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Entries in Health Insurance (8)


Health Care Reform - The New Reality for PEOs

The End of Denial for Employee Leasing and PEO Companies?

NAPEO, The National Association for Professional Employer Organizations has published on their website napeo.org an announcement entitled;


I had to clean my glasses. This is an industry where many of it’s owners and executives, (over 98% of all employee leasing companies and PEOs are privately held) have fought health care reform every step of the way. Large contributions were made to The National Federation of Independent Business, The Chamber of Commerce, (click on this link to see the NFIB position) and a host of Republican PACs and lobbyists. We reported on their attitudes and views about Health Care Reform and the PPACA in our earlier blog post Want to Repeal Health Insurance Reform, Not Likely!!!.

NAPEO President and CEO Pat Cleary is quoted as saying “PEOs are already the go-to source for small businesses looking for help in preparing for and complying with the healthcare benefits changes brought on by reform, so we feel we have an important role to play as the implementation of the ACA proceeds” and offered its industry’s expertise as the Obama administration moves forward with implement the Patient Protection and Affordable Care Act (ACA).

Only time will tell if NAPEO, and the industry as a whole embraces Health Care Reform or not. My opinion is that the PPACA is one more reason small business owners should consider the services of proactive, qualified and responsible employee leasing companies and professional employer organizations.


Small Employers Struggle to Offer Health Insurance

Only 43% of small businesses still offer health coverage

In the past decade, the average health insurance premium for a single worker at a company with fewer than 50 employees went from $2,475 to $4,501, an 82% increase, according to data from the U.S. Department of Health and Human Services. Family premiums increased by 93% in that period, to $11,679.

At the same time, the percentage of small businesses offering coverage dropped from 47% to 43%, compared with 96% for companies with 50 or more employees.

Shifting Costs to the Employee

Analysis by PricewaterhouseCoopers (PwC), reaveals that overall medical costs will grow by about 9% in 2010. Many companies are buying less generous policies to keep prices in check and shift part of the cost increase to workers. “A company that maybe has a $1,500 deductible today might renew and get a $2,500 deductible”; says Carey Wolf, sales manager for the small group health unit at online insurance broker eHealth.

“Businesses are realizing that maybe part of that has to be absorbed by the user by having a little bit higher deductible or a little bit higher co-pay”.

Carey Wolf, eHealth

Is Help from Congress Around the Corner?

Washington lawmakers are trying to write legislation to contain health-care costs and expand coverage. According to PwC, even if reform passes this year, any effect on the price of care wont be seen until 2011 at the earliest.

In the meantime, small businesses, many having survived the worst 2 years in their histories, face hard questions.  How—and how much—to pay to keep their employees and their families healthy.

Source : John Tossi, Business Week October 6, 2009


Hewitt Reports Cobra Enrollments Double After Subsidy

Enrollments in Cobra, which extends health benefits to fired U.S. workers, have doubled since the start of a government program in February that pays 65 percent of the cost, a survey by Hewitt Associates shows. The analysis by the Lincolnshire, Illinois-based firm found that monthly enrollment rates for workers eligible for the subsidy averaged 38 percent from March 2009 to June 2009, up from 19 percent from September 2008 to February 2009. “The size of the subsidy really influenced people to enroll,” said Karen Frost, Hewitt’s health and welfare outsourcing leader. “If you only have to pay 35 percent, that gets you in the ballpark of affordable.”

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Aon Puts a Favorable Spin on Health Insurance Increases

Aon Corporation, the world’s 2nd largest insurance broker released their latest survey on projected “health care” costs for 2009. An increase of only 10.6%. So what would you expect the headline to be. HEALTH INSURANCE RATES GOING UP AGAIN. Well not exactly. How about …. HEALTH CARE COSTS TREND DOWN. Don’t be fooled by the industry “spin”. Small business owners and mid-sized companies should be prepared to experience another round of double digit rate increases again this year. Just like your experience last year, and the year before that, and the year before that. Aon Consulting’s U.S. Health & Benefits practice director, John Zern, said of the survey results: “While the medical trend rate is still more than twice the consumer price index, it is encouraging to see that health care cost rate increases are continuing to slow down. This is a step in the right direction for companies nationwide that continue to feel significant health care price pressures.”

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Bill Makes HSAs More Flexible

The U.S. House and Senate on Saturday passed a bill that may increase the popularity of health saving accounts. The Tax Relief and Health Care Act of 2006 (H.R. 6408) awaits President Bush’s signature. Under the legislation, employees and employers can contribute up to $2,850 for single coverage and $5,650 for families, even if the deductible is lower. Moreover, companies can contribute more money to HSAs for workers making less than $100,000 per year than for higher-income employees. The legislation allows a one-time transfer of funds into an HSA from an individual retirement account, health reimbursement arrangement or flexible spending account. The provisions also permit workers hired during middle of the year to enroll in an HSA and make a full-year maximum contribution at that time.

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