Join us to learn how AGL Resources, Inc., reduced retiree health insurance costs and provided retirees with benefits of equal or better value by leveraging a Medicare exchange.

During this webcast you will learn:

  • How AGL Resources was able to provide its retirees with more choice and better value for their health care dollars.
  • How AGL Resources reduced OPEB liabilities, simplified administration, and made retiree health care benefits sustainable.
  • Details of AGL Resources’ decision making process, communication protocol and keys to success.

Register today!

Webinar Details:

April 11, 2012
10:00 am PST/1:00 pm EST


Chasity Miller
Managing Director, Compensation & Benefits
AGL Resources, Inc.

Richard K. Wheeler
Senior Vice President
Extend Health, Inc.

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare exchange.

The road map for state exchange health plans in 2014 was just released. Posting it here to make the whole report available.

Essential Benefits Package (IOM Oct 6 2011)

New piece by Emily Chasen in the Wall Street Journal CFO journal today features Bryce Williams discussing the future of private exchanges as a mechanism for providing health care benefits to active employees. You must be a subscriber to see the whole story, but here’s a snip:

…a corporate exchange could be a middle ground between keeping a group plan and leaving employees to use the state exchanges. Regulations that would affect corporate exchanges are still being written, so most companies will probably want to wait for the new laws to take effect in 2014 before deciding whether to use them.

According to Bryce Williams, CEO of health-care exchange operator Extend Health, such corporate exchanges could offer companies an alternative to buying group plans from a health insurer.

Visit Extend Health — the nation’s largest private Medicare exchange.

McKinsey fires back

June 20, 2011

If you’ve been following the controversy around the recent McKinsey & Company Quarterly, you’ll want to read this. McKinsey, in a break from its traditional policy, has released survey questions and results from its recent study of employer-sponsored insurance.

McKinsey has been pushed to this unusual step by a groundswell of Democratic unrest about the survey’s methodology. McKinsey’s response explains that “The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act. Rather, it captured the attitudes of employers and provided an understanding of the factors that could influence decision making related to employee health benefits.”

Visit Extend Health — the nation’s largest private Medicare exchange.

McKinsey & Company in Shanghai _3417

Image by !/_PeacePlusOne via Flickr

According to a recent study released by McKinsey & Company report titled How US Health Care Reform Will Affect Employee Benefits, 30 percent of employers will “definitely or probably” drop health insurance for their employees. This is a far cry from earlier projections, such as the Congressional Budget Office’s estimate that only 7 percent of employees will have to switch from employer-sponsored insurance (ESI) to subsidized-exchange policies in 2014.

McKinsey’s survey of 1,300 employers found that the impact will be much greater than those original estimates. Here’s a summary of their key findings:

  • 30 percent of employers will “definitely or probably” stop offering ESI
  • 45 to 50 percent of employers will “definitely or probably” seek ESI alternatives
  • 50 to 60 percent of employers with “high awareness of reform” will pursue ESI alternatives
  • 30 percent of employers would still benefit economically by dropping coverage even after compensating employees with other benefits or increased salaries
  • 85 percent of employees would not quit their jobs if ESI was no longer offered

McKinsey’s findings also indicate that to remain competitive for top talent, employers that drop ESI are expected to make up for it by increasing other benefits like salaries, vacation, retirement, or health-management programs. However, McKinsey believes that employers won’t have to compensate employees for 100 percent of the lost insurance value.

Interestingly, the survey shows that employers that are considering dropping ESI are doing so because they realize ESI may not be the most efficient way to provide health coverage for their employees after 2014. But the report also points out that most employers will probably find solutions somewhere between the extremes of completely dropping ESI and continuing their current offerings:

“For employers and insurers, success after 2014 will require a better understanding of employee and employer segments, and the development of the right capabilities and partnerships to manage the transition.”

Not everyone agrees with the findings of this thought-provoking report. The Obama administration, for instance, has pointed out the McKinsey’s research is at odds with that from the Congressional Budget Office, Rand Corp., and the Urban institute. One thing is for sure: the McKinsey report is a must read if you are interested in the potential effects of health care reform on employer-sponsored health care benefits. You can download the report from McKinsey Quarterly.

Visit Extend Health — the nation’s largest private Medicare exchange.

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Back in May 2010, HHS announced a $5 billion program to help employers fund health care for their early retirees – people who are not yet eligible for Medicare. The fund was much talked about in the news, and pundits predicted it would all be gone within two years if not before. That meant it wouldn’t last until 2014, when early retirees can get guaranteed issue insurance on state health benefit exchanges.

Well, it looks like those predictions may have been a little pessimistic. To date, according to U.S. News & World Report, only $535 million of that $5 billion has been paid out. State and local governments and non-profits make up the majority of employers who’ve applied for and been granted funds.

At this rate the money will last for ten years. (If you’re interested in participating, go here for details.) So what about it, employers? Why has so little of this fund been used?

The state of Nevada will work with Extend Health to move Medicare-eligible retired government workers from group Medicare insurance to private coverage. In the process, the state expects to save $8 million and retirees will pay less for their Medicare gap insurance.

“By purchasing individual plans on a health insurance exchange, retirees will have more choice and control over their health care coverage, and the opportunity to select plans that are right for them,” according to James Wells, executive director of the Nevada Public Employees Benefit Program.

You can read more about the state’s decision in this Bloomberg Business Week article.

After reviewing public comments, HHS has issued an amendment to the grandfathered plan rules in the PPACA. Companies can now change insurance companies and retain grandfathered status, as long as they keep employee costs and benefits “substantially” the same. Previously, the only change allowed was to third-party administrator, but after review the government concluded that not allowing employers to change insurance companies gave too much power to the carriers to increase rates on their corporate customers. This welcome change gives employers a little more breathing room to find the best value for their employee benefits without losing grandfathered status.

EBN has a pretty good summary of the new ruling.  You can find the actual ruling here; scroll down until you see this section, where you can dowload a .pdf of the ruling.



Group Health Plans and Health Insurance Coverage:

Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act

Benefits and human resources consulting firm The Segal Company has just published its yearly survey of health care plan cost trends. Based on responses from 60 insurance carriers, the report offers a wealth of helpful data on the outlook for plan costs in 2011 and compares 2009 actual results to forecasts. The 6-page report is chock full of data on medical plans for active employees, pre-65 retirees, and Medicare-eligible retirees, prescription drug carve-outs, and dental and vision plans.

The report projects cost trends for Medicare Advantage PFFS and PPO plans with prescription drug coverage to increase in 2011 by 7%, vs. an expected 9.5% for 2010. MA HMO plans with RX are projected to grow by 7.4%, vs. a projected 8.2% in 2010. Interestingly, forecasts in the past have erred on the high side, as “…actual trend rates in 2009 for MA HMOs…were significantly lower than forecasted…” and “Actual prescription drug trend rates continue to be lower than forecasted.”

One of the contributors to the always worthy and interesting The Health Care Blog, Mike Turpin, has some very interesting and challenging advice for HR benefits managers as they consider how to respond to the changes wrought by the Affordable Care Act. For example, here’s a short excerpt:

Don’t be intimidated by self-insurance – Many employers underestimate the advantages of self-insurance and overestimate its complexity and risk.  But, in a post reform world, firms with more than 200 employees should give serious consideration to partial or total self-funding.  Aside from the total transparency of commissions, fees, administrative expenses and pooling charges, employers own their own data. The sooner employers get comfortable with self-insurance as a risk financing strategy, the sooner HR professionals can construct loss control programs that can mitigate claims costs.”

Mr. Turpin is currently the Executive Vice President for Benefits for the New York based broker, USI insurance Services and was formerly northeast regional CEO for United Healthcare and Oxford Health.  Great food for thought, and recommended reading.