Benefit Premiums

Here's our situation. We're a small employer (40 ee's) in suburban Philadelphia. Most of our employees reside at the home office, but we do have about 6 sales reps located in other states. We need a health care plan that covers all employees. Last year we switched from Aetna to Blue Cross because Aetna hiked our rates 33%!! I just got the renewal rates from Blue Cross. You guessed it...rate renewal 22.5% higher this year. This is getting ridiculous. I'm surprised because everything I've been reading indicated increases in the range of 12-15%. Are you all experiencing the same kind of increases? It is true that our drug plan is bundled with the medical plan, and I know drug plans are out of control. Our drug plan isn't that rich, however. It's a 3 tiered plan with a $10/$20/$35 co-pay. I'd like to give senior managment some insight about other small employers' experiences. Thanks!

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  • 14 Comments sorted by Votes Date Added
  • Our renewal comes up March 2003. The 2002 renewal started at 22% but with some plan changes ended up at 14%. The biggest changes we made were in the drug plan which went to $10/$25/$50, office visit out-of-pocket from $10 to $20 and hospital emergency room visit from $50 to $100. Because we had an employee out on disability with a terminal illness, it was impossible to "shop" the plan.
  • We have an employee base of 250 employees. We are with Blue Cross/Blue Shield. Typically, we have gotten some increases - last year we got 14%, but negotiated down to 8%. But this year, we got hit with 33% rate increase, which they will not negotiate. Our prescription drug benefit is also tiered like yours.

    Being a medical facility, we are constantly being asked to take more in reimbursement from these insurance companies, but they continue to hike up the premiums more and more. Most of these same companies had record profits last year.

    I have been calling around this morning to some of my peers and they are all in the same boat. Some smaller practices have opted to give employees what money they were paying for benefits and have them get their own insurance - it's gotten that bad.

    Recruiting wise, we couldn't afford not to have an insurance plan, but it is getting harder and harder to ask employees to take less money in raises and then drop a bomb like this on them also. We have previously paid almost 100% of the employee premium, but we won't be able to afford this much longer. We have also gone up on deductibles/co-pays, etc. in an effort to lower premiums. After a while, insurance will only cover catastrophic illnesses and will be meaningless otherwise.

    I don't know of solutions to this, but I am afraid there is going to be a huge mutiny about health insurance costs in this nation in the not too distant future.
  • Our company was in a similar situation. We had Aetna Healthcare and switched to a self-funded program, Great West, last year. If your company is relatively young, this type of program will work for you. This year, due to our performance, we are looking at an increase of 6-8%. Granted we are a little bigger, 75 employees, but it may be worth looking into.
  • Our plan year begins December 1st and we've taken a big hit. We've been able to absorb the costs in the past but not this year; this year the highest increase will be a $58 bi-weekly increase for the family plan from $110 to $168; single is going up from $25 to $56 ouch!! We have about 170 employees and are currently with Tufts. There doesn't seem to be much bargaining room with the plans this year.
  • We belong to an employer's association, they negotiates the rates for us. The increases were about 10-15% even so.One thing for sure, the co-pays for emergency rooms are $ 50 , while the co-pays for intermediate care is only $15-
    and from my experience - there wasn't much difference in the type of services provided, and the intermediate care is MUCH faster than emergency room care .Another thing, a lot of HMOs give 30-days supply of prescription for a set co-pay fee,say $ 10. I found out that I could get - by really being pushy about it - a 90 day supply for that very same $ 10.

    While the company can try to save - the employees also have to be proactive.
  • [font size="1" color="#FF0000"]LAST EDITED ON 11-14-02 AT 04:26PM (CST)[/font][p]Boy, you really must have been pushy. After they gave you the 90 days supply, did they arrest ya? x:P Under our drug plan, you can get 90 day supply for the cost of 60 days if you use mail order.
  • The real issue here is that we are on a spiral of health cost/insurance increases created by better technology, higher drug costs, an aging population and an increasing number or uninsured. This will not end until we have a major change in our health delivery system. You can keep up with this issue by going to [url]www.kff.org[/url] (the Kaiser Family Foundation and nothing to do with Kaiser, the HMO). They are a think tank/research organization specializing in health care. You can get on their weekly e-mail list. I have been using this information to communicate with employees so that premium increases won't be a surprise. For cebudragonlady there is an equivalent California organization - [url]www.chcf.org[/url].
  • Wonder if all the HR mangers could form a very LARGE group... We'd sure have buying power!
  • We are slightly larger -- 150 employees, 110 or so of whom are on Tufts HMO and PPO. We got hit with an astounding 27% increase, were able to negotiate down (by bringing in Pres) to a bargain basement 23%. Ouch! Dental went up 14%.

    We just couldn't pass those all on to employees, especially those electing family plans. The increase would have surpassed any salary increase they might get. Making plan design changes didn't seem to buy us much... an increase to $10 office visit (yes we are still at $5, probably not for long) , increasing prescription drug to $10/$15/$30 and increasing day surgery copay to $100 would have for many outweighed the savings in premiums.

    We have found some room to absorb all but 15% of the increase, which we are passing on to employees. But next year we are probably going to have to re-think our formula... We can't keep absorbing, and there is no sign of a slowdown in health plan costs.


  • In reading the replies, I agree that we are in the midst of a National Crisis, and I have participated in various forums with the CEO's of Plans, and they honestly admit that they have no control over the costs. It is discouraging to ask employees to pay higher premiums, just as it is equally difficult for employers. Wellness programs are helpful, but 1 serious case can wipe out any gains. I can think of two proposals that might help. 1. A single payer plan. I have many reservations re this, but with the system so out of control, why not try. 2. Identifying and assisting chronic care patients. i.e. give them more dedicated service, as a means of stabilizing them, and preventing costly in-patient care.
    Finally, As my Doctor says - "Steps to Good Health" 1. Don't smoke, 2, don't smoke, 3. Just in case you missed the point - don't smoke. 4. Always wear your seatbelt.
  • Diane,

    I know this is an old post, but I just had to share. We were very excited at this year's re-newal as we had only a 10.14% increase. But if you want to speak of staggering..in 1988 we were hit with a 28.9% increase, and in 1989, a 54.8% increase!!! We lessened our benefits and '93, '94 and '95 were good years. We were hit again in '96 with a 17.8% increase. We experienced increases through the next several years - 13.55%, 16.39%, 14.16. So you can see why we were excited about this year's rates. We have over 100 employees now but this is fairly recent; we always had about 75.
  • We use a third party to find our renewal rates and every year it gets later and later, we get backed to a corner and then we have to go with what he has. We renew in July and we do not receive rates from him until the 1st week of May, is this normal? He states, that the companies we have our benefits with do not provide him with rates until the end of April. Please share some insight.

    Thanks,
    A~
  • Usually the insurance companies issue their renewal notices 60 days before the end of the contract year. If the renewal rates are outragious (and they usually are) this should give your insurance broker the necessary time to "shop" the plan and make his/her recommendations. There is time spent negotiating with the current carrier about their rates and rates for comparable coverage from other carriers. If all your third party does is present to you your renewal rates, find another one that will do the job they get paid commission for.
  • We are a non-profit (140 emps) and are experiencing the same increases. What I have been hearing is 20%+ this year from our broker so if you got 22.5% you might be in the lucky category. We also have BCBS and I really am going to hate to see what kind of increase we might be facing. Because of our industry (long term care) we have a difficult time finding companies that will even quote us. Last year we sent out to about 14 different companies and all but 2 no-quoted us. We have already received a quote from another carrier for this year- 60-70% increase over this year. They told our broker that it was an instant 50% increase due to our industry. Good luck.
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