Keith Girard
All Business.com
With a vote nearing on the historic health reform legislation, the Obama administration has gone into overdrive in its effort to reach out to small businesses. It wants to assure them that the proposed reforms will not only lower costs, but will allow them to be more competitive in the marketplace.
The task, however, has been daunting. The National Federation of Independent Business last week called the Senate bill, in particular, “disastrous” for small businesses because of “new taxes, the creation of new mandates, and the establishment of new entitlement programs.”
Small businesses have been a flash point in the current debate because they make up roughly 40 percent of the nation’s private labor force, yet have fared the worst under the current system. Recent studies indicate that small businesses are likely to see their premiums rise 15 percent in the coming year, double the rate of last year’s increase.
To help shed some light on the issue, we asked the administration to make its best case for the reform measures and to apply them to real-life case studies provided to AllBusiness.com by small business owners.
We also asked small business owners to submit individual questions that addressed their particular concerns. Then, we asked Nancy-Ann DeParle, director of the president’s office of health reform, to address these concerns. In an exclusive interview last week she made the administration’s case.
“We know that small businesses are worried, and they have every reason to be,” she said. “The status quo when it comes to health insurance is not working for small business.
“About one quarter of the uninsured, around 11 million people, are employed at firms with fewer than 25 workers,” she noted. “The number of firms offering insurance is declining, and those that do offer insurance pay about 20 percent more than large firms.”
One of the goals of reform, she said, is to lower costs for small firms. One of the main ways the legislation will do that is through the proposed insurance exchange, which will pool together small firms and increase their ability to negotiate better rates and lower administrative costs.
She added that the estimates she has seen show that some small businesses will be able to save as much as 25 percent on premiums when the bill is fully phased in.
“Most small businesses would be exempt from any requirement that they participate in this, because of size and relatively small payrolls,” she continued. “But those that do, we think should get lower costs; we think they will have more access to more choices and will have access to tax credits to help them afford it.”
Small business owners have been particularly concerned about how the reforms would affect their businesses. So, AllBusiness.com asked firms to submit profiles of their businesses and outline their experience with health insurance.
DeParle addressed two of these case studies directly in the interview, and will post the administration’s response to others on their Web site, which can be found here. AllBusiness.com will also post the information on its Web site.
Helen Dean is one of the cases. She owns a company called Toy Safari in Alameda, Calif., that has five full-time equivalent employees with salaries that average around $20,000 a year. She currently provides health insurance, which costs about $350 a month per employee. Her rates have gone up, on average, 7 percent per year, well ahead of inflation.
She has some workers who are over age 50, which is adding to her health insurance bill. She said that she has avoided hiring people because they would have needed health insurance.
“That’s something we really see a lot,” said DeParle. “There are small businesses out there that could grow, that have good ideas, or [there are] people who would like to start small businesses and they can’t just because of the cost of health insurance.”
First, DeParle said, under the new plan, Dean would have a tax credit to help her pay for insurance, although she wouldn’t be required to offer insurance because of the size of her firm. In the House bill, the credit would cover up to 50 percent of the cost. The Senate tax credit is less initially, but also would cover up to 50 percent once it is fully phased in after 2013.
Both the House and Senate bills would prevent insurance companies from charging higher rates based on health status, and limit the premium variation based on age. Dean could also get lower rates by purchasing insurance through the exchange with other small businesses, she said.
Finally, it should help her be more competitive in hiring workers. “She mentioned that high health insurance costs had prevented her from hiring new workers. Under reform, people will have access to high-quality, affordable coverage through the exchange, meaning that she’ll compete on a level playing field with other firms that offer benefits and attract and retain top, talented workers,” DeParle said.
In addition to preparing case studies, AllBusiness.com also solicited individual questions from business owners. Almost 100 business owners responded, and their concerns ranged from the cost of the overall program to how it would affect such programs as Medicare and Medicaid, and the quality of health care overall.
Steve Benish, of Magic Car Wash in Sheboygan, Wis., asked a question that was representative of a number of small business owners: What is this going to cost to me?
“I own a business with 16 employees, but with sales less than $500,000 a year, am I going to be required to purchase health care for my employees, which I cannot afford, and will I be penalized if I don’t?” he asked.
“For most small businesses, and I believe his certainly would qualify, there won’t be any employer responsibility or requirement,” said DeParle. “It’s really only when you get to a larger payroll and larger number of employees [that you will be required to offer a health plan.]”
Raju Jairam, of MBI Consulting in Fort Collins, Colo., asked: “I’m currently paying premiums for my health insurance. Will the health care reform increase the premiums I’m paying, and will my coverage increase or decrease?”
“First, if you have a health insurance plan that you think works for you, under these bills, it’s going to be what we call grandfathered, meaning that you can keep it,” DeParle said.
“The only change should be that over time your cost should be lowered as we do some of the delivery system reforms.
“The other good thing that just can’t be overemphasized is, let’s say you decided ‘I’m going to go start a small business,’ or you were laid off from your job,” she continued. “After reform, you will be able to go purchase insurance in the exchange and it will be more affordable to you. If you are low income, you’ll have access to subsidies.
“It will enable you to have that peace of mind,” she said. “Pretty much anybody over the age of 30 in this country right now, if you try to go into the individual market, you could have a good chance of being locked out, or find it difficult to purchase because of a pre-existing condition. This has happened in my family and may have happened in yours.
“That’s a benefit of this reform,” she said. “If you wanted to change, if you wanted to start a small business, you will be able to do that.”
Friday, December 4, 2009
White House Makes Its Case for Health Reform to Small Businesses
Thursday, December 3, 2009
Health care reform would mean more costs for businesses
By Danielle Ulman
Business Writer
Daily Record - Baltimore
Kenneth R. Huber of PSA Insurance & Financial Services says there isn’t anything in either the House or Senate version of the health care reform bill that would ‘meaningfully improve care.’ Health insurance requirements could take a radical turn if a health care reform bill ever lands on President Barack Obama’s desk, and that could mean costly changes for businesses.
The House and Senate versions of the bill vary in several key areas, but both call for some sort of employer mandate, requiring certain business owners to provide health insurance to full-time employees, and would require individuals to have health insurance. Businesses and individuals that don’t follow the rules would pay fines for not having coverage.
“For many, many businesses, the employer mandate is going to mean new costs on the business, whether they take the fine or comply,” said Kenneth R. Huber, senior vice president of the employee benefit group for PSA Insurance & Financial Services in Hunt Valley.
“I look at the economy, and a lot of businesses have already trimmed their expenses, including employees. … They’re going to look at a new cost the same way all employers look at a new cost. They’re going to have to figure out how to deal with it,” said Huber, who advises small to medium-sized businesses.
Under the House bill, which passed in November, companies with annual payrolls of $500,000 or more would be required to offer employees health care coverage. Sanctions would begin at 2 percent of payroll expenses and ramp up to 8 percent if the business has a payroll of $750,000 or more.
Under the Senate bill, which has not been debated yet, employers would not have to provide coverage. However, if any employee received government assistance to buy an insurance plan, the company would have to pay a $750 penalty for each of its employees. Companies with fewer than 50 employees would be exempt.
Out of more than 119,000 businesses in Maryland, 74 percent have fewer than 50 full-time employees. But only 44 percent of those businesses offered health benefits in 2008, according to the Department of Health and Human Services.
About 56,000 small businesses in Maryland could qualify for tax credits of up to 50 percent of a health insurance premium under health reform. Reform would expand on Maryland’s Health Insurance Partnership, which gives businesses with two to nine full-time employees the same subsidy if they have not offered insurance in the last year and their employees make less than $50,000 on average. Under reform, a business that employs up to 25 people, with average salaries of $40,000, would qualify for credits.
Reform would also provide coverage for people with pre-existing conditions. But the small-group plans offered in Maryland — for companies with 2 to 50 employees — already do that.
“Our concern is that Maryland already imposes more mandates on the small-group insurance,” said Kathleen Snyder, president and CEO of the Maryland Chamber of Commerce, which opposes the House health care bill.
“We’re concerned that Maryland will come back and add on to a very rich federal government plan, which will add up the costs to insurers [and] to employers,” she said.
Vincent DeMarco, president of the Maryland Citizens’ Health Initiative, said he is hopeful that health care reform will become a reality. His group has pushed for universal health care in Maryland through a 2 percent payroll tax on businesses.
“We would like to do our proposal the way the House did, which is to require all businesses provide health care and charge them an assessment if they don’t,” he said.
“If something like that passes, that would make it unnecessary for us to do many of the things we were going to do,” DeMarco said. “We’re ready to adapt our proposal to theirs to finish the job here in Maryland.”
He said that requiring all businesses to provide health care would decrease the hidden costs in premiums that cover the uninsured. But both Huber and Snyder said they are unsure if health care reform would actually bring costs down.
“At the end of the day, both of these bills are primarily health insurance reforms and expanding coverage, and there isn’t a lot that I believe will meaningfully have any impact on bending the cost curve,” Huber said. “Nor is there anything in either of these bills that will meaningfully improve care.”
Saturday, November 28, 2009
Small firms scrapping, scaling back health plans
By DAVID A. LIEB
Associated Press
Faced with high health insurance costs, a North Carolina brokerage passed the buck on to its employees, a Texas public relations firm switched from group insurance to stipends, and a Missouri travel agency let its workers walk away instead paying for insurance.
Across the country, businesses already strapped by the economy to turn a profit are sacrificing or scaling back employee health insurance plans because of their escalating costs. The crunch has particularly socked smaller employers, who have become a centerpiece in the debate over how to overhaul the nation's health care system.
In recent weeks, small business owners have pleaded their case to the White House and Congress. Top Democrats in both the House and Senate have announced probes into how health insurers price their policies for small businesses. And lawmakers have proposed a variety of insurance rating changes, mandates and tax breaks to try to control costs.
That comes against a backdrop of some stark statistics:
_ Small businesses are paying an average 18 percent more than the largest firms for comparable health insurance policies, according to a study financed by the Commonwealth Fund.
_ Many small businesses are facing double-digit rate increases for insurance coverage this fall. Insurers are requesting small group rate hikes of 10-15 percent in Ohio, an average of 15-16 percent in Maryland and as much as 20 percent in Washington state, according to an informal survey by the National Association of Insurance Commissioners.
_ The number of businesses with three to nine employees that offer health insurance has shrunk from 58 percent in 2002 to 46 percent this year, according to the Kaiser Family Foundation.
"There's no way that (small businesses) can go another 10 years like the last 10 years," said James Gelfand, senior manager of health policy for the U.S. Chamber of Commerce.
Small companies lack the leverage of their bigger counterparts to negotiate with insurers. So when health insurance rates rise, they often look for a new insurer — a time-consuming task for firms that lack a human resources department. Many small businesses seek to soften rate hikes by asking employees to make higher co-payments, offering high-deductible plans, switching to less generous benefits or simply dropping their coverage.
Cooper Smith tried each of those options over the past several years while straining to offer health benefits at his four-person public relations firm in Dallas. He dropped dental coverage, doubled the employees' yearly health care deductible from $1,500 to $3,000 and raised co-payments for doctor visits and prescription drugs.
"Every year I just saw it go up and up and up, like 18 to 20 percent, and every year we did what everyone does — we tried to figure out ways to get the cost of the plan down," Smith said.
Finally, Smith's firm decided to drop its group health insurance plan in favor of a $125 per month stipend that each employee can put toward an individual insurance policy. Smith was surprised to discover that insurers wouldn't sell him an individual plan because of a diagnosis of psoriatic arthritis. So he now pays about $425 a month for a $5,000 deductible policy through Texas' high risk insurance pool.
About three-fourths of states allow insurers to vary their standard rates by demographics such as age and gender, geography, industry and the cumulative health status of the people covered in the group. A small business with more older workers or women of childbearing age is likely to pay more than one composed mainly of young males. Employees with pre-existing health conditions or an unexpected big medical expense also drive up premiums for a small group, making it hard for small business owners to plan for their health care costs from year to year.
Classic Travel Tours & Tanning in Jefferson City, Mo., sought to provide health insurance when one of its fewer than a half-dozen employees developed breast cancer, said owner Linda Bax. But there weren't enough other employees wanting to purchase a policy for the company to be able to afford it. Eventually, the employee with cancer quit.
"We've had some great employees who have had to leave" for other jobs, Bax said. "Even though they took a cut in pay to go someplace else ... it provided them the benefits they needed."
Proposals in Congress would prohibit the insurance industry from adjusting rates based on the health of employees, though some variation for age would still be allowed. Small businesses also could more easily shop for policies through a new health insurance exchange.
Both the House and Senate versions would offer temporary tax credits to offset a portion of the health insurance costs for businesses with fewer than 25 employees and average wages of less than $40,000.
Those provisions could make health insurance more affordable for small businesses currently priced out of the market. But others not now offering health insurance could find themselves forced to do so.
Legislation passed by the House would impose a tax penalty on businesses with payrolls of more than $500,000 that don't offer health insurance or fail to pay at least 72.5 percent of the premium costs for a health plan with federally mandated benefits.
The National Federation of Independent Business estimates that payroll threshold would get triggered for businesses with about 17 employees. The group lists the mandate to offer insurance and the corresponding tax penalty as its top two reasons for opposing the legislation.
"It's a roadblock to job growth," said NFIB tax counsel Bill Rys. For a business near that payroll threshold, "the cost of adding one or two workers isn't just the cost of hiring the employee, it's the cost of complying with the mandate."
Ashley Ascott, whose 12-person brokerage firm sells commercial, home and car insurance, says her Morrisville, N.C., company faces the same financial pressures her customers are facing. She's laid off one employee, cut another to part-time and has two people working four-day weeks.
Yet her insurance company still is struggling to provide its workers health coverage.
Last year, the company paid 60 percent of the health insurance premiums. This year, Ascott switched to a flat $100 monthly contribution, amounting to about 40 percent of the cost for an individual plan and less for family coverage.
"We still need to provide it, but we just couldn't keep paying the 60 percent," she said.
Wednesday, November 25, 2009
How Health Insurance Discriminates Against Female-Heavy Business
By Marc Tracy
BizBox.Slate.com
Kaiser Health News has a new article detailing how woman-owned or -dominated small businesses tend to get hit particularly hard by high health care premiums. The reason is simple: women, particularly under 55, tend to require more health care than men of the same age, primarily due to maternal and infant care. If you think that means it's okay for women to have to pay more, then we suppose you're entitled. But we don't think that makes it okay, and we suspect more people agree with us than with you.
But even if you feel that way, there is simply no good argument for why so-called "gender rating" should apply to small businesses and not to large ones. You see, under current law, insurance companies are banned from gender rating among large-group markets. So if you have 51 employees, you're okay; if you have 50, you're out of luck. Of course, most of the legislation currently circulating on Capitol Hill would change that, and would establish that the small-group market be treated essentially the same as the large-group one. One more reason to hope for reform's success.
Sunday, November 22, 2009
Clipping health costs in the bud
BY CAROL FLETCHER
The Record
As health insurance premiums skyrocket and small businesses struggle to pay them, insurers are pointing to wellness programs as a way to help offset costs.
Through Web sites, health assessments and seminars, wellness programs act as health coaches to turn employees away from smoking and overeating and toward exercising and eating leaner, and to help them track their health data.
"Employers, large and small, who provide [wellness] programs for employees to address such common health challenges as diabetes management, heart disease, smoking cessation and good nutrition, will play a direct role in cutting health care costs," wrote Michael McGuire, chief executive officer of United Healthcare of New Jersey, a division of the health-care insurer based in White Plains, N.Y., in a column about wellness programs.
Such initiatives began emerging a decade ago and the concept has found its way into the health care overhaul debate.
In July, the U.S. Senate's Health, Education, Labor and Pensions Committee approved The Affordable Health Choices Act that requires health insurance policies to include financial incentives rewarding wellness efforts.
Most insurers' wellness programs include Web sites to determine and track health data. UnitedHealthcare's Web site includes a body mass index to determine body fat as well as heart attack calculators.
Newark-based Horizon Blue Cross Blue Shield of New Jersey's Web site allows employees enrolled in any type of health plan to monitor data such as blood pressure, weight and their progress toward quitting smoking, said Peter Morey, director of product development.
In October, Horizon began offering employers with 100 to 499 enrollees onsite health screenings and lunchtime seminars about issues such as weight management or control of diabetes as part of the premium, said Morey, something that previously required an additional cost.
"A lot of wellness activities seem to be concentrated in the higher end of the market — above 500 employees," said Morey, adding that United is offering activities to smaller employers who might not have the resources to do such programs.
He said insurance brokers are excited about the new offering and Horizon is considering it for even smaller employers.
On the topic of whether health screenings and assessments reduced insurance premiums, Morey said savings would come in the long run if conditions such as high blood pressure are caught early.
Employers participating in wellness programs with Amerihealth Insurance Co. of New Jersey in Mount Laurel can get slight premium reductions — up to 1 percent, said Paul Portsmore, vice president-health services.
So the insurer, which focuses on businesses with 50 to 500 employees, does not charge for wellness committees, health expos and onsite health assessments, said Portsmore.
Additionally, it offers discounts for services such as acupuncture and reimbursements for fitness-center memberships, weight-management programs and other efforts. Amerihealth also provides health coaches and online tools.
At UnitedHealthcare, "enrollment in certain wellness products and programs can reduce premiums anywhere from 5 to 15 percent," for employers, said Mary McElrath-Jones, a spokeswoman for the health insurer.
But insurers agree the key factor to making these programs reduce claims is senior management.
"The accountability of the behavior needs to be on the individual and the employer group," said Portsmore. "There's only so much an insurance company will be allowed to do."
Historic health care bill clears Senate hurdle
BY DAVID ESPO
The Record
WASHINGTON — Invoking the name of Edward M. Kennedy, Democrats united tonight to push historic health care legislation past a key Senate hurdle over the opposition of Republicans eager to inflict a punishing defeat on President Obama. There was not a vote to spare.
The 60-39 vote cleared the way for a bruising, full-scale debate beginning after Thanksgiving on the legislation, which is designed to extend coverage to roughly 31 million who lack it, crack down on insurance company practices that deny or dilute benefits and curtail the growth of spending on medical care nationally.
The spectator galleries were full for the unusual Saturday night showdown, and applause broke out briefly when the vote was announced. In a measure of the significance of the moment, senators sat quietly in their seats, standing only when they were called upon to vote.
Republican Sen. George Voinovich of Ohio missed the vote.
In the final minutes of a daylong debate, Majority Leader Harry Reid, D-Nev., accused Republicans of trying to stifle a debate the nation needed.
“Imagine if, instead of debating whether to abolish slavery, instead of debating whether giving women and minorities the right to vote, those who disagreed had muted discussion and killed any vote,” he said.
The Republican leader, Sen. Mitch McConnell of Kentucky, said the vote was anything but procedural — casting it as a referendum on the bill itself, which he said would raise taxes, cut Medicare and create a “massive and unsustainable debt.”
For all the drama, the result of tonight's showdown had been sealed a few hours earlier, when two final Democratic holdouts, Sens. Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas, announced they would join in clearing the way for a full debate.
“It is clear to me that doing nothing is not an option,” said Landrieu, who won $100 million in the legislation to help her state pay the costs of health care for the poor.
Lincoln, who faces a tough reelection next year, said the evening vote will “mark the beginning of consideration of this bill by the U.S. Senate, not the end.”
Both stressed they were not committing in advance to vote for the bill that ultimately emerges from next month’s debate. Even so, their announcements marked a major victory for Reid and the White House in a year-end drive to enact the most sweeping changes to the nation’s health care system in a half-century or more.
The legislation would require most Americans to carry insurance and provide subsidies to those who couldn’t afford it. Large companies could incur costs if they did not provide coverage to their workforce. The insurance industry would come under significant new regulation under the bill, which would first ease and then ban the practice of denying coverage on the basis of pre-existing medical conditions.
Congressional budget analysts put the legislation’s cost at $979 billion over a decade and said it would reduce deficits over the same period while extending coverage to 94 percent of the eligible population.
Wednesday, November 18, 2009
While Feds Debate, Small-Biz Health Care Rates Skyrocket
By: Carol Tice
Entrepreneur.com Daily Dose
The whole healthcare-reform debate hit home for me this week. I've been ignoring a large envelope that came from my health insurance agent about a month ago. They left me a sort of ominous-sounding phone message about it, too, but I hadn't had a chance to call back. You know how sometimes when you can smell something bad's up, you just want to avoid it? I was in that mode.
Then I started reading news stories about how small-business healthcare plans were all having their rates jacked up to the sky...and I finally got up the nerve to open the envelope. Then I about fell over.
I'm on a health plan through my local city chamber of commerce through my freelance writing business, for me and my three kids. When I signed up two years ago, I was paying about $450 a month in premiums. This year, that became $560 a month. Guess what they'd like me to pay for the same coverage next year? $840 a month. That's a more than 30 percent increase.
Apparently, it's not just me, though mine seems like it's top of the class for ridiculous rate hikes. The Poynter Institute's Al Tompkins reports the average hike is 15 percent--more like what I saw last year.
Obviously, I'm going to be looking for a new health care plan, and I gather I'm not alone. It'll be interesting to see if this small-business healthcare rate spike has any effect on the ongoing effort to create a national healthcare plan.
Are your rates going up? If so, what's your plan--suck it up, or look elsewhere? Cut benefits?
Does it change the way you feel about national healthcare reform? Leave a comment and let us know.
Obama Backs Mandatory Sick Leave Law
By ROBB MANDELBAUM
New York Times - You're the Boss
This news from our colleague Steven Greenhouse, a Times reporter who posted on the Economix blog. Swine flu, he writes:
has given momentum to Congressional efforts to enact legislation that would guarantee paid sick days to tens of millions of workers — although it is far from clear that such legislation will be enacted. Those legislative efforts received added momentum on Tuesday when the Obama administration backed the Healthy Families Act, which would guarantee seven sick days a year to workers in companies with 15 or more employees.
Separately, and a week earlier, Representative George Miller, the chairman of the House Education and Labor Committee, introduced temporary legislation that would require companies with 15 or more employees to guarantee five paid sick days when the company sends a worker home (or urges the person to stay home). Mr. Miller introduced that legislation, which would sunset after two years, the same day that Mr. Greenhouse reported in another story that a “lack of paid sick days may worsen flu pandemic.”
Not surprisingly, the leading small-business lobbies, like the National Federation of Independent Business and the National Small Business Association, are opposed to mandatory leave, even in the face of the H1N1 virus. ” The impetus behind this legislation is not sensible and lacks understanding of the complex dynamics of small businesses,” the N.S.B.A, wrote (pdf) to Mr. Miller. And: “it is unfathomable that Congress would consider legislation mandating additional costly requirements on small businesses.”
Sunday, November 15, 2009
When health insurance costs rise
What businesses can do:
• Make sure your broker has shopped around for the best price.
• See if you can reduce costs by offering a wellness program.
• Ensure that your broker is analyzing your claims to see where the costs and needs are. There may be a cheaper plan for that pattern.
• Consider cost sharing: increasing deductibles, copayments, employee contributions.
• Talk to other brokers to get different offers.
• See if low-income employees may qualify for state-funded care.
• Evaluate whether it would be cost effective to be self-insured.
Sources: The Employee Benefits Advisors Group; Singer Nelson Charlmers
The Record: In Chronic Pain
Thursday, November 12, 2009
Rothman supports health-care reform
By Susan C. Moeller, Senior Reporter
The Leader
(Nov. 12, 2009) — The U.S. House of Representatives voted for the historic “Affordable Health Care in America Act,” Saturday, Nov. 7, at approximately 11:30 p.m.
Congressman Steve Rothman, who represents the southern section of Bergen County, was one of the 220 legislators to vote for the bill, HR 3962. Another 215 logged “no” votes.
“This is probably the most important domestic policy vote I have cast in my 13 years in Congress,” Rothman stated in a press release after the vote.
“The vast majority” of the constituents who have communicated with Rothman “agree that the status-quo of our dysfunctional, wasteful and unfair health-care system is simply unsustainable,” the congressman continued. “While America’s present health system offers some of the world’s best medical care, ever-increasing millions of Americans are denied access to this care, because they cannot afford it.”
Rothman’s local listening sessions drew crowds of people with passionate opinions about health-care reform, both for and against.
The provisions of the bill will now be debated by the Senate.
A copy of the bill — 1,990 pages long — is available online at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3962ih.txt.pdf
Or by referencing the bill number at the Library of Congress’ Thomas Web site, Thomas.LOC.gov.
Tuesday, November 10, 2009
In chronic pain
By Hugh R Morley & Carol Fletcher
THE RECORD
As Congress debates the health care overhaul partly aimed at controlling costs, small businesses are facing a dramatic hike in the cost of employee coverage over the next year — squeezing employers already reeling from years of steady, often double-digit increases.
Insurance companies are seeking upward of 20 percent more to renew coverage, and as much as 40 percent in some cases, forcing companies to cut benefits or ask employees to contribute more, employers and brokers say.
Insurance companies say they are merely responding to increases in their own expenses, including a rise in patient visits due to fears over swine flu, and the ongoing escalation in medical costs.
The hike has left employers scrambling to cope with a cost they say is impossible to anticipate or control.
"It's insane," said Timothy P. Rose, president of Flyte Tyme Worldwide Transportation, a Mahwah-based limousine company.
He said the average per-person cost of covering his 180 insured employees jumped from $500 a month to $650 when the company renewed its policy with Aetna on Nov. 1.
Clifford Lindholm III, president of Passaic metal-products maker Falstrom Co., said his carrier recently raised the cost of covering single employees 17 percent, from $594 a month to $694. The cost of covering a family rose from $1,447 a month to $1,687, he said.
"We couldn't afford that," he said. "If I go to my customers and tell them I need to increase our prices 16 percent, they are going to tell me to jump in a lake."
Instead, he cut back on coverage for hospitalization — the company pays 90 percent of the cost now, instead of the 100 percent coverage of the past — and increased deductibles and copayments.
The surge in health care costs comes as the debate in Washington, D.C., over health care reform intensifies while lawmakers look for ways to provide coverage to tens of millions of uninsured workers and to slow the rate of cost increases.
Whatever the outcome, it will likely be too late to help businesses in the near term.
Last week, a Senate committee said it is investigating how health insurers price the coverage they sell to small businesses, sending letters of inquiry to UnitedHealth Group Inc., WellPoint Inc., Aetna Inc. and others.
Patti Goldfarb, owner of Ridgefield Park-based Employee Benefits Advisors Group, a broker, wondered if insurance companies are setting prices with one eye on the debate.
"I do think the carriers are taking their last shot at getting high rates before reform passes," she said.
One insurer, Horizon Blue Cross Blue Shield of New Jersey, rejected the suggestion. "That's not how we operate," said spokesman Daniel Emmer.
Other brokers and employees said recent premium increases are fueled in part by laid-off workers scrambling to get as many health benefits as possible before their policies run out.
"Folks who lose their employment are going to use their medical benefits … and maximize whatever value there is," said Adam Speck, who heads the Morristown-based brokerage and consulting business for Mercer, a global consulting firm. He said he believes that even employed workers are using their health benefits more, fearing they may soon be jobless and without insurance.
Faced with those kinds of pressures, insurers are driving a harder bargain, Speck said.
"They are being much more deliberate and less flexible in their negotiations," he said. "This is without doubt a more challenging renewal year than we have seen in years."
Companies with 500 or more workers surveyed in 2008 by Mercer said they saw a 6.2 percent increase in health care costs per person, and expected an 8.4 percent hike in their 2009 policies.
The results of a similar study conducted this year will not be released for several weeks. But Speck said that the companies he deals with, which tend to have 200 to 1,000 employees, are facing 20 percent increases, with some in the 30 percent and 40 percent range.
Singer Nelson Charlmers, a Teaneck-based insurance broker, also said its clients are seeing increases that far outstrip those of recent years.
Sean Abrams, an account manager, said that after a 19 percent hike a year ago, Oxford Health Plans is raising premiums 25 percent to 37 percent for companies with fewer than 50 covered employees that renew their policies in November.
"We're anticipating bigger increases for 2010," said Mark Shanock, Singer Nelson Charlmers' chief operating officer.
Emmer said Horizon Blue Cross Blue Shield is raising rates for businesses with fewer than 50 employees by upwards of 20 percent. One reason, he said, is rising out-of-network costs. Another reason, he said, is the fear of swine flu, which is driving patients to the doctor.
"If they got a cold or a sniffle in the past, they would normally have taken over-the-counter medication," he said.
At Aetna, spokesman Ethan Slavin said an "unexpected rise in medical costs" for New Jersey small businesses has affected policy prices, although he declined to comment on how.
Mary McElrath-Jones, spokeswoman for UnitedHealthcare, which owns Oxford, also would not discuss specific increases, but said the company expects to "continue to maintain steady pricing disciplines in response to prospective medical cost pressures."
Whatever the reason, the hikes have forced small businesses to look again for ways to cut costs.
Paul Gourhan, owner of Glen Rock-based PMW.net, a graphics design and branding company, said that until he cut his staff by half due to the recession he had six employees, but he paid half of them as contractors, in large part to avoid the cost of providing them with health care.
In addition, he has steadily cut benefits for his three staffers, slowing the annual growth in the company's health care bill, which otherwise would have grown at about 15 percent a year, he said.
In 2009, the cost would likely have risen by at least that much, but an employee in her 50s left and was replaced by one in her early 20s, he said.
"You have a young, single woman, who the demographics say is not going to get sick," replacing one with higher coverage costs, he said. So the company's overall health premium remained about flat, he said.
Last week, he received a notice from his insurer, Oxford, saying his 2010 policy would increase by 25 percent, taking the coverage for three employees from $1,416 a month to $1,761 each.
"It's obscene," he said, adding that he will consider whether to cut an employee to reduce his costs. "In an economy where everybody is cutting back prices to be competitive, and trying to bend over backwards to try and help their fellow businessperson, they are instituting a 25 percent increase."
"How am I going to find that?" he said. "With this economy, with everything the way it is, I am scraping by."
How small business fares under health-reform bill
By Kent Hoover, Washington Bureau Chief,
Denver Business Journal
Many small business groups oppose the massive health care reform bill that passed the U.S. House of Representatives late Saturday, contending it would raise insurance premiums for many firms and create disincentives for hiring new workers.
Some small business owners, however, support the legislation. They think the insurance market needs the bill’s reforms, such as barring insurance companies from denying coverage based on pre-existing conditions. Plus, they think providing a government-run option in new health insurance exchanges would bring needed competition to the insurance market.
The 220-215 vote on the House bill is the first step in the end game for health care reform. The Senate still must vote on its own version, and then the two bills must be merged for a final vote by each chamber. The legislation would then go to President Barack Obama for his signature.
This process could take weeks, if not months, to play out, but the House bill provides a starting point for small businesses to determine whether they would be helped or hurt by the legislation.
Here’s a look at some of the provisions that would have the most impact on small businesses:
Health insurance exchanges
The House bill would create a national insurance exchange where small businesses and individuals without coverage could shop for coverage. States could opt to offer their own exchanges or create regional exchanges.
These exchanges would become operational in 2013. In the first year, businesses with up to 25 employees could purchase insurance through the exchanges. That would increase to 50 employees in 2014 and 100 employees in 2015.
A government-run plan would be offered as an option in the exchange. This plan would negotiate the rates it pays to hospitals and other health care providers, instead of paying Medicare rates, which are lower than the rates that private insurers pay providers. The public plan’s costs would be covered by the premiums it charges.
By 2019, 30 million Americans would be covered through the exchanges, 6 million of them opting for the public plan, according to Congressional Budget Office estimates.
The exchange will “promote transparency and new choices,” said Kelly Conklin, who owns Foley-Waite Associates, an architectural woodworking company in Bloomfield, N.J. “It provides a competitive public health insurance plan that will give small businesses new leverage, drive down costs and inject new competition into the marketplace.”
Conklin serves on the national executive board of Main Street Alliance, a coalition of small business owners that supports the House bill.
In recent days, several Colorado small-business owners traveled to Washington to voice support for congressional health care reform efforts, including the public option.
The business participants were part of a pro-reform coalition assembled by advocacy groups, including Main Street Alliance, and labor unions.
The National Federation of Independent Business, which opposes the bill, supports allowing small businesses to pool their purchasing power for health insurance. It sees several major problems with the exchanges in the House bill, however.
Health plans that would be offered through the exchange would have to offer a minimum level of insurance benefits -- including behavioral health treatments and durable medical equipment -- that exceeds what’s now covered in many small business policies, said Michelle Dimarob, a House health care lobbyist for NFIB.
“It’s going to be more expensive that what small businesses typically are buying today,” Dimarob said.
All employers, even those not using the exchanges, would have to meet these minimum insurance standards by 2018.
Business groups also fear the public plan would undermine private insurance.
A letter to House leaders signed by 10 other business groups that oppose the House bill, including the U.S. Chamber of Commerce, said the public plan “will not operate on a level playing field and compete fairly if the government acts as both a payer and a regulator.”
Even if the public plan initially pays negotiated rates to health care providers, “soon there would be tremendous pressure for the new public plan to pay below-market rates, just as we have seen in Medicare and Medicaid,” the letter states. This would shift costs to private insurers and employees who are covered by private plans, it said.
Monday, November 9, 2009
House passes health care reform bill
CNN.com
Washington (CNN) -- The House of Representatives on Saturday night passed a sweeping health care bill by a vote of 220-215.
With the passage of H.R. 3962, the Affordable Health Care for America Act, proponents of health care reform took an important step forward, but turning the bill into law remains uncertain.
It's unclear when the Senate will vote on a version of the health care legislation debated in that chamber. If the Senate passes its bill, the House and Senate bills would have to be reconciled into one document and voted on again.
The House Democrats needed 218 votes to ensure passage of the bill. On Saturday, it appeared the vote would come down to the wire, as the intentions of some conservative Democrats remained unknown.
In the final tally, 219 Democrats voted for the legislation, and 39 voted against it.
Rep. Joe Cao (R-Louisiana) was the only Republican who voted in favor of the bill.
Read the House bill (PDF)
Democrats began counting down with eight seconds left in the voting period and erupted in a loud cheer when the hotly debated legislation was passed. Republicans in the chamber stood across the floor, some with their arms folded.
"Oh what a night," said House Speaker Nancy Pelosi in a news conference after the House adjourned its session for the night. She thanked President Obama and her colleagues who fought to get the bill passed.
The Republican National Committee released a statement after the vote.
"Today with help from their liberal House allies, President Obama and Nancy Pelosi finally got what they have been creating behind closed doors these past months -- a government-run health care experiment that will increase families' health care costs, increase the deficit, increase taxes on small businesses and the middle class, and cut Medicare," the statement said.
Earlier, the House passed an amendment to pending health care legislation that prohibits federal funds for abortion services in the public option and in the insurance "exchange" the bill would create.
The vote passed 240-194.
A second amendment considered by the House, introduced by Minority Leader John Boehner, which would have substituted several sections of the health care bill dealing with insurance, did not pass. Legislators voted against the amendment 258-176.
The first amendment, introduced by anti-abortion Democrats, bans federal funds for abortion services in the public option and in the insurance "exchange" the bill would create. Its consideration was considered a big win for them and for the U.S. Conference of Catholic Bishops, which used its power -- especially with conservative Democrats in swing congressional districts -- to help force other Democratic leaders to permit a vote that most of them oppose.
The prohibition, introduced by Democratic members, including Rep. Brad Ellsworth, D-Indiana, and Rep. Bart Stupak, D-Michigan, would exclude cases of rape, incest or if the mother's life is in danger.
Republicans strongly supported the measure.
The GOP accounted for 174 of the votes in favor of the amendment, with 1 Republican voting "present." On the Democrats' side, 64 voted for the measure, and 194 voted against.
Earlier Saturday, President Obama said members of the House of Representatives face the chance of a lifetime as they consider the legislation.
After a meeting with the House Democratic leadership, the president said he told lawmakers that "opportunities like this come around maybe once in a generation."
"This is their moment, this is our moment, to live up to the trust that the American people have placed in us," Obama told reporters in the White House rose garden. "Even when it's hard, especially when it's hard, this is our moment to deliver."
Small Employers Struggle to Offer Health Insurance
By John Tozzi, Businessweek.com
Unlike most small employers, Boeggeman, George & Corde, a New York law firm with offices in White Plains and Albany, pays full health insurance coverage for each of its 23 employees and their families. At least for now.
Premiums are rising so quickly that partner Richard Corde has been grappling for six years with whether to make workers pay part of the cost. In that time, the health-care share of the firm's total compensation budget has doubled, to 10%. When Corde went to his insurer, Health Net (HNT), to arrange a November renewal for the firm's' policy, he was given a 22% higher rate, an increase Corde says is typical. He has switched insurers at least three times to avoid such hikes. To keep the policy affordable this year, he agreed to higher deductibles for doctors' visits and prescriptions.
Even with the concessions, the firm will pay about 9% more this year—close to $200,000. "I don't know how many years of those kind of increases I can absorb," Corde says.
Washington lawmakers are trying to write legislation to contain health-care costs and expand coverage. But even if reform passes this year, any effect on the price of care won't manifest until 2011 at the earliest, according to an analysis by PricewaterhouseCoopers. Many small businesses, some closing the worst year (or two) in their histories, face hard questions about how—and how much—to pay to keep their employees and their families healthy.
Workers see ever-higher deductibles
In the past decade, the average health insurance premium for a single worker at a company with fewer than 50 employees went from $2,475 to $4,501, an 82% increase, according to data from the U.S. Department of Health and Human Services. Family premiums increased by 93% in that period, to $11,679. As costs rise, companies ask workers to contribute a greater portion of premiums: Employees at small companies that provide health insurance in 2008 paid more than twice what they did in 1999. Even adjusted for inflation, the increase is 63% for single coverage and 49% for family plans. At the same time, the percentage of small businesses offering coverage dropped from 47% to 43%, compared with 96% for companies with 50 or more employees.
Overall medical costs will grow by about 9% in 2010, according to the PricewaterhouseCoopers analysis. Many companies, especially those facing leaner demand, are buying less generous policies to keep prices in check and shift part of the cost increase to workers. "A company that maybe has a $1,500 deductible today might renew and get a $2,500 deductible," says Carey Wolf, sales manager for the small group health unit at online insurance broker eHealth (EHTH). "Businesses are realizing that maybe part of that has to be absorbed by the user by having a little bit higher deductible or a little bit higher co-pay."
Small businesses that want to continue to offer health benefits face limited options to control the cost. EHealth has seen many more companies shopping for new plans, Wolf says, which sometimes keeps premiums down, at least for a year, as competing insurers try to acquire new customers with attractive rates. But the money that supports ever-growing health-care costs must come from somewhere—higher premiums, deductibles, or co-payments.
"appalled by this entire process"
About three years ago, Hoglund Transportation, a family-owned school bus operator in Monticello, Minn., switched from paying half the premium for comprehensive coverage to paying the full cost of a high-deductible plan offered by the same insurer, Medica. The cost to the company was about the same, leaving Hoglund paying over $44,000 annually for its six covered employees. But Medica quoted a 26% increase at the end of September, which would raise the premium to $55,800, according to Kari Kounkel, who runs the business her grandfather started in 1947.
Kounkel says she will discuss three options with her employees: Keep the current policy, but ask them to start paying part of the premium; increase the deductible from $5,000 to $9,000; or agree to a plan where employees would pay 20% of their medical costs even beyond the $5,000 deductible—which could cost someone with a catastrophic illness many thousands of additional dollars. She doesn't like any of the choices. "I've just been appalled by this entire process for the past two years," she says.
She hopes to blunt future increases by finding a creative solution, such as giving her workers incentives to improve their health—discounted gym memberships, for example. But like most small businesses, health insurance takes up an increasing share of Hoglund's compensation spending. Few see better alternatives ahead. Kounkel doubts that reform will really curb premium hikes and she fears that her company could be forced to provide even costlier coverage than its current high-deductible plan.
For his part, attorney Corde says his firm will pay the higher premiums this year without asking workers to contribute. "I don't want my employees in this economic environment to try to save money and not carry health insurance," he says. But he's not sure how long the firm can keep it up. "I don't know what next year's increase in premiums is going to be, or the year after that, or the year after that."
Monday, October 19, 2009
A Good Read on Healthcare
The quest to reform the way healthcare insurance is provided to Americans continues as the Senate is closer to finalizing a bill. However, the debate is hardly over as the two chambers of Congress still need to reconcile their differences.
For those of you still looking for answers and ideas to send to your representatives, a good place to start is T.R. Reid’s book Healing of America
2009).
The non-partisan investigation described within was undertaken by a Pulitzer Prize winning journalist long before the current debates started.
No time to read the book? This link will take you to the transcript of an interview which gives you the highlights: http://www.npr.org/templates/transcript/transcript.php?storyId=112172939
If you prefer, you can also find the audio version on the site.
-Abby Duncan, Duncan Resources
HR Help for Firms with Up to 50 Employees
Friday, August 14, 2009
Time For Recess
This week the members of the Senate will join their colleagues in the House for a month-long recess from the legislative session. During this summer break, Representatives and Senators are expected to return to their communities and hear from constituents on the issue of health care reform. A media firestorm on this issue is anticipated, as lobbyists and interests groups from all angles ratchet up their campaigns via television, the internet and newspapers. Expect to see substantial debate, discussion, headlines, and even political grandstanding on this topic over the coming weeks, even though no new actual legislative movement is anticipated.
Further, many communities are holding town hall forums to address and discuss health care reform. While the intent of these forums is to provide clarification around the health care issue, it is likely that disruptions and protests by individuals from both sides of the debate will occur.
The following summarizes recent legislative developments from the health reform debate.
• By a 31-28 vote, the House Energy and Commerce Committee passed a health reform bill. Passage of the bill was assisted by securing support of some Blue Dog Democrats who initially opposed the bill. Concessions were made to secure their support, including:
o Requiring the public plan to negotiate provider reimbursements on a more favorable basis than current Medicare reimbursement rates; and
o Exempting a greater number of small businesses from the required employer contribution toward health care (“Pay or Play”).
• Reform bills have now been passed by all three House Committees with control over health reform legislation. After the recess, the matter will move to the House floor for continued debate and an eventual vote.
• While the issue of a public plan option remains hotly contested, the House bills and Senate HELP Committee bill both include a public plan under a health insurance exchange. It is unclear whether the Senate Finance Committee, which has yet to release their bill, will include such an option.
• Senator Max Baucus, chairman of the Senate Finance Committee, indicated he expects to release his Committee’s reform bill by September 15, 2009. Baucus has been working closely with a small, bi-partisan group of Senators to develop a reform plan that may deviate from earlier bills by not including a public plan option. Further, the bill is expected to address financing proposals to pay for reform, including changes to the current tax treatment of employer-provided health benefits. Republican Committee members indicate they have not signed off on a September 15 deadline for introducing a bill. Time will tell whether the Committee will have consensus by this September target date.
• The President invited the six members of the bi-partisan Senate group working on health care reform to a meeting at the White House. In this meeting, the President reiterated that work on a bi-partisan solution should continue. He also stated that reform must be achieved this year. In earlier comments, the President indicated he is willing to push forward with a reform package without bi-partisan support in order pass legislation this year.
We will continue to follow the health care reform debate and provide timely updates as information develops.
About the Author
The Employee Benefits Bulletin is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws, regulations or to address specific client situations.
Tuesday, June 16, 2009
Health reform is going to happen
There is no doubt about it. Health reform is going to happen. Small businesses are going to reap its benefits. Now is the time to have your say in how this reform takes place. There are many issues, including:
• Affordability
• Access for All
• Private vs. Public Plans
• Should a Public Plan mimic Medicare and it’s Gaps
• How to Pay for Care
• Taxes
• Rationing of Care
Now is the time to make your voice heard. In the fall we are planning to hold a grassroots meeting in participation with several other organizations. We will present several points of view about health care reform. We will also publish a white paper advocating on behalf of our members. In order to truly represent you we need to know what your thoughts about reform are. Please take a moment to post them as comments to this blog post.
Friday, May 1, 2009
Are You Prepared? About What Do You Really Need To Be Concerned? Comments and Guidance About The Swine Flu
When a new strain of flu emerges that can be spread from person to person, it may be spread rapidly, since many will have no natural immunity to it, and it will take months before a vaccine is developed and distributed. When there are outbreaks of this type of disease in more than one country within a short time period, health agencies use the term “pandemic”. However, this term in no way refers to the severity of symptoms.
Some pandemics are mild in terms of level of illness, some even more mild than seasonal flu. Others, such as have occurred earlier in the century, produced widespread severe symptoms among the population and caused significant economic disruptions. Especially in the current news climate, where the “reporting” often seems to be more about generating ratings than informing the public, it is important to listen or read closely to understand the course of the current outbreak and how it might affect you.
Here is what is known about the Swine Flu at this time:
Swine flu in humans resembles seasonal flu, with symptoms such fever, cough, sore throat, body aches, headache, chills and fatigue. Some people experience diarrhea and vomiting as well. Like regular flu, swine flu can in some cases cause serious respiratory problems or worsening of chronic medical problems.
There is currently no vaccine for Swine flu. Vaccines for seasonal flu provide no protective effect for the H1N1 strain.
At this time, the CDC recommends that people who live in or have recently traveled to San Diego and Imperial Counties in California or Guadalupe County in Texas and who develop flu symptoms consider seeking care from their health care providers. More serious symptoms require emergency medical care.
In children, such symptoms include:
•Fast breathing or trouble breathing
•Bluish skin color
•Not drinking enough fluids
•Not waking up or not interacting
•Being so irritable that the child does not want to be held
•Flu-like symptoms improve but then return with fever and worse cough
•Fever with a rash
In adults such symptoms include:
•Difficulty breathing or shortness of breath
•Pain or pressure in the chest or abdomen
•Sudden dizziness
•Confusion
•Severe or persistent vomiting
Relative to all flu epidemics, workers have varying degree of exposure risk depending on their occupations:
•Healthcare employees, such as doctors and medical laboratory personnel have the highest risk followed by healthcare support staff exposed to known or suspected flu victims
•Those in schools or other high density work environments are at medium risk of exposure
•Lower risk employees have minimal contact with other co-workers or the public. However, since even these workers may have family members or associates with greater exposure or participate in avocational activities involving large groups, it is foolish to assume that this population does not have to take any precautions.
For more information about how to protect your business, follow this link:
Guidance on Preparing Workplaces for an Influenza Pandemic
Monday, April 6, 2009
New COBRA Legislation Effects Employers with Less Than Twenty Employees
COBRA, also known as the Consolidated Omnibus Budget Reconciliation Act, is the law that allows former employees to purchase their company's health insurance plan for 18 months if they pay the premiums. If you thought you were exempt from this requirement because the original law only applied to companies with more than 20 employees, listen up. The new legislation that became part of the American Recovery and Reinvestment Act (ARRA) effective February 17, 2008, makes a provision that applies to state continuation plans such as the one we have in New Jersey. In layman’s terms, all businesses with more than 2 employees will be required to offer terminated employees the right to continue their coverage and if they qualify will have to pay 65% of their premiums beginning March 1, 2008. The subsidy lasts for a period of 9 months.
New Subsidy for COBRA Beneficiaries
ARRA provides for premium reductions and additional election opportunities for health benefits under COBRA. Eligible individuals pay only 35% of their COBRA premiums and the remaining 65% is reimbursed to the coverage provider (the employer or insurer) through a tax credit. If the credit amount is larger than the taxes due, the employer will be reimbursed by the Secretary of the Treasury. For insured plans, not subject to Federal COBRA, where the insurer is collecting the premium, the insurance company will be entitles to the reimbursement through a corresponding credit to its own payroll taxes. There are also filings that payers receiving the subsidy must make with the Secretary of the Treasury.
The New Jersey Dept. of Banking and Insurance is working on a provision that will allow the insurance companies to handle this subsidy. We will keep you posted on their progress. Meanwhile, the employer will be responsible for paying the carrier.
Beneficiaries must notify the employer in writing if they become eligible for other coverage under a group major medical health plan or Medicare. There are substantial penalties if they do not.
Eligibility for the Subsidy
Not everyone is eligible for this premium reduction. They must meet the following requirements:
• Involuntarily terminated from employment on and after September 1, 2008 for reasons other than gross misconduct
• Not be eligible for other group health coverage (such as through a spouse's plan or a new employer’s plan) or for Medicare.
• Individuals earning more than $145,000 (or $290,000 for joint filers) must return the subsidy when they file their taxes
• For those earning between $125,000 and $145,000 (or $250,000 and $290,000 for joint filers) a proportional amount of the premium reduction must be repaid
Electing a Different COBRA Option
While the old COBRA rules would not allow a terminated employee to move to a less costly plan, if the employer offered more than one plan option, this new legislation permits but does not require the employer to allow assistance eligible individuals to switch the coverage options. To retain eligibility for the ARRA premium reduction, the different coverage must have the same or lower premiums as the individual’s original coverage. The different coverage cannot be coverage that provides only dental, vision, health flexible spending account, or coverage for treatment that is furnished in a on-site-facility maintained by the employer.
Notifying Terminated Employees
Any employee terminated between September 1, 2008 and February 16, 2009 will have to be offered the right to accept these benefits (again) with the subsidy. They must be notified of the subsidy and opportunity to elect coverage within 60. The election period for those beneficiaries will begin on the date of enactment and end 60 days after. The Dept of Labor will be issuing sample notices employers can use within the next 30 days.
Failure to provide notices would be subject to penalties of up to $110/day. Additionally, there could be adverse tax consequences under the IRS code which can impose excise taxes of $100/day per notice on the plan administrator.
Logistics
ARRA requires the employer to collect only the 35% of the COBRA or continuation premium from the terminated employee. They will pay the remaining 65% and obtain a reimbursement from the Federal Government when they file Form 941, Employer’s Quarterly Federal Ta Return to report their COBRA premium assistance payments. If the credit amount is larger than the taxes due, the employer will be reimbursed by the Secretary of the Treasury.
Employers must maintain supporting documentation in order to receive the credit:
• Documentation of receipt of the employee’s 35% share of the premium
• A copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the carrier
• Declaration of the former employee’s involuntary termination
Please email your questions to: pgoldfarb@ebagroup.net
Should Our Health Care System be run by the Government or Private Industry?
It’s no secret that our health care system is failing. Ever increasing costs and a growing number of uninsured or under insured make it clear. The issue of reforming our nation’s health care system will dominate much of the policy debate in 2009 and beyond. This system, which accounts for 16 percent of our economy, produces hundreds of life-saving marvels every day, yet fails to provide affordable health care for all Americans (mathmatica.com).
While consuming more resources per capita than any other health care system in the world, our system yields outcomes that are often worse than those of other countries and well below our own expectations and what seems possible. These tensions have led to broad-based public interest in finding ways to improve the quality, efficiency, affordability, equity, and financing of health care. We have been hearing a lot about the Obama administration’s goal to reform health care in order to provide affordable universal coverage. There are many issues:
• Making coverage available to all
• Affordability
• Uniformity of care
• Rationing of care
• Availability of physicians
• Who should administer health care; the government or private industry
• Integrating technology to reduce costs
How it is achieved is the topic of many debates. One issue is central to almost all the debates—should the government take over the administration of health care or should we leave it in the hands of private industry.
Those on the pro-government side cite that health care has become increasingly unaffordable for businesses and individuals. We can eliminate wasteful inefficiencies such as duplicate paper work, claim approval, insurance submission, etc.
That free medical services would encourage patients to practice preventive medicine and inquire about problems early when treatment will be light; currently, patients often avoid physicals and other preventive measures because of the costs. We can develop a centralized national database which makes diagnosis and treatment easier for doctors.
Opponents to this approach point out that there isn't a single government agency or division that runs efficiently; do we really want an organization that developed the U.S. Tax Code handling something as complex as health care? "Free" health care isn't really free since we must pay for it with taxes and this may lead to reductions in funding for important areas such as education or defense. In addition, healthy people who take care of themselves will have to pay for the burden of those who smoke, are obese, etc. Changing to a government run system will result in a long, painful transition taking place. It will involve lost insurance industry jobs, business closures, and new patient record creation. The loss of private practice options and possible reduced pay may dissuade many would-be doctors from pursuing the profession.
The Meadowlands Regional Chamber has always advocated for the small employer both in Trenton and Nationally. We want to know what you think. Here is your chance to make your voice heard.
Friday, March 6, 2009
Managing STRESS effectively: A fundamental skill for healthy living
We all face stress in our daily lives, managing stress effectively is fundamental to healthy living. When unchecked, excess stress can affect blood pressure, weight, emotional well-being, sleep, and increase one’s risk for heart disease. Therefore, it is important to learn to practice effective coping strategies to improve our awareness and response to stress.
Below are some tips and techniques to help you manage your stress.
• Exercise regularly.
• Limit alcohol and caffeine and don’t smoke.
• Keep your schedule manageable. Give yourself time to get organized, and learn to say “no”.
• Change how you respond to difficult situations by trying to be positive instead of negative.
• Learn to relax. Try different relaxation techniques that just take a minute or two.
Here are some that may work:
1. Deep Breathing: Exhale slowly, relax your muscles, and feel the tension flow out of your body.
2. Progressive relaxation: Tense every muscle in your body starting with your toes, hold for 10 seconds, and gradually release the tension.
3. Shoulder shrugs: Raise your shoulders up to your ears, hold for 4 seconds, release, and slowly rotate your head in a circular manner.
4. Focused breathing: Imagine that the air you are inhaling is coming to you as a cloud that floats away as you exhale; repeat very slowly and relax.
5. Time out: Pick something enjoyable where you are and focus on it for 10 seconds, admiring what you like about it, and breathing deeply.
These are only a few healthy ways of coping with the daily stress that most of us feel. Remember that is important to find a way to deal with the stress that we face in order to be more effective and accomplish our goals in every aspect of our lives.
About the Author
Orlando Vasquez is a Health Services Manager with Concentra Medical Centers, who have 8 locations in Northern NJ and over 300 locations nationwide.
Contact Orlando_vasquez@concentra.com or 201-206-4554.
Thursday, February 5, 2009
Women Urged to “GO RED” to Focus Attention on Cardiovascular Disease
Choosing to ignore your heart health might not seem life changing today, but women are dying of heart disease at the rate of almost one per minute. Luckily, cardiovascular disease is largely preventable. Women simply have to choose to act.
Since 2004, the American Heart Association has been running a “Go Red” campaign, aimed to focus attention on Cardiovascular disease, the No. 1 killer of women and the No. 1 health threat facing women today.
This has claimed nearly 14,000 New Jersey women’s lives annual, and African-American women face a greater threat of death from heart disease than women of other races.
Cardiovascular disease kills approximately 450,000 women each year, which is about one every minute. More women die of cardiovascular disease than the next five causes of death combined, including all forms of cancer. Sixty-four percent of women who die suddenly of coronary heart disease have no previous symptoms. More than 41 million American women are living with one or more types of cardiovascular disease, yet only one in five view heart disease as their greatest health threat.
Research shows that 96 percent of women who “Go Red” have made at least one choice to improve their heart health. For example:
• More than 40 percent have lost weight.
• More than half have increased their exercise.
• Six out of ten have changed their diets.
• 53 percent have checked their cholesterol levels.
• One third have investigated their family’s history of heart disease or talked to their doctor about their personal heart risks.
You may look and feel healthy, but do you know your risk for developing heart disease in the next 10 years? The American Heart Association’s Go Red Heart CheckUp only takes a few minutes to assess your main cardiovascular health risk factors. You’ll be rewarded with a Personal Action Plan, a customized guide to help you achieve your fitness and nutrition goals and live heart smart.
Choose to take the Go Red Heart CheckUp and enroll in the Go Red For Women movement at GoRedForWomen.org. Whether it’s eating healthier, exercising more, reducing our cholesterol, or quitting smoking, Go Red helps women make these choices for themselves and each other.
Choose to know the warning signs of heart attack, stroke and sudden cardiac arrest. Not all warning signs occur in every situation. If some warning signs occur or you observe them in someone else, get help fast. Heart attack, sudden cardiac arrest and stroke are urgent medical emergencies. Call 9-1-1 immediately!
Heart Attack
The most common or “classic” warning signs of a heart attack:
• Uncomfortable pressure, fullness, squeezing or pain in the center of the chest lasting more than a few minutes, or goes away and comes back
• Pain that may spread to the shoulders, neck or arms
• Chest discomfort with lightheadedness, fainting, sweating, nausea or shortness of breath may also occur
Less common signs of a heart attack, which often occur in women:
• Atypical chest pain, stomach or abdominal pain
• Nausea or dizziness
• Shortness of breath and difficulty breathing
• Unexplained anxiety, weakness or fatigue
• Palpitations, cold sweat or paleness
Stroke • Sudden numbness or weakness of face, arm or leg, especially on one side of the body
• Sudden confusion, trouble speaking or understanding
• Sudden trouble seeing in one or both eyes
• Sudden trouble walking, dizziness, loss of balance or coordination
• Sudden severe headache with no known cause
Sudden Cardiac Arrest
Sudden cardiac arrest is different than a heart attack, but cardiac arrest can be caused be several factors, including heart attack, trauma, electrocution or drowning, or it can have no known cause. Unresponsiveness is the critical red flag for sudden cardiac arrest.
* All statistics and figures according to the American Heart Association
Wednesday, January 21, 2009
OSHA Recordkeeping
If your company is required to comply with the mandated OSHA standard 29 CFR 1904, then reduce your risk of OSHA imposed citations by maintaining the proper and required written OSHA Recordkeeping documents.
$5,000 to $7,000 is the unadjusted penalty for failure to report to OSHA the death of any employee or the inpatient hospitalization of three or more employees, from a work-related incident.
$7,000 is the maximum penalty for failure to make available the OSHA 301 forms ($1,000 per form), when requested by any employee, former employee, personal representative, or authorized employee representative.
$1,000 is the unadjusted penalty if an employer fails to post the OSHA 300A Summary.
OSHA’s 300 Log
Not all injuries / illnesses are recordable on the log. You must determine if the case is “work related” and meets the criteria for a recordable case.
Examples of injuries / illnesses that occur in the work environment but are not work-related, therefore not recordable:
injury / illness results from voluntary participation in a wellness, fitness or recreational program.
injury / illness is solely the result of an employee eating or preparing food for personal consumption.
injury / illness is solely the result of personal grooming or self medication.
First aid cases are also not recordable, even if the employee has been sent to the hospital. Some examples include:
removing foreign bodies from the eye using only irrigation
administering tetanus immunizations
using hot / cold therapy
visits to the physician solely for observation for counseling
diagnostic procedures such as x rays and blood tests
Some employers record everything “just to be safe”. Why is this a problem? Because too many incidents for your Standard Industry Code (SIC) may trigger an OSHA inspection!
OSHA’s 301 form
Complete an OSHA 301 or an equivalent form for each recordable injury or illness. Many employers use their insurance company’s incident investigation form as an equivalent.
OSHA’s 300 - A form
The annual summary must be completed and certified (signed) by a company executive. You must post a copy of the annual summary in a conspicuous place where notices to employees are customarily posted. The annual summary must be posted no later than February 1st and remain posted until the end of April.
Retention
All forms must be retained for five (5) years following the end of the calendar year that these records cover. So, your 2008 records must be kept until 2013!
Summary
Every year, the U.S. Occupational Safety and Health Administration
sends letters to approximately 80,000 employers across the country
requesting their injury and illness data from the previous year. From this data, OSHA picks 14,000 workplaces with the highest incident rates. Not only are these
workplaces listed on OSHA's website, but from the 14,000 workplaces
listed, 4,500 are then targeted for wall-to-wall inspections.
As we begin a new year I cannot overestimate the importance of accurate recordkeeping. Too many employers either don’t record injuries or record injuries that don't need to be recorded ... skewing their incident rate and making their safety performance appear questionable.
About the Author
Sunny Corona, is Managing Member of Custom Safety Services, LLC and is a Certified Safety Professional with 25 years in the safety field. Custom Safety Services is a safety consulting / training firm specializing in workplace violence/sexual harassment, office /industrial ergonomics, OSHA compliance, Fleet Safety Programs and Return to Work Programs . Contact Sunny@CustomSafetyServices.com or 201-703-6966. http://www.customsafetyservices.com/
Saturday, January 17, 2009
Thursday, January 15, 2009
Early Return to Work Programs: The Second Best Tool for Controlling Workers’ Compensation Costs
Why Have an Early Return to Work Program? Second to accident prevention efforts, an Early Return to Work (ERTW) Program is management’s best tool to minimize the financial cost of a Workers’ Compensation claim. The key word is “Early”. Your actions upon notification of illness or injury have a profound impact on the outcome of most cases. ERTW actions should start as soon as possible. Statistics and Facts about Return to Work: An ERTW Program will have a direct impact on your Workers’ Compensation premium for the next three years! Typically, an injured employee, of a company without an ERTW Program, will contact an attorney within two weeks after injury.
Studies show that 80% of all litigated claims result in higher settlements. Employees who retain an attorney see an average of 5.2 doctors. Those who do not retain an attorney are treated by an average of 2. Studies also show the chance of litigation is reduced by 50% if the employer maintains contact with the injured employee which reinforces the worker’s self image and value to the company. Returning an injured employee to the workplace reduces associated recovery costs, including medical expenses, rehab expenses, therapy and surgical expenses. Often the percentage of permanent impairment is significantly reduced. Injured employees off work longer than six months have only a 50% chance of every returning to their job; if lost time exceeds one year, their chances decrease to less than 10%!
Objectives of Return to Work Programs: Return to work objectives should include the following:
Reduce the number of cases entering the workers’ compensation litigation system. Decrease the number of lost work days.
Increase employee morale and motivation to return to and remain at work.
Facilitate temporary or permanent job reassignment or job restructuring.
Identify alternative employment consisting of modified duties.
Types of Alternative Work Activities: An employee who is off work for a sustained period of time will lose interest in his/her job and be less effective upon return to work. The main idea is that the employee moves from a placid environment, where the disability is the reason for being at home or off work, back to a productive environment. At work, the employee’s mind is busy with production, and the productive atmosphere fosters positive thoughts.
Modified Work
Modified Work is when an employee is brought back to work and placed temporarily within an existing job that is not as physically taxing or demanding as their normal job.
Restricted Work
Restricted Work is when an employee is brought back to their normal job with restrictions assigned by a physician, i.e. lifting no more than 30 lbs., six times per hour, standing no more than two hours, etc.
Modified or Total Accommodation
This is when positions are specifically created which will accommodate the restrictions of the injured employee.
Job Function Analysis: You should develop a Job Function Analysis, which is an extension of the Job Description and its purpose is to:
Describe tasks and physical demands of the regular job.
Develop a task inventory which can be used to fill the work day, for an injured employee.
Allows the supervisor a broad selection from which to choose and accommodate many different types of injuries.
Be used by the treating physician to determine job limitations.
Why Use a Managed Care Facility?
Statistics show that the longer an injured employee is off work, the greater the total cost of that case. This is where Concentra is a huge benefit. Concentra provides occupational healthcare services that employers need to keep safe and healthy workforce.
Each patient medical encounter is an opportunity to measure the effectiveness of our treatment procedures and our management processes from the first visit to case closure. Customers who have provided total claim cost data for comparative result studies have discovered that injuries not treated by Concentra have higher average total claim costs. The study results indicate that Concentra saves employers up to 52% per claim when compared to other providers in the study.
To find real solutions, look to Concentra:
Dynamic Early Intervention Model Exercise-based therapy with functional outcomes Workers return to work with a reduced risk of re-injury
Your employees will receive high-quality healthcare from specialists that understand your occupational healthcare needs. Better care and better outcomes mean a better bottom line for everyone.
Conclusion
Assign someone enthusiastic to oversee your ERTW Program.
Analyze injury statistics to determine problem areas and then meet withsupervisors to analyze and document modified duty tasks within existing job descriptions, prior to an injury.
Ensure that all tasks are important to your operation and productivity.
Communicate the goals and rationale of the program to all supervisors and employees so that everyone know how it works and how they fit into the plan.
Evaluate the program on a regular basis and make adjustments as necessary.
About the Authors
Sunny Corona, is Managing Member of Custom Safety Services, LLC and is a Certified Safety Professional with 25 years in the safety field. Custom Safety Services is a safety consulting / training firm specializing in workplace violence/sexual harassment, office /industrial ergonomics, OSHA compliance Fleet Safety Programs and Return to Work Programs . Contact Sunny@CustomSafetyServices.com or 201-703-6966.
Orlando Vasquez is a Health Services Manager with Concentra Medical Centers, who have 8 locations in Northern NJ and over 300 locations nationwide. Contact Orlando_vasquez@concentra.com or 201-206-4554.
Tuesday, January 6, 2009
Monday, January 5, 2009
New Healthcare Guide is Here!
