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

Medicare Changes For 2010

Section 102: Currently, Medicare outpatient mental health services require beneficiaries to pay a 50% co-payment under Part B. Other physician services under Part B require only a 20% co-payment. A phased reduction in this co-payment for outpatient mental health services begins in 2010. In the actual statute, the current co-payment amount is not described as “50%”. Rather, it defines what counts as incurred costs in such a way that the result is a 50% co-payment. So, the current statute counts incurred costs at 62.5% and this results in a 50% copayment for beneficiaries. In 2010, instead of incurred costs counting at 62.5% as they do now, they are counted at 68.75%. Once the definition of incurred costs reaches 100%, there is parity.

Section 112: Currently, the Medicare Savings Programs (QMB, SLIB, QI-1) have countable resource limits of $4000 for an individual and $6000 for a couple. This provision increases the amount of allowable resources for applicants to these programs so that it is the same as the resource limit for the full low-income subsidy individuals in 2010. The full low-income subsidy program has higher resource limits that increase based on a formula every year. Therefore, this change should result in an enrollment increase into these Programs, which can provide much needed assistance in Medicare cost sharing.

Section 113: Beginning January 1, 2010, SSA shall have in place a system for electronically transmitting information from an LIS application to the appropriate state agency that accepts Medicare Savings Program applications. Transmittal will only 4 occur with consent of the beneficiary. The information will be used to complete an application for the Medicare Savings Programs.

Section 115: Under the current Social Security statute, states are allowed to collect from the estates of deceased individuals any items or services under a state Medicaid plan that were provided to the individual when he or she was 55 or older. This Section amends the statute to eliminate that authority to collect from Medicare cost-sharing (the Medicare Savings Programs) beginning in 2010.

Section 116: With respect to applications filed on or after January 1, 2010, the value of a life insurance policy and in-kind support and maintenance will not be considered as income or resources for LIS determinations.

Section 118: This provision requires the Secretary provide the application for the Medicare Savings Program in the 10 languages (other than English) most commonly used by applicants for Medicare hospital insurance to states and the Social Security Administration. Such applications must be provided by January 1, 2010.

Section 176: Beginning with the 2010 plan year, the Secretary is required to identify categories of drugs and require that all drugs in those categories that are Part D covered drugs be included on all plan formularies. Such classes must meet specific criteria. It is generally expected that the current 6 protected classes would meet this criteria. The Secretary is also allowed to establish exceptions to this requirement for particular drugs within the class, including allowance for benefits management tools. However, any of these exceptions must meet particular criteria and can only be allowed after notice and comment.

Section 187: A report is due no later than two years of the date of enactment (July 15, 2010) that will describe the extent to which providers and plans are complying with Title VI prohibition against national origin discrimination affecting limited English proficient persons and the Office of Minority Health’s Culturally and Linguistically Appropriate Services (CLAS) Standards. This report shall also make recommendation on improving compliance and enforcement of CLAS Standards.

For more information on Medicare and Medicare Advantage Plans email me at bknauss@employeemployersolutions.com visit us on the web at 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

2010 Health Savings Account(HSA) Changes

For those of you that have a Health Savings Account(HSA) in conjunction with your High Deductible Health Plan (HDHP), you should already be aware that the minimum deductible amounts, as well as, the maximum that an individual can contribute to their accounts are changing for 2010. The changes are as follows:

1. The minimum deductible amount must be $1,200 for self-only coverage and $2,400 for family coverage; increased from 2009 requirements.


2. The out-of-pocket maximum must be no higher than $5,950 for individual or $11,900 for family coverage; increased from the 2009 requirements.


3. The HDHP must be set-up with a combined medical/pharmacy deductible. This deductible must apply to the out-of-pocket maximum; no change from the 2009 requirements.


4. All medical and pharmacy services must be subject to deductible and out-of-pocket maximum except for preventative services.


5. The annual contribution limits are being raised to $3,050 in 2010 for individual coverage; increased from $3,000 in 2009. For family coverage the maximum is increasing from $5,950 in 2009 to $6,150 in 2010.

If you don't already have a compatible Health Savings Account component to your HDHP then it's time you switched. You're already having to ask your employees to pay a greater share of their health care expenses out-of-pocket; why not pay them with tax-free dollars. With a full court press of government takeover of health care just around the corner; you better make the switch now while you still can.

For more information on this and other employee benefits related matters; email me at bknauss@employeemployersolutions.com visit my website at http://www.employeemployersolutions.com/ or twitter me at http://twitter.com/mployebenefits