Survey Shows Health Insurance Costs on the Rise

According to a survey conducted by Kaiser Family Foundation Trust and the Health Research & Educational Trust, the cost of health insurance continues to climb for U.S. companies and workers, outpacing wage increases.  Annual family premiums for 2011 increased b 9% over the costs for 2010.  Single premiums rose 8% this year.

U.S. health insurance, unlike other industrialized countries, is largely provided by employers. Although the latest Census found more Americans losing company-sponsored insurance, almost 170 million Americans were on employer-based plans in 2010.

Kaiser and the Health Research & Educational Trust surveyed 2,088 randomly selected public and private employers large and small earlier this year.

On average, employees are contributing 28%, or about $4,129, a year toward employer-sponsored family plans. That is 131% more than a decade ago.  Including employers’ contributions, the overall premium has increased 113% since 2001 to $15,073 a year.

Employees, especially those employed by smaller employers, continue to join high-deductible health plans. Thirty-one percent of covered employees this year have to pay at least $1,000 in single plans before coverage kicks in, up from 27% last year.

For more information on the survey please go to


An Employer COBRA Quiz!

Since one of my favorite game shows is Jeopardy, it stands to reason that I just love quizzes.  Since I know that many of you also love Jeopardy, lets play round one with the only subject being COBRA.  You do not need to answer in the form of a question.

Q:. Can Continuants receive the same benefits they had while an active employee?

A: Continuees can have the the same benefits that are available to active workers. If an employer decides to change for active workers, then the new offerings must also be available to COBRA particpants.

Q: Can the COBRA spouse of a participamt continue on COBRA after divorce?

A: No.  If the husband was not on the active coverage, and he was added to COBRA after it started, then he is not eligible for a second qualifying event.

Q:  What are some common COBRA mistakes?

A:  They can include:

*Not sending the Initial Right Notice

*Not sending the Qualifying Event notice

*Not maintaining accurate archives

*Making a decision simply because it “feels right”

*Making exceptions

*Not maintaining an accurate, up to date policy and procedure manual

*Overlooking the COBRA continuants at annual enrollment

Q: Should an HR Manager answer an inquiry regarding COBRA prior to obtaining all the facts and answers?

A:  No.  This one is a trick question.  Anything the HR/benefits manager says before reviewing the worker’s COBRA files may be inaccurate, and that’s a compliance liability for the employer.  Many things changed in the COBRA world in 2004, especially with coverage election and general notice letters. The new regulatory guidelines improved, in part, how an employee was required to notify an employer about a qualifying event, such as a divorce or a child who is no longer eligible for coverage as a dependent.

For more information, please refer to or contact our office at (888) 474-6627.

Thank you for playing!



Proposed Rules for Summary of Coverage Available

In follow up to our post from August 18, 2011, the departments of Labor and Health and Human Services (with the
Treasury) laid out the new proposed rules for the “uniform summary of coverage” that is required under PPACA.   Health insurers and group health plans have to provide consumers with clear, consistent and comparable information about their health plan benefits and coverage starting in 2012.

All health plans and issuers would provide a summary of benefits and coverage, along with a glossary of terms to employees before enrollment.  Health plans and issuers will also provide notice at least 60 days before any significant modification is made in the plan or coverage during the plan or policy year.  The summary of benefits coverage would be some simple standard boxes for comparison shopping. If the exchanges are in place by 2014, this would allow an employee to compare employer sponsored coverage against other market-available options.

As these are merely proposed, there is nothing final and employers do not have to immediately act, nor can then act until the proposed
uniform definitions are drafted. But employers and plan sponsors should keep this information handy as a reference point for developing a long-term compliance strategy.

For more details about the proposed regulations, please go to the dol website at


HHS Announces Proposed Rule for Uniform Benefit Summaries

On August 17, the Department of Health and Human Services (HHS) released a Notice of Proposed Rulemaking for Uniform Benefit Summaries under the Patient Protection and Affordable Care Act (PPACA).

The intent of Uniform Benefit Summaries is to provide individuals with standardized information so they can review medical plans, compare insurers and make decisions about medical plan choices.  The proposed rule provides additional guidance on the information that must be provided to all individuals enrolling in a medical plan on or after March 23, 2012.

This provision applies to individual and employer-sponsored medical plans, regardless of grandfathered status or funding. It does not apply to retiree-only plans or to standalone dental and vision plans.

What Information Must be Included

Insurers and self-insured employers must provide a Summary of Benefits and Coverage (also referred to as an ‘SBC’ in the proposed rule) to individuals who apply for and enroll in medical plans. The Summary of benefits and Coverage is a required document that must be provided in the standard format.

There are four standard components:

  • A four-page Benefit Summary (double sided)
  • Medical Scenarios called “Coverage Examples” that  are patterned after the Food and Drug Administration food labels. They estimate customer costs based on the specific plan’s benefits for three medical scenarios – Maternity, Breast Cancer Treatment and Managing Diabetes
  • A standard glossary of medical and insurance terms
  • A phone number and website where individuals can get additional information including documents such as Certificates, Summary Plan Descriptions (SPDs) and policies

HHS asked the National Association of Insurance Commissioners (NAIC) to propose a format for the four components in the Summary of Benefits and Coverage. Here is a link to the documents proposed by NAIC:

The information on the NAIC website is not a guideline or example. It is the exact wording, format and layout that must be used. Insurers and employers will just insert plan details into the predetermined rows and columns.

The Benefit Summary must be a freestanding document and may not be incorporated into any other document. Supplemental
communication materials may be provided with it. Currently produced documents will not satisfy the requirements of the regulation.

The Coverage Examples must include three pre-defined medical scenarios: Maternity, Breast Cancer Treatment and Managing Diabetes. These scenarios are intended to show typical services and cost sharing under the plan. The numbers would be based on client-specific plans and costs. The estimates are based on national average costs and in-network benefit levels.

Who is Responsible for Providing the Information

For fully insured plans and HMOs, the insurer is responsible for producing and distributing the summaries. For self-insured
plans, the responsibility lies with the employer.

What is the Required Timing

Summaries must be provided when an employer or individual requests information about a plan, applies for coverage or enrolls in
a plan. They must also receive a summary if there are plan changes or if the individual has a HIPAA special enrollment event that prompts a new enrollment opportunity.

People enrolled in a health plan must be notified of any significant changes to the terms of coverage reflected in the Summary of
Benefits and Coverage at least 60 days prior to the effective date of the change. This timing applies only to changes that become effective during the plan or policy year but not to changes at renewal (the start of the new plan or policy year).

How Benefit Summaries will be Delivered

Summaries are required both before and after enrollment and may be delivered in paper and/or electronic format. There are
specific requirements for group vs. individual plans.

Penalty for Non-Compliance

The penalty for ‘willful’ non-compliance is up to $1,000 per enrollee for each failure to comply.

Next Steps

Comments on this proposed rule – including the specific request for expatriate plans – are due 60 days from the published date.

UNUM Survey Results Show The Importance of Benefits

UNUM, a corporation insuring employee benefits such as Long Term Care and other benefits, recently published the survey “What Matters Most:  Attracting Talent in the Recovering Economy”. This  survey shows that both employed and unemployed job seekers look beyond the money, to the benefits. The  surveyed employed and unemployed workers felt that being offered financial protection benefits showed their employers cared about their well-being, which was rated over a high base salary or a results-based bonus program.

“Given the economic recession of the past few years, this could be especially true for those who may not have had adequate protection when they were laid off,” says John Kmiec, Jr., a research associate in human capital development at The University of Southern Mississippi. He also acknowledged that the group that earned less than $50,000 and long-term unemployed people might not have cared as much about voluntary benefits; however, the survey did not break those numbers down.  Age plays a role in the needs of job seekers, according to Kmiec. Fifty percent of respondents were between the ages of 35 and 55, which might have influenced the answers and the desires of potential employees.

“We think it’s a trend. We’ve seen that employees–how much they value benefits–is increasing,” says Barbara Nash, vice president of corporate research at Unum. “They’re learning more about it than they have in the past; they’re seeing that benefits are an important part of what they get from their employer.”

Significantly, 74% of those surveyed rated a good benefits package as being “very important,” which historically, has been equated to monetary value if the benefits are actually used.  People still need jobs, but beyond that, potential employees also want to have a financial safety net.

“The monetary value of a benefit isn’t realized until it is used by the employee. This ties to the employees’ perception of the benefit’s worth,” Kmiec says. “Since many benefits are only occasionally used, it is important that employees know what they feel is important, and that employers are clearly communicating the value of the entire compensation package (pay and benefits) to their employees.”

Unum also surveyed HR executives, of which 21% represented larger companies with 2,000 or more employees and 39% with fewer than 100 employees. About two-thirds of HR leaders said that employees and prospective employees are more aware of benefits, are asking more questions and take benefits less than a few years ago.

“They contribute a large chunk of the benefits budget and a truly caring HR department will insist this benefit be available,” Andes says.

Finding Dr. Right

As Consumers, ,most of us spend more time and effort researching the latest television sets for purchase than we do in finding the best doctor for our medical care.    Isn’t our health worth the effort?  Below are some tips to help you find the best medical providers:

1. ASK YOUR FRIENDS AND WORK COLLEGUES WHO THEY SEE FOR MEDICAL CARE.  Your firends and work associates will often be the most honest, as they do not stand to gain from any recommendation, and will often care enough about your welfare to be honest about any faults or issues the provider may have.

2. ASK YOUR CURRENT PHYSICIAN.  This works best if you need a specialist, or if you ar transitioning a child from a pediatrician to an internist or GP.  Doctors usually know the scuttlebutt on who is the best in their fields.

3. CONTACT A TEACHING HOSPITAL.  As with #2 above, they usually know who is a good physician.

4. USE THE INTERNET.  There are many websites devoted to physician reviews, such as and  Keep in mind that most people comment on these sites when they are dissatisfied with a provider, and not to commend one.  It would be good to know if there are many complaints, so you can avoid this doctor.

5. CONTACT AN ADVOCACY GROUP.  Organizations such as The American Cancer Society will be able to advise who is the best in their field, as they work closely with physicians and are on top of the latest research and advancements.

6. DO A BACKGROUND CHECK.  Contact the Federation of State Medical Boards at  for information on licensing and complain history.  Also check out the American Board of Medical Specialties at abms. org to check board certification status.

7. GO WITH YOUR GUT. Since you may be spending a lot of time with this person, you have to feel that you are a team and that you can work together.  You know who you feel a kinship with, and who you dislike.  If you don’t like the doctor, don’t use him/or her as your provider!  Can you imagine being sick and vulnerable, having your health and future in the care of someone you don’t like?

Of course, any doctor you choose doesnt have to be your provider for the rest of your life.  As your needs change you may also want to reconsider your choices.  Do not be afraid to change doctors.  As in life, not every relationship is meant to be permanent.  If you were meant to stay with the same doctor all of your life, there would be many elderly patients at the pediatrician’s office.