Controlling Health Insurance Costs

“Health insurance is so expensive!!!” That’s what my clients tell me everyday and I have to agree with them. Many small business owners say the cost of health insurance has risen to the point that it is the second most expensive monthly bill, the first being payroll.

Many people have tried to explain the reasons for this cost trend. The reality is that there are many reasons for it. There is no one thing that can be done to lower the cost, it will take an effort from everyone from the doctors, to the pharmaceutical companies, but most importantly, it will have to start right here with the consumers.

The first step in controlling the cost of health insurance is understanding where the cost comes from. The prices of medical procedures are very well kept secrets. Great West Healthcare commissioned Harris Interactive (2005) to conduct a survey about consumers and their knowledge of health care costs. Some of the statistics that the study brought to light are startling. To offer a reference point respondents were also asked some non health care related questions. When asked about the price of a new Honda Accord, the respondents were over by 1%. When asked the price of a round trip ticket in coach from New York to Los Angeles, they were over by 8%. When asked about the cost of an average four day stay in a hospital, they were off by 56% believing that the cost would be around $6,400.00 instead of the actual cost of $14,500.00. Only 15% of respondents asked about the cost of a procedure before they were treated. They also assumed that a 24 hour hospital stay would only vary by 20% based on the location, instead of the actual difference of 60%. In reality, we have not had to take responsibility for this information in the past. With the escalating cost of health insurance, which closely relates to the cost of health care, it is more important now than ever before to take control of these costs.

Where do we go from here? For the immediate time, it is important to get information on how much our health care costs. The way to press ourselves into this is simply by taking advantage of high deductible health plans (HDHPs) and health savings accounts (HSAs). In a nutshell, this means that you take a lower cost health insurance plan, and put money into a special tax favored fund (HSA). The insurance will not cover doctor visits or medications or any other health care needs until you exhaust a high deductible (HDHP). The money for all those other expenses comes from your own account (the HSA). When the doctor prescribes a medication, you will find yourself asking for a lower priced alternative in order to preserve your account. You may even find yourself asking the doctor about prices. At no point does anyone believe that a person will choose a doctor, procedure or medication based on price alone. We will begin to determine our medical needs the same way we determine everything else in our lives, by the quality versus the price. Right now we have no reason to determine the prices, because we have the notion that the insurance companies will pay whatever the price is. We neglect to remember that we pay the insurance companies, so we are ultimately responsible for the costs anyway.

Another way we can lower our cost is by looking for the company and plan that best fits our needs. Many people are over insured, that is, they pay more out than they will ever get back. Finding an agent that will help you shop is the bottom line on getting the right health plan and company. Many businesses are finding that the insurance companies that they have used for many years no longer offer the best value. They also find out that other companies are much better than they realized. It is important to find an agent who is a thrifty shopper for your health insurance. It is always wise to use an independent agent, because they know all the different companies and the plans offered from each.

Obviously, if you can join a group that offers a true discount on health insurance through a reputable company, that is a great source of savings. The Fayette County Chamber of Commerce has a terrific new arrangement for health insurance through Humana. Qualifying members can save 4% off the street rates for the identical products.

To help with your future costs, you must first look at the culture your company fosters. A good place to start is your vending machines. Are they full of junk food? Consider starting slowly by adding raisins and pretzels and then every few weeks adding another healthy alternative. Look also at the drink selection. Make sure that you offer juices and non carbonated beverages. Increase the healthy choices over time. People will often eat what is most available. If they crave a candy bar, they will find a way to get it, but you don’t need to provide candy. Make it part of the culture of your business to promote good nutrition and make it more difficult to eat unhealthy foods.

Another good idea is to promote a healthy life style. Consider a company bowling team, or softball team. Participate in a walking group or running club as a company. Help pay for gym membership and try to attend aerobics classes as a team. Give out a company t shirt when employees have hit attainable milestones, such as walked for 30 minutes three days out of every week for six months. By making the goals attainable, but challenging, those who have been sedentary as well as those who have been active can achieve them. These ideas can cost anywhere from nothing for a walking club to a small fee for a team or membership. Many gyms will discount memberships for small companies. It is important to find an activity that your employees will enjoy. You must realize that this process may take some time.

Health Fairs are a great way to help your employees discover health issues. Many people have found they have high blood pressure through health fairs, and were able to get on medication before it became a serious health concern. If your business is small, perhaps you can work with other companies in your office complex to put a health fair together. You can even attend a community health fair as a company function. Make sure you add information on smoking cessation and nutrition.

By encouraging your employees to stop smoking, eat more healthy foods, to live a more active lifestyle, and to find medical issues before they escalate to more expensive problems, you can start the process for some future relief on health insurance costs.

Kaiser Permanente’s Broker Relations Lead, Susan Cook Receives “Kathy Cruce” Award from Georgia Associations of Health Underwriters

 

The Georgia Association of Health Underwriters is proud to announce Susan Cook, Broker Relations Lead for Kaiser Permanente, received the Georgia Associations of Health Underwriters “Kathy Cruce” Award.  An example of what a first class insurance professional should be, Kathy Cruce gave her time not only to her employer, The Benefit Company, but also to the Atlanta and Georgia Associations of Health Underwriters.  She was greatly admired for her contributions by her clients, co-workers and fellow members of Health Underwriters.  Beginning in 1996, In order to honor her memory GAHU were asked to present an annual award in her name to an outstanding insurance professional.

 

Susan is the past president of the South Atlanta Association of Health Underwriters and is currently serving as the media relations chair for the 2006 GAHU Board of Directors.  She is also serving as the awards chair for the 2006 SAAHU Board of Directors.  “I would not be here today without the continued support of my employer, Kaiser Permanente along with many mentors within this organization,” said Susan Cook upon receipt of the award.

 

Susan resides in Sharpsburg, Georgia with her husband, Chuck.  They have two daughters, Keri Toggle who is a sophomore at Northgate High School, and Olivia Cook who attends pre-school.  She is involved with CURE Childhood Cancer, a non profit organization for children with cancer.  She has been employed with Kaiser Permanente for a total of 17 years.

 

The Georgia Association of Health Underwriters, a chapter of the NAHU that represents more than 18,000 professional health insurance agents and brokers nationwide who provide insurance to millions of Americans.  Over 650 members participate in the organization right here in Georgia, headquartered in Woodstock, GA.

 

 

Challenges of Human Resources: Ask the Experts

Greater Henry County, Southern Crescent and SHRM Atlanta (South GEM) are all pooling their resources to offer a terrific learning experience.

This will be in an interactive roundtable forum, featuring the following discussion groups:

Conducting Thorough Internal Investigations
Wrongful Discharge or Rightful Discharge: You Decide
Immigration Update
Mediation/Conflict Resolution
Workers Comp Made Easy!
Recent Union Organizing Tactics
Understanding Unemployment Insurance Law
Recruiting Metrics for Improved Performance
Lesbian/Gay/Bisexual/Transgender Issues in the Workplace
Understanding the Funding of Healthcare - How to Stand Toe to Toe with your CFO

Not Your Same Old Fashioned Supplemental Insurance Benefits!

Each presenter is a subject-matter-expert in their respective field and will provide you with professional and practical guidelines you can use to assist you with on-going issues and concerns.

Earn up to 3.5 CEU re-certification credits!

Date: August 14, 2006
Time: 8:00 a.m. - 12:30 p.m.
Location: Clayton State University
Continuing Education Center, Morrow, Georgia
(See www.conted.clayton.edu for directions to event)

Registration fee: $25.00 for advance registration/$35.00 same-day registration for Greater Henry County SHRM members; Southern Crescent SHRM members; or SHRM-Atlanta members

$30.00 for advance registration/$40.00 for same-day registration for non-SHRM members advance registration and payment dead-line is August 9, 2006

Seating is limited - Early registration is recommended and encouraged!

* * * Registration, networking and a full breakfast buffet will begin at 7:00 a.m. * * *

Reservation Information:

If you are a Greater Henry County SHRM; Southern Crescent SHRM or SHRM-Atlanta member, you may register through your normal meeting registration process (each respective SHRM group leader will communicate registration procedures directly to its membership).

If you are not a SHRM member from one of these three groups, you may go on-line to the SHRM-Atlanta website (www.shrmatlanta.org) and establish a "guest account" that will enable you to register for this event

South Atlanta Association of Health Underwriters Held Their Annual Awards Breakfast

South Atlanta Association of Health Underwriters (SAAHU) held their annual awards breakfast.  This is always a very popular event.  The out going board of directors was thanked for their efforts by out going President Susan Cook (Kaiser Permanente).  Each one was presented with a nice parting gift.  In coming President, Matt Holcomb (Kayda Insurance) welcomed his new board of directors, including President-Elect, Tim Taylor (Benefit Support Inc), Secretary, Donna Hill (DDH Associates), and Treasurer, Mark Phillips (AFLAC).

 

The featured speaker was Jim Astuto from Verizon Wireless, who spoke on the rising cost of insurance in the workplace.  The meeting was held at The Crowne Plaza on Virginia Avenue.

 

For more information on SAAHU, please call Matt Holcomb at 678 612 3072.  The meetings are the third Thursday of most months at 11:45 at the Crowne Plaza on Virginia Avenue in College Park., and are open to all insurance professionals and people who work with insurance professionals.  SAAHU is an association that is a part of the Georgia Association of Health Underwriters, and also a part of the National Association of Health Underwriters.

3 million HSA/HDHP policies have been sold nationwide!!!

People are really interested in the new Health Savings Accounts (HSAs). There are now three million of them that have been bought nationwide. These are the new policies that have been getting so much attention, including favorable comments from President Bush.

The idea is to get a High Deductible Health Plan, which is lower priced than the regular health insurance plans. These are very specific insurance policies. With the exception of preventive care, they can not cover anything until you hit the high deductible. Once the deductible is met, they either cover a percent of the rest of the medical needs, or they cover all of the rest of the costs for the year. If they cover a per cent, it is usually until another dollar amount has been reached, at which point they cover all the additional costs for the year.

What happens to all the expenses that come up before the deductible has been met? Well, the idea is that you put some money aside into a special Health Savings Account (HSA). These accounts are available from specific institutions that specialize in them. The money goes into the accounts pre tax, and grows tax free. You take money out for your health needs, also tax free. The institutions that specialize in HSAs often offer debit-like cards so that getting your money out is really easy.

It is expected that the renewals for HDHP policies will be lower, because you really don't use much of the insurance part of the plan. With the usage down, the rates have less reason to rise.

This sounds a lot like the old FSA accounts, except it is better. Individuals can take out HSAs and whether you are a group or an individual, your money is always yours. It does not go away if you don't use it, and there are no deadlines for the usage. Also, if you still have money in your account, it rolls over year after year. When you are 65 you can take out the money at your then tax rate. Anytime you use your money for medical expenses it is tax free, and if you need to take it out for a non medical need, you pay the taxes and a ten per cent penalty.

If your account rolls over and you develope quite a lot of money in it, you may feel pretty comfortable raising your deductible even higher. This will result in even less renewal increases.

So, it sounds pretty good so far, right? Well, it gets better. As you are using the high deductible part of the policy, you still get in network negotiated rates. That means that your dollars will go farther than if you didn't have insurance. In order to get these rates, you must use an in network doctor and facility, of course.

The tax savings part of the account is great, but really think for a minute what that means to your wallet. If you go to the doctor, and his normal rate is $150.00, but the in network negotiated rate is $100.00; if you pay for it with tax free dollars and you are in the 25% tax bracket, it will be like you are paying only $75.00 for the visit. The other $25.00 is your tax savings. That is using relatively low numbers. Imagine the impact of a a higher priced medical need.

Lower amounts of money sent to the insurance company, tax favored medical costs and savings accounts, lower renewal rates... What's not to love????

No wonder three million of these have been sold!!!!

Successful Fundraiser by SAAHU

The South Atlanta Association of Health Underwriters had a successful turnout at their most recent fundraiser. Oliver Halle and Associates came and spoke to agents as well as professionals in the south Atlanta area, about allowing their employees to take "The Harder Right". The symposium was about ethics, and how easy it is for good people to get swallowed up by making a series of small, but bad choices. It showed how these decisions can have a "snowball effect". The association used some of the proceeds to donate to the Fayette Samaritans.

SAAHU was founded in 2003 to serve the needs of health insurance professionals on the south side of Atlanta. It is an organization that provides opportunities for agents and vendors to network and to learn about new laws and products that are useful to their clients. It also gives health insurance professionals an opportunity to give back to their community.

SAAHU's first donation to the Samaratins was Thanksgiving 2003. This started a tradition of annual donating that has continued through Thanksgiving of 2005. When the budget was updated in March of 2006 as a result of the fundraiser, the board agreed to make a special donation. The recipients again, were The Fayette Samaritans and, the Cystic Fibrosis Reaching Out Foundation.

Each year the donations have increased as the association has grown in size through membership contributions and fund raising efforts. The South Atlanta Association of Health Underwriters believes that giving back to the community is an important part of their work.

Anyone involved in the field of health insurance is welcome to join the association and attend the meetings. Visit www.saahu.com for more information.

What Do You Do When Your Employee Becomes Disabled?

 

 

What Do You Do When Your Employee Becomes Disabled???

 

Who is going to pay the bills for your long time employee,  the one who just found out they have a major illness, and can't come back to work for several months.  You talk with them in the hospital, and you tell them that everything will be all right, but you look at your own situation, and you realize that without an income, things wouldn't be all right at your house, either.  You have some decisions to make... will you just go ahead and pay the employee their salary for the remaining time they are out?  Can you actually afford to pay that expense?  What if another employee goes out on disability, can you afford to set a precedence?  What if they are out indefinitely?  How long can you afford to cover them?  Can everyone else in your organization keep doing the work of the disabled person?  At some point you will need to hire a person to replace them.  This problem can happen to anybody and at any time.   But this is not the time to be doing this sole searching.  Many employers think that having a good health plan is all they need to make sure their employees are happy, and well taken care of, but what about the other needs that may come up? 

 

Now you realize you can't afford a lot more expense for your business, so how can you offer more benefits?  Obviously, if you are contemplating paying for this salary, the cost of insurance would have been cheaper.  Realistically speaking, you offer health insurance, life insurance, and maybe even dental and vision, you can't possibly do it all!!  No one expects you to pay for everything!

 

Most people recommend that you do not pay for all of your employees disability benefits. The perfect balance is to pay just enough to make them able to pay for the rest of it.  The portion that you pay is usually the portion that becomes taxed when they receive the benefit, so it defeats the purpose if you pay too much of it, anyway.  The surprising thing about it, is that disability is not much more expensive than dental insurance, in most cases.  Small business owners tend to think the cost will be out of range for them.  Employees perceive dental insurance to be more important, but the worst case scenario with forgoing dental insurance, is not nearly as devastating as forgoing disability insurance.  In other words, the highest payout of most dental insurance companies, is $1000.00 per person in any given year.  The largest payout with a disability insurance company, is going to be 50% or more of the employees income for the duration you purchased.  This is a much better use of the benefit money that you are paying out.

 

So what happens when you offer disability and some of your employees decline to get the coverage?  Then what do you do if they become disabled?  Well, you do the same thing that you would do if they had a cavity and chose not to take dental insurance.  You get a good night sleep knowing that you have made it available, and if they chose not to take it, then they made that decision.  Most employees look to their boss to make available the insurances that they need.  As the boss, you have a great influence over the benefit choices your employees make.  If you strongly encourage disability, then you will have a greater number of people participate in the plan.  You have to ask them how they will cover their house and car payments, and maybe even college expenses if they are not able to come to work everyday.  Make sure they realize that as a business, you can not afford to pay their salary for longer than their sick days.  When they realize that the responsibility is theirs, they can make a good decision.  If you don't get actively involved in the process, your employees will not think it is important.

Health Insurance What to do before you quit your job!!!

I get so many calls from people who have decided to make the BIG BREAK!  They are tired of working for someone else, and they have decided to go into business for themselves.  This is a very exciting time; there is a lot to do and there are a lot of decisions to make.  One of the first decisions, BEFORE you leave the old job, is to decide on your health insurance plan.  If you can get COBRA from your previous employer, ask how much it will cost you to continue with it.  You need to budget this into your expenses.  If you can't get COBRA, then you need to see what you can do about getting your own health insurance.  What many people do not realize, is that insurance companies can decline you coverage based on your health.  What you consider healthy is not necessarily what the insurance companies will consider healthy, either. 

 

There are a lot of misconceptions about health insurance.  Most people think that group health insurance is less expensive than individual.  It may appear that it is cheaper, because your company is paying a percentage of the total cost.  In many cases an individual plan is the least expensive way to go.  It may even be cheaper than COBRA.  The worst thing to do in looking for an accurate quote, is to go online and see what rates they post.  Many times they use quotes that are accurate for a very healthy person, and you may not be considered that healthy.  Sometimes they show rates that are for an 18 year old male, and don't exactly specify that it is not for your age bracket.  If you do decide to go online, expect to receive many phone calls back from various agents.  One gentleman I spoke with recently, told me he had received more than one hundred phone responses.  Some insurance agents run quotes on their websites.  These are tied into a single agency, and you are not likely to get so many calls as you will from a search engine.  These rates are also more likely to be accurate, but not as accurate as actually speaking to someone who can give you advise.  Your health insurance depends on getting the right rates and availability. 

 

It is best to actually visit or at least call an insurance agent, so you can get straight answers.  How do you find a good insurance agent?  I always recommend you look for someone that you would enjoy working with.  This should be the start of a long term business relationship, so get to know them.  It is a good idea to look for an agent who is an active member of an insurance association.  These agents meet once each month to learn the new trends, laws and products that are pertinent to the insurance industry.  One such organization is South Atlanta Association of Health Underwriters.  It is a part of the National Association and the Georgia Association.  You can access the website at www.saahu.com  (www.nahu.org and www.gahu.org).  Ask your agent if he is a member.  It is also advisable to make sure your agent is able to help with the increased life insurance you may need, as well as "buy-sell" and "business overhead" insurance.  These will become important as your new business grows.

 

It is certainly better to have all of the expenses understood, including your health insurance, before you make this big move. You don't want to quit your job and then find out that you can't get coverage or that it is not what you expected.  This is a big change and an exciting time.  Make sure you are fully ready for it.