More Workers Covered By Bosses’ Self-Insured Plans

By Ankita Rao

November 28th, 2012, 5:25 PM

The number of U.S. workers covered by self-insured health plans—in which their employer assumes the financial risk for health costs rather than paying insurance companies to do that—has grown steadily in recent years. But such plans are still primarily used by large companies, not small employers, a new study finds.

As of 2011, more than half of U.S. employees were covered under these self-insured plans, compared to about 41 percent in 1998, according to a report by the Employee Benefit Research Institute. These plans can lower costs for employers by reducing administration, exempting them from state-mandated services, and allowing them to provide uniform coverage across state lines.

Sometimes workers do not even know that their employer is self-insuring because the company will hire a traditional insurance plan to administer the program.

Businesses with less than 50 employees have not followed the same trend, with only 10.8 percent of private sector enrollees in self-insured plans in 2011. The number has remained generally around 12 percent since 1998, according to EBRI.

The analysis also found that the rates varied by state — Hawaii was on the lower end with 30.5 percent of workers enrolled in self-insured plans, and Indiana and Minnesota were on the higher end with more than 70 percent enrolled. Massachusetts, the only state to have enacted universal health care coverage, saw more medium and large firms choose self-insurance.

The report’s author, Paul Fronstin, director of EBRI’s Health Research and Education Program, says the research was prompted by speculation that smaller firms increasingly may move to a self-insured model because of their concerns about rising insurance costs under the 2010 federal health law.

Employers generally, and small employers particularly, concerned about the rising cost of providing health coverage may view self-insurance as a better way to control expected cost increases,” notes Fronstin. “This new analysis provides a baseline against which to measure future trends.”

In a separate issue brief, researchers from The Urban Institute said the health law will make self-insurance plans more attractive to small employers because of less price discrimination against small groups.

But since the federal regulations don’t apply to self-insurance, authors said a small business migration to the plans could “undermine the effectiveness of the Affordable Care Act’s small-group reforms and to destabilize the market.” But the brief describes ways that federal or state regulation can help mitigate that problem.

This sign, displayed at all credit unions, inf...

This sign, displayed at all credit unions, informs members that their savings are insured by the NCUA. (Photo credit: Wikipedia)

Voluntary Insurance Benefits

Share of federal excise taxes paid by US house...

Share of federal excise taxes paid by US households reporting different income levels, 1979-2007 (Photo credit: Wikipedia)


Voluntary Insurance Benefits What are Voluntary Benefits? Voluntary benefits are insurance products that employees may choose to purchase through their companies at rates that are lower than they could get on their own. A few examples of voluntary benefits are dental, vision, life, disability, supplemental health and cancer insurance. Many employers offer voluntary benefits because they allow companies to provide a more robust benefits package at no cost to them. How do voluntary benefits work for employees? For an example of how voluntary benefits work we’ll need our good friends Gary and Greta. Tonight, they’re going to a restaurant for dinner. Gary and Greta’s entrées include soup and salad with the price of their meals. In this case, their meal is like their company’s health plan – they get what they want along with a few added extras. Hopefully, their food tastes better than their health plan. Anyway, tonight Gary and Greta want more than the basic entrée, soup and salad. They’d also like to order some appetizers, a bottle of wine and dessert. These extras are kind of like voluntary benefits – Gary and Greta get more than the basic offering, but only pay for what they order. Like appetizers, desserts and wines, voluntary benefits come in many varieties that help protect your financial and physical well-being. For example, for a little extra money that’s simply deducted from his paycheck each month, Gary can purchase disability insurance that will help offset loss of income if he is unable to work due to sickness or injury. He can choose supplemental insurance to cover copays, deductibles or other costs of care not covered by his regular health insurance. And benefits are paid directly to the employee, so Gary can use the money however he needs to. Most consumers don’t plan for loss of income, or for expenses like childcare and travel that are necessitated by illness or injuries but not covered by medical insurance. Yet studies show that unexpected illness and injuries account for more than 350,000 bankruptcies every year. By enrolling in these voluntary benefits, Gary is rewarded with greater peace of mind. As an added bonus, the premiums Gary pays for voluntary benefits are paid using pre-tax dollars. Voluntary benefits may also include options like vision and dental insurance, which can protect more than your eyes and teeth. Annual eye exams, for example, can help detect health problems like diabetes and high blood pressure. And did you know that gum disease is a serious risk factor for heart disease? Keeping your teeth and gums in good shape helps protect your overall health. Now, what are the advantages for employers who offer voluntary benefits? Offering voluntary benefits to employees provides a great incentive for people to stay with your company. Your employees can receive more benefits – and you don’t pay any extra. You’re also helping your employees protect their health, their savings and everything they’ve worked so hard to achieve. As an added bonus, offering voluntary benefits provides the opportunity to lower your payroll taxes with each enrolled employee. Summary of Voluntary Benefits Voluntary benefits allow employees to purchase additional insurance products through their company at rates that are lower than if they bought them on their own. Premiums are paid from pre-tax dollars and deducted from the employee’s paycheck, making payment simple and convenient. Voluntary benefits are also a way for employers to offer an added incentive to employees without having to pay extra. Everybody wins when voluntary benefits are a part of a company’s employee benefits package. What are Voluntary Benefits? Watch Healthcare Video: What are Voluntary Benefits.


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Young Undocumented Immigrants Allowed To Stay In U.S. Are Still Ineligible For Obamacare Benefits

Maximum Out-of-Pocket Premium Payments Under PPACA

Maximum Out-of-Pocket Premium Payments Under PPACA (Photo credit: Wikipedia)

Topics: Insurance, Health Reform

Aug 30, 2012

Modern Healthcare: Rule Excludes Illegal Immigrants From Exchanges, High-Risk Insurance Pools
A new CMS rule aims to ensure that illegal immigrants exempted from deportation under the Obama administration’s June 15 policy change on immigration will not qualify for subsidized coverage under either high-risk insurance pools or state-based exchanges. The amendment to a July 30, 2010 interim final rule establishing the insurance pools for uninsured people with pre-existing conditions explicitly excludes people who qualify for the recently announced change in the administration’s approach to immigration enforcement (Daly, 8/29).

Crain’s Business Insurance: No Penalties For Employers Not Offering Dependent Coverage: Employer Group
An employer benefits lobbying group has urged the Obama administration to make it clear that the healthcare reform law does not impose financial penalties on employers that do not offer coverage to dependents. Under the Patient Protection and Affordable Care Act, employers are to be assessed $2,000 per full-time employee if they do not offer coverage to employees in 2014 (Geisel, 8/29).

This is part of Kaiser Health News’ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

English: Depiction of the Senate vote on H.R. ...

English: Depiction of the Senate vote on H.R. 3590 (the Patient Protection and Affordable Care Act) on December 24, 2009, by state. Two Democratic yeas One Democratic yea, one Republican nay One Republican nay, one Republican not voting Two Republican nays (Photo credit: Wikipedia)

Consumers, Employers Reconsider Insurance Costs

Bill Clinton made health care reform one of th...

Bill Clinton made health care reform one of the highest priorities of his administration. He asked the First Lady to chair the Task Force on National Health Care Reform. (Photo credit: Wikipedia)

Topics: Health Costs, Insurance, Marketplace, Health Reform

Aug 28, 2012

Individuals and businesses are weighing the pros and cons of buying health coverage as a result of the advent of high-deductible policies, as well as the provisions of the health law set to take effect in 2014.

San Francisco Chronicle: Patients Negotiate For Care With Cash
Palo Alto resident Ed Lee routinely negotiates for his own health care services, everything from the cost of a scan to an urgent-care visit – often securing discounts of 30 to 50 percent off the original charges. ee, 61, a self-employed public relations expert in the semiconductor industry, started bypassing his health insuranceand paying out of pocket last year when he realized that premiums and deductibles were costing him more than $12,000 before his insurer paid a dime. With that decision, Lee became part of a new breed of health care consumer — people who pay such a large portion of their health costs that they’re questioning the value of insurance. And because they’re footing so much of the bill, they feel they owe it to themselves to get a decent price (Colliver, 8/27).

Modern Healthcare: Most Employers To Continue Offering Health Care Plans In 2014: Survey
The overwhelming majority of employers say they will continue to offer health care plans after core provisions of the health care reform law take effect in 2014, but most say they will need to make plan changes later to avoid a new excise tax on the most costly plans, according to a new survey. Eighty-eight percent of employers surveyed by Towers Watson & Co. said they have no plans to terminate coverage in 2014 or after for full-time employees, while 11 percent were not sure. Just 1 percent said they planned to terminate coverage for some employees (Geisel, 8/27).

This is part of Kaiser Health News‘ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

San Francisco To Require Employers Pay More For Employee Health Care

English: Barack Obama signing the Patient Prot...

English: Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

Topics: Insurance, Marketplace, States

Aug 23, 2012

Employers in San Francisco with more than 100 employees will have to contribute more to their employees’ health care starting in 2013.

Modern Healthcare/Crain’s Business Insurance: San Francisco Ups Employer’s Health Care Spending Requirement For 2013
Employers with workers in San Francisco will have to pay more next year to comply with the city’s health care spending law. Beginning on Jan. 1, 2013, employers with 100 or more employees in San Francisco will be required to spend $2.33 per hour per covered employee on health care, up from $2.20 in 2012, city officials announced this week (Geisel, 8/22).

Elsewhere, three major insurers in Connecticut are asking for rate increases of 13-14 percent for small business coverage —

CT Mirror: Three Major Insurers Seek Up To 14 Percent Rate Hike For Small Business Coverage
In recent weeks, Aetna, ConnectiCare and Anthem all have requested rate hikes of 13 to 14 percent for small-business coverage. That’s just below the 15 percent threshold that could trigger a public hearing on the proposed increases. The requests have some health care advocates questioning whether increases are still too high. Insurance companies say the hikes reflect the cost of mandated federal benefits required by the Affordable Care Act (Merritt, 8/22).

NOTE on this article:
 Badgley and Associates Guarantees all business’s nation wide the lowest rates possible. We can save you 60% off your current monthly premiums plus the rate hikes they are predicting! Fill our a form to get enrollment info on our big money savings Health Insurance/Benefits plans today. OR call Badgley and Associates now 888-737-0594

This is part of Kaiser Health News‘ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

Employers Expect Health Costs To Go Up, Ready Compliance With Health Law

Topics: Marketplace, Insurance, Health Costs

Aug 07, 2012

A new survey of employer health benefits by the National Business Group on Health has found businesses expect their health care costs to jump 7 percent next year as they comply with new parts of the federal health care reform law. Employers also expect to increase workers’ share of health care costs 5 percent, the study found.

Politico Pro: Survey: Employers Ditching Annual Limits
Dozens of the nation’s largest employers are making moves to comply with the Affordable Care Act by eliminating annual benefit limits in health plans, according to a new survey by the National Business Group on Health. Half of the 82 large companies surveyed said they had eliminated annual benefit limits in their offerings for the 2013 plan year, although a third said they hadn’t made changes to their limits yet. The most likely benefits to be limited, according to the survey, are services for mental health, substance abuse and rehabilitation. Most businesses reported that they wouldn’t have any health plans that fall short of the law’s requirements but would be eligible to be grandfathered (Cheney, 8/6).

The Hill: Businesses Predict 7 Percent Jump In Health Care Costs
Businesses expect their health care costs to grow by about 7 percent next year — a bigger jump than they’ve seen in the past three years — according to a new survey. The National Business Group on Health, which conducted the survey, did not directly attribute the expected jump to President Obama’s health care law, though it noted that employers are changing their health plans to comply with the new law. Sixty percent of employers surveyed said they plan to shift more health care costs to employees, but most said their workers’ costs would rise by less than 5 percent next year. Companies are also trying to cut costs by beefing up programs that reward workers for healthy behavior (Baker, 8/6).

CQ HealthBeat: Big Employers Eye Wider Use Of Wellness Bonuses, Reference Pricing To Control Costs
A health benefits survey of some of the nation’s largest corporations released Monday in a sense is just more of the same — costs will rise, employees will pay more. But it does show some interesting new wrinkles when it comes to cost containment. For example, it says that a number of employers plan to sharply increase the amount of money they pay employees to maintain a healthy lifestyle or participate in a program that promotes good health. And the survey by the National Business Group on Health (NBGH) also shows growth in the use of “reference pricing,” said Helen Darling, the president of the business group, referring to a system under which employers pay a certain amount for a particular health service and employees who want to see a doctor or get a procedure that costs more than the reference point must pay the difference out of their pockets (Reichard, 8/6).

Kaiser Health News: Capsules: Survey: Employers Expect 7 Percent Growth Cost Of Health Benefits
As employers brace to absorb cost increases in employee health benefits, many are also experimenting with new ways to control these expenses, according to a new survey from the National Business Group on Health, a non-profit association of 342 large employers (Fleming, 8/6).

This is part of Kaiser Health News’ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.

Five items not to miss at open enrollment


July 25, 2012 • Reprints

In its workplace survey released last year, HR consultant Mercer found benefits were increasingly pivotal for the employer-employee relationship.

Nearly eight out of 10 employees say their benefits are one of the reasons they work where they do, and almost as many (76 percent) say that benefits make them feel appreciated by their company.

Many companies are now gearing up for open enrollment, and this is a good time to highlight their benefits offerings. Based on information revealed in its 2011 Mercer Workplace Survey, the company derived five short items that plan sponsors should have on their open enrollment checklist >>

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