Posts Tagged ‘San Francisco Health Plans’

What are Multiple Employer Plans? Part 1

Wednesday, June 15th, 2011

Have you heard people talking about Multiple Employer Plans? Are you curious as to what these are? This series of  blog posts will help you understand the terminology and the benefits of offering Multiple Employer Plans for your business.

Let’s start with some relevant terms:

Multiple Employer Plan (MEP): A retirement plan for businesses that typically have
a common interest, but are not commonly owned or affiliated.

Multiple Employer Plan Sponsor (MEP Sponsor): The organization that sponsors and maintains the MEP and master contract under which adopting employers may adopt a retirement plan; An example of organizations that may sponsor an MEP include a professional employer organization (PEO), or a professional association.

Adopting Employer: The term used to describe an employer that participates in an MEP.

A few Advantages of Multiple Employer Plans:

  1. MEP’s offer great potential as a savings option for small-business owners who want to provide their employees the same flexible features and benefits of a traditional 401(k) plan.
  2. If you are a small businesses you probably have a unique retirement plan-related needs, and very different concerns about the cost of administering a retirement plan than a larger company, therefore, a MEP would be very beneficial.
  3. The MEP structure also offers flexibility for small business owners to remain in this plan construct or to easily graduate to a stand-alone plan when they are ready.

If you are interested in Multiple Employer Plans it’s important to contact your Employee Benefit Adviser.

Stay tuned for the next blog with more information on MEP’s.

Resource: TRANSAMERICA Retirement Services

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Posted in Employee Benefits, Multiple Employer Plans | 1 Comment »

5 Healthcare Reform Myths & Truths

Tuesday, October 19th, 2010

We thought we would start off the week with some myths and truths regarding the Healthcare Reform. Sometimes it’s easier to see things in a myth/truth form in order to clearly understand the truth. Hope this helps you become more informed.

Myth:

1. This is a universal health care bill.

Truth:

1. The bill is neither universal health care nor universal health insurance: Per the CBO

- Total uninsured in 2019 with no bill: 54 million

- Total uninsured in 2019 with Senate bill: 24 million (44%)

Myth:

2. Insurance companies hate this bill.

Truth:

2. The bill is almost identical to the plan written by AHIP, the insurance company trade association in 2009.

- The original Senate Finance Committee bill was authored by a former Wellpoint VP. Since congress released the first of its health care bills on October 30, 2009, health care stocks have risen 28.35%.

Myth:

3. The bill will significantly bring down insurance premiums for most Americans.

Truth:

3. The bill will not bring down premiums significantly, and certainly not the $2,500/year that the President promised.

- Annual premiums in 2016, status quo / with bill:
- Small group market, single: $7,800 / $7,800
- Small group market, family: $19,300 / $19,200
- Large Group market, single: $7,400 / $7,300
- Large group market, family: $21,100 / $21,300
- Individual market, single: $5,500 / $5,800*
- Individual market, family: $13,100 / $15,200*

*Cost of premiums goes up somewhat due to subsidies and mandates of better coverage. CBO assumes that cost of individual policies goes down 7-10%, and that people will buy more generous policies.

Myth:

4. The bill will make health care affordable for middle class Americans.

Truth:

4. The bill will impose a financial hardship on middle class Americans who will be forced to buy a product that they can’t afford to use.

- A family of four making $66,370 will be forced to pay $5,243 per year for insurance. After basic necessities, this leaves them with $8,307 in discretionary income — out of which they would have to cover clothing, credit card and other debt, child care and education costs, in addition to $5,882 in annual out-of-pocket medical expenses for which families will be
responsible.

Myth:

5. This bill will provide health care to 31 million people who are currently uninsured.

Truth:

5. This bill will mandate that millions of people who are currently uninsured must purchase insurance from private companies, or the IRS will collect up to 2% of their annual income in penalties. Some will be assisted with government subsidies.

We will continue with more myths and truths tomorrow. If you need clarification you can always contact your employee benefit consultant for more information.

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Posted in Healthcare Reform | 1 Comment »

Are you aware of the 2010 Medical Cost Trends?

Thursday, August 26th, 2010

This blog will address the 2010 medical cost trends. Today, the cost of health care is a very large issue for small businesses. When a small business is trying to attract top talent, offering benefits is key. However, the question is how do you balance the rising health care costs with profitability?

The most frequently asked question is, why are rates rising?

According to a brochure by Anthem Blue Cross in 2008 national spending on health care reached $2.3 trillion. So, the question is what factors contributed to this cost. There are three costs we will look at, treatment costs, prescription drug costs and utilization, and cost shifting.

Some factors that drive higher treatment costs include:

  1. Medical price inflation is driving 51% if the growth in health care spending.
  2. Doctors in the U.S. earn two to three times as much as other industrialized countries.
  3. More physicians are becoming specialists and specialists charge their patients twice as much.
  4. Between 1997 and 2006 compensation increased 97% for dermatologists, 78% for gastroenterologists and 65% for radiologists.
  5. Medical technology is expensive. It has lead to improved care, but its contribution to health care spending growth ranges from 38% to 65%.

Factors that drive higher prescription drug costs and utilization include:

  1. Between 1997 and 2007, prices for prescription drugs grew at an average of 2 1/2 times inflation.
  2. Specialty drugs can save and extend lives, but the cost is very high. A new cancer drug can cost $100,000 or more per a treatment.
  3. Half of adults in the U.S. take at least one drug a day.
  4. 7% of all adults in the U.S. take at least five drugs a day.
  5. 2/3 of all people who walk into a doctor’s office walk out with a prescription.

Now let’s look at cost shifting factors:

  1. Government programs, such as Medicaid, SCHIP, and Medicare – pay physicians and hospitals lower rates than private insurers.
  2. Providers adjust prices charged to insurers to offset losses from partial or non-payers.
  3. A Millman study found cost shifting represents 15% of the amount spent by commercial payers to hospitals and physicians.

The more you are educated on medical cost trends the better decisions you can make for your business. Speaking with an employee benefits consultant will help you better understand health care costs and how to minimize the expense for your business, but still provide the maximum coverage.

(References: Anthem Blue Cross)

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Posted in Medical Cost Trends | 20 Comments »

Voluntary Benefits- Are you Confused?

Wednesday, July 14th, 2010

In a recent conversation with the CEO of a start-up company in San Francisco, the words “voluntary benefits” were used in a discussion about benefits and he answered with “what?” If you are reading this, have you asked yourself what voluntary benefits are? We have the answer. BayPoint has done a few blog posts about voluntary benefits; however, it’s time to do another one!

So the question is what are voluntary benefits? Voluntary benefits are a cost-effective tactic for enriching a company’s offerings for employees. Voluntary benefits can include flexible spending accounts, pet insurance, entertainment and hotel discounts. For a small company that wants to establish its brand and be an employer of choice who is competing with larger more developed companies for top talent, voluntary benefits are an excellent offering. You can sell your company by saying, “Not only do you get all medical benefits, but you get voluntary benefits as well.”

An example of something a company could implement is a green fund. If you company is committed to being green and believes in sustainability you can reflect something of this matter through your benefits. You could add a green fund to your pension scheme by creating a “Benefits Extra” package to your employees, which would help spread your green message.

Some people believe that voluntary benefits require too much administration from your HR department, however, this is not true, if you are having problems with this issue, there may be some things that your employee benefits consultant can help you with. It’s important to work with an employee benefit consultant who can really help you improve your benefit communication and most importantly help educate your employees.

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Posted in Voluntary Benefits | No Comments »