savings Account (HSA) 58.3
Health Reimbursement 36.5
Arrangement (HRA)
Are those clients offering a choice of a consumer-driven
health plan or a managed-care plan?
Yes, employees can select either one 35.3
Yes, but the managed-care plan 8.5
will likely be eliminated
No--just a consumer-driven health 24.4
plan is offered
No consumer-driven health plan, 10.0
but one is in the works
No plans to offer a consumer-driven 8.5
health plan
Don't know 13.4
Employee Benefits Purchasers
In the past year, has your company changed or begun to
consider changing the health plan provider?
Yes 38.3
No 51.9
Don't know 9.7
Employee Benefits Providers
Have you had clients change health plan providers in the
past year?
Yes-the majority left 17.7
a different provider
Yes-the majority went to 32.3
a different provider
Not one has changed 50.0
If the company or client changed the health plan, or has
inquired about changing the health plan, what reason was given?
Better cost-savings found with different Provider 83.2
managed-care provider Purchaser 89.1
Note: Table made from bar graph.
Retirement Benefits
Employee Benefits Purchasers
How much does your company contribute toward its
defined contribution plan?
No company match 23.4
One to 25 cents on the dollar 18.8
26 to 50 cents on the dollar 21.6
51 to 75 cents on the dollar 7.6
76 cents to a dollar-to-dollar match 28.7
Does your company offer employees a Roth
option -after-tax contributions and tax-free
withdrawals-with their 401 (k) or 403(b) plan?
Yes 25.4
No 74.6
What is your company's waiting period before contributions
are made to its defined contribution retirement plan?
No company match 15.3
0 to 3 months 34.7
3 to 6 months 12.5
6 to 9 months 7.6
9 months to a year 5.5
One year or longer 24.4
Has your company made any shifts to the defined
contribution plan in the past year?
No 82.2
Added target-date mutual 10.9
funds as an option
Added an auto-enrollment 12.2
provision to plan
Employee Benefits Providers
On average, how much are your clients contributing
toward their defined contribution plan?
No company match 15.0
One to 25 cents on the dollar 21.6
26 to 50 cents on the dollar 32.0
51 to 75 cents on the dollar 18.3
76 cents to a dollar-to-dollar match 13.1
Are a majority of your clients looking to provide a
Roth option--after-tax contributions and tax-free
withdrawals--with their 401(k) or 403(b) plan?
Yes 19.4
No 80.6
On average, what is the length of the waiting period
clients want before they begin contributing to their
defined contribution retirement plan?
No company match 7.7
0 to 3 months 18.9
3 to 6 months 22.4
6 to 9 months 7.7
9 months to a year 9.8
One year or longer 33.6
How have clients altered their defined contribution plan
in the past year, if any shifts were made?
No shifts 80.3
Added target-date mutual
funds as an option 10.9
Added an auto-enrollment
provision to plan 10.9
Note: Table made from bar graph.
Other Benefits
(bars = % of responses
Employee Benefits Purchasers
If it isn't already offered, which of the following insurance
products is your company considering making a voluntary
benefit?
(%) (%)
Considering Already Have
Dental 5.5 94.5
Vision 6.9 93.1
Long-Term Care 20.9 79.1
Voluntary Auto 16.5 83.5
Voluntary Homeowners 18.3 81.7
Supplemental Life 4.7 95.3
Supplemental Long-Term Disability 5.1 94.9
Critical Illness 16.5 83.5
Hospital Income 22.5 77.5
Mini-Medical 48.6 51.4
Pet 38.2 61.8
Employee Benefits Providers
Which of the following insurance products have your
clients made a voluntary benefit?
(%) (%)
Purchased Not Purchased
through us through us
Dental 85.0 15.0
Vision 74.6 25.4
Long-Term Care 48.4 51.6
Voluntary Auto 12.5 87.5
Voluntary Homeowners 13.8 86.2
Supplemental Life 83.7 16.3
Supplemental Long-Term Disability 67.0 33.0
Critical Illness 51.6 49.5
Hospital Income 45.1 54.9
Mini-Medical 29.7 70.3
Pet 6.3 93.8
What noninsurance benefits are part of your company's
benefits package?
On-site child care assistance 4.4
Off-site child care assistance 4.4
Elder care assistance 14.4
Adoption assistance 17.9
Workplace banking 17.0
Travel agency access 0.2
Cell phone discount 37.0
On-site fitness center 25.2
Health club discount 32.1
Flexible schedule 72.5
Which of the following have your clients made a
voluntary benefit?
Off-site child care assistance 8.2
Elder care assistance 6.8
Adoption assistance 8.2
Workplace banking 16.4
Travel agency access -8.2
Cell phone discounts 38.4
On-site fitness center 17.8
Health club discount 60.3
Flexible schedule 61.6
Subsidized food service 13.7
Note: Table made from bar graph.
Survey Respondents Demographics
Employee Benefits Purchasers
Which of the following best describes you role in
employee benefits?
Benefits Consultant 10%
Business Owner 41.5%
Corporate Risk Manager 14%
Human Resources Professionals 34.5%
Note: Table made from pie chart.
Employee Benefits Providers
Which of the following best describes you role in
employee benefits?
Health Plan Provider 7%
Insurance Agent 46%
Managing General Agent 4%
Benefits Broker 37%
Note: Table made from pie chart.
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