Employers Are Not Paying as Large a Share of Workers’ Health Insurance Premium.

March 3, 2016 by Frank West

Employees still have high expectations that their companies will pay a large portion of their health insurance premiums, believing that the responsibility lies with them.

This expectation is not waning even though employers are increasingly shifting a larger percentage of health insurance costs to their workers. A recent survey by Aflac found that 52% of employees expect their employer to pay at least 80% of the cost of their medical insurance, and another 14% said they expect an employer to pay the total cost or 100% of their health insurance.

“These expectations may be just a bit too high, as the average employer pays about 70% of an employee’s health insurance premium, according to the U.S. Bureau of Labor Statistics,” said Matthew Owenby, chief human resources officer at Aflac, the Columbus, Ga.-based supplemental health insurance company.

After a decade of moderate growth, premiums for both individuals and families of employer-sponsored health insurance increased by an average of 4% this year, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2015 survey. Premiums haven risen an average of 5% annually since 2005, compared to 11% annually between 1999 and 2005. The average annual premium for single coverage is $6,251 with workers paying an average of $1,071. The average family premium is $17,545 with workers on average contributing $4,955.

Since 2010, both the share of workers with deductibles and the size of those deductibles have increased severely. The combination of these two factors result in a 67% increase in deductibles since 2010, much faster than the rise in single premiums of 24% and about seven times the rise in workers’ wages of 10% and general inflation of 9%, the Kaiser survey found.

“With deductibles rising so much faster than premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” Foundation CEO Drew Altman said.

Filed Under: employee benefits, Group Health Insurance Tagged With: Group Medical Insurance, insurance broker

7 tips for lowering your medical bills— even if you have health insurance.

February 11, 2016 by Frank West

Having insurance may make it easier to get health care, but that doesn’t always translate to medical bills you can afford. High deductibles, copayments and coinsurance mean some people are avoiding medical care altogether to save money. But regular medical care is important, and you shouldn’t have to sacrifice your health to save money. By tackling your health care strategically, you may be able to avoid that tough decision.

More than 90 percent of Americans have health insurance, leaving 29 million still without coverage, according to the latest data from the federal government. But in a 2014 Associated Press survey of insured adults, one in four said they were not confident they could afford care if they or someone in their family had an unexpected medical need.

If you fear that a future medical expense may too steep, the following steps may help:

1. Find the right plan.
Saving on health care begins with selecting the right insurance plan. Consider how much the monthly premium will cost, but don’t choose your plan based on that factor alone. Instead, evaluate all of your options.

A plan that trades lower premiums for higher out-of-pocket cost — like a high deductible health plan (HDHP)— may make sense for someone with relatively few expected medical needs. Someone with a chronic condition, however, could save more with a plan that has higher premiums and lower deductibles, copays and coinsurance, as he or she will be going to the doctor more often.

Consider your medical needs for the coming year, and use them to estimate how much you’d spend with a few different plans.

2. Visit only in-network providers.
Insurance plans contract with groups of doctors and facilities to form a network that offers lower rates for members. When you use providers within that network, your care is covered at a higher rate. If you venture outside, you’ll have to pay more.

For example, one visit to an in-network family doctor for acute illness could result in a $35 copay, with your insurance picking up the remainder. A visit to an out-of-network doctor for that same illness could cost about $150, or the entire billable cost.

Always check your insurer’s website and search for doctors under your specific plan’s network.

3. Take advantage of FSA and HSA offerings.
Flexible spending accounts (FSAs) and Health Savings Accounts (HSAs) can help you budget for medical expenses while providing tax benefits. If your employer offers one, sign up. When deciding how much to contribute, estimate your medical expenses for the year and go from there. If you have a deductible, set aside at least that much.

A few important points:
● FSAs are— with few exceptions— “use it or lose it” accounts, so estimate your contribution carefully because if there are funds left at the end of the year, you may lose that money.
● HSAs are only available for people with qualifying high-deductible health plans. If you have such a plan, but your employer doesn’t offer an HSA, you can open one yourself through an outside financial institution.
● Unlike FSAs, an HSA is your account and the balance can be carried over from year to year, and even follow you as you change jobs.

Your Employer Health Insurance Plan May Change in 2016.

September 14, 2015 by Frank West

Most employers are passing along at least some of the premium hikes. But you may see more generous incentives if you participate in wellness programs.

What changes can I expect from my employer’s health insurance plan during open enrollment for 2016?

Employers are just starting to announce their health insurance options for 2016, and you may need to make your decisions during open enrollment in the next month or two. The National Business Group on Health recently came out with its annual survey of large employers, which offers the first glimpse of the changes employees are likely to see in their health plans for 2016.

1. Higher premiums. Large employers expect their health care costs to increase by about 5% for 2016 – the same size increase they expected in 2014 and 2015. They plan to pass along some of the extra cost to employees but more of it to dependents, with employees contributing 20% of their own premiums and 24% of the premiums for dependents (higher-income employees may pay more). About one-third of the companies plan to add a surcharge for spouses who could get coverage elsewhere but don’t. But very few (only 4%) plan to exclude spouses who have similar coverage available through their own employer.

2. More high-deductible health plans. Employers are continuing to try to contain rising costs by forcing employees to take more control of their health care: 83% of large employers plan to offer a consumer-directed health insurance plan in 2016 (primarily high-deductible health insurance paired with a health savings account). Half of the employers plan to offer the high-deductible plan as an option, and 33% plan to offer it as the only option. More than half contribute to employees’ HSAs, giving them tax-free money for medical expenses; some add more if you participate in a wellness program or take a health risk assessment.

3. Restrictions on expensive drugs. Employers identified the cost of specialty drugs as one of the major causes for health care cost increases, and they’re imposing more restrictions on coverage. More than three-quarters of the employers surveyed plan to use prior authorization for some of these specialty medications – requiring physicians to fill out forms explaining why you need the specific drug. Three-quarters plan to use step therapy, covering the drug only after you’ve tried a list of less-expensive medications first.

4. New telemedicine options. Nearly three-quarters of the employers will offer telemedicine, which provides virtual visits with a doctor, as an option. “It’s still primarily phone-based, but the video component is starting to take off,” says Karen Marlo, vice president of benchmarking and analysis for the National Business Group on Health. “You can take a picture of a rash with your phone and e-mail it to someone who can look at it, for example. It’s a good way to provide good quality care at a lower cost, and it improves access in parts of the country where you have to travel a long distance to go to a physician.” A telemedicine doctor’s appointment may cost $40 or $50, while an actual office visit may cost $150.

5. Cash for wellness programs. Employers continue to focus on plans to improve your health, which they hope will ultimately help lower their medical expenses, and they’re giving employees more incentives to participate. Thirty-nine percent plan to offer a break on health insurance premiums or cost sharing for employees who participate in a wellness program, health assessment or biometric exam. Thirteen percent plan to offer breaks for participating in a disease management program, which provides special care and resources for people with complex conditions, such as diabetes. You may also get more money in your HSA: Nearly one-third of employers plan to contribute to an HSA for employees who complete a wellness or health education program, and 8% plan to make HSA contributions if you achieve a health goal

Filed Under: employee benefits, Group Health Benefits, Group Health Insurance Tagged With: Group Medical Insurance

Top 10 Financial To Do’s During Open Enrollment Season.

September 7, 2015 by Frank West

Top 10 Financial To Do’s During Open Enrollment Season.

With these challenging economic times, it more important than ever that you make smart money decisions with your benefits package. Here are 10 things to look at when your open enrollment period comes this fall. Don’t wait until the day before to check your options!!

Compare Your Coverage Against Your Spouse’s/Partner’s Coverage – If you and your partner both have company benefits make sure to weigh the pros and cons of your health insurance and overall benefits package. Since premiums can change significantly in smaller and medium sized companies based upon last year’s health claim ratings, one company’s insurance programs can be cheaper than other even though it may have been more expensive than the year before. Be sure to check that you doctor takes the new health carrier if you decide to make a change.
Compare Your Regular Medical Plans Against A Health Savings Account (Review Your Out Of Pocket Medical Expenses) – You should compare the total out of pocket costs you spent last year in medical expenses, and the cost of your overall medical expenses. An HSA plan will be significantly cheaper than your normal HMO, POS, or PPO type medical plan, and can potentially give you other tax advantages.
Examine How Much To Put In Your Flexible Spending Account (FSA or MSA account) – If your company has a Flexible and/or Dependent Care Savings Account, this could help you reduce your overall tax liability. Be sure to examine your out of pocket expenses closely as these programs are not use or lose.
Understand Your Life Insurance Needs – Your company may allow to purchase additional term insurance for you, your spouse, and your children through work. This is a great time of year to determine whether your overall financial situation has changed, and whether you need more or less life insurance rather than just signing up for the same amount you did the year before.
Consider Buying Supplemental Disability Insurance – Most regular group long term disability plans cover 60% of your base salary only (not commissions, bonus, or stock options). Larger companies offer the ability to purchase supplemental long term disability insurance through work. This can be an important part of your overall financial plan as your income is really what drives reaching your financial goals.
401(k) or Roth 401(k) (or both?) – To Roth or not to Roth, that is the question. Many employers have not added the Roth 401(k) provision to their overall 401(k) plan. With many tax changes coming up in 2011, this is a great time to determine how much money to put away pre-tax and post-tax for your retirement.
Examine Your Withholdings – Did you get a refund last year or did you owe money? Did you have a new child this year? Did you get married or divorced this year? Asking these questions will allow you to determine the right amount of withholdings from your paycheck so you don’t get too large a refund or owe too much money come tax time. Many people fill their withholding forms out once, and then never change them again.
Review Your Beneficiaries – This is an important thing to do on a yearly basis. Purchases you make through work such as life insurance and your 401(k) plan allow for both a primary and a contingent beneficiary. If your family situation has changed at all, it will certainly merit making a review of your beneficiaries.
Get Rid Of Accidental Death And Dismemberment Insurance – You need a certain amount of life insurance . . . period. You don’t need more insurance if you die accidentally. A sound financial plan should allow you to avoid these little extra insurance costs.
Learn What Happens With Your Benefits If You Get Laid Off – With unemployment officially around 10%, be sure you understand what benefits are portable if you get laid off. Some programs may be able to extend after your job is terminated while other benefits may just go away. This is important to review whenever any job transition occurs as your financial situation or your health may have changed that could potentially put you in a precarious position should a lay off happen with your position.

Filed Under: employee benefits, employee perks, Group Health Benefits Tagged With: Group Medical Insurance

Your Benefits Package At Work: Health Insurance.

September 7, 2015 by Frank West

Your Benefits Package At Work: Health Insurance.

One of the most overlooked parts of an overall financial plan is the benefits package you receive from your employer. Making benefits decision can often be a difficult process. Most of the time, I have found that people wait until the very last day of open enrollment with their employer only to quickly check the boxes that they checked last year without any research on what may be their best options. Remember, that your compensation package from your employer should always be looked at from a total economic package point of view. This means looking at your cash compensation plus benefits plus stock options, fringe benefits, etc. If you view your compensation only from a myopic point of view such as salary, you won’t be able to really analyze what you are getting paid from your employer nor the true value of your benefits package.

One of the first decisions you will have to make upon your benefits election is to choose the type of health insurance coverage you want for the next year. It is important to note that your company may have changed health care providers, deductible, or the overall plan they use with the current health insurance carrier so compare closely when you make this election. Here are some items to consider when you select your health insurance through your employer’s benefits package.

What were my ‘real’ out of pocket medical costs for the prior year? Most employer sponsored retirement plans will have the option of allowing you to put money in an FSA (Flexible Spending Account) which is a way to essentially put away dollars pre-tax for items such as medical, dental, and dependent care expenses and use them on a tax-free basis during the year. The rub on these accounts is that they are use or lose during the calendar year, so you don’t want to bank away too much on an annual basis. However, what I have found to be more of the case is that employees either don’t participate at all or participate at a very low amount because they haven’t taken the time to really calculate their out of pocket costs from the prior year.
Can I take advantage of a Health Savings Account plan within my employer’s plan? Although not all employer sponsored plans offer this type of solution, I predict that you will see more and more of these as annual enrollments continue in the years ahead of us. The Health Savings Account really means that you are choosing a high deductible health insurance plan through your employer (it will most likely be the same insurance company). This will automatically reduce your medical premiums you pay out of pocket, and it will also allow you to bank dollars pre-tax into an account that is NOT use or lose for items such as medical, dental, and vision expenses. This could help you reduce your tax liability for the current year, and it may actually reduce your overall medical cost out of pocket if you don’t go to the doctor that often. This is absolutely something to look into come benefits time.
Do my doctor’s still take this type of insurance? If your employer changes insurance companies or sometimes even the type of plan, the doctor’s you currently use may not take that particular type of insurance. If you really like the doctor’s you currently use, it may make some sense to call their offices and give them the particulars around the insurance company and type of plan you are going to choose so you can stay in the group of physicians you really like.
Did anything change with co-pay or in/out of network costs? If you don’t look at this closely, it may appear to you that your overall premiums out of every paycheck are only going up slightly. However, if there was an increase to co-pay items such as doctor’s visits or prescription drugs, then you could see an overall increase for the year. In addition, your plan may have originally covered 100% after your deductible is fulfilled for in network and 80% for out of network procedures. When open enrollment comes, you need to really look at the plan line by line to see if there were any major changes so you don’t get hit with unexpected bills.

Filed Under: employee benefits, Group Health Benefits, Group Health Insurance Tagged With: Group Health, Group Medical Insurance

Quick Links