Health care consumerism continues to grow through both consumer-directed health plans and tools that provide all health care consumers with more information about their health care choices and costs. Here are some examples of their growth:

• The number of employers with 500 or more employees offering CDHPs increased from 14 percent in 2007 to 20 percent in 2008
• Thirty-one percent of new coverage issued in the Small Group market was for HSA/HDHPs
• Companies that offered an HSA for 3 years saw significant growth each year, reaching 29 percent in the third year
• In 2008, enrollment in CDHPs reached 7 percent of all covered employees, up from 5 percent the previous year
• In companies that offer CDHPs, employee enrollment also continues to rise – from 8 percent in 2006, to 10 percent in 2007 and 15 percent in 2008

The top two reasons that plan sponsors give for offering a consumer-directed health plan (CDHP) are lowering benefits costs and promoting consumerism. Both of these reasons are likely to become even more important as plan sponsors deal with the current economic situation.

During a recession, health care use tends to increase. Consumers get care they might otherwise delay because they’re concerned about losing their employer-provided health coverage. People paying for coverage under COBRA also tend to have higher usage than active employees. And there is a higher incidence of stress-related medical and behavioral health conditions.

How CDHPs can help plan sponsors with benefits costs

CDHPs save money. According to one survey, companies with at least half of their workforce enrolled in a CDHP had a 2-year median cost trend, almost half that of companies without a CDHP. Another study found that CDHPs cost 4.8 percent less than PPOs and HMOs.5 One explanation for this cost difference is the fact that CDHPs have higher deductibles than other medical plans. But they still cost more than $400 less per employee when compared to PPOs with $1,000 or higher deductibles.

High deductibles are a growing trend among non-CDHPs. Over the last 2 years, the percentage of covered workers in a plan with at least $1,000 for single coverage grew from 10 percent to 18 percent. The jump was even greater for smaller companies – 16 percent to 35 percent.6 Plus, a recent Mercer study found that the median deductible for more traditional health plans is also rising, from $500 in 2007 to $1,000 in 2008, possibly due to the influence of CDHPs. The minimum deductible for an HSA-qualifying high-deductible health plan (HDHP) is $1,150 in 2009.

Higher deductibles are just one way plan sponsors are cutting costs. In the next year, 40 percent of companies report that they’re likely to increase employee premium contribution amounts, 45 percent are likely to increase office visit cost sharing, and 41 percent are likely to increase the amount employees pay for prescription drugs.

Healthier employees also reduce costs

The increase of CDHPs is also tied to a more general increase in health care consumerism. A survey by the Employee Benefit Research Institute found that CDHP participants make better-informed health care decisions and are generally healthier. That’s because employers who offer CDHPs also provide more and better health information tools to their employees. In most cases, these companies promote healthy lifestyles to all their employees, not just those participating in CDHPs.

CDHPs are here to stay

As more plan sponsors of all sizes adopt consumer-directed health plans, their impact on the entire health benefits industry will continue to grow. In fact, current economic pressures are likely to accelerate the growth of CDHPs.

HSAs accounted for most of the CDHPs added in 2008. Unlike HRAs, HSAs don’t require an employer contribution. In fact, 29 percent of large HSA sponsors do not contribute. This makes these plans particularly attractive to plan sponsors struggling to offer health benefits to their employees. They also provide attractive tax incentives.

Tags: CDHPs, consumer driven health plans, consumer driver health plan studies, HSA employer info

The maternity rider is now available for RightStart and SaveRight plans with the following deductible options in Illinois:

• $1,000
• $2,500
• $5,000
• $10,000

Tags: Assurant maternity

New Assurant Short Term Medical clients now receive around-the-clock access to non-emergency medical care by telephone, 24 hours a day, 365 days a year with TelaDoc Medical Services. TelaDoc board-certified, licensed physicians provide quick treatment for routine medical conditions such as:

• Respiratory/sinus infections
• Colds and flu
• Ear infections
• Sore throats
• Urinary tract infections
• Pink eye
• Allergies

TelaDoc membership is included with new Short Term Medical plans. Each physician consultation is only $35, and consultation fees are covered* subject to deductible and coinsurance, for all STM plans that include TelaDoc services. New members will receive registration information with their new policy welcome packets.

Tags: Assurant short term medical, teladoc

Take Care Clinic, a new retail health clinic at select Walgreens, is now available to Assurant Health customers. With over 325 Walgreens drugstores in 19 states, now it’s more convenient than ever to receive high-quality, affordable health care by board-certified Family Nurse Practitioners, and in select states, Physician Assistants. No appointments are necessary and Take Care Clinics are open seven days a week – including weeknights.

With three retail health clinic organizations, MinuteClinic®, RediClinic®, and now Take Care Clinic, Assurant Health gives insureds network access to approximately 800 clinics across the U.S. for non-emergency medical care at a low cost. For more information about Take Care Clinics at select Walgreens, visit www.TakeCareHealth.com or call 1-866-Take-Care.

Tags: Assurant Walgreens, Take Care Clinic

Employers will have to scramble to comply with federal legislation providing a federal subsidy of COBRA health insurance premiums to laid-off employees.

Employees who were laid off from Sept. 1, 2008, through Dec. 31, 2009, will be eligible for a 65% federal subsidy of their COBRA premiums under provisions in the massive economic stimulus bill.

Beneficiaries would be entitled to the subsidy for up to nine months or until becoming eligible for coverage in another employer’s plan or for Medicare. The subsidy, though, would not be available to individuals with annual incomes exceeding $125,000 or couples with annual incomes exceeding $250,000.

The subsidy, estimated to cost the federal government nearly $25 billion, could help up to 7 million jobless individuals and their families maintain health care coverage, according to an estimate by the Joint Committee on Taxation.

With the subsidy resulting in beneficiaries paying about one-third of the COBRA premium that often has a monthly cost of about $400 for individual coverage and $1,200 for family coverage, employers with lots of laid-off employees should expect a surge in enrollees.

“The takeup rate is going to skyrocket,” said Andy Anderson, of counsel with law firm Morgan, Lewis & Bockius L.L.P. in Chicago.

COBRA often is a big money-loser for employers. Due to the high cost of coverage, those now opting for COBRA typically make extensive use or expect to use medical services. As a result, it is not uncommon for employers to pay out $1.50 in claims for every $1 in COBRA premiums they collect.

With the government picking up nearly two-thirds of the COBRA premium tab, the COBRA risk pool is certain to improve, though premiums collected by employers still are not likely to equal claims, experts say.

“Adverse selection, while perhaps not as great as before, still is going to be a problem,” said Paul Dennett, senior vp with the American Benefits Council in Washington.

A modest improvement in the premium-to-claims ratio is certain to be offset by the flood of new beneficiaries opting for coverage.

“At the end of the day, this is going to be very costly for employers,” said Mark Ugoretz, president of the ERISA Industry Committee in Washington.

The challenge for employers will be complying with the requirements that kick in almost immediately.

Under the legislation, the subsidies will be available starting March 1. That means employers will have to notify eligible beneficiaries of the change in what they have to pay for COBRA and send out new premium statements.

Some beneficiaries, unaware of the change in law, will overpay. Under the legislation, employers will have a choice initially of either providing a refund or a credit to be used against future payments.

Another big challenge for employers will be tracking down former employees laid off since Sept. 1, 2008, who declined COBRA coverage at the time. The legislation requires employers to notify those individuals that they have a new right to opt for subsidized COBRA coverage. The notice also has to spell out that beneficiaries have 60 days in which to opt for coverage.

In addition, employers will have to inform beneficiaries that their right to the subsidy will end when they become eligible for coverage from another employer. That is a change from nonsubsidized COBRA coverage in which COBRA eligibility ends only when beneficiaries actually enroll in a new employer’s health care plan or after 18 months of receiving the coverage.

Under the legislation, beneficiaries collecting subsidies they no longer are eligible for will be required to repay the government 110% of the subsidy they received.

Few, if any, pieces of legislation of this size—the cost of the stimulus package is nearly $800 billion—have moved through Congress so quickly. The legislation was introduced shortly after President Obama took office. President Obama, noting the deepening recession, said quick action was crucial and legislators responded.

While COBRA subsidies were part of earlier bills introduced in the House and Senate, the details changed along the way. The most significant change was congressional conferees dropping a provision—staunchly opposed by business groups—that would have allowed employees who worked 10 years for an employer and employees age 55 and older to retain COBRA until eligible for Medicare at age 65.

In addition, legislators fiddled until the last minute with the size of federal subsidy. In fact, a summary of the final agreement released by House Speaker Nancy Pelosi, D-Calif., said the premium subsidy would be 60%. A few hours later, a summary of the legislation prepared by the House Ways and Means Committee and the Senate Finance Committee said the premium subsidy was 65%, a sign of the 11th-hour tinkering by legislators.

Tags: COBRA enrollees, Employers COBRA

According to a report released today by the liberal Center for American Progress and also the group Health Care for America Now, 14,000 Americans are losing health-care insurance every day during this economic crisis.

Since the recession began, the report says, an estimated four million additional Americans have lost their health insurance and two million have become uninsured. “Forty-six million people in America did not have health insurance prior to the recession in 2007,” Judy Feder, a senior fellow at the Center for American Progress, said in a conference call with reporters today. “But with the recession, it got worse. The unemployment rate grew by 0.8 percentage points in December and January alone, implying that just in these two months nearly 900,000 people became uninsured.”

Michael J. Wilson, legislative director for the United Food and Commercial Workers Union, sees the rising number of uninsured Americans impact other parts of the economy. “With 14,000 people losing health care every day, even people who still have health care are affected,” said Wilson. “If people are desperately saving their money to pay for health care, they will not be able to spend money on food or other goods, which adds to the recent turmoil in the market.”

Tags: health insurance study, losing health insurance

Congress has passed the American Recovery and Reinvestment Act (“the Act”), and the Act has been signed by President Obama. This communication describes the provisions in the Act that affect COBRA continuation coverage and similar state continuation coverage.

Applicability and Effective Date
The COBRA changes affect both the federal COBRA provisions and the Public Health Service Act program that provides similar extension benefits for public programs. In addition, however, the subsidy provisions apply to state continuation coverage that is comparable to federal COBRA. That would include so-called “mini-COBRA” state laws that cover groups below the 20 employee threshold for COBRA. To be comparable, the state continuation law must allow the individual to continue substantially similar coverage as was provided under the group health plan at a monthly cost that is based on a specified percentage of the group health plan’s cost of providing such coverage. Reference to “COBRA” throughout this memo will also refer to the state programs that meet those requirements.

The Act is effective February 17, 2009, the day that President Obama signed the bill. All of the COBRA provisions that have a time frame will date from that day. As for calendar monthly billed programs, the effective date is March 1, 2009.

New Subsidy for COBRA Beneficiaries
The Act provides for a new subsidy for certain COBRA beneficiaries. The subsidy is 65% of the COBRA continuation coverage premiums for eligible individuals for up to 9 months. The COBRA beneficiary will pay only 35% of the overall COBRA premium for that period. The period expires on the earlier of (i) nine months, (ii) the date the individual becomes eligible for major medical group coverage or Medicare or (iii) the end of the maximum required period of continuation under COBRA. Further, the beneficiary must notify the employer in writing if they become eligible for coverage under a major medical group health plan or Medicare and is subject to significant penalties (110% of the subsidy amount) for failing to do so.

An individual who does not receive a subsidy that he/she believes appropriate may appeal the plan’s determination to the Department of Labor for private plans or to the Department of Health and Human Services for public plans covered under the Public Health Services Act. The relevant agency must rule on the appeal within 15 business days. Individuals whose appeal is denied may sue under ERISA.

Eligibility for the Subsidy – Timing
The subsidy is available to individuals (and their dependents) who were involuntarily terminated from their employment and became eligible for COBRA beginning September 1, 2008 through December 31, 2009. Persons who elected prior to the enactment of the Act (but on or after September 1, 2008) will be eligible to receive the subsidy prospectively from the date of enactment through the maximum nine-month period. Otherwise eligible persons who did not elect COBRA between September 1, 2008 and the date of enactment will have the opportunity to elect COBRA on a prospective basis with the maximum duration of the coverage dating from the date that they could have first elected COBRA. Employers or plans will have to provide notice to these groups of individuals. In addition, a group health plan or insurer must refund the individuals any COBRA premiums that subsidy-eligible persons paid on or after the date of enactment in excess of 35% of the premium. This may be in the form of a reimbursement payment or credit against future premium payments due.

Eligibility for the Subsidy – Income Test
The subsidy is adjusted based on income. Joint filers with $250,000 or more of modified adjusted gross income and all other filers with $125,000 or more of modified adjusted gross income are not eligible for the full subsidy. The subsidy is phased out completely for persons with modified adjusted gross incomes of $290,000 joint or $145,000 for other filers. The subsidy is not considered income as long as the beneficiary meets the income tests. Excess amounts of subsidy over the amount the person is entitled to by income will be added to the person’s tax on the person’s federal tax return. The employer will not have to be concerned about the taxable effect on COBRA beneficiaries although a COBRA beneficiary may request that the employer not provide any subsidy.

Mechanics of the Premium Subsidy
The Act requires that the relevant entity that is collecting the 35% premium simply not collect the remaining 65% and, instead, obtain reimbursement from the federal government. In cases of a multiemployer plan, a group health plan subject to federal COBRA and/or a self-funded employer, the plan or the employer that is collecting the premium will recoup the subsidy amounts through commensurate reductions in payroll taxes. For insured plans not subject to federal COBRA, where the insurer is collecting the premium, the insurance company will be entitled to the reimbursement through a corresponding credit to its own payroll taxes. In cases where the payroll taxes are not sufficient to cover the subsidy, the additional amount will be provided as a credit to the taxpayer as if it was an overpayment of payroll taxes. There are filings that payers receiving the subsidy must make with the Secretary of the Treasury.

Electing a Different COBRA Option
An employer may allow a COBRA-subsidy eligible individual to change his or her health insurance coverage option when making a COBRA election. The new plan option must be made within 90 days of receipt of the COBRA election notice, must have the same or lower premiums and must be available to non-COBRA active employees under the plan.

Notice Requirements and Election Period
Under the Act employers must provide modified election notices or provide separate supplemental notices to all persons who became entitled to elect COBRA continuation coverage during the period beginning on September 1, 2008 and ending on December 31, 2009.

The new forms would notify the individual about the subsidy and, if applicable, the right to change to different benefits options. The Department of Labor, Treasury and Health and Human Services are supposed to work together to provide a model notice within 30 days of enactment.

Notices are required to be sent to subsidy-eligible persons who became qualified beneficiaries before the date of enactment within 60 days of enactment. (The Act does not affect the timing of notices sent to individuals who become qualified beneficiaries on or after the date of enactment.) The election period for those beneficiaries who became eligible before the date of enactment will begin on the date of enactment and end 60 days after the date the plan administrator provides the required notice.

Failure to provide the notices would be a COBRA violation and subject to the standard COBRA penalties of up to $110 a day under ERISA. Additionally, there could be adverse tax consequences under the Internal Revenue Code, which can impose excise taxes of $100 per day per notice on the plan administrator.

Tags: COBRA American Recovery and Reinvestment Act, COBRA Provisions, COBRA stimulus, COBRA stimulus package

Effective May 15, 2009 for Local Market Accounts, Blue Cross Blue Shield of Illinois members will automatically be set up to view and download their Explanation of Benefits (EOBs) online, through Blue Access® for Members, rather than receiving printed versions in the mail. This change is environmentally friendly, saves time, enhances the security of personal data and can help improve record keeping. If paper mailings are still preferred, members can call BCBS of IL toll free at (800) 316-1150 anytime or log in to Blue Access for Members, click on User Profile and change their user preferences

Tags: Blue Cross Blue Shield of Illinois EOB

Triessent®* is the new specialty pharmacy program offered by Prime Therapeutics’, BCBSIL’s pharmacy benefit manager. Triessent is a partnership between Prime and Walgreens Specialty Pharmacy. To further develop our specialty pharmacy program services and help control the rising cost of providing coverage for specialty medications, we will begin transitioning members using specialty pharmacy services to Triessent on March 1, 2009.

The Triessent program offers the following advantages:

• Integration of specialty pharmacy with the overall pharmacy benefit
• Integration of pharmacy and medical data, helping facilitate utilization management and case management
• Experienced benefit consultation and coordination for specialty medications
• Patient care coordinators to support members; condition-focused care management programs
• Prescriber alerts notifying them of patient nonadherence; assistance with prior authorization requests
• A Triessent team available to visit specialty physicians to educate them about the program

In addition, Triessent offers members services designed to help in managing their therapy – at no additional
charge – including:

• Coordination of coverage between the member, physician and BCBSIL
• Convenient delivery of medication to the member or physician’s office
• Condition-specific educational materials and information about managing medication side effects
• Syringes and other supplies with every shipment of self-injectable medications
• 24/7/365 phone access to a Triessent pharmacist for urgent medication issues

Letters were mailed to affected members, notifying them of the change and providing instructions for ordering through Triessent. In addition, outreach calls are being made to these members to assist them during the transition.

Tags: BCBS IL pharmacy, Triessent

The following are the most popular products and plan design elements chosen by employer
groups with Blue Cross Blue Shield of Illinois.

The most popular PPO plan design elements:

• $500 individual/$1500 family deductible (in-network)
• $1,000 individual/$2,000 family out-of-pocket expense limit (in-network)
• 80%/60% in and out-of network coinsurance
• $20 office visit copay
• $15 generic, $30 formulary, $50 non-formulary prescription drug copay

The participation in most of these PPO plan categories has decreased somewhat since 2006, as high deductible, more affordable consumer-directed health plans (CDHPs) have become more commonly available.

The most popular HMO plan design elements:

• $0 inpatient care hospital copay
• $20 office visit copay
• $15 generic, $30 formulary, $50 non-formulary prescription drug copay

From 2006 to 2008, there has been a drop in member participation in both the PPO and HMO plans, while membership in CDHPs has increased. Of the groups that offer the CDHP option, subscriber enrollment in CDHPs is highest within the 2-50 market segment, whereas enrollment in PPO plans remains the highest in the 51-99 and 100+ market segments.

Tags: Most popular plans Blue Cross Blue Shield of Illinois