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What interesting approaches are you hearing about or seeing related to companies dealing with the cost of health insurance?

To date, I have read about - -changing the premium share mix between employer and employee; -changing the deductible amounts for certain procedures, i.e. Emergency Room visits; -large companies providing self-insurance; -providing funds to employees to buy their own insurance - Sears/Darden; -providing funds to retirees to buy coverage on a Medicare insurance exchange - IBM; and, -denying health coverage to working spouses who are eligible for health insurance through their own employers - UPS. What else are you seeing?

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Additional strategies from Penn State, which is self-funded, include -

Wellness Program – Screening - Employees and Spouses complete an online wellness profile and certify that they have had or will have a preventive physical exam. Those who do not complete the steps will be assessed a monthly $100 surcharge; and Tobacco Cessation – A monthly surcharge of $75 per tobacco user per month will be assessed to those who choose to continue to use tobacco.

New health plan options to provide employees with a greater range of coverage choices. Cost will be dictated by choices that the individual makes. Some options eliminate cost sharing on preventive care.

A monthly insurance surcharge of approximately $100 will be assessed to benefits-enrolled spouses/SSDPs who have the option to elect health care coverage through their own employer.

(http://news.psu.edu/story/282659/2013/07/25/administration/benefits-changes-focus-employee-wellness-long-term-cost)

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Regis:

Interesting!

However, many of the examples that you mention seem like they'd run afoul of various employment law provisions if not IRC considerations for tax excludible benefits.

Adding surcharges seems to be in complete defiance of the goals of the HCRA in the fist place. So, I'd wonder if an employer could do that?

I hope I'm wrong but..................

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

I agree Tom. It is better to be a follower in this situation, to make sure that you do not innocently run afoul of regulations.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Regis:

I thought I might more directly answer your original question.

I know one, recently created public agency, that has chosen to not offer heath care benefits. Instead, they are offering to provide up to $1,190 cash per month right now, to cover COBRA benefits that one might bring with them and that will morph into $1,500 month in January 2014 to be applied to the employee obtaining health care through the exchange. I'm assuming that cash arrangement will be through a cafeteria plan or some such way of making it a non-taxable benefit.

Although I think this was a gutsy move on their part, I have my doubts this will work, particularly because this is a public sector agency and they are keen on recruiting away from existing, similar public sector firms. Virtually all public sector agencies offer "Cadillac" health care plans already.

Additionally, there is much unknown and unresolved about the HCRA. We still haven't had time to "read it" after passage as Ms. Pelosi so famously advised. It hasn't been fully implemented and no regs have been issued.

So far, as I understand it, my doubts have been verified. They are having an absolutely difficult time in recruiting for several positions, although they did get a lot of out of state applications for one management position that I helped with.

However, my own experience cautions me about that result. An out-of-state applicant's enthusiasm for relatively high CA pay often fades when the reality of the high cost of living in a major metropolitan area of California sets in. Particularly the high cost of housing, whether renting or buying. Six figures a year in the Silicone Valley of San Francisco doesn't go nearly as far as 2/3rds of that in Atlanta or Omaha as far as lifestyle goes. ;-)

Caution remains the byword.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Update - Reported at 11:28am this morning in the WSJ, Penn State is suspending some of its new health plan features, due to privacy concerns. Specifically - Employees and Spouses complete an online wellness profile and certify that they have had or will have a preventive physical exam. Those who do not complete the steps will be assessed a monthly $100 surcharge.

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