Group Health Insurance: What Makes An "Unreasonable" Rate Increase?

You can't pick up a newspaper without reading about the Health Insurers raising rates. Media and Legislators often accuse them of giving out "unreasonable increases."

The CEO of MVP Health Care, a New Hampshire and Vermont HMO, recently talked about the fact that insurance companies are often excoriated for increasing rates faster than the rate of medical inflation.

He relates a story of being in Washington and having a lawmaker tell him that she found it "shocking" that rate increases for insurance premiums would exceed the rate of medical inflation. At the same time she was griping to him and not far away at the Department of Health and Human Services, regulators were busy trying to define the new health care law's "unreasonable" rate increase standard. HHS bureaucrats -- lacking any real world experience -- have suggested that any increase that exceeds medical inflation might be "unreasonable."

Self-serving legislators all over the country, such as the woman he mentioned, decry the "greed" of carriers who are giving out 10-15% rate increases at a time when medical inflation is only 3.4%. And of course the only examples that are EVER reported by the media are the most egregious. News organizations drive readership with shocking numbers, so the larger increases are the ones that get all the attention.

But Is It Always the Carriers' Fault?

Before we run through some math to explain why increases are often larger without netting the carrier any more money, take a look at Massachusetts, where the big three carriers -- Blue Cross, Harvard and Tufts -- have between them earned virtually zero dollars of profit for the last three years combined. At the same time Partners Health Care, owners of Mass General Hospital and several other powerful providers racked up a $195 MILLION profit for their most recent fiscal year. So are the MA non-profit carriers greedy, or is the non-profit health care provider.

Does that lack of earnings suggest that these carriers are inefficient? I don't think so -- these three carriers' average cost of managing claims averages about 10.5% between the three of them. While they're adjudicating claims at that rate, look at national Health Reform legislation that is trying to force rates down to the 15-20% range. So there's a valid argument that Massachusetts insurers are neither inefficient nor greedy.

Rates go up for a couple of reasons, the first of which is that every year America gets older, and older folks use more medical care. The Baby Boomer generation is aging... and until they exit the scene America's average age will continue to rise... that will help.

But in the meantime let's look at an example. Assume a hypothetical company with 100 employees at an average health cost of $400/month.

* 100 employees times $400 each equals $40,000 a month.

* 50 are age 40 or older, with an average health system use of $600/month, $30,000 usage.

* 50 are 39 or younger and use only $200/month each = $10,000 per month usage.

* Total? $40,000 - we're assuming no administrative cost here to simplify the illustration.

OK, that was the situation when the plan was renewed last year. During the year the company laid off 20 employees because of the economy. Of course following industry-standard practices, they laid off the most recent hires -- which also happen to be the youngest employees.

Let's look at the numbers:

* Medical inflation is 3.4%, so the under-40 crowd saw their claims cost go from $200 to $206.80... 3.4% increase, in line with medical inflation.

* There are now only 30 of the younger group, so claims are 30 times $206.80 -- $6,204.00

* The 50 older guys also have a 3.4% increase, so their usage goes from $600 to $620.40 -- again, a 3.4% increase = $31,020 claims

* Total claims = $37,224.40 per month.

* Divided by 80 remaining employees = $465.30 claims per month per employee.

* $465.30 divided by $400 = a 16.3% increase in rates.

* And we haven't even allowed for the fact that each and every one of the remaining employees is a year older... and more likely to use incrementally more services.

No smoke, no mirrors... the carrier is still collecting premiums equal to the claims the group incurs. What the large 16.3% rate increase represents is just the reality of a lousy economy and layoffs done the way they've always been done.

So listen up, Legislators, Regulators: Before you point the finger in an attempt to buy votes with your righteous anger and certainly before you pass some misguided law that regulates the pricing of a product that you clearly don't understand, think twice. Do some research. Find out the truth.

Jim Edholm owns Business Benefits Insurance (BBI), located in Andover, MA. He.is an employee group benefits consultant to companies with up to 200 employees. He has prepared a report titled "How Businesses Can Lower Healthcare Costs, Maintain Benefits and Put Cash in Employees' and Owners' Hands." Request your free copy.

How To Apply For Health Insurance For Your Business In Texas

If you own a small business in Dallas, Houston or anywhere else in Texas and are looking for a health insurance provider for your employees, here’s a standard list of business data you’ll need to provide:

· Employer name. The legal name of your company.

· Address of your business. Insurers need the street address, not a P.O. Box, to determine your region or service area.

· A list of employees you plan to cover. Not all employees will be eligible.

· Tax identification or employer identification number. This is the EIN (sometimes called FEIN) you obtained from the IRS when you started your business.

· Business background. Depending on the size of your business, you may have to provide:

o Date your business started

o Payroll records

· Standard Industry Code (SIC or NAIC), informing the insurer what industry you’re in.

· Quarterly salary and wages for the past two quarters.

· Employee census information. Insurers use this to estimate the health care costs your group is likely to incur. A census does not include health status, race, religion, sexual orientation (even if applying for domestic partner benefits), Social Security number, or U.S. citizenship/immigration status. In order to quote you a rate, insurers will ask you to complete a census form for each of your employees with this information:

o Name

o Age or date of birth

o Number of dependents

o Zip code.

Creating a Schedule

Next, you’ll need to finalize these scheduling details early in the process of shopping for an insurance plan:

· Effective date of coverage. This should be at least six weeks ahead, so you’ll have time to complete the administrative steps, but no more than three months ahead, so the quotes don’t expire. Most employers choose the first of the month to begin coverage.

· Plan cycle. Many plans operate on a calendar-year basis (January - December). Some plans operate on a different 12-month cycle, or your company may have specific busy seasons when you don’t want to deal with insurance issues.

Establishing a Budget

Once you finish creating a schedule, you’ll need to determine how much money you can afford to spend for coverage, and then calculate the cost:

· By percentage of payroll. Calculate an amount as a percentage of your total monthly and annual payroll.

· Per employee per month. Calculate how much you could spend per employee per month. Determine a bottom-line maximum figure, without worrying about such variables as employee contributions or dependent coverage. Based on your budget, you can figure those variables later.

· Consider cash-flow issues.

· Monthly premium commitment. Most insurers require payment on the first day of the month covered. You would pay for April coverage on April 1, May coverage on May 1, and so on. If you’re buying coverage for the first time or replacing existing coverage, the insurer will likely ask for a month’s premium in advance.

· Grace period. Most insurers offer a 30-day grace period on paying premiums. If you’re a few days late, your policy isn’t likely to be cancelled. Ask about your insurer’s grace period and notification policy regarding cancellation.

· Cancellation/reinstatement. If you’re habitually late with payments, your insurer has the right to cancel your group insurance. Most insurers have their own procedures for reinstating canceled polices, so be sure to ask.

· Premium increases. Most premiums are renewed annually, which means the insurer can adjust the price once a year. Some plans allow insurers to increase premiums every six months. By law, you must be given at least 30 days’ notice of a proposed increase.

How to Find Your Health Insurance Plan.

Now that you’ve gathered your information and put together your schedule and budget, it’s time to start looking for a plan.

Brokers Versus Agents

These licensed professionals can help you find and choose the best plan for your business. They know:

· The best products available, and

· State and federal regulations to protect your business from liabilities.

· They’ve also satisfied licensing requirements that require them to keep up-to-date on Texas’ insurance market.

A broker can direct you to products offered by a range of providers. An agent works with only one company and promotes that company’s products. Both may be referred to as “agents” and are licensed professionals in the state of Texas.

The broker or agent will help you:

· Shop for the right plan for your company and provide one or more premium quotes

· Discuss alternatives to help you understand your plan options

· Implement the plan you select

· Service the account, including solving problems with billing, eligibility, and claims

· Do the legwork so you don’t have to spend the time

· Get the most from the coverage you purchase

· Expedite the renewal process

Online Options

The online world is changing rapidly and the number of consumers and employers using the Internet to research or purchase health insurance is dramatically increasing. The Internet makes it easier to shop for health insurance, you can learn about your options from the comfort of your home or office and on your own schedules – without pressure to buy.

Implementing the Plan

Review the various plans you’ve chosen for your business:

· Weigh the benefits against the plan costs.

· Research the insurers for:

o Financial stability

o Ease of administration

o Overall quality of service.

· Consider cost-saving strategies.

· Review at least two to three health insurance carriers and plan options.

Action Plan Checklist:

· Sign the contract before the quote expires, usually within 30 days.

· Communicate plan choices to employees.

· Distribute and collect enrollment materials for those people covered.

· Copy and return all original materials for enrollment before the requested date.

If you’re a small business owner who would like to offer an affordable health insurance plans to your employees but can’t afford group health insurance, you should take a look at the revolutionary, comprehensive individual health insurance solutions created by Precedent specifically for young, healthy individuals. Precedent offers affordable, individual health plans with catastrophic coverage, but without a high deductible, and we’ll work with you to make these plans available to your employees at a discount. For more information, visit us at our website, [http://www.precedent.com]. We offer a unique and innovative suite of individual health insurance solutions, including highly competitive HSA-qualified plans and an unparalleled “real time” application and acceptance experience.

Precedent puts a new spin on health insurance. Learn more at [http://www.precedent.com].

Who is responsible for unsustainable healthcare fresh - part I

Who is really responsible for the costs of health care in this country? We have been conditioned to point the finger at the Government, Private Insurance Carriers or medical providers. We have heard endless blame dam, the assault charge and the fury of fault-finding between these parties for many months now. Each would have us believe that others are solely responsible for the problems in our health care system. No doubt, however, it is shared fault and joint responsibility. The Government, major insurers and medical providers, I would suggest three additional parts of conviction:

(1) insurance brokers of
(2) employers and
(3) you and me individually.

There was and there will be many more question of the role of the first three parties have had in the creation of the current situation. My intention in this series of three is to expose the role of the three groups of the latter and suggest how these groups can become really part of the solution.

Health insurance brokers

To include brokers in this discussion may seem incriminating because it is my job. However, I do so with a clear conscience because the approach my business takes when representative of our customers. Last week I was discussing trends in Health Plans franchise high with one of our representatives local carrier insurance she told me that she had recently heard a broker him, said "I do not sell this product to one of my clients." The broker who made this comment was referring to a top Plan coupled with an HSA health franchise and the comment was made in the context of its commission. The carrier REP has transfixed the broker to admit showing does not a plan of some of its clients because of the impact it would have on its Board.

The use of a high deductible Health Plan (HDHP) strategy will generate a reduction in substantial and immediate bonuses - usually between 30 and 50%. You guessed it. The reduction in premiums: a corresponding reduction in the commission to the broker. How brokers are honest and ethical enough suggest a strategy aimed at their client that will lead to a sizable pay cut for them? Unfortunately, this is how the system is designed and creates an inherent conflict of interest unless the brokerage firm is built on a different model. A model which measures the success based on the savings to their customers. In this model, the broker will look always all first take advantage of the savings created by health plans of forthrightness in the construction of a proposal rather than looking at as a last resort or only if the client requests about these plans.

The Government actually provided some very good options for the employer health care plans. Flexible of spending accounts (FSA), accounts of health (HSA) savings and the arrangements for health (HRA) provide different ways of achieving premium savings and tax savings. If properly designed, these favourable tax plans may result in the equivalent coverage or higher for employees at a price lower than the employer. A well-designed plan accomplishes these win/win results must be performed by a broker who specializes in the design and administration of these plans, not a broker that simply suggested later or at the request of the client.

Survey Kaiser/insurgencies 2009 report-employer sponsored health benefits, we better understand why employers have adopted of HDHP and what were the results:

72% of companies offering an HDHP said the main reason for which they have begun to offer this option was to save on health care costs
49% of the companies offering an HDHP has reported that the result of more success has been the control of health expenditure
A further 27% reported that the result of more success has been encouraging employees to be better consumers of health care (who, in passing, ultimately led to reduce health care costs)
82% of employees enrolled in a HDHP reported being either very satisfied or somewhat satisfied with the plan while only 3% reported being very dissatisfied

Here is the surprising statistics.

Only 5% of the companies currently offering an HDHP say "very likely" to offer an HDHP with a HRA next year
Only 6% of the companies currently offering an HDHP say "very likely" to offer an HDHP with an HSA in the next year

(Kaiser Family Foundation, and 2009, pp. 166-167)

Why few companies is planning start HDHP offering when the results were so favourable to employers and employees? Brokers did not do a fairly good job of promoting these types of plans and educate their customers about the financial benefits of the use of a HDHP. Whether due to a lack of knowledge of the product or a desire to preserve their commission, there is fault with the brokerage industry to be more aggressive with the reform of positive health that the Government has already adopted. Brokers must be sufficiently well informed and ethical enough to recommend, design and implement these plans for the benefit of their clients. Employers must find a broker who is competent and ethical enough to recommend, design and implement these plans for their business.

Reference

The Kaiser Family Foundation and research in health & Educational Trust (2009). Employer benefits 2009 annual survey (electronic Version). 166-167.

Scott is a Consultant of benefits for the benefit of Design Specialists, Inc. (BDS) in their Office in Phoenix, AZ. BDS is a broker of full services and a Director of third party specializing in the design and administration of high deductible health plans that help businesses save money on health care without cuts to the coverage of employees. Prior to joining the BDS, Scott has more than 12 years of experience as Manager of human resources and CFO.

Experience of Scott and the balanced approach that it can work effectively with the CFO and HR managers to achieve the often competing objectives of HR and finance. In addition, responsiveness and organisational skills of Scott to manage the process of renewal and registration for customers in an orderly manner and timely at the time. Scott likes to help businesses save thousands on their health expenditures without cuts that have a negative impact on employees.

http://www.bdsadmin.com

Choosing Health Insurance For Your Small Business

With small businesses employing the majority of the workforce, the health benefits they offer is vitally important to millions of workers. When evaluating which health insurance plan is best for your employees, make sure you shop around. The large variety of plans and coverage options available can be difficult to navigate, but these options allow small businesses to tailor plans that best fit the needs of their employees.

When considering a health insurance plan for your small business, it's important to note that insurance carriers calculate rates according to the following case characteristics:

Age of employees - Older employees are assumed to have more expensive and more frequent health-related claims, so generally speaking, an older workforce means steeper health plan costs.

Gender - Women typically incur more medical costs than men at younger ages, while males incur higher costs as they age. If your small business has a young, predominately female workforce, or one that is older and mostly male, expect to pay higher premiums.

Number of plan participants - As the amount of plan participants increases, the administrative cost for each individual decreases.

Industry - Certain factors, like unsafe working conditions, subject small businesses to higher costs. And even high employee turnover can result in a more expensive plan due to higher administrative costs for the insurer.

Geographic area - Health care costs vary by region due to differences in cost of living, medical practices and the amount of medical competition in the area.

Since the above factors affect health insurance rates, you can expect premiums, deductibles, coinsurance percentages and copayments to vary drastically from plan to plan. Shop around and do your research to ensure that you get the best plan at the best price for your small business.

Richard Monello is the President and CEO of Custom Health Plans, a full-service Texas health insurance agency offering the most cost-effective and affordable health insurance solutions for individuals, families, small businesses and the self-employed.

Acquired rights under the new health care legislation

Introduction

The health care legislation signed into law on March 23, 2010 is officially known as the "Patient Protection and Affordable Care Act." Gaining widespread use is the abbreviated "Affordable Care Act," and when used in context, simply "The Act." (1)

The Act is immense in scope and complexity, affecting every aspect of the delivery and financing of health care in the United States. Many of its provisions took effect the day the bill was signed, while hundreds more will be implemented in the coming years, most notably in 2014 with the establishment of state-based insurance exchanges, coverage mandates for individuals, and penalties for employers who do not provide their employees with proscribed levels of health care benefits.

In helping our clients understand and comply with the provisions of The Act - and owing to its complexity and multi-year implementation - we've found it most effective to address The Act in chapters, as it were, with advance learning and planning periods of three to six months--three to six months, that is, with the major exception of planning for "grandfathering" - in particular, the advantages of grandfathering as it relates to the new non-discrimination rules that will apply to all health plans, including fully-insured plans, on the policy anniversary following September 23, 2010, unless the first plan is grandfathered. For this provision, planning should be accomplished as soon as possible.

About Grandfathering

Under The Act, health plans that have been in continuous effect since March 23, 2010 can avoid several costly requirements of the legislation by adhering to strict guidelines that allow them to continue under current regulations, i.e., to remain "grandfathered."

Grandfathered status does not exempt a health plan from existing federal and state law, e.g., COBRA, Cal-COBRA, and FMLA, nor does it exempt it from all of The Act's provisions; However, avoidance of The Act's requirements as they pertain to the nonâ??discrimination rules of Internal Revenue Code Section 105 (h) may be of paramount importance to the financial well-being of the use.

Moreover, grandfathered status exempt employers from yet-to-be-defined requirements for the establishment of "internal claims appeal and external review processes," as well as new "modified community rating" provisions.

New Requirements for Health Plans

Effective with the first policy anniversary after September 23, 2010, all health plans, whether grandfathered or not, must comply with the following new requirements:

-No limit on lifetime benefits

-No limit on annual benefits (except as permitted by The Act)

-Extension of dependent coverage to age 26 (or older if required by state law) (2)

-No exclusions for treatment of pre-existing conditions for persons under age 19

-Designation of Primary Care Providers and direct access to OB - GYN providers and emergency services as needed

Health plans in effect on March 23, 2010 that do not remain grandfathered must also comply with the following new requirements, both at renewal and in perpetuity:

-Provide first-dollar coverage for in-network preventative care

-Establish internal claims appeal and external review processes (3)

-Conform to the non-discrimination rules under IRC Section 105 (h) (4)

And it's this last requirement - conformity to the stringent rules of IRC Section 105 (h) non-discrimination - that can present an employ with the greatest cost increase under the entire sweep of The Act The rules for non-discrimination under Section 105 (h) are extraordinarily complex, and the penalties for non-compliance extraordinarily punitive. (5) Indeed, $100 per day for each individual "to whom the failure relates" to the lesser of 10% of the plan's costs or $500,000.

Changes after March 23, 2010 that Will Not Cause a Loss of Grandfathered Status

-Changing premiums (payable to the carrier).

-Complying with federal and state law.

-Increasing benefits.

-Voluntarily complying with The Act.

-Changing plan structure, e.g., switching from a Health Reimbursement Arrangement to a traditional plan, if benefits are not reduced per the rules on page three herewith.

-Changing provider networks.

-Changing a prescription drug formulary.

-Making changes to accommodate a merger or acquisition, as long as the merger or acquisition is not performed solely to allow a group to move from grandfathered one plan to another with impermissible reductions in benefits or increases in cost sharing.

-Changing administrators for ASO (Administrative Services Only) groups.

Changes after March 23, 2010 that Will Cause a Loss of Grandfathered Status

-Changing from one insurance carrier to another.

-Increasing the co-insurance or percentage of any other cost-sharing feature above the levels at which they were set on March 23, 2010.

-Increasing any fixed-amount cost-sharing, e.g., whatever and out-of-pocket limits, above the level in effect on March 23, 2010 by a percentage that exceeds the sum of medical inflation plus 15%. (6)

(-Increasing co-payments above the levels in effect on March 23, 2010 by an amount that exceeds the greater of: a). the sum of medical inflation plus 15%. However, b). $5, increased by medical inflation.

-Reducing use contributions toward any tier of group health insurance coverage or group health plan by more than 5% below the contribution rate on March 23, 2010.

-Eliminating all (or substantially all) benefits to diagnosis or treat a specific condition.

-Imposing an annual or lifetime limit on benefits if an annual or lifetime limit had not been previously imposed on all benefits; or, for plans that previously imposed a lifetime limit on all benefits, imposing an annual limit that is lower than the lifetime limit. or, for plans that previously imposed an annual limit on all benefits, decreasing the dollar value of that annual limit.

Conclusion

Employers should preserve their rights under The Act by planning now - well in advance of their renewal - to determine if it's in their best interest to retain grandfathered status for their health plans, and if so, then to manage them with extreme care.

(1) The health care legislation is actually comprised of two new laws: The Patient Protection and Affordable Care Act (H.R. 3590) as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872).

(2) Grandfathered plans may exclude

(3) Per the requirements of IRC Section 503.

(4) The Act does not actually extend IRC Section105 (h) to fully-insured health plans. rather, it adds Section 2716 to the Public Health Services Act which, for the most part, mirrors IRC Section 105 (h).

(5) Penalties are imposed in the form of an excise tax under the provisions of IRC Section 4980D.

(6) The Department of Health and Human Services currently assumes an annual medical inflation rate of 4% for 2011â??2013 (simple interest), so that to retain grandfathered status, maceutical, whatever, and out-of-pocket limits may not be increased by more than 19% above 3/23/10 levels at the first post 9/23/10 renewal, nor by more than 23% above 3/23/10 levels at the second renewal, nor by more than 27% above 3/23/10 levels at the third renewal, etc.

Who is Responsible For Unsustainable Health Care Costs? - Part II

Part 1 of this three-part series answered this question by addressing the fault of health insurance brokers. Part II of this series shifts to the culpability of employers who provide insurance to their employees.

The employer-based health insurance system that we are familiar with in this country is very unique. No other industrialized nation has anything quite like the American system which developed as a means to circumvent wage controls that were imposed by Congress during World War II. Since that time, employees have come to expect fringe benefits such as health insurance as part of their total compensation package. In this system, we entrust our employers with some very important decisions that largely determine what our cost of medical care and access to medical care will be. We rely on our employers to make good decisions that will afford us better access and cost control than we would have on our own.

A very disconcerting pattern that I see as I interact with Human Resource and Finance Executives is that heavy workloads and apathy prevent decision-makers from spending the time necessary to make and implement good decisions on behalf of their employees. All too often, the decisions are made late in the game without a proper decision-making process and the path of least resistance is taken. That path of least resistance is usually to simply renew the current plan and absorb the customary double-digit increase or to weaken the plan in some fashion to save money. Shortsighted decisions such as these lead to higher premiums and/or higher out-of-pocket costs for employees.

The average Employer Premium Contribution in 2009 is $4,824 for single coverage and $9,860 for family coverage (The Kaiser Family Foundation and HRET, 2009, p. 2). The cost of benefits can easily add 10% or more to the total cost of compensation for an employee. We are not just talking about the cost of free sodas in the break room here. These decisions merit the best decision-making skills of HR and Finance executives. A thorough and responsible decision-making process includes the following:

Internal research to learn about trends and best practices in benefits
An early dialogue with the broker - a good broker will initiate this dialogue several months in advance of the renewal
Exploration and discussion with other brokers and administrators to make sure your broker is the best option for you and to allow healthy competition to work in your favor
A willingness to make changes to plan design, carrier, and/or broker in order to contain rising costs without sacrificing the quality of coverage

I am an HR Professional and I have been through years and years of health insurance renewals on the employer side prior to coming to the brokerage side. During those years as an HR Director, I was at times guilty of rushing the process, guilty of being closed-minded, guilty of making dangerous assumptions, and guilty of not doing my due diligence before making decisions that would bind my company and employees for another year.

The best renewal experience I ever had, though, was the year I took the time and effort to truly make the best decision. It was the year that I put my time constraints and assumptions aside in the interest of finding real solutions. In that year, solutions were found and decisions were made that led to a 30% savings for the company and yet better coverage for the employees. These win/win outcomes were very gratifying and well-received, especially in a year when the company would have otherwise been forced to cut benefits or pass on more cost and liability to the employees. Those outcomes were only possible though, because of a willingness and determination to find solutions to the problem of rising health care costs.

HR professionals clamor for the same recognition and respect that other leaders in the organization get. These are the types of outcomes and decisions that will vault you as an HR professional to a higher level of respect and influence within your organization. It will not come to those who always accept status quo and allow problems to get worse every year. Approach your next renewal season with a determination to make it the best renewal ever by solving the nation's problem of unsustainable health care costs for you and your employees.

Reference

The Kaiser Family Foundation and Health Research & Educational Trust (2009). Employer Health Benefits 2009 Annual Survey (Electronic Version). 2

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Google and Microsoft's New Battleground - Your Health

The concept of online patient medical records is taking off after Google recently released 'Google Health' and Microsoft a few months earlier released 'HealthVault'. AOL was first out of the block with 'Revolution Health' but hasn't made quite the same splash as the big two behemoth's.

Online medical records will allow patients to access their complete medical records (have you ever wondered what's in your paper file, now you'll know) wherever they go. With most people moving many times in a life time and seeing many different doctors this will lead to more informed and better healthcare decision making as their complete records follow them wherever they go.

Currently when people move they usually just start a new file with their new doctor, leaving their medical history behind. When they also see different specialists these doctors will likely not see the patients complete medical history and just base decisions on the current diagnosis, including emergency situations. Now these doctors will have a lifetime of medical history at their fingertips instantly.

This also cuts down on a great deal of administration expenses and delays which may be reflected in lower healthcare insurance premiums if implemented.

The technology has been available for years to make this a reality for everyone, it will improve patient healthcare decisions and cut down on administration expenses. So why haven't we put everyone's medical history online previously?

For starters, current healthcare records are primarily on massive amounts of paper, about 14% is currently stored on a computer in the USA. Transferring the mountains of medical records to a digital format is no small task and could induce more than a few cases of carpal tunnel syndrome typing all that data in. Most other industrialized countries have 50-90% of their records currently stored on a computer.

So why has the USA been so slow to put medical records on a computer?

In the USA hospitals are really business's, and they don't want to share information with their competition. Why should they help a patient/customer go see another doctor at another hospital? So they will drag their feet as long as possible.

Despite this Google and Microsoft are getting many people to volunteer and join their programs. These eager volunteers may be in for a bit of a surprise down the road.

Medical record privacy laws were written 12 years ago and addressed doctors, pharmacists and patients. There are no references to anything that may cover Google and Microsoft. In other words you will need to trust these large multi billion dollar corporations to look out for your best interests. Most of you are probably having a good chuckle after that last sentence.

Why should you care if Google or Microsoft sells or grants access to your medical records to the highest bidders?

Those bidders will be insurance companies and it would be pure gold to them. They could raise premiums or even deny you health insurance based on the slightest medical problems you have, and if you have a 'suspicious' gene it gets worse. Now you can adversely affect your children and relatives seeking medical insurance as they may be deemed carriers of this questionable genetic trait because of their relation to you.

Then employers will be bidding on those precious records. Perhaps they will conclude you are likely going to cost them a lot of medical expenses, therefore you can forget about a promotion or if you are applying for a job you're out of luck.

These online medical records have the potential for great benefits but until legislation to protect patients catches up with the technology those early volunteers signing up are in for a big surprise down the road, after all, Google and Microsoft are interested in the health of their bottom line, not your medical health.

Paul Fezziwig is a contributor for Healthcare Reviews, http://www.healthcarereviews.com, a free patient resource to rate and review their doctor, hospital, dentist and more.

Small Business Health Insurance - An Employer's Guide to Getting Small Business Health Insurance

Saving on your small business health insurance can be a challenge. But there are ways to overcome the financial obstacles and get the coverage necessary for your business. There are two major benefits of employer-based coverage. First these plans, although expensive, usually carry the best all around protection for you and your employees. Second, providing benefits plays a key role in attracting and retaining quality employees.

Why is coverage for small businesses so much more than for large corporations?

Health insurance for small businesses cost so much because of the high quality coverage concentrated among a small group of people. Every individual within the group represents a different level of financial risk to an insurance company, and this risk is added up and spread out among the group. Large corporations pay considerably less because the risk is spread to such a large group, where small business owners can see unreasonably high increases in premiums due to one or two members. Small businesses also have to insure their employees under state mandates, which can require the policies to cover some specific health conditions and treatments. Large corporations' policies are under federal law, usually self-insured, and with fewer mandated benefits. The Erisa Act of 1974 officially exempted self-funded insurance policies from state mandates, lessening the financial burdens of larger firms.

Isn't the Health Care Reform Bill going to fix this?

This remains to be seen. There will be benefits for small business owners in the form of insurance exchanges, pools, tax credits, subsidies etc. But you can't rely on a bill that is still in the works, and you can't wait for a bill where the policies set forth won't take effect until about 2013. Additionally, the bill will help you with costs, but still won't prevent those costs from continually rising. You, as a business owner, will need to be fully aware of what you can do to maintain your bottom line.

What can I do?

First you need to understand the plan options out there. So here they are.

PPO

A preferred provider option (PPO) is a plan where your insurance provider uses a network of doctors and specialists. Whoever provides your care will file the claim with your insurance provider, and you pay the co-pay.

Who am I allowed to visit?

Your provider will cover any visit to a doctor or specialist within their network. Any care you seek outside the network will not be covered. Unlike an HMO, you don't have to get your chosen doctor registered or approved by your PPO provider. To find out which doctors are in your network, simply ask your doctor's office or visit your insurance company's website.

Where Can I Get it?

Most providers offer it as an option in your plan. Your employees will have the option to get it when they sign their employment paperwork. They generally decide on their elections during the open enrollment period, because altering the plan after this time period won't be easy.

And Finally, What Does It Cover?

Any basic office visit, within the network that is, will be covered under the PPO insurance. There will be the standard co-pay, and dependent upon your particular plan, other types of care may be covered. The reimbursement for emergency room visits generally range from sixty to seventy percent of the total costs. And if it is necessary for you to be hospitalized, there could be a change in the reimbursement. Visits to specialists will be covered, but you will need a referral from your doctor, and the specialist must be within the network.

A PPO is an expensive, yet flexible option for your small business health insurance. It provides great coverage though, and you should inquire with your provider to find out how you can reduce the costs.

HMO (Health Maintenance Organization)

Health Maintenance Organizations (HMOs) are the most popular small business health insurance plans. Under an HMO plan you will have to register your primary care physician, as well as any referred specialists and physicians. Plan participants are free to choose specialists and medical groups as long as they are covered under the plan. And because HMOs are geographically driven, the options may be limited outside of a specific area.

Health maintenance organizations help to contain employer's costs by using a wide variety of prevention methods like wellness programs, nurse hotlines, physicals, and baby-care to name a few. Placing a heavy emphasis on prevention cuts costs by stopping unnecessary visits and medical procedures.

When someone does fall ill, however, the insurance provider manages care by working with health care providers to figure out what procedures are necessary. Usually a patient will be required to have pre-certification for surgical procedures that aren't considered essential, or that may be harmful.

HMOs are less expensive than PPOs, and this preventative approach to health care theoretically does keep costs down. The downside, however, is that employees may not pursue help when it is needed for fear of denial. That aside, it is a popular and affordable plan for your small business health insurance.

POS (Point of Service)

A Point of Service plan is a managed care insurance similar to both an HMO and a PPO. POS plans require members to pick a primary health care provider. In order to get reimbursed for out-of-network visits, you will need to have a referral from the primary provider. If you don't, however, your reimbursement for the visit could be substantially less. Out-of-network visits will also require you to handle the paperwork, meaning submit the claim to the insurance provider.

POSs provide more freedom and flexibility than HMOs. But this increased freedom results in higher premiums. Also, this type of plan can put a strain on employee finances when non-network visits start to pile up. Assess your needs and weigh all your options before making a decision.

EPO

An Exclusive Provider Organization Plan is another network-based managed care plan. Members of this plan must choose from a health care provider within the network, but exceptions can be made due to medical emergencies. Like HMOs, EPOs focus on preventative care and healthy living. And price wise, they fall between HMOs and PPOs.

The differences between an EPO and the other two organization plans are small, but important. While certain HMO and PPO plans offer reimbursement for out-of-network usage, an EPO does not allow its members to file a claim for doctor visits out its network. EPO plans are more restrictive in this respect, but are also able to negotiate lower fees by guaranteeing health care providers that it's members will use in-network doctors. These plans are also negotiated on a fee-for-services basis, whereas HMOs are on a per-person basis.

HSA (Health Savings Account)

An HSA is a tax-advantaged account used to pay existing and future medical expenses. HSAs are used in conjunction with high-deductible health plans (HDHP), which will make some with pre-existing conditions ineligible. Also, HSAs must be funded with cash. Communicating the terms of this account to your employees is important, as a large number of HSAs are underfunded or improperly funded. The health savings accounts were signed into the law by George Bush in 2003, and have become an affordable alternative to a group health plan.

When inquiring about an HSA, there will be a few things you will want to clarify. While HSAs generally cover routine medical expenses and copays, some can provide dental and vision care as well. And since HSAs can be combined with certain compatible plans, it is important to understand how money from the account will be allocated. And finally, you will want to know about cashing out your HSA balance. The amount is taxable and could be subject to a ten percent excise tax.

HRA (Health Reimbursement Arrangement)

An HRA is exactly what it sounds like. The employer reimburses the employee for health care. As an employer, you will usually have the option to contribute to a reimbursement fund, or to pay fees as they are incurred. These reimbursements can be deducted from your taxes, and are tax-free for your employees, saving you both money.

Some providers empower employers by giving them more options. HRAs, unlike HSAs, don't have to be funded with cash money, placing a book keeping entry on your balance sheet is enough. You can usually control aspects of your arrangement such as reimbursement limits, whether you or your employee pays first, and if the previous year's funds roll over.

HRAs are becoming a more popular option because of the control it has given small businesses. Combined with a high deductible health plan (HDHP), an HRA could be the most cost-effective solution to your small business health insurance problems. It's always best to compare these plans to PPOs, HMOs, and EPOs to know what works best.

Fee for Service (FFS) or Traditional Indemnity

A fee for service plan is the most flexible small business health insurance option. You choose your doctor, and your hospital. You can see a specialist without a referral. This flexibility, however, comes with more out-of-pocket expenses and higher insurance premiums.

The typical FFS plan has a deductible ranging anywhere from five to fifteen hundred dollars. After this amount is reached, the provider will pick up eighty percent of your medical bills, and require you to pay the remaining twenty percent. Because of the rising costs of health care, and the potential for a small number of doctor's visits to cost thousands, these plans can become incredibly expensive.

Flexible Spending Account (FSA)

A flexible spending account is a savings account to be used for medical expenses, and is funded by pre-tax dollars. Using pre-tax dollars means that your employees will actually show that they have less income, and will therefore have less taxes withheld. As an employer, you set the limit on contributions to the account per year. In addition to the employee contribution, you can also credit the account, or fund it completely from your general assets.

An FSA, especially if combined with an HDHP, can significantly reduce the costs of small business health insurance.

You should be forewarned, money from FSA accounts cannot be rolled over. They are, however, available to use for two years and two and half months after the benefit year. A terminated employee won't be able to use leftover funds, unless there is a positive remaining balance and COBRA is elected.

Small business health insurance providers have made significant improvements in their services to simplify the administration of your plan. With HRAs, FSAs, and HSAs, your employees can use debit cards for medical transactions. Be sure to research this thoroughly. You will want to be sure your debit card plan is IRS compliant, and that you can use a large number of pharmacies. You should also pick a plan that can verify eligibility on the spot. Talk with your agent about linking transit, parking fees, and prescriptions to the same card. When picking the debit card options, please be sure to clarify the details of the substantion process. This is IMPORTANT! With other plans, the provider may assign someone to manage your plan. Or you may have to hire someone. Still, you should be able to login to your account and print insurance cards, important papers etc.

The next thing you can do is thoroughly assess your needs. Being that every member of your small business plays a key role in its success, it is vital that their needs are met. And understanding these needs is crucial to finding the right plan. Find out about chronic illnesses, and additional information related to past health issues. Know what your employees think about health insurance, and get them involved in the process.

Hiring an agent or a broker

Finding and understanding small business health insurance can be a daunting task. While some choose to go it alone, others need some professional assistance. You need to understand the difference between an agent and a broker, and how you can get the most from either of them.

A broker

Brokers function independently and usually work for several different companies. Since they have a variety of resources, they can usually provide more options and a better overall view of the marketplace. Brokers will assist you by evaluating the costs and designs of plans from your local major carriers. The cost isn't everything, you want to get the coverage that you need.

Ask the broker how he or she is getting paid for their services. They should readily divulge that information. Some brokers may charge you a flat free. Some receive a fee from an employer, while others receive a commission from the insurance provider. Any commissions could be reflected in your premiums, but not to the point that you should worry.

An agent

Agents typically provide services for one company. They have a closer relationship to the insurance company than a broker would, giving them more leverage to make alterations to your plan. In some cases they can offer a particular plan for less than a broker, and may have access to additional services like worker's compensation. To find out what different providers have to offer, talk to more than one agent. It may be time-consuming, but it could bring you closer to the most cost-effective solution for your small business health insurance.

One of the common options presented by agents is the employee-elect option. This is an arrangement where employees pick the plan they prefer. Those who don't need as much coverage won't be forced to pay so much, and those who do need it can get it without increasing the financial burden of the company as a whole.

How to Save On Your Small Business Health Insurance Plan

What's important to remember is that there really is no inexpensive solution to health care. Even if your initial premiums are reasonably low, they could rise significantly at your next renewal. So saving money on small business health insurance is about doing a combination of things simultaneously to get good rates, and to then maintain those rates.. And it will require a consistent effort from you, your employees, and your insurance provider.

First, you can save yourself money by reading the fine print. You need to know exactly what your plan does and DOESN'T cover. There are also state mandated coverages. For example, in states like Illinois, your insurance must cover mammograms. Also, understanding the ins and outs of your plan will give you and your employees a better idea of how to deal with your insurance.

Next, you should shave unnecessary benefits. After reading all about your plan, you will find coverage for things you may not need. Eliminating these benefits can significantly drop monthly small business health insurance premiums. For example, eliminating coverage for brand name medications can reduce costs by more than 25 percent.

Wellness program have worked wonders for small businesses. A wellness program is any program designed to promote healthy living within the organization. Weight loss competitions benefit every participant. Add a financial incentive for further motivation. Stock the work fridge with water, and leave literature about healthy living lying around. Search the internet for calorie counting charts. Raising awareness entice workers to make positive changes. Active, exercising, diet-conscious employees have stronger immune systems, more vitality, and more productive workplaces. They also don't deal with as many health issues. Fewer doctor visits and hospitilizations will help maintain lower annual premiums, because it will prove to your insurance provider that your business is a low financial risk.

Increasing your co-pay and deductible can go a long way towards cutting costs. For instance, raising co-pays by just ten dollars has saved companies as much as thirteen percent on their premiums. A higher deductible will significantly reduce your monthly premium. To lessen the financial burden of high-deductible health plans (HDHPs), combine them with an HSA. Combinations like these have saved both business owners and employees bundles of cash.

Check into getting a nurse hotline. A nurse hotline is a toll free, 24-hour-a-day, seven-day-a-week service. Employees can get medical advice from qualified, registered nurses. This method has deterred a large number of people from emergency visits, and it can also be used for preventative care as well. Insurers like Nationwide have them, or you may have to purchase from a third-party provider.

Increase the size of your group to reduce your monthly small business health insurance premiums. In a survey by America's Health Insurance Plans, small businesses who employed ten people or less paid forty three more dollars on average than businesses with twenty six to fifty employees. Check around with other businesses owners, or fellow members of business organizations. Some states also have small business groups and pools for this purpose. Check with your state Chamber of Commerce and Department of Insurance.

Beware of heavily discounted plans. First, there are numerous scammers trying to get your money. They promise low rates, and usually cover little to nothing at all. The internet is notorious for swindlers trying to hustle you out of a buck. If you are going with a company you aren't familiar with, please do your research. On another note, even reputable companies present problems. In an attempt to gain market share, Blue Cross offered small businesses discounted rates in 2008. For 2009, some of these same businesses were set to see increases of as much as 47% in their premiums. As the costs of medical care increases, the costs are shifted from the insurer to the insured, and discount plans become overpriced plans quickly.

Shop around. As mentioned before, talking to different agents will expose you to the best that insurance providers have to offer. Ask other small business owners about their providers. You can use trusted online resources like Netquote and Ehealthinsurance to shop around instantly. These services also let you compare plans side by side, and allow you to purchase your plan online. Even after you get your initial plan, it's good to annually reevaluate your coverage. This will keep you on the up-and-up about what the market is offering. Keeping costs down is an ongoing effort, especially with rates and plans changing all the time from company to company.

Share some of the costs with your employees. Raising employee contributions isn't a popular option, but it may be one of the only ways to absorb costs and maintain small business health insurance coverage. Communicate with your employees about how to keep costs down, and remind them that their increase is your increase as well.

The sad truth is that, no matter how many cost-cutting methods you apply, your insurance premiums are expected to continually rise. In addition to this, you can't prevent every health problem with exercise and higher co-pays.

The Health Care Reform Bill won't kick in until about 2013, so waiting on its benefits won't do you any good. There is definitely a need for change, because the current system discourages competition and growth. With smaller businesses functioning as the backbone of this ailing economy, company medical insurance must BE affordable, and STAY affordable.

For the best prices and plans visit http://www.esmallbusinesshealthinsurance.com

Wait Until You See The Next Health Insurance Bill

Fortunately, I'm on Medicare, but my wife has more than two years to go before she qualifies. I was able to switch carriers and save hundreds of dollars for my supplemental coverage, but my wife had to stay with the insurance company due to a previous medical condition. Now, her premiums have increased nearly 20% (19.57% to be exact). Did the president tell us costs would not increase under the reform plan, or was I dreaming?

The so-called health care reform bill that was pushed through Congress - after arm-twisting, backroom deals and out-right lying - won't be fully implemented until 2014. By that time, based on a straight line projection of the increase just experienced, my wife's basic plan will double.

A call to the insurance company resulted in plenty of non-answers, double-talk and false sympathy. Not only was this frustrating, it has become just plain scary for a retired couple that has seen nearly a third of our savings and much of our home equity vanish over the past couple of years, with no signs of short-term recovery.

On top of this, our family physician sold his practice to a younger doctor who has raised the rates for office visits, but the insurance company's allowable charges have not increased. We can't be the only ones feeling the squeeze. Am I wrong to suspect the current administration is turning a blind-eye to increases from health insurance companies, doctors, hospitals and those who do the lab tests, x-rays and other services?

My wife recently underwent the first surgery of her life. We could not believe the costs to date and the statements are still coming in. We have yet to find out what portion of these bills will be covered and what we must pay. They say it will take a couple of months before we receive all the charges. I wonder if the fact that she actually used the insurance we've been paying for over decades will mean another increase is on the way.

There's no doubt in my mind that we need health care reform. But what we got instead was 32 million more people on the insured roles, half of whom will be on Medicaid. This means the ones who have paid their premiums over the years are expected to bear the load for those unwilling or unable to buy insurance. And the insurance companies are raising rates to hedge against the added cost they expect to incur.

This suggests the entire health care system needs to be scrutinized from top to bottom and revamped where needed. We know something is wrong when $500 billion is going to be cut from Medicare and the administration claims this will be offset by tightening up on waste, fraud and abuse. Wouldn't you think the folks in Washington would have fixed these problems long ago instead of hoping to accomplish this sometime in the future?

It's time to change the existing health care bill and do something to protect the people who have tried to do the right thing but somehow got caught an ongoing political battle. We should not be the ones to suffer through higher premiums, lower quality care or both.

Don Potter, a Philadelphia native, was born in 1936 and is a 50 year veteran of the advertising agency business. Now living in Los Angeles, he has written two novels in retirement, frequently writes on marketing issues, and has a blog dedicated to pre-boomers (those born between 1930 and 1945).

Read more articles for and about pre-boomers with thoughts, comments and opinions designed to spark thinking, foster discussion, and stimulate debate by logging on to http://www.pre-boomermusings.com

More Small Business Health Insurance Basics In Texas

Because premiums, deductibles, copayments, and coinsurance levels for small business group health insurance policies in Texas can vary widely from plan to plan, it pays to shop around.

Have a good understanding of your employees’ healthcare needs before you start shopping. Do they require frequent medical care or do they rarely see the doctor? Are they more concerned about preventive checkups or coverage in case of emergency? Are prescription or maternity benefits important to them? This is an essential first step. You want to purchase a plan that offers the medical benefits your employees need, without a bunch of “extras" your employees won’t take advantage of. You’ll pay for these “extras" in the form of higher premiums.

When shopping for coverage, the Texas Department of Insurance recommends keeping these guidelines in mind:

· Be sure you understand the full extent of each plan’s coverage when comparing plans and rates. If you decide to go with a consumer choice health benefit plan over one with all the state-mandated benefits, the carrier or agent is required to explain in writing which coverages you don’t have.

· Plans with higher deductibles, copayments, and employee share of coinsurance generally will have lower premiums. Keep in mind, however, that your employees will also have to pay more out of pocket when they access services or benefits.

· Consider factors other than cost, such as a company’s financial strength and complaint record. These are indicators of the service you can expect. You can learn a company’s financial rating, as determined by an independent rating organization, by calling the Texas Department of Insurance (TDI) Consumer Help Line. You can also learn information about the frequency of consumer complaints filed against specific companies by calling the Consumer Help Line: 1-800-252-3439/463-5515 in Austin.

· Look into purchasing cooperatives. These are groups of small employers with similar health care needs who join together to negotiate discounted rates for shared plans. For a list of registered purchasing cooperatives in Texas, call the Consumer Help Line.

· Buy only from licensed insurance companies. Selling unlicensed coverage is illegal in Texas. If you buy from an unlicensed carrier, your employees’ claims could go unpaid and you could be held liable for the full amount of your employees’ claims and losses. Guaranty associations pay the claims of licensed carriers that become insolvent. You can learn whether a company is licensed by calling the Consumer Help Line.

· Understand that employee health coverage is different from workers’ compensation insurance, which covers only job-related injuries and illnesses. Although workers’ compensation insurance is not required in Texas, it protects you from high damage awards in the case of workplace accidents. Providing regular health coverage to your employees is not a legal alternative to providing workers’ compensation insurance.

Who Pays and How Much?

The law doesn’t require employers to contribute toward health benefit plan premiums. However, many carriers require employers to pay at least 50 percent of the plan’s premiums. Employers may choose to pay a higher percentage than the carrier requires.

The carrier must offer dependent coverage to all eligible employees. Generally, employers are not required to contribute toward the cost of dependent coverage. If the employer doesn’t contribute, employees may have to pay all of these costs themselves.

Premiums may increase at each renewal term, largely due to rising health care costs and possibly as a result of employee claims experience. Texas law caps small-employer rate increases due to health factors at 15 percent per year.

Insurers cannot require businesses to purchase additional lines of insurance, such as life insurance or disability insurance, as a condition of the sale of a health plan.

Employee Signup and Waiting Period

New employees must be given at least 31 days from their start date to enroll in a plan. After this time, they may be required to wait up to one year for the next “open enrollment period" to join. Carriers must offer a 31-day open enrollment period annually.

You can choose to require your employees who enroll in a plan to wait up to 90 days before being eligible for benefits. During this period, the carrier may not charge you or the employee a premium.

Carriers may require participants to wait a certain amount of time before covering pre-existing medical conditions. In general, plans have different rules for pre-existing conditions. Plans using the open-enrollment requirement cannot make new members wait more than one year before covering their pre-existing conditions.

New enrollees who were covered in the year prior to joining a plan also receive credit toward the waiting period on a month-for-month basis. For example, an employee who was covered under creditable coverage for the entire year before joining a new plan would receive 12 months’ credit toward a one-year pre-existing condition wait -- and would therefore experience no wait at all. For previous coverage to be considered creditable, there may not have been more than a 63-day break between the end of the previous coverage and the start of the new coverage.

A small business employer carrier cannot refuse to provide health coverage for employees on the grounds of employee illnesses or pre-existing conditions. Nor may carriers use health-related factors -- such as employees’ prior claims experience or information on conditions arising from violent family situations -- to decide whether to provide coverage.

How Small Employer Plan Premiums are Calculated

The rates for any given small employer plan are not solely determined by the benefits and deductibles of the plan itself. Certain objective “case characteristics," along with any health status-related factors of employees, may also be components in determining the premium rate for the small employer group. Case characteristics consist of age, gender, group size, industry, and geography. Carriers can use some or all of these five objective criteria:

· Age of employees: Older people can reasonably be expected to have more expensive and more frequent health-related claims. Generally, the older your workforce, the more your plan will cost.

· Gender: Females generally incur higher medical costs than males at younger ages, particularly during childbearing years. The variance diminishes with age until medical costs for males begin to exceed those for females as they near ages 50 and 60. If you have a younger, proportionately more female workforce, or one that is older and proportionately more male, expect to pay higher premiums.

· Number of plan participants: Carriers often base rates on group size for two reasons. As size increases, administrative costs per insured decrease. Also, smaller groups tend to buy health coverage based on the targeted needs of participants, increasing the likelihood of claims for the benefits provided. As group size increases, this “custom-tailoring" becomes more difficult and premiums tend to decrease. However, the highest group size factor may not exceed the lowest group size factor by more than 20 percent.

· Industry: Some industries have higher medical claims costs than others because of working conditions and the prevalence of accidents. High employee turnover in some industries can also result in higher administrative costs for the carrier. However, the highest industry factor a carrier charges may not exceed the lowest factor by more than 15 percent.

· Geographic area: Health care costs vary by region due to differences in cost of living and medical practices, as well as the amount of medical competition in the area. Most plans vary rates by either county or ZIP code, using the employer’s business address to set rates.

The rating process for a small-employer group can be described as a two-step process. First, a carrier determines a premium rate based on case characteristics and plan design, without regard to health status-related factors. This produces the baseline price of the policy. Second, the carrier may adjust the rate to reflect health status-related factors of the group. This adjustment must apply uniformly to all members of the group and may not exceed 67 percent of the baseline price of the policy.

Group health insurance can be unaffordable for many small businesses, not to mention an administrative headache. Another alternative to group health insurance plans is to offer individual health insurance options to your employees. By law, an employer is not allowed to contribute to these plans, or that would be treated as group insurance under Texas state law. But you can still help your employees become insured in a good plan and improve their health and well-being and also improve employee retention in the process. If you’re a small business owner who would like to offer affordable health insurance plans to your employees, but can’t afford group health insurance, you should consider offering your employees the revolutionary, comprehensive individual health insurance solutions created by Precedent specifically for young, healthy individuals.

Precedent offers affordable, individual health plans with catastrophic coverage, but without a high deductible, and we’ll offer these plans to your employees at a discount. For more information, visit us at our website, [http://www.precedent.com]. We offer a unique and innovative suite of individual health insurance solutions, including highly competitive HSA-qualified plans, and an unparalleled "real time" application and acceptance experience.

Precedent puts a new spin on health insurance. Learn more at [http://www.precedent.com].

Small Business Health Insurance - The Best Policy Is A Great Agent

I have been a health insurance broker for over a decade and every day I read more and more "horror" stories that are posted on the Internet regarding health insurance companies not paying claims, refusing to cover specific illnesses and physicians not getting reimbursed for medical services. Unfortunately, insurance companies are driven by profits, not people (albeit they need people to make profits). If the insurance company can find a legal reason not to pay a claim, chances are they will find it, and you the consumer will suffer. However, what most people fail to realize is that there are very few "loopholes" in an insurance policy that give the insurance company an unfair advantage over the consumer. In fact, insurance companies go to great lengths to detail the limitations of their coverage by giving the policy holders 10-days (a 10-day free look period) to review their policy. Unfortunately, most people put their insurance cards in their wallet and place their policy in a drawer or filing cabinet during their 10-day free look and it usually isn't until they receive a "denial" letter from the insurance company that they take their policy out to really read through it.

The majority of people, who buy their own health insurance, rely heavily on the insurance agent selling the policy to explain the plan's coverage and benefits. This being the case, many individuals who purchase their own health insurance plan can tell you very little about their plan, other than, what they pay in premiums and how much they have to pay to satisfy their deductible.

For many consumers, purchasing a health insurance policy on their own can be an enormous undertaking. Purchasing a health insurance policy is not like buying a car, in that, the buyer knows that the engine and transmission are standard, and that power windows are optional. A health insurance plan is much more ambiguous, and it is often very difficult for the consumer to determine what type of coverage is standard and what other benefits are optional. In my opinion, this is the primary reason that most policy holders don't realize that they do not have coverage for a specific medical treatment until they receive a large bill from the hospital stating that "benefits were denied."

Sure, we all complain about insurance companies, but we do know that they serve a "necessary evil." And, even though purchasing health insurance may be a frustrating, daunting and time consuming task, there are certain things that you can do as a consumer to ensure that you are purchasing the type of health insurance coverage you really need at a fair price.

Dealing with small business owners and the self-employed market, I have come to the realization that it is extremely difficult for people to distinguish between the type of health insurance coverage that they "want" and the benefits they really "need." Recently, I have read various comments on different Blogs advocating health plans that offer 100% coverage (no deductible and no-coinsurance) and, although I agree that those types of plans have a great "curb appeal," I can tell you from personal experience that these plans are not for everyone. Do 100% health plans offer the policy holder greater peace of mind? Probably. But is a 100% health insurance plan something that most consumers really need? Probably not! In my professional opinion, when you purchase a health insurance plan, you must achieve a balance between four important variables; wants, needs, risk and price. Just like you would do if you were purchasing options for a new car, you have to weigh all these variables before you spend your money. If you are healthy, take no medications and rarely go to the doctor, do you really need a 100% plan with a $5 co-payment for prescription drugs if it costs you $300 dollars more a month?

Is it worth $200 more a month to have a $250 deductible and a $20 brand name/$10 generic Rx co-pay versus an 80/20 plan with a $2,500 deductible that also offers a $20 brand name/$10generic co-pay after you pay a once a year $100 Rx deductible? Wouldn't the 80/20 plan still offer you adequate coverage? Don't you think it would be better to put that extra $200 ($2,400 per year) in your bank account, just in case you may have to pay your $2,500 deductible or buy a $12 Amoxicillin prescription? Isn't it wiser to keep your hard-earned money rather than pay higher premiums to an insurance company?

Yes, there are many ways you can keep more of the money that you would normally give to an insurance company in the form of higher monthly premiums. For example, the federal government encourages consumers to purchase H.S.A. (Health Savings Account) qualified H.D.H.P.'s (High Deductible Health Plans) so they have more control over how their health care dollars are spent. Consumers who purchase an HSA Qualified H.D.H.P. can put extra money aside each year in an interest bearing account so they can use that money to pay for out-of-pocket medical expenses. Even procedures that are not normally covered by insurance companies, like Lasik eye surgery, orthodontics, and alternative medicines become 100% tax deductible. If there are no claims that year the money that was deposited into the tax deferred H.S.A can be rolled over to the next year earning an even higher rate of interest. If there are no significant claims for several years (as is often the case) the insured ends up building a sizeable account that enjoys similar tax benefits as a traditional I.R.A. Most H.S.A. administrators now offer thousands of no load mutual funds to transfer your H.S.A. funds into so you can potentially earn an even higher rate of interest.

In my experience, I believe that individuals who purchase their health plan based on wants rather than needs feel the most defrauded or "ripped-off" by their insurance company and/or insurance agent. In fact, I hear almost identical comments from almost every business owner that I speak to. Comments, such as, "I have to run my business, I don't have time to be sick! "I think I have gone to the doctor 2 times in the last 5 years" and "My insurance company keeps raising my rates and I don't even use my insurance!" As a business owner myself, I can understand their frustration. So, is there a simple formula that everyone can follow to make health insurance buying easier? Yes! Become an INFORMED consumer.

Every time I contact a prospective client or call one of my client referrals, I ask a handful of specific questions that directly relate to the policy that particular individual currently has in their filing cabinet or dresser drawer. You know the policy that they bought to protect them from having to file bankruptcy due to medical debt. That policy they purchased to cover that $500,000 life-saving organ transplant or those 40 chemotherapy treatments that they may have to undergo if they are diagnosed with cancer.

So what do you think happens almost 100% of the time when I ask these individuals "BASIC" questions about their health insurance policy? They do not know the answers! The following is a list of 10 questions that I frequently ask a prospective health insurance client. Let's see how many YOU can answer without looking at your policy.

1. What Insurance Company are you insured with and what is the name of your health insurance plan? (e.g. Blue Cross Blue Shield-"Basic Blue")

2. What is your calendar year deductible and would you have to pay a separate deductible for each family member if everyone in your family became ill at the same time? (e.g. The majority of health plans have a per person yearly deductible, for example, $250, $500, $1,000, or $2,500. However, some plans will only require you to pay a 2 person maximum deductible each year, even if everyone in your family needed extensive medical care.)

3. What is your coinsurance percentage and what dollar amount (stop loss) it is based on? (e.g. A good plan with 80/20 coverage means you pay 20% of some dollar amount. This dollar amount is also known as a stop loss and can vary based on the type of policy you purchase. Stop losses can be as little as $5,000 or $10,000 or as much as $20,000 or there are some policies on the market that have NO stop loss dollar amount.)

4. What is your maximum out of pocket expense per year? (e.g. All deductibles plus all coinsurance percentages plus all applicable access fees or other fees)

5. What is the Lifetime maximum benefit the insurance company will pay if you become seriously ill and does your plan have any "per illness" maximums or caps? (e.g. Some plans may have a $5 million lifetime maximum, but may have a maximum benefit cap of $100,000 per illness. This means that you would have to develop many separate and unrelated life-threatening illnesses costing $100,000 or less to qualify for $5 million of lifetime coverage.)

6. Is your plan a schedule plan, in that it only pays a certain amount for a specific list of procedures? (e.g., Mega Life & Health & Midwest National Life, endorsed by the National Association of the Self-Employed, N.A.S.E. is known for endorsing schedule plans) 7. Does your plan have doctor co-pays and are you limited to a certain number of doctor co-pay visits per year? (e.g. Many plans have a limit of how many times you go to the doctor per year for a co-pay and, quite often the limit is 2-4 visits.)

8. Does your plan offer prescription drug coverage and if it does, do you pay a co-pay for your prescriptions or do you have to meet a separate drug deductible before you receive any benefits and/or do you just have a discount prescription card only? (e.g. Some plans offer you prescription benefits right away, other plans require that you pay a separate drug deductible before you can receive prescription medication for a co-pay. Today, many plans offer no co-pay options and only provide you with a discount prescription card that gives you a 10-20% discount on all prescription medications).

9. Does your plan have any reduction in benefits for organ transplants and if so, what is the maximum your plan will pay if you need an organ transplant? (e.g. Some plans only pay a $100,000 maximum benefit for organ transplants for a procedure that actually costs $350-$500K and this $100,000 maximum may also include reimbursement for expensive anti-rejection medications that must be taken after a transplant. If this is the case, you will often have to pay for all anti-rejection medications out of pocket).

10. Do you have to pay a separate deductible or "access fee" for each hospital admission or for each emergency room visit? (e.g. Some plans, like the Assurant Health's "CoreMed" plan have a separate $750 hospital admission fee that you pay for the first 3 days you are in the hospital. This fee is in addition to your plan deductible. Also, many plans have benefit "caps" or "access fees" for out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc. Benefit "caps" could be as little as $500 for each out-patient treatment, leaving you a bill for the remaining balance. Access fees are additional fees that you pay per treatment. For example, for each outpatient chemotherapy treatment, you may be required to pay a $250 "access fee" per treatment. So for 40 chemotherapy treatments, you would have to pay 40 x $250 = $10,000. Again, these fees would be charged in addition to your plan deductible).

Now that you've read through the list of questions that I ask a prospective health insurance client, ask yourself how many questions you were able to answer. If you couldn't answer all ten questions don't be discouraged. That doesn't mean that you are not a smart consumer. It may just mean that you dealt with a "bad" insurance agent. So how could you tell if you dealt with a "bad" insurance agent? Because a "great" insurance agent would have taken the time to help you really understand your insurance benefits. A "great" agent spends time asking YOU questions so s/he can understand your insurance needs. A "great" agent recommends health plans based on all four variables; wants, needs, risk and price. A "great" agent gives you enough information to weigh all of your options so you can make an informed purchasing decision. And lastly, a "great" agent looks out for YOUR best interest and NOT the best interest of the insurance company.

So how do you know if you have a "great" agent? Easy, if you were able to answer all 10 questions without looking at your health insurance policy, you have a "great" agent. If you were able to answer the majority of questions, you may have a "good" agent. However, if you were only able to answer a few questions, chances are you have a "bad" agent. Insurance agents are no different than any other professional. There are some insurance agents that really care about the clients they work with, and there are other agents that avoid answering questions and duck client phone calls when a message is left about unpaid claims or skyrocketing health insurance rates.

Remember, your health insurance purchase is just as important as purchasing a house or a car, if not more important. So don't be afraid to ask your insurance agent a lot of questions to make sure that you understand what your health plan does and does not cover. If you don't feel comfortable with the type of coverage that your agent suggests or if you think the price is too high, ask your agent if s/he can select a comparable plan so you can make a side by side comparison before you purchase. And, most importantly, read all of the "fine print" in your health plan brochure and when you receive your policy, take the time to read through your policy during your 10-day free look period.

If you can't understand something, or aren't quite sure what the asterisk (*) next to the benefit description really means in terms of your coverage, call your agent or contact the insurance company to ask for further clarification.

Furthermore, take the time to perform your own due diligence. For example, if you research MEGA Life and Health or the Midwest National Life insurance company, endorsed by the National Association for the Self Employed (NASE), you will find that there have been 14 class action lawsuits brought against these companies since 1995. So ask yourself, "Is this a company that I would trust to pay my health insurance claims?

Additionally, find out if your agent is a "captive" agent or an insurance "broker." "Captive" agents can only offer ONE insurance company's products." Independent" agents or insurance "brokers" can offer you a variety of different insurance plans from many different insurance companies. A "captive" agent may recommend a health plan that doesn't exactly meet your needs because that is the only plan s/he can sell. An "independent" agent or insurance "broker" can usually offer you a variety of different insurance products from many quality carriers and can often customize a plan to meet your specific insurance needs and budget.

Over the years, I have developed strong, trusting relationships with my clients because of my insurance expertise and the level of personal service that I provide. This is one of the primary reasons that I do not recommend buying health insurance on the Internet. In my opinion, there are too many variables that Internet insurance buyers do not often take into consideration. I am a firm believer that a health insurance purchase requires the level of expertise and personal attention that only an insurance professional can provide. And, since it does not cost a penny more to purchase your health insurance through an agent or broker, my advice would be to use Ebay and Amazon for your less important purchases and to use a knowledgeable, ethical and reputable independent agent or broker for one of the most important purchases you will ever make....your health insurance policy.

Lastly, if you have any concerns about an insurance company, contact your state's Department of Insurance BEFORE you buy your policy. Your state's Department of Insurance can tell you if the insurance company is registered in your state and can also tell you if there have been any complaints against that company that have been filed by policy holders. If you suspect that your agent is trying to sell you a fraudulent insurance policy, (e.g. you have to become a member of a union to qualify for coverage) or isn't being honest with you, your state's Department of Insurance can also check to see if your agent is licensed and whether or not there has ever been any disciplinary action previously taken against that agent.

In closing, I hope I have given you enough information so you can become an INFORMED insurance consumer. However, I remain convinced that the following words of wisdom still go along way: "If it sounds too good to be true, it probably is!" and "If you only buy on price, you get what you pay for!"

©2007 Small Business Insurance Services, Inc. http://www.smallbusinessinsuranceservices.com

C. Steven Tucker, is the President of Small Business Insurance Services, Inc. and has been a Licensed Mult-State Insurance Broker serving the small business and self-employed market for over a decade. Mr. Tucker believes an informed insurance consumer makes the best health insurance purchasing decisions. Mr. Tucker has written several articles that focus on small business health insurance, which can be read on a number of web sites.

Mr. Tucker's blog can be read at http://www.smallbusinessinsuranceservices.vox.com

If you have general questions regarding health insurance, or you are in the market to purchase a health insurance plan, you can contact Mr. Tucker through his web site at http://www.smallbusinessinsuranceservices.com,

via Email at smallbusinssvcs@aol.com or by plone, toll-free at 1-866-SBIS123 (724-7123)

Soon All Employee Health Insurance Benefits Will Be Voluntary

Employee health insurance benefits are trending from company paid and sponsored towards voluntary or employee paid benefits. Health care costs are rising for everyone and the landscape is changing. Risings costs of health care are forcing employers to raise employee contributions, while simultaneously cutting back on coverage - making coverage options more voluntary. In addition the Health Care Reform Act contains provisions that accelerate this trend. The end result will be that employers simply become a facilitator of benefit programs, giving rise to a new breed of providers to administer the process.

Each year when employers reach their health insurance renewal date their insurance broker works with the carrier to determine the employer's renewal rate - the new premium for the next 12 months to provide the same level of benefits for the same group of employees. Often these renewal rates translate come in at 20% to 30% over the previous year's rates. The compounding of these costs over time makes this business cost unbearable for many employers. So employers react by doing one of two things, or a mix of both: cut back on benefits to lower premium costs, or ask the employees to contribute a greater share of the premium cost.

Increased Employee Out-of-Pocket Costs

When employers cut back on the plan benefits in order to lower premium costs, they are really pushing the cost increase onto the back of the employees who experience health events. Any plan with a larger deductible, higher co payments and co insurance, or smaller network of doctors will cause employees needing health care services to pay more out-of-pocket. In essence the employees are now choosing where, when, and how they engage health care services. The employees are forced to volunteer their resources when health events occur and services are needed.

Employees Pay a Greater Portion of Premium Costs

Employers may also choose to reduce the amount of premium they subsidize for each employee. Each employer is required to pay a minimum percentage of the overall group premium in order to qualify for group coverage. That minimum percentage has historically been far below what employers chose to subsidize. The thinking was that low-cost health insurance coverage helped attract and retain workers.

But as health care premiums continue to rise employers reach a limit of what they are willing to subsidize. And during difficult economic times, the subsidy level will tend to fall. Many employers are requiring employees to pick up a larger and larger portion of the overall cost. Some employers change subsidy levels based upon the type of coverage selected: individual, husband/wife, family, etc. Many employers will keep a higher subsidy on individual coverage, and ask employees to cover a larger share of coverage for other family members. No matter what strategy employers use to pass premium increases on to employees, at some point the choice becomes more voluntary than in the past.

Health Care Reform Accelerates Trend

The recently passed health care reform, the Patient Protection and Affordable Care Act will bring many changes to how employee health insurance benefits are administered and delivered in the workplace. While the law focuses primarily on the individual market, the creation of a guaranteed issue, community rated individual market will accelerate a trend towards voluntary employee health insurance options. Today there are significant differences between what group health insurance covers and what people can find in the individual market. As the gap narrows, so does the value of group health insurance coverage. Many employers will find that offering health insurance benefits is less important than in the past and not worth the administrative headaches.

Health insurance choices are being pushed from the employer onto the individual employees giving rise to the question: who will explain all this, and administer all the variations? Voluntary employee benefit providers are happy to step in and answer that question.

Find out more about how small business health insurance is changing, and how to adapt.

Kevin Haney is a licensed health insurance agent helping businesses make the most of voluntary employee benefits by using using supplemental family health insurance benefits.