Year-End Health Plan Renewals: Are You Ready?

It's hard to be in the company of any small business owner today and not have the discussion of health insurance crop up.  Much of that discussion seems to be centered around a high level view of the Patient Protection and Affordability Care Act, enacted into law earlier this year.  Many of those major provisions went into effect on September 23rd and missed the radar screen of many small business owners in the Lehigh Valley.  Many of those provisions are part of the consumer protections that the President proudly touts as its major accomplishments.  At the pinnacle of the problem, in my view, is that so many employers are just putting their head in the sand and taking the posture that we'll wait until 2014 when the full breadth of this legislation takes effect.  That will be too late!

Many insurance carriers estimate that the direct cost of this initial compliance with PPACA with be around 3 to 4 percent increase in premiums - that's aside from any natural increase that will occur from medical claims throughout the year. After many discussions with average business owners about what there level of knowledge is regarding this huge legislation, the response is surprisingly very little. Employers don't have the luxury of just waiting until 2014 to see how this will impact them.  They need to act now in light of all the penalties and new taxes that will result for non-compliance.  My strong recommendation is to make sure that you're with a health broker that you're confident in there ability to help you wade through the maze of complexity.  The role of a trusted health insurance advisor will be more important than ever.  Here are some practical tips to help you better prepare for your health insurance renewal:

1. Give yourself plenty of time before your actual effective date.  Don't let your broker dictate that pace.  Your insurance carrier may take a little longer this year to get out renewal rates because they've been busy complying with PPACA but it's still wise to start discussion about potential tweaks to your plan or identifying other carriers that might suite your needs better.
2. Your plans deductible is the only real way to make significant impact on your monthly premiums so start discussions about what would be palatable for your employees.
3. With the prospect of raising deductibles, discuss with your broker what suite of supplemental/voluntary benefits would best fill the gaps left by larger deductibles.
4. Start looking for a broker and an insurance carrier that has a robust health and wellness component to their plans.  The unhealthy lifestyles of your employees will continue to be the largest contributing factor to escalating health premiums so you need to take a proactive approach to stem that tide.
5. Discuss implementing a defined contribution plan versus a defined benefit plan.  So, for example, the single rate on your plan is $250 per month.  If you establish a policy going forward that you will hold that contribution steady at $250, your cost becomes a fixed instead of a variable.  Now, having said that, you do have to be careful of one possible pitfall.  Most group health plans require the employer to pay a minimum of 60% and up towards the single rate.  So, you have to monitor going forward that you don't violate that provision.
6. Depending on the size of your group, consider researching self-insured plans for both medical and dental.  Many of the new health reform compliance provisions don't apply to self-insured plans.

I trust that this information has been helpful.  For these tips and more, register to attend my free seminar by clicking http://tenbenefitstrategies.eventbrite.com  If you only see your broker once a year around renewal time and there's no strategic planning discussions about the future and direction of your companies employee benefits then maybe it's time to look into someone else.  I'd be glad to speak with you by contacting me at bknauss@employeemployersolutions.com visit my website at www.employeemployersolutions.com or call my office at 484-892-3314.  Thanks

Promoting Health & Wellness in Health Care Reform

I must admit, there's not a whole lot in the over 2,000 page piece of health reform legislation that I do like - except for one area.  It happens to be in the area of promoting health and wellness.  There is a provision in this bill that allows for grants to be doled out to small businesses who set-up and encourage health and wellness programs at the worksite.  The thing I like most about grants versus loans is they don't have to be paid back.

I firmly believe that, if we do nothing else while implementing this huge new entitlement program, we must get a handle on healthy lifestyle choices for our employees.  Just by way of example, obesity health care related costs in this country have reached a staggering 146 billion dollars a year.  If we make health insurance available and affordable for all Americans and don't do anything to address controllable health issues - we're just throwing good money after bad.  This bill allows for grants to start flowing in 2011 and continuing for 5 years.  The specifics haven't been revealed yet but there's another dimension to this provision that is well worth mentioning.  For employers who implement health and wellness programs and for the employees who participate in them - there is a percentage reduction in the amount of premium paid in the form of reward or incentive.

Never before, that I can remember, is there a process that says if you do this you receive a discount on your premiums.  We don't yet know what the benchmarks or criteria will be but I am very encouraged about the possibilities of creating healthier lifestyle choices for American workers.  We will all benefit from that - not just the participants in the program.  Here are some of the highlights of this initiative:

• Provide grants for up to five years to small employers that establish wellness programs. (Funds appropriated for five years beginning in fiscal year 2011)

• Provide technical assistance and other resources to evaluate employer-based wellness programs. Conduct a national worksite health policies and programs survey to assess employer-based health policies and programs. (Conduct study within two years following enactment)

• Permit employers to offer employees rewards—in the form of premium discounts, waivers of cost sharing requirements, or benefits that would otherwise not be provided—of up to 30% of the cost of coverage for participating in a wellness program and meeting certain health-related standards. Employers must offer an alternative standard for individuals for whom it is unreasonably difficult or inadvisable to meet the standard. The reward limit may be increased to 50% of the cost of coverage if deemed appropriate. (Effective January 1, 2014) Establish 10-state pilot programs by July 2014 to permit participating states to apply similar rewards for participating in wellness programs in the individual market and expand demonstrations in 2017 if effective. Require a report on the effectiveness and impact of wellness programs. (Report due three years following enactment)

If you would like to take advantage of implementing a health and wellness initiative at your company then email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com

10 Creative Employee Benefit Strategies: Part 1

I grew up in the Lehigh Valley, lived and worked here my whole life.  I can remember a time when Blue Cross Blue Shield was the only option for health insurance and it was great coverage.  The best part about the plan, back then, was the employer typically picked up the entire premium cost and the employee deductible was very small or none at all.  Well, fast forward, the coverage is still great, the deductibles are still fairly low but the cost is just unsustainable. So much so that companies are faced with the possibility of dropping coverage all together.  Well, it's not just the Blue's that has this challenge.  It's really any insurance provider that offers very low-deductible plans.  Companies just cannot afford these extremely benefit rich plans anymore.  Employees love these plans because they have minimum, if any, out-of-pocket exposure.

If you're one of these Lehigh Valley businesses desperately trying to hold on to this type of plan structure - you simply have to consider increasing the deductible on the plan.  There's no other component that will get you where you need to be.  You can entertain increasing co-pays and co-insurance to the existing plan but none of those options will make a significant financial impact.

Now that you've made the tough decision to raise the deductible - now what?  There are some very practical things that you can do in conjunction with raising your deductibles that will lessen the impact on employee morale, as well as, cultivate more employee engagement with your companies employer-sponsored health plans.  Over the next several months, of this 10 part series, we will look at some creative ways to accomplish these goals.  Look for part 2, The Value of a High Deductible Health Plan, next month.

In the meantime, email me questions or concerns at bknauss@employeemployersolutions.com, visit my website at www.employeemployersolutions.com or just call our office at 484-892-3314.

Mandating Losses

Imagine with me, if you will, someone requiring you and your business to take on more losses.  It seems inconceivable I know but just play along for a moment.  Let's take your business for example.  Suppose you happen to carry a 95 percent collection rate on your entire receivables.  That would be great - wouldn't it?  This would mean that you only have to write off 5 percent as bad or uncollected debt.  I'm just choosing round numbers and I have no idea if that's good or bad.   Now, suppose I came into your business, with the full weight and might of the U.S. federal government and I said that a 95 percent collection rate was way too good.  You need to bring on more bad debt.  You'd think I was crazy.  Right?  You'd bemoan that this isn't how a free market system is supposed to operate - not mention, it would have the effect of eroding your profit margins.  You'd also have to pass that increase cost on to your customers.  No business owner likes to do that.  You might also have to lay off some people as a result of this added burden.  Yet, this is exactly what the federal government is mandating to health insurance companies by having them carry a minimum loss ratio of 80 percent on individual policies and 85 percent on group policies.

An insurance companies minimum loss ratio (MLR) is nothing more than the amount of all premium collected subtracted by the amount of claims for all of their policies.  The amount that's left over goes to things like overhead, salaries, administrative expenses and commission paid to brokers like me.  So, in normal profit making ventures the object is simple; grow revenues of the business and keep expenses in line to maintain a reasonable profit.  I use the term "reasonable" loosely because I'm a free market guy and I don't want companies to be punished for managing their finances well.  However, that's exactly what's taking place in this new mandate that health insurance carriers take on a minimum loss ratio.  So, if I'm currently carrying an 80 percent loss ratio on group business, I'm now going to be forced to increase my losses by 5 percent across the board.  Who do you think will feel the weight of that new mandate?  That's right, you, in the form of higher premiums.  It's no different than our example earlier with the small business who now has to write off more bad debt.

Look, let's for a moment put aside our natural inclination to want to see the "big guys" get what's coming to them.  This will end up hurting you as much as it will hurt them.  After all, how much do you really think is left over for a health insurance carrier after all premium is collected and all the claims are paid?  Not as much as you would think.  Maybe a couple of points.  Let's also not forget that these so called "evil insurance carriers" employ tens of thousands of employees in this country.  They're huge employers.  How do you think an increase in the cost of doing business will impact their jobs? 

I welcome your viewpoint, especially if you think this is a good thing.  Email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com

Small Business Health Insurance Credit

The Internal Revenue Service has come out with guidelines for small commercial and nonprofit employers that want to take advantage of a new health insurance tax break.  PPACA and a companion act, the Health Care and Education Reconciliation Act, are part of what federal agencies have dubbed the Affordable Care Act(ACA).  This year, the new ACA small business tax break will offer small employers a tax credit equal to at least half the cost of single coverage, if the employees earn average wages of less than $50,000 per year.  The tax credit is not available to ordinary government employers, but it is available to small businesses, small tax-exempt employers, and government-affiliated tax-exempt employers that can be described as section 501(c) organizations.  Here are some of the highlights of this provision:

• Tax years 2010 to 2013, the maximum credit is 35% of premiums paid by eligible small business employers and 25% of premiums paid by eligible employers that are tax-exempt organizations.  
• Employers with 10 or fewer FTE employees that pay annual average wages of $25,000 or less can qualify for the maximum credit.  
• Employers with 10 to 25 FTE employees that pay annual wages of $50,000 or less can qualify for a smaller tax credit.

For the full review of this new IRS Section 45R and to see whether or not you qualify for this new tax credit CLICK HERE.  I highly recommend that you speak with your employee benefits broker/consultant for expert advise on what you're entitled to or if you're not currently working with a broker email me at bknauss@employeemployersolutions.com or visit me on the web at www.employeemployersolutions.com

Health Reform Timeline

The federal health care reform legislation, known as the Patient Protection and Affordable Care Act, signed by the President on March 23, 2010, and the Health Care and Education Reconciliation Act approved by Congress, signed by the President, will expand the availability of health care coverage to millions of Americans. While some of the measures will be implemented this year, many do not take effect until 2014 and some extend out to 2020. 

Below is a high-level overview of the time line.  It is important to note that many of these reforms and their effective dates are subject to the rules and regulations process both at the state and federal levels – which could alter the intended timing of implementation.

2010

New Programs:
 * Temporary retiree reinsurance program is established
* National risk pool is created, small business tax credit is established
* $250 rebate for Medicare members who reach the ”doughnut hole”

Insurance Reforms: 
* Prohibits lifetime benefit limits – based on dollar amounts
* Allows restricted annual limits on the dollar value of certain benefits
* Coverage rescission's/cancellations are prohibited (except for fraud or intentional misrepresentation)
* Cost-sharing obligations for preventive services are prohibited
* Dependent coverage up to age 26 is mandated
* Internal and external appeal processes must be established
* Pre-existing condition exclusions for dependent children (under 19 years of age) are prohibited
* New health plan disclosure and transparency requirements are created

2011

Insurance Reforms:
* Uniform coverage documents and standard definitions are developed
* Minimum medical loss ratios are mandated

Medicare Reforms:
* Medicare Advantage cost sharing limits effective
* Medicare beneficiaries who reach the doughnut hole will receive a 50% discount on brand name drugs
* A 10% Medicare bonus will be provided to primary care physicians and general surgeons practicing in under-served areas, such as inner cities and rural communities.
* Medicare Advantage plans would begin to have their payments frozen.

Other: 
* Employers are required to report the value of health care benefits on employees' W2 tax statements.
* Annual industry fee for pharmaceutical manufacturers of brand name drugs.
* Voluntary long term care insurance program would be made available to provide cash benefit for assisting disabled individuals to stay in their homes or cover nursing home costs. Benefits would start five years after people begin paying a fee for coverage.
* Funding for community health centers would be increased to provide care for many low income and uninsured people.

2012

* Hospitals, physicians, and payers would be encouraged to band together in "accountable care organizations."
* Hospitals with high rates of preventable re-admissions would face reduced Medicare payments.

2013

* Individuals making $200,000 a year or couples making $250,000 would have a higher Medicare payroll tax of 2.35% on earned income —up from the current 1.45%. A new tax of 3.8% on unearned income, such as dividends and interest, is also added.
* Medical expense contributions to flexible spending accounts (FSAs) limited to $2,500 a year—indexed for inflation. In addition, the thresholds for claiming itemized tax deduction for medical expenses rise from 7.5% to 10% of income.
* Medical device manufacturers would have a 2.9% sales tax on medical devices; devices such as eyeglasses, contact lenses, and hearing aids would be exempt.
* Eliminates deduction for expenses allocatable to Medicare Part D subsidy for employers who maintain prescription drug plans for their Medicare Part D eligible retirees. 

2014

Coverage Mandates and Subsidies:
* Individual and employer coverage responsibilities are effective. 
* Individual affordability tax credits are created and small business tax credits are expanded.

Health Insurance Exchange & Insurance Reforms:
* State individual and small group health insurance exchanges operational.
* Guaranteed issue, guaranteed renew-ability, modified community rating and minimum benefit standards (“essential benefits” plan) effective. 
* Lifetime and annual dollar limits are prohibited for essential benefits.
* Pre-existing condition exclusions are prohibited.

Taxes and  Fees: 
* Addition of new taxes on health insurers

Medicaid and Medicare Reform: 
* Medicaid expanded to cover low income individuals under age 65 up to 133% of the federal poverty level—about $28,300 for a family of four.
* Minimum medical loss ratio of 85% required for Medicare Advantage plans

2018

Taxes and Fees:
 * Tax (“Cadillac tax”) imposed on employer sponsored health insurance plans that offer policies with generous levels of coverage. 

2020

Medicare Reform: 
* Doughnut hole coverage gap in Medicare prescription benefit is fully phased out. Seniors continue to pay the standard 25% of their drug costs until they reach the threshold for Medicare catastrophic coverage.

Creating a Culture of Health and Wellness

I deal mainly with small-to-medium sized employer groups and every time I broach the subject of creating a company culture that promotes the health and wellness of their employees - I usually get the same response.  It goes something like this; "Are you kidding?  It's not good enough that I provide a good paying job with a great employee benefits program, now you want me to promote healthy lifestyles for my employees?  Forget it!"  Coincidentally, my response is always the same.  "As long as you [the employer] have a fiduciary responsibility for your companies health plan, meaning, it's your name on the plan and you're the one they ultimately look to for payment - then you have an incumbent responsibility to shield your company finance's against premium increases.  Think about it for a moment.  If the majority of your employees are living unhealthy lifestyles (ie. they're over-weight, they smoke, live sedentary lives) then you'll be bearing that burden in the form of higher health insurance premiums year after year.

It's not just higher premiums that become the negative outcome.  It's also the fact that unhealthy employees tend to be more unproductive than their healthy counterpart employees.  They have a higher absenteeism rate and they have a tendency to be less productive even when they're at work.  Ignoring a robust health and wellness component to complement your employer-sponsored health plan just doesn't make good business sense.

Here are some chilling facts:  

A recent analysis of data from the National Health and Nutrition Survey (NHANES), which is conducted regularly by the National Center for Health Statistics, warns that middle-aged individuals may be at greater health risk than anyone anticipated. In comparing the results of two large-scale studies of the U.S. population in 1988 to 1994 and in 2001 to 2006, the report shows that the number of people aged 40 to 74 adhering to healthy lifestyle habits has seriously declined.

• The percentage of surveyed adults with a body mass index greater than 30 has increased from 28 percent to 36 percent *

• Physical activity 12 times a month or more has decreased from 53 percent to 43 percent *

• Eating five or more fruits and vegetables a day has decreased from 42 percent to 26 percent *

• Moderate alcohol use has increased from 40 percent to 51 percent *

• Smoking rates have not changed (26.9 percent to 26.1 percent) *  

*The Vitality Group " CREATING A NEXT-GENERATION HEALTH AND WELLNESS PROGRAM: Why employers should take the lead, and how to do it

While it's true that Americans are living longer today (life expectancy for males is 75 years and for females it's 80 years), it's also true that more Americans suffer from chronic and debilitating diseases such as diabetes, hyper-tension, acid reflux, heart disease, mostly stemming from too many Americans being obese.  In fact, it's estimated that obesity alone accounts for 147 billion dollars a year in health care related costs.  Now, I'm not an economist by any means but I can figure out that if we created a culture of health and wellness in this country that seeks to stem the negative affects of obesity, we wouldn't need the government to get involved with health care at all.

Business owners, maybe it's time to make some radical changes in your workplace like, don't just ban smoking in the building but eliminate the 35 smoke breaks that take place throughout the day.  After all, if I came to you with a request to go into the break room to eat something every 30 minutes you would probably
suggest that maybe this jobs not for me - and you would have every right to suggest that!  Studies have shown that it's well worth the investment with ROI's sometimes being $3.27 reduction in medical costs for every dollar spent on health and wellness, as well as, reducing absenteeism costs by $2.73 for every dollar spent. Just some healthy food for thought.

If you would like to learn more about how to cultivate a culture of health and wellness at your company; email me bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com  Don't forget to subscribe to my blog and follow me on twitter at: http://mployebenefits.com

What Does Health Care Reform Mean To You?

Well, the ink is dry on our nations most sweeping piece of Health Care legislation to come out of Washington since Social Security and now it's time for the experts to figure out what it all means.  There's only one problem, the folks in Congress who voted for it aren't quite sure what's in the over 2,500 page mammoth bill but there are some significant changes as a result of passage that we can outline here.  With that in mind, we won't know the true extent to which this law with alter the way we do business for months to come.  The things that no one is in disagreement about in this Bill is that it's riddled with new mandates, taxes, penalties, compliance requirements,  price fixes, Medicare cuts, Medicaid expansion and administrative burdens that will forever change the face of business.

There are various time-lines and important benchmarks set forth in this legislation that can lend to a great deal of confusion.  So, with that said, let's look at some FAQ's:

• Will employers and individuals see premiums increase as a result of health care reform?

 In compliance with the guidelines and requirements of the new health care law required by September 23, 2010, insurance carriers will modify policyholder benefits accordingly. With these adjustments to policy benefits, it is probable that an increase in premium costs will occur. Beginning in 2014, premium prices cannot be based on a customer’s gender or health status. Until then, current premium pricing will apply.

• Are there annual or lifetime maximums on coverage under the new law?

Effective September 23, 2010, there are no lifetime maximum limits on coverage. In addition, there will be no annual limits on group plans. For individual plans, annual limits may be allowed based on what Health and Human Services deems reasonable. This information is not yet available.

• When are employees able to have their dependents covered until they are 26?

Effective September 23, 2010, the law states that customers will be able to have dependent coverage for their married AND unmarried children up to the age of 26. The requirement is applicable even if the child is not a tax dependent. The law does not specifically include spouses of married children. There is no requirement to cover children of covered dependent children (i.e., grandchildren).

• Under the new law, do pre‐existing conditions no longer matter?

Effective September 23, 2010, insurance companies cannot limit coverage for children on individual or group policies with pre‐existing medical conditions. For adults with individual policies, this provision goes into effect in 2014.

• Under health care reform, what happens to rescission?

Effective September 23, 2010, rescissions will occur only in cases of customer fraud or intentional misrepresentation.

• Is it true that anyone who applies for coverage will be issued coverage?

Under the Guarantee Issue provision, effective in 2014, anyone who applies for coverage must be issued coverage.

• How will this new law affect MSAs/HSAs?

At this point, the only change we are aware of is the tax penalty increase from 10 percent to 20 percent for “non‐qualified” expense withdrawals.

If you would like to find out more about how Health Care Reform effects you and your business email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com Thanks

Lehigh Valley Business Owners Speak Out On Health Care Reform

It seem like every day we're bombarded with some sort of poll.  On the topic of health care reform, there's been literally hundreds of polls over the past twelve months.  Many of those polls have varying questions to test the poll takers perception of health care reform on many different levels, as well as, gauge the overall validity.  However, one thing is certain about the results, they've been pretty consistent in showing that a majority of Americans aren't in favor of a government-run option for health care reform.  So, I decided to put together my own poll of Lehigh Valley owners and entrepreneurs to see where they fell in relation to these national polls.  Some of the results did, in fact, surprise me.  However, by-and-large the results were in line with what I suspected.

Now, before I get into the individual results, a little bit of a disclaimer.  I'm not proposing that this sampling is scientific or even broad-based in it's application to be representative of all Americans.  However, I do feel the results of local Lehigh Valley owners of small businesses are pertinent and valuable to share.   Here's how the numbers shape up:  614 individuals were sent the email to take this survey and out of those, 44 actually took it with about a 14% participation rate.  Not scientific by any means but helpful overall.

For example, when asked whether or not they favored reforming the existing health insurance industry or replacing it with a government run option similar to Medicare, an overwhelming majority (88.64%) chose - reform the existing insurance industry.  I found this very helpful because when you listen to those in Washington who are trying to sell this to the American people, they do it with demagoguery and attacks of evil health insurance companies.  However, this survey question illustrates that Lehigh Valley business owners trust the existing system enough to want to create reforms from within.  This is a more constructive way to go about reform; building upon the strengths and reforming what's not working.  Make no mistake, there's a lot of good in the current system.  When respondents were ask to further clarify this by answering the question of who they felt more confident in managing and overseeing the health insurance industry, government or the private insurance carriers, overwhelmingly they chose the private sector by a margin of 80.95%.

Finally, when respondents were asked to identify the single biggest factor affecting health care today, pre-existing conditions, cost containment, malpractice liability, access to health insurance or affordable health insurance, none (0) chose access as being an issue at all.  Doesn't this surprise you since all we've heard for over a year is that Americans are denied access to health insurance?  Now, affordable health insurance did top the list at 38.64% of respondents.  The important take away from this is that access and affordability don't necessarily go hand-in-hand. 

As you review the results of this survey, you come away with a pretty clear picture that Lehigh Valley small businesses would rather not scrap the health insurance industry altogether but rather change what's not working.  Share your feelings on health insurance reform by emailing me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com

Typical Washingtom Mistake: Asking The Wrong Question

I had the unusual opportunity, because of inclement weather, to watch much of the recent health care reform summit. After all, I do have a vested interest in the outcome. I listened intently from both sides about positions that, quite frankly, to the more than casual observer like me, are nothing new.  However, I was struck by the presupposition which has become the basis for the entire discussion on health care reform. That is, what part of the current legislation President Obama has put forward can they find common ground on? At first blush, it's sounds like a perfectly reasonable strategy. Then it struck me! We're asking the wrong question entirely. The question in Washington shouldn't be what do the Republicans like in the current proposal that they can support and find common ground on. Instead, the question should be. What, in our current health care system can we agree is good and, therefore, worthy of building upon? A natural follow-up question to that would be. What's broken that needs fixing? Democrats would argue that they are doing exactly that - fixing what's broken. However, their proposal is too far reaching, overly intrusive and would upset the delicate balance between proper government oversight and the free-market system.

Most, if not all Americans believe that our health care system is one of the best in the world - if not the best! So why should we take the approach that the whole system needs to be scraped in favor of a government-run alternative. There are many areas in the current health care system that are flawed and in need of change and restructuring so why not build on that framework for true effective reform? I'm always struck when an important foreign dignitary announces that they will be flying to the United States to have some sort of medical procedure done. That's not an accident by any means. They know that there best chance of medical success lies in their treatment in the United States. Indeed, our very Congressman and Senators take full advantage of all our amazing medical technological advancements. You don't see any one of them requesting to get treatment in another country. No, I'm afraid this is more about power and making history for the Democrat party rather then real, substantive change for all Americans.  That's really a shame because we do have the ability to make significant change.

If you're genuinely concerned about obtaining affordable health insurance for you or your family then email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com

President Obama: Acme Health Plans

In the recent health care summit that the President presided over, he made mention several times to "Acme Health Plans' when referring to High Deductible Health Plans (HDHP). This is just further evidence of Washington's elitist attitude toward health care options that don't conform to their view of the way the world should operate. Furthermore, his plan would all but do away with the incentives for Health Savings Accounts, therefore, rendering them a thing of the past. And for good reason. In order to pay for this massive cash cow, he has to take away the tax advantages associated with Health Savings Accounts. Instead, he should be revising the tax code to allow for individuals to deduct the amount of out-of-pocket medical expenses they incur throughout the year for co-pays and the like. Right now, the tax favor-ability only applies to individuals with Health Savings Accounts and employer-sponsored health plans.

I personally have many clients who have made the choice of going to a higher deductible plan because it made sense for them and their families.  Therefore, I find it offensive to make this characterization! To somehow suggest that individuals that choose to take a higher deductible to lower there monthly premium are actually buying "Acme Health Insurance" is just plain wrong and disingenuous on the part of the President and those who support their plan. There are many Americans that want the comfort of knowing that catastrophic medical claims would be taken care of under a high deductible health plan but don't mind paying for the smaller expenses such as office visits and prescription drugs out-of-pocket.  Especially, if the expenses are paid for out of a tax-free savings account.  To some individuals, prescription drugs may be a very big expense so a plan with a richer Rx component would be better for them.

There's a basic principal at work here that those in Congress are incapable understanding because they don't know health care and that is, the higher the deductible the lower the monthly premiums. Conversely, the lower the deductible the higher the premium. Those that choose higher deductible health plans would rather see the savings in monthly premium because that don't use the health care system that heavily. However, if they do have a catastrophic claims it's covered - many times at 100% with lifetime limits in upwards of 5 to 8 million dollars. All of these plans are provided by reputable, well-known companies like Aetna, United Health Care, Assurant Health, Health America, Capital Blue Cross and many more. It's just pain ignorance to imply that these plans are "Acme Health Plans". They are, in fact, a legitimate health care cost-reduction driver. The President and Democrats seem to be talking out of both sides of their mouths when they highlight how many Americans claim medical bankruptcy because of so-called catastrophic claims, while at the same time, look down upon a plan that allows for this very coverage for individuals to actually avoid bankruptcy.

If you'd like to understand more about how High Deductible Health Plans with Health Savings Accounts might benefit you or your company then email me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com 

Confidence In Our Goverment To Manage Health Care?

I listened very intently as the President made his passionate plea for Congress to act on and pass the current health care legislation.  He spoke of the plight of millions of people who are currently without health insurance.  He also spoke about those that have serious medical conditions that either prohibit them from getting coverage or are in jeopardy of loosing coverage.  There's no doubt that these stories tug at the heartstrings of every American.  The President also made a statement that really hit me in a very profound way.  He said that the American people are waiting for them [the federal government] to act.  Moreover, that our future, yours and mine, depends on whether or not they act.

With all do respect, Mr. President, I think it's terribly arrogant to think that you, and those in Washington, can somehow take better care of my family then I can.  After all, you don't even know me or anyone in my family.  Aside from the few Americans you've spoken to about their plight with the current health care system, you really don't know anything about the rest of us.  And what in the federal governments history of implementing programs and services can you point to that is an overwhelming success, and therefore, warrants pursuing your proposal?  Isn't that what you're really saying, that the federal government is the only mechanism to bring about effective reform?  It seems to me that the federal government has a long-standing history of exactly the opposite - complete failure regardless of the party in charge! 

Don't take my word for it, let's look at some simple facts.  Over the last 70 years, the federal government has tried it's hand at many different business endeavors such as, transportation (AMTRAK), package delivery (USPS), health care (Medicare), welfare, food distribution (Food Stamps), the auto industry, retirement planning, financial institutions and many more.  Let's examine just a few that many Americans would be very familiar with.

First, we have the nation-wide package delivery system called the United States Postal Service.  The USPS hasn't actually generated any sort of profit for years and the recent announcement of canceling Saturday deliveries came as no surprise.  The fact is, that long before the popularity of email, the USPS was in financial peril.  If it weren't for a constant stream of funding from Congress - they would have to close their doors completely.

Secondly, we have the federal governments attempt at providing transportation in - Amtrak.  Again, if it weren't for the constant stream of operating capital supplied by Congress, this form of transportation would be gone.  I happen to believe that a high-speed rail system is vital to the growth of our nation and our economy but I don't have faith in the governments ability to make it happen.  If you look at how we rank around the world with respect to well operated high-speed rail systems we are at the bottom of the list.

Lastly, let's look at the federal governments fifty year plus experiment with a health care delivery system called Medicare.  Ladies and gentlemen, I don't care whether you're a Democrat, Republican or Independent.  We can all look to the current system of health care for seniors and consider it a failure on so many levels.  The President himself points out the need to provide massive funding to keep Medicare solvent for only another 10 years.  Most seniors are grateful to have the kind of coverage they have with Medicare but most cite the unending barrage of red tape, changes in regulations, cost and coverage as some of the biggest problems with the system.  The rules governing Medicare are so enormous that brokers like myself are required to go through a separate certification process just to be able to offer Medicare Advantage Plans.  After going through it, I understand why.

I haven't yet mentioned one other huge factor with all these Federal Government attempts at private sector ventures, they become huge political footballs for those who find themselves in power.  You need to ask yourself, is that what I really want for my health care?  Polls overwhelming show that the American people want some sort of health insurance reform.  But I think an even better question to ask the America people is, do they have complete faith in our federal government to run and manage the health insurance industry?  Or would they rather it be left to the health insurance carriers like Aetna, Health America, United Health Care and Capital Blue Cross?  The over-whelming response has to be - no to the federal government!  Base your decision on history - not on sound bites or talking points.  I do believe that there is a healthy combination of government and private sector reforms that would bring about meaningful change.  If you're interested to find out what those ideas are - email me.

Whether you agree or disagree with me I'd like to hear you make your case as to why or why not the Federal Government is better suited to run our health care system by emailing me at bknauss@employeemployersolutions.com or visit my website at www.employeemployersolutions.com Thanks

Drive-Thru Health Care

With all the negative talk about the health care industry these days it's easy to overlook some very important, highly positive aspects - namely, advances in medical technology.

Americans are living longer today than anytime in our history. Advances in modern medicine have made the seemingly impossible - possible. Technology has improved laboratory testing; allowing for the development of CT scans, MRI's, and PET scan imaging to improve diagnosis accuracy. New advancements in treating heart disease have made it possible to treat a potential heart attack within minutes rather than hours. Hospitals have highly trained and technologically savvy medical professionals available a round-the-clock to treat patients. Cure rates for critical illnesses are up. The pharmaceutical industry has produced a myriad of new drugs to effectively treat anything from high cholesterol to reducing the effects of clogged arteries. There are drugs for treating impotence, depression, high blood pressure, osteoporosis and anxiety. Successful organ transplants and joint replacements have increased the quality of life for countless Americans. These are all some amazing advancements that each one of us should be grateful for.

However, these modern miracles have created an unhealthy level of expectation with so many Americans that wrongly think we can have our cake and eat it to. It's gotten to the point where Americans act as though they're going up to the drive-thru window to order their health care. It might sound something like this, "may we help you sir/madam?" "Yes, I'll have one upper GI and a lower GI, I'd like 5 different inhalers to improve my lung function so I can continue to smoke. I'd also like to order an MRI and why don't you throw in a CAT scan while you're at it! Let me get the gastric by-pass surgery to. One knee replacement and my usual 30 day supply of high blood pressure meds, anti-depressants, anxiety medicine and my purple pill for acid reflux - to go please". "Will that be all sir/madam?" "That will be all for now".

I don't mean to sound flippant about such important matters. Really, I know how vital these advancements are to changing the lives of some many. However, we're under some kind of illusion that we can have such a high demand for all these amazing wonders in medical science and not have costs spiral out of control. Our Government is making a promise that they just can't keep. We can't possibly stay on our current course and be able to effectively reduce health care costs. Furthermore, if we stifle advancement in the medical community by a massive government takeover then the only result will be to reduce the level of advancement.

The other myth that we fall prey to is that we can reduce the cost of health care without making any personal sacrifices to our current lifestyle choices. If we don't become a national that values health and wellness again we can forget about making any real and sustainable impact on our nations health care costs. Obesity, for example, is related to so many controllable and preventable medical conditions. We need to take more personally accountability for our own health and well-being and stop looking to the government or the medical profession to take care of us from cradle to grave and start with making right lifestyle choices today. No one will look out for you better than you!

My mission is to make the complex world of employee benefits understandable. Please reach out to me at bknauss@employeemployersolutions.com, visit my website at http://www.employeemployersolutions.com/ or twitter me at http://twitter.com/mployebenefits

The Year of the Broker

With all the changes to health care being talked about in Washington today, the consensus seems to be that employer groups are going to be more likely to seek out the expertise of a professional employee benefits broker. In the past, employer groups have been largely split on the value and benefits they derived from dealing with a professional. Some, have been under the false assumption that if you go through a broker your premium will go up to compensate for commissions being paid out - that's just not the case. Rates are the same regardless of whether or not a broker is involved. The same is true for the individual market, yet still, many people try to got it alone on-line to secure the right health care coverage for their family. Here are some interesting facts:

Plan Sponsor's Current and Future Use of Benefit Brokers

1. Currently use a broker/consultant - 83%
2. Use of broker/consultant will increase in the next five years - 17%
3. Use of broker/consultant will stay the same in the next 5 years - 64%
4. Use of broker/consultant will decrease in the next five years - 8%
5. Don't know how use of broker/consultant will change - 11%

* source Benefits Selling Magazine January 2010 edition

Regardless of where you stand on the whole idea of overhauling our entire health care system, it doesn't negate the fact that managing employee benefits going forward will not be reduced in the level of complexity but only increased. Underscoring the need to deal with a professional benefit broker. If you don't currently work with a broker/consultant or you're not happy with the level of service you've been getting from the one your with than we should chat. It's very easy to switch. I can be reached at:

email: bknauss@employeemployersolutions.com
website: http://www.employeemployersolutions.com/
twitter: http://twitter.com/mployebenefits