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Benefits sticker shock
Benefits & Compensation
Benefits sticker shock
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Last year Blue Cross hit us with a 46% increase. (one large claim). So we switched ot Aetna. First renewal comes in at 30% increase. (One claim just under 100K and one just under 50K)
We seem to b
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Forums » Topic Forums » Benefits & Compensation » Benefits sticker shock
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Benefits sticker shock
posted at 7/28/2011 10:12 AM EDT
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
Last year Blue Cross hit us with a 46% increase. (one large claim). So we switched ot Aetna. First renewal comes in at 30% increase. (One claim just under 100K and one just under 50K)
We seem to be trapped in the conundrum of many small (over 50 under 100) employers. Any adverse claims and they try to price you out. Any creative strategies others have used? |
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Benefits sticker shock
posted at 7/28/2011 10:28 AM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
Yes...you need to go self-insured on some level. Insurance carriers prey on groups with less than 100 employees since they know your options are limited.
It's hard to say whether your renewal is fair or not without reviewing the numbers, however, 30% sounds unjustified. Aetna is playing up the fact that you had 2 large claims, when statistically, it's not out of the ordinary for a group your size. Also keep in mind that you pay pooling insurance (roughly 7% of your total premium) so that catastrophic claims do not wreck your renewal. If you'd like me to at least review the numbers and give you an honest opinion, shoot me an email: matthew@heliosnm.com. |
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Benefits sticker shock
posted at 7/28/2011 12:13 PM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
Did they provide you with premium versus claims? What % credibility did they assign your company's experience (it couldn't be high due to company size and it being a run-in year)? Does the 90% loss ratio include the large claims? Or only the amounts up to the pooling level? What were Aetna's manual rates?
I'm an underwriter by trade, so it's a lot easier for me to actually look at the renewal workup and any applicable exhibits. |
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Benefits sticker shock
posted at 7/29/2011 9:38 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Some other things to consider (without having seen what you currently have):
(1) HDHP with a large employer contribution to an HSA -- $s going to the employee rather than to the insurance company; also usually has a side benefit of employees paying more attention to the true cost of health benefits and being nontaxable income (2) We did things over the years to increase copays, deductibles, etc but after a while, there is no other spots to increase that make sense (3) Review who is declining coverage and why -- if the young and healthy aren't in the plan, that hurts too because your premiums to claims ratio will be hurt. Do you have a group of employees who aren't eligible that might help out in this area without costing too much? You can have different levels of the employer portion paid. There are some people who do truly only work to gain access to health insurance. |
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Benefits sticker shock
posted at 8/1/2011 4:37 AM EDT
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
We looked into HDHP last year, our broker didn't make it sound very appealing. CEO thought the explanation on how it works was too complex to implement.
Having a 90% female workforce it's not surprising that some staff members are on spousal coverage, but we still have 70% participation. Have been rolling back coverage to mitigate rate increases. We're currently paying 85% of the employee coverage (base plan). |
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Benefits sticker shock
posted at 8/9/2011 11:18 AM EDT
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Posts: 3
First: 7/1/2008 Last: 8/9/2011 |
Ida: We too have fewer than 100 employees, the majority of whom (90%) are female, and our average age is 46. We too have seen those large increases. However, there are some things you can do. First, I have solid data that in my part of the world (the midwest) the "average" is that the employer pays 75% of the premium and the employees pay 25%. That is the standard we have gone to. Second, we have, in essence, forced spouses off the plan or, if employees choose to keep their spouse on the plan, there is a surcharge. Third, we instituted a wellness plan which includes biometric screening (that is, a blood pressure check, a blood draw which is used for a complete standard blood screen, and a health risk assessment). The screening results in a report -- direct to the employee -- regarding cholosterol, blood glucose levels, etc. There is a "score" at the end of the report. The employee's goal is to maintain that score or to improve it. The following year we do the biometric screening again -- and the company gets a report which says which employees met their goal and which didn't. Those who meet the goal get the reward of a reduced premium.
Employees who choose not to participate are not eligible for the reward. Fourth, I pump out, on a regular basis, information about various free health screenings in our area, special prescription programs, etc. (For example, one supermarket pharmacy in our area offers some diabetes medications free.) Fifth, we also pump out messages on a regular basis about using all the resources offered by our benefits providers. Finally, we also offered a High Deductible plan (HSA). I don't know if any of this is right for your company. I do know that I am getting the message across that all employees must take our health insurance costs seriously7. I hope I've given you something useful! Good luck. |
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Benefits sticker shock
posted at 8/10/2011 3:55 AM EDT
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
Thanks for the ideas tosca. We have elected to change brokers to get more leverage on rates. New broker has come up with some ideas which should help. Will probably offer at least one high deductable plan.
We are paying a larger share of the employee health ins. cost than most organizations in our industry, but our leadership has been reluctant to pass more on due to a wage rollback a couple of years ago. Our EAP provider provides a lot of health information. I will begin passing on more of it. There was a big discussion on one of the other boards a week or so ago regarding the effect of Wellness programs on insurance rates. The concensus there seem to be that they were a good thing to do but ultimately had little impact on insurance rates. Thanks again |
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Benefits sticker shock
posted at 8/11/2011 10:12 AM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
They gave you the whole "leverage" pitch eh? I hate to break it to you, but different brokers don't have different leverage with the insurance carriers regardless of what they claim. Each renewal is independent. Now, one broker can definitely be more competent than another. You'd be surprised how many brokers don't understand how to pick apart a renewal.
Going back to the top, unless you are self-insured on some level, you're not going to beat renewals over the long haul. If your broker pushes hard one year and does a heck of a job negotiating your renewal, it's going to catch up to you the following year since you're going to be that much further away from the manual rates. Lastly, high deductible plans have little to no impact on the TOTAL cost of a health plan. All it does is push more costs on to your employees. While you can definitely get creative with HRA's and HSA's, the plan as a whole needs to reward employees that make healthy lifestyle choices and penalize those that don't in order for you to have a "positive" impact on claims. |
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