General Insurance Issues

THE LAW OF DISPROPORTIONATE COSTS: SMALL NUMBER OF EMPLOYEES ACCOUNT FOR LION’S SHARE OF GROUP HEALTH PLAN MEDICAL COSTS

There’s plenty of cost related analytics available to support the disproportionate cost premise that medical expenses are highly concentrated among a very small proportion of enrolled employees.  These highlights, for example, from a Agency for Healthcare Research and Policy (AHRQ) are pretty telling:

  • 1 % of the population accounts for 21.4 % of total health care expenditures nationally
  • 5 % of the population account for 49.9 % of total expenditures
  • 10 % of accounts for 65.6 % of all medical costs

EMPLOYER REIMBURSEMENT OF INDIVIDUAL HEALTHPLAN PREMIUMS REMAINS A BANNED PRACTICE UNDER ACA

While this was more of a hot topic when the full monty of healthcare reform was implemented back in 2014, some employers perhaps unaware of the turmoil in the individual marketplace still ask about reimbursing employees for individual health insurance policies.

The IRS, the Department of Labor and Health and Human Services have all released several directives and guidelines that pretty clearly prohibit the practice. The most recent was issued in December 2015 (n-15-17).

Definition of Predicament: People Who Don’t Have Access to Employer Coverage, Aren’t Medicare Eligible, and Don’t Qualify for Subsidies

Yes, this is a bit anecdotal. Nevertheless, I think it’s  worth reporting and some may find it interesting.

First, recently our team managed the annual open enrollment process for the group health plan of one of our employer clients. After a quick but thoughtful evaluation of options, one employee who was previously covered by an individual market policy opted to enroll on the employer’s group plan (family coverage) and terminate coverage under the individual market plan. Both the individual plan and the group plan were Qualified Health Plans (QHP) under ACA. The plans had similar benefits. And, they were underwritten by the same large insurance carrier.

Savings?

$600 a month in gross premium. That’s quite a spread.  Add in the employer contribution and the savings to the employee were even greater.

Ohio’s Health Co-op (In-Health) Shut Down

In-Health, the Ohio health insurance Co-op established as a part of ACA, is shutting down.  Here’s an explanation of the co-op program. HCR Consumer Operated and Orientated Plan CO OP Program.

Although no BBG client is insured by In-Health, we wanted to let you know in case it hits your radar with employees that get their insurance from a source other than your employer sponsored plan.

In-Health insured approximately 23,000 Ohioans.
We will help anyone who needs it.

In the meantime,

Things to know:
– Claims are to be paid (according to the Ohio Department of Insurance)
– Members will be informed of how the run-down will work
– In the near future the members will need to shop for new insurance and will be provided an special open enrollment period

We hope this does not affect any of your people, but if it does feel free to let us know. We will help.

You can read more about the implications of InHealth’s shut down here.

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