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.

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 

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

7 Creative Benefit Strategies For 2010

Whether it's the debate raging in Washington about health care reform, small businesses dealing with the ever-increasing premiums for employee benefits or individuals trying to secure health insurance for themselves - health insurance is on everyone's mind these days. Well, I don't know where any legislation will end up in Washington so let's discuss some very practical ways to deal with the challenges relating to health care today. If you're like most average small business owners in the Lehigh Valley with just three or four employees, you're wondering if there's any real impact you can make on your companies employee benefits structure. The answer is most definitely yes and I'm going to offer 7 very easy ways to accomplish that task.

1. Increase plan deductibles - For so many years the Lehigh Valley has been dominated by extremely low deductible very rich health plans that are great for the employees but are choking the business financially. The days of $500 individual deductibles are over.
2. Consider implementing a High Deductible Health Plan(HDHP) with and HSA component - So, if you're going to ask your employees to pay a greater portion of their health expenses, why not do it with an individual health savings account that is tax-free going in and coming out to pay qualified medical expenses. Oh, and by the way, the money continues to grow with interest.
3. Combine a higher deductible plan with an Accident Policy - Accident policies are very inexpensive and pay a lump sum to the individual in the event of an injury as a result of an accident. (Example: increasing deductible to $1,500 and implementing a $2,000 accident policy on each employee. With the savings realized in the premium reduction you can more than afford the policy. If the employee is injured because of an accident they will get a lump-sum payment of $2,000 to cover expenses).
4. Establish or convert to a defined contribution health plan model - This strategy is nothing more than encouraging your employees to obtain individual coverage that you will help reimburse them for in a fixed amount. There can be some inherent pitfalls with this model as it relates to pre-existing conditions.
5. Consider switching insurance providers - The Lehigh Valley has long been dominated by the "Blues" which offer outstanding coverage and expansive networks of provider care but typically have the highest premiums in the market. I'm not knocking the "Blues" because I sell those plans to - it just may be time to shop the market.
6. Consider self-funding for benefits like dental coverage - Dental is one benefit that functions relatively smooth and it offers a pretty predictable expense model that makes self-funding attractive for some employers to set-up. This will also reduce your dental premiums significantly.
7. Don't just look to renew your existing plan this coming year but instead sit down with your broker and talk through some of the strategies that I've outlined here. That's our job!

If you haven't heard from your broker since last years renewal then maybe we need to talk. Or, if you don't have a broker to help you through some of these very challenging employee benefit waters then please reach out to me at bknauss@employeemployersolutions.com, visit my website at www. employeemployersolutions.com or Twitter me at http://twitter.com/mployebenefits

Consumer Driven Health Plans

The term, Consumer Driven Health Plans, has been gaining a lot of momentum over the last couple of years with the cost of health insurance premiums spiraling out of control. There's been discussion for some time in small business circles about shifting more of the responsibility for health care needs to the employees rather the employer. Business owners of all walks of life are quickly coming to the realization that they are ill-equipped to manage and administer the complexities of employee benefit plans. Aside from that, they also know that the days of low deductible health plans are all but a thing of the past. The premiums for these low deductible plans are chocking them financially. The biggest, and maybe, the only way to make a significant impact on health insurance premiums, is raising the deductible thresholds that employees are responsible for meeting before the plan covers expenses. Many employers are reluctant to pursue this necessary strategy to get a handle on their cost but it's completely unavoidable in today's economy.

So, it begs the question. What can an employer do to lessen the impact of employees being responsible for meeting higher deductibles? The answer is; doing it in conjunction with a Health Savings Account(HSA) for each of their employees. Each employee has this HSA set-up in their name for the purpose of making tax-free contributions into their account to ultimately cover the qualified medical expenses they're now responsible for with a High Deductible Health Plan. This gives the employee greater control and flexibility over making their own health care decisions. The IRS regulates the type of health plans that qualify for an HSA, as well as, how much money the employee can contribute to their HSA's.

Whether, it's the increasing trend toward higher health care premiums or the Federal and State regulations (COBRA and Mini-COBRA) of certain health plans - business owners are now faced with the very real task of shifting the responsibility for health care to the employees. Experts predict that Consumer-Driven Health Plan enrollment will spike in 2010 Read Full Article

For more information on Consumer Driven Health Plans, HSA's or how to effectively shift more of the burden for health care to your employees, email me at bknauss@employeemployersolutions.com visit us on the web at www.employeemployersolutions.com or twitter me at http://twitter.com/mployebenefits

46 Million Uninsured Americans

Wow, August just flew by but there's been a lot going on in the news cycle these days. I've tried for the longest time not to weigh in on the political battle currently being waged in Washington centered around health care but it hits home too closely for me to be silent anymore. There's so much misinformation out there and flat out ignorance that I feel the need to set the record straight on a few points of contention. The first is, the figure of 46 million uninsured Americans currently in the United States. Let's just take it on face value that this number is somewhat accurate (it's not because it includes many young and wealthy Americans who choose not to have health insurance as well as illegal immigrants). However, for the sake of this discussion, let's say it's true. The debate is expressed two-fold in terms of the need to get those who are uninsured access and the affordability of health care for all. Let's just talk about the accessibility aspect of this debate first. Access to health insurance for these uninsured people is available right now to anyone. In fact, insurance companies are standing by waiting to sign them up with their own individual health policy that's completely portable to take with them from employer to employer. In fact, they can call directly to the insurance carrier or shop on-line to access this health insurance without even getting an agent involved.

The second issue, affordability, is a little bit more complicated because it's a relative term. The real question is, how much can they afford. On this note, the variety of options are absolutely endless. I know for a fact that an individual can get a limited-medical benefit plan for less than 100 dollars in monthly premium or an individual comprehensive major medical plan in upwards of 200 dollars in premium per month. So affordability isn't completely the issue either. So what is it really?

Ahhh, I think I know what the real issue is - pre-existing conditions. That's the real sticking point in the whole health care debate. It's the real reason why employer-sponsored group plans continue to see average increases of 20 plus percent each year. You see with employer plan the insurance carrier typically can't exclude pre-existing conditions, so, they therefore have to accept everyone in the plan at the same rate - healthy or not. Now, you're probably saying, "so, what's wrong with that"? The answer is, nothing, if you're the employee. To the employer and the health insurance carrier, it means everything.

Let's take the employer first. The basis on which the insurance carrier uses to adjust employer plan rates is what type of claim exposure they've had. If employees are becoming a heavy burden on the health care system then they have to increase the premium every year at renewal time.

To the insurance carrier, it doesn't give them the ability to properly assess rates on an individual basis. Now, before you start shouting to me, "that's not fair". I want you to first consider another type of insurance that we're all familiar with - Auto Insurance. Just imagine if I came to you and said that your auto insurance premium was going way up because there's been a rash of auto accidents and DUI's in your area. You would be extremely upset at me and rightfully so. Why should you be punished for someone else's reckless behavior. You don't and that's the point. Somehow we've taken the health insurance concept into an entirely different realm where no one wants to pay more because they may have a certain disposition to sickness for one reason or another.

Now, I now our present system is in need of some changes - not an overhaul. There are some things we can do to address pre-existing conditions and get a handle on the overall cost. However, we must not exclude equally weighty matters such as personal choices about our individual lifestyles and wellness and be a bit more open to the reality that if you're a heavy user on the health care system you may need to pay more than others who aren't. I don't know how the finale of this current debate will end up legislatively but I can say this. As a benefit specialist, I'll personally commit to signing up as many of those 46 million uninsured who find themselves left out of an employer group as possible to get them into their own individual option. Those of you in Pennsylvania - I can help. I'd like to hear your opinions on this and other health care related matters at email at bknauss@employeemployersolutions.com or by visiting me at my website http://www.employeemployersolutions.com/. Thanks