January 12, 2014

THANKS, W:

Here's What My Company Will Pay for Health Insurance (PAUL DOWNS, 12/18/13, NY Times)

 Of 17 employees, five declined coverage altogether. They are already insured through spouses or, in one case, parents.

My bookkeeper, who works part time but meets the definition of an employee, realized that it would be cheaper for her to get coverage individually through the exchange because her family qualifies for substantial subsidies. In the past, we had included her in our group, but I'm not required to offer part-timers insurance, so I changed our company policy to exclude her (with her complete agreement).

As a result, she can now buy on the exchange, and I don't need to cover her. Coincidentally, she and her husband were the oldest people in our group -- so taking her off our policies will bring a significant reduction in our costs.

The remaining 11 chose a wide range of plans: one took the gold HMO that was equivalent to our current coverage, two chose a gold HMO with tiered pricing, one took a silver HMO, and three took a bronze HMO. The most popular choice was a bronze PPO with a health savings account. Three employees took that option, and so did I. The company will make an initial contribution of $500 into those health savings accounts.

The net result? It depends on the point of comparison. Our total cost for 2013 was $108,856. Of that, the company paid $72,937 and employees paid $35,919.

If I had taken my agent's first proposal (put everyone in a Gold HMO), the total cost for premiums would have been $135,738. Company share: $88,344. Employee share: $47,394.

The agent's cheaper option (put everyone in a Silver HMO) would have resulted in a total cost of $114,895. Company share: $76,620. Employee share: $38,275.

Our actual choice (a range of plans, with one employee choosing to leave the group) produced a total premium cost of $87,194. Company share: $59,005. Employee share: $28,189.

One of my goals was to reduce the cost of our coverage to the company. And in that respect, all of the hard work paid off. The cost that the company will bear was reduced by $13,932, or 19 percent, over last year's premiums, and it will be $29,339 cheaper, or 33 percent, than the cost I would have incurred had I simply accepted the quote that the agent dropped on my desk on Oct. 30.


Real Health Care Reform, Wal-Mart Style (IBD, 01/07/2014)

Businesses across the country have struggled for years to get their health costs under control, and these efforts are finally paying off, as they increasingly shift to consumer-directed plans that encourage workers to economize on health spending.

Health savings accounts, for example, have exploded in popularity. These plans combine higher deductibles with lower premiums and tax-free savings accounts for out-of-pocket costs. HSAs now account for more than 20% of the employer market, up from zero in 2005.

A RAND study concluded that expanding the HSA market share to 50% would cut health costs by nearly $60 billion a year.

Wal-Mart offers its employees individual coverage for about $40 a month. And that's for a plan with a deductible of $2,750, access to a wide network of doctors and hospitals, and at least $250 deposited in a worker's own health reimbursement account, according to the Washington Examiner.

Health Savings Accounts: Ten Years On (Greg Scandlen December 16, 2013, Heartland Institute)

HSA-Health Savings AccountsOn a wintery Monday night in Washington about 70 people gathered at a banquet to celebrate the tenth anniversary of the signing of Health Savings Accounts into law.

Fittingly, the dinner, organized by the National Center for Policy Analysis (NCPA), was held in the O'Byrne Gallery of the DAR's Constitution Hall where President Bush signed the law on December 8, 2003.

Represented were many of the people who conceived of the idea in the 1980s, the policy staff and legislators who enacted the first Medical Savings Accounts (MSA) law in 1996, the entrepreneurs and regulators who took the concept and created Health Reimbursement Accounts in 2002, and the companies who have turned the law into the products and services that benefit tens of millions of people today. [...]

Kyle Rolfing and Dr. Mike Parkinson, formerly of Definity Health and Lumenos respectively, spoke of taking the MSA concept a step further after the collapse of managed care in the late 1990s. They found a way to apply the idea under current tax law and sell it to large corporations. They found a receptive audience in the Bush Treasury Department, according to Bill Sweetnam, which termed the effort Health Reimbursement Arrangements.

Posted by at January 12, 2014 8:18 AM
  
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