Tax Form 5498 by kpc11388


More Info
									                       Robert Heller


                      Alpha Benefits Group
Please silence your   Health Market Review
    cell phone.
Full Service Employee Benefit Firm
   Brokerage & Consulting
   Voluntary Benefits
                                     Plymouth Meeting
   Human Resource Support
   Retirement Plans
   Executive Benefits
   Property & Casualty

                                             Plymouth Meeting

                                             Camp Hill

New Camp Hill Office – Moving May 1, 2006!
COBRA Administration
Section 125 Cafeteria Plan
  Premium Only Plans (POP)
  Flexible Spending Accounts
  Full Flex Credit Based Plans
High Deductible Plan Design & Administration
  Medical Expense Reimbursement Plans (MERPTM Plan)
  Health Reimbursement Arrangements (HRA)
  Health Savings Accounts (HSA)
Retirement Plan Services
    Roth 401(k)
    Profit Sharing
    New Comparability
Executive Benefits
    Key Person Coverage
    Deferred Compensation
    Split Dollar Plan
    Estate Planning
    Long Term Care
Welfare Plan Documents
    5500 Filing
    Wrap Plan Documents
Starting Point in Process
“Good Ole’ Boy Network” Changing
Trust and Confidence
What You Should Expect From a Broker:
  Knowledge of the Marketplace
  Customer Service and Support
  Clout With Carriers
  Gets a Head Start on the Renewal Process
  Value Added Services
                       Human Resource

                                        Personalized Claims
COBRA Administration

                                        Employee Benefit
 Wellness Support

    Many options are rate neutral regardless
of whether you are working directly with a carrier
         or working through a broker.

From Your Broker!
Year In Review…

Single Digit Increases
Some Rate Decreases
Alpha’s average starting renewal in
the past six months is 11%, after
going to market, it drops to 2%
Looks Good for Rest of 2006 & 2007
Still too Expensive
Percent vs. Dollar Increases

    Year    Single Cost   % Increase   Dollar Increase

    2002      $250          N/A             N/A
    2003      $300          25%             $50
    2004      $360          20%             $60
    2005      $450          25%             $90
    2006      $490           9%             $40
Why Good News?

   Credible Data
   Catch Up to Rest of the Country
   Wellness Initiatives

   Aging Population
   Pharmacy Component
     Todd Hons


 Medical Carrier Updates
Healthcare Survey Results
Carrier Updates
New Participation Guidelines
   75% participation required after spousal waivers
   Spousal waivers from any carrier are valid (must provide photocopy!)
   No more than 50% of the group may waive coverage
New Prescription Drug Plans – Effective 4/1/2006 or Upon Renewal
   For groups 2-99 – new business or upon renewal must take one of the
   new options
   New 3-tier co-pays and deductible options
   New specialty drug vendor for self-injectable drugs
KHP Prescription Drug Coverage Will Be Terminated
   Effective at the first renewal on or after June 1, 2006
   A Capital BlueCross prescription plan will replace the existing plan
Medical Underwriting for Groups 2-19 – Effective March 1, 2006
   Groups will receive discounted illustrative rates
   Must submit application and HIPAA authorization form 30 days in advance
   Final rates will be based on medical information received and final
Keystone Health Plan Central Works Through the CBC Broker
Program – Effective January 1, 2006
   Major advantage for groups 2 to 99
   Groups may work with a broker at
   no additional cost (up to 99)
Important Rx Change
  If a brand is prescribed and a generic is available and the
  member chooses the brand, he or she will be required to pay
  the brand co-pay plus the cost difference between the brand
  and generic
First Health
   Replaces PHCS as HealthAmerica’s National Network
Gettysburg Hospital
   Tentatively Rejoining Network This Year
Individual Applications Required For Groups 51-99
   Individual applications with medical questions required for each employee
   to get final rates in all counties except Lehigh, Northampton, and 5 county
   Philadelphia area
   Average rate increase 3.5%
   95% of companies completing applications enroll
Rx Select
   For Groups > 50 Employees
   Standard Option for PPO Plans
   Available as Rider for POS Plans
   Removes Prior Authorization for Most Drugs
       Proton Pump Inhibitors, Nexium, etc.
3-tier Prescription Incentive Change – Effective May 1, 2006
   Currently, when a brand name drug is purchased instead of the available
   generic medication, the member must pay the brand co-payment, plus an
   ancillary charge. Upon renewal, HA is updating
   the Rx coverage to remove the ancillary
   charge. Therefore, members will only be
   billed the third tier co-payment.
Lifestyle Returns
   Integrated health-enhancing incentives into your company’s benefit
Highmark Radiology Management Program
   Partnered with National Imaging Associates (NIA)
Introduced New Programs With Co-pay or Co-insurance on Diagnostic
   CAT, PET, MRI Scans
   New specialty pharmacy for specialty medications such as injectables,
   biological agents, etc.
   Program to manage coverage through online services
   If qualified, group gets 2% discount!
For Groups > 50 Employees
   Will accept spousal waivers from any carrier
   After spousal waivers, 75% participation required
   Does not apply to groups under 50 employees
   Highmark Blue Shield must be the sole carrier
   A minimum of 50% of the group must enroll
New plans coming out July 2006 for groups 2 – 50
   High deductible plans with office visit co-pays
United Healthcare/Oxford/MAMSI
Third Party Administrator (TPA) located in
Provides self-funded and fully insured plans
100% owned by BlueCross of Northeastern PA
Large statewide doctor and hospital network
High deductible with no other features
Health Savings Account (HSAs)
Health Reimbursement Arrangement (HRAs)
Medical Expense Reimbursement Plans (MERPTM Plan)
             The Concept Makes Sense

Larger out of pocket cost reduces employer/employee
Turns employee into consumer
Employees utilize medical plan pay more
Isn’t insurance designed to pay for catastrophic?
Major insurance carriers slow to adopt plan design
Not enough discount in rates
Employee communication issues
Confusion over regulations
Employers view this as just a “cost shifting” method as
opposed to a way to reduce overall costs
Medical Expense Reimbursement
       Plans (MERP Plan)

    Stepping stone to HSAs?
Governed by IRC Section 105
Utilized with an insurance carrier’s high deductible plan
Permits employers to self-insure certain medical expense
78% have claims of less than $1,000

35% have no claims!

5% have 50% of the total claims

To Reduce Premiums, Buy Less Coverage
Employer secures high deductible plan (i.e. $2,000) for
major expenses (in/out patient surgery) from carrier
Generally less than 20% of employees utilize these types
of expenses
Communicate lower deductible (i.e. $250) to employees
Employer self insures from $250 to $2,000 ($1,750
maximum exposure), only if actually incurred
Employer utilizes premium discount savings to fund the
self insured portion
Typically part of PPO plan with office visit co-pay and
drug card
Alpha Benefit Administrators administers the self funded
portion for the employer
Advantage over HSA in that the employee can retain the
doctor visit co-pays and Rx co-pay card while still having
PPO arrangement for service
All expenses over $2,000 are the responsibility of the
insurance carrier
Cash flow advantage – Employer only pays if expenses
are incurred
Serves as a starting point for getting into high deductible
plans without having to communicate a complicated
process to employees

Alpha Benefit Administrators can provide proposal on
savings and costs
Example 1: 223 Employees
  Received a 25% Medical Increase = $353,500
  Implemented MERPTM Plan 1-1-05 to 12-31-05
  Group made no changes to employees’ benefits
  Final increase was 11% or $157,000
  Savings of 14% or $196,500
  1-1-06 group received 9% increase
     Increased MERPTM Plan deductible
     A decrease in cost is projected
Example 2: 99 Employees
  Received an increase from an association
  Implemented MERPTM Plan 7-1-04 to 6-30-05
  Provided three options to employees
  End result was 19% less than the previous year’s cost
  Savings of $73,000
  7-1-05 group received 14% increase = $65,000
     Increased MERPTM Plan deductible
     A 3% increase is projected
Example 3: 53 Employees
  Received a 40% increase = $119,500
  Implemented MERPTM Plan 8-1-04 to 7-31-05
  Group made no change in benefits to employees
  Final increase was 14% or $42,000
  Savings of 26% or $77,500
  8-1-05 group received 5% increase
     Increased MERPTM Plan deductible
     A 6% decrease is projected
High Deductible Plans In-Force

   MERP Plans 90

   HSA         8
High Deductible Plans In-Force
   MERP Plans 90
   HSA         8                   Alpha Experienced With
                                       MERP Plans

                                 Leader in Central/Eastern PA
                                 with this concept
                                 More plans in-force than other
                                 Not one employer has gone
                                 back to the traditional approach
Issues to Consider With Your MERP Plan


   Independent from carrier
   Not as seamless as appears
   HRA vs. MERP TMPlan contractual differences
Why Are HSA’s Now Making More Sense?

   Carriers offering more plan designs
   Better pricing
   Greater employee/employer acceptance
   Employers desperate to control costs
   MERP Plan/HSA concept
What Makes Alpha’s “HSA Today” Different?

   The only complete focused HSA administrative
   system in the country
Why would I choose Alpha for my HSA provider?

    Value Added Services that we provide:
       Don’t have to switch HSA providers every time you change medical
       insurance carriers
       Coordinate the HSA with the cafeteria plan
           Insurance premiums & Limited Purpose FSA
       Online access to Claims Vault
           An electronic storage facility for medical claims & receipts
           Available for EOB import when provided by carrier or TPA
       “Certification” of qualified medical expenses
       Contribution management to eliminate over-contributions
       Toll free phone support
       Tax form assistance
           1099, 5498, 1040, and 8889 preparation
Online Access to Your HSA
    More than just an account balance
    Revolutionary Claims VaultSM Technology (Patent-Pending)
    Claims certification service
    Online claims entry
    Online withdrawal requests
    Interest earned summary (currently paying 4.6%)
    Ability to update your HDHP or personal information
Group of 102 Employees
  Renewal premium $763,657 (+$134,853)
  Changed carriers to TM$567,573 annual premium
  Savings from original renewal $196,084
  Employer funded HSA account $34,500
  Employee funded HSA account $43,851
  Claims estimate $42,600
  Overall increase from prior year $15,873, however, we also got

  $78,351 in HSA funding for the year!
Developer and leading national provider of workplace wellness

             “People Powered Wellness”
Brings workplace wellness to life by humanizing and personalizing the
wellness process
Enhances or replaces the traditional wellness delivery technology with
persuasive power of personal, face-to-face, human interaction – LIVE,
not over the phone or internet
Average participation is over
90% of employees
Dates for providing Disclosure Notice to CMS
   Plan years ending in 2006: March 31, 2006
   Plan years ending in 2007 and beyond: Within 60 days after
   the beginning of the plan year (ex. Plan begins 1/1/2007,
   deadline is 3/2/2007)
   Within 30 days of terminating a plan that provides prescription
   drug benefits
   Within 30 days of a change in the creditable coverage status
   of a plan that provides prescription drug coverage
Dates for providing a creditable coverage notice to
   By November 15th of each year, starting in 2005
   Prior to an individual’s initial enrollment period
   Prior to the effective date of coverage for any Medicare-
   eligible individual that joins your group’s plan
   When the plan you sponsor terminates
   When the plan you sponsor changes its prescription drug
   coverage so that it is no longer creditable or becomes
   Upon an individual’s request
   Comes off patent 6/23/2006
   Comes off patent 6/30/2006

   Once generics are available, these drugs will be moved to non-
                     formulary for most carriers
Alpha is often asked what plans and contributions are most
  common. We surveyed our clients to get a representation

      Employer/Employee Contributions
      Average plan designs

                   Here are the results
% of Companies

                 10                                                  2006
                      100 90 85 80 75 70 60 55 50                0
                       Percentage of Employer Contribution to Cost

% of companies


                 15                                                 2004

                      100 90 70 50 45 40 30 25 20 15 10        0
                      Percentage of Employer Contribution to Cost
76% of companies surveyed pay 75% or more of the
single contribution
66% of companies surveyed pay 20-25% of dependent
costs, down from 73% in 2005
26% pay nothing toward dependent costs, up from 21%
in 2005
40% of those surveyed said they envision increasing the
employees cost next year, down from 60% in 2005

% of Companies

                 30%                                             2004
                 20%                                             2006


                       $10   $15         $20       $25   > $25
                                   Plan Copay Amount
% oCompanies

                     $0   $1 - $249   $250   $251 -   $500   > $500
       HMO 16%     Indemnity 8%
   POS 7%
                 PPO 69%                HMO 12%      Indemnity 8%

                   Traditional    POS 15%
                   Indemnity 5%
       HMO 15%

   POS 14%
                                                   PPO 70%
2004         PPO 66%
What is the likelihood of your company implementing
an HSA?
   Have already        2%
   High probability   16%
   Possible           40%
   Not Likely         42%
79% have a 3-tiered formulary plan as opposed to 78% in
2005 and 70% in 2004
9% have deductibles then coinsurance as opposed to
12% in 2004 and 15% in 2004
10% have a 2-tiered co-pay (usually 10/20) as opposed
to 6% in 2005 and 12% in 2004
2% have straight coinsurance as opposed to 4% in 2004
and 3% in 2004
Results point to two major trends in the industry:

  Renewal increase are lower than the previous years
  High deductible plans are continuing to become more
      Thank you for attending!

This presentation will be available for
             download at:

To top