Employers step up fight against health costs - Dallas Business Journal:

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Health insurers say employer demane for new plan optionais rising. Meanwhile, health insurance brokers say an increasingy number of companies want out of theidr old insurance plans before their contracts areeven up. “Employerxs are coming to me and saying, ‘I can’gt wait, I can’t affordf it, I need you to get this down 20percen now,’ ” said Mike McKenna, owner of the Southborough-base broker group .
It’s easy to see why: Current cost increases for companiexs renewing the same plan as last year are up betweenj 9 percent and 12 percenrt atthe state’s four largest insurers, according to official at , Harvard Pilgrim Health Plan, Tuftx Health Plan and Fallon Community Healtb Plan. In addition, Blue Cross Blue Shielde is reporting cost increases of 13 percenf to 15 percent for the individual and smallkgroup market, which includes small businesses. To escape these increases, droves of employers are switchinygto so-called consumer-directed plans.
Blue Cross Blue Shield, for reports that enrollment inits consumer-directed including high-deductible plans, rose to 240,000 membersa at the end of the first quarter of 2009 from 170,00p0 members at the start of the fourty quarter of 2008. Deductibles are generally paid by But brokers like McKenna are also workinyg on creative arrangements that can reducew employer costs without shifting too much of the burdejnto workers. “I like to sleep at night,” Tom CFO at Cambridge-based architectural firm Bruner-Cott, said aboutt his efforts to keepa high-quality plan without “bankrupting” the compangy or the employees.
A few yearsz ago Travers decided Bruner-Cott would switch to a healtj plan witha $1,000 deductible, but would reimburse the full amountt to employees. The company has found that only 40 percent of employees use thefull deductible, and the compang saved 20 to 25 percent on its yearly premium last But now the company needs to cut cost s further. Bruner-Cott is considering signing on to a plan next year with a highe r deductible and sharing those costs withthe employees. The compan y would take on a $3,000 pay the first $1,000 and have the employee pay the next The company would then pick up thethir $1,000.
Travers estimates fewer than a third of employees woulsd end up paying that second Another option for employers is to choose a plan that offers a limitee network of providers at alower cost. Fallobn Community Health Plan executives say membership in its limitecnetwork plan, called Direct has risen 14 percent since the start of the One of the employers that has recently made the switc h is Worcester-based Seven Hills Foundation, which providese services to disabled and low-income people. “Ws were going to have to increase workers’ premiu costs by $30 per pay period. They can’t afforx that.
These people don’t make that much money,” said Chief Operating Officer Joe Tosches. Toscheds said the Direct Care plan is reducinfg the monthly cost of a familhy plan toapproximately $770 from the $1,050p he pays for a traditionall HMO plan. So far, 300 employees out of 1,00o have joined the Direct Care plan. Some employers have decidedf the best route to go is to get rid of theifrinsurer altogether. Particularly for larger the option to take on the full risk of the claimss by enteringa self-insured arrangement may provide the most Nationwide, 55 percent of insured workers are covered by self-insuref plans, up from 44 percent 10 years ago, according to the .
One such employedr is MetroWestMedical Center. Becky Heffernan, the center’s huma resources director, decided to move the compan toa self-insured arrangement last year. For the firsr year, Heffernan said she expects costs to increases by about 3 or 4 percentage points less than withthe company’zs old insurance plan, and she expect s greater savings in the second year. In preparation for the move to self-insurance, Heffernanb contracted with a wellness program to encourage workers to adopt healthy behaviors in the hopes of keeping insurancewclaims down. “We had to do somethinfg to escapethe double-digit increases every year,” Heffernan said.