How to structure a Wellness Program for your company to help keep your employees active and healthy.

Recently we’ve implemented a few wellness plans for some of our clients, and I’ve come to the conclusion that most business owners aren’t 100% sure what a Wellness Program actually is.

So, I figured I’d take a few moments to talk about an idea or 2 to further explain how Wellness programs work.

If your company is above 100 employees you are considered a large group and multiple factors are taken when obtaining health insurance coverage. At this size you are individually underwritten, and certain things are set in stone, the number of employees, their ages, medical histories etc.

But the one variable is… Claims History.

When an insurance company is calculating your renewal they are going to look at the amount of claims that were put through the prior year.

So, if your group is healthy and doesn’t go to the doctor very often, you will get a much cheaper renewal then a group that has very high claims.

Many people tell me “Well when a person gets sick they go to the doctor, what can I do about it?"

My answer is, nothing. If someone is sick, catches a cold, or needs an operation, they have to have one, but a persons weight, activity and eating habits have a huge impact on the persons overall well being. If you put a plan in place to help people to stop smoking or lose weight with incentives, the amount of times they go to the doctor will go down and so will the claims.

For example:

We got one of our clients employees pedometers. Now for the next month they’ll all wear it and whoever walks the most steps will get a grand prize, say a day off, and the next 4 runners up will get a half a day off.

This encourages employees to walk more then usual, helping them to burn calories, improve lung function in a low impact way.

And you know what… Claims will decrease… So the employee gets something (Better Health and a day off) and the employer gets a health bill they can live with (Because we can’t get them a free health bill which they really want).

Its important to live a healthy life and small changes and incentives can make all the differences in your employees lives and your premiums.

If you have any questions you can reach me at (631) 338- 9917.

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The Health Insurance Portability & Accountability Act (HIPAA) and what its means to you.

I’m sure at one time or another as either a business owner or an individual you’ve heard the phrase HIPAA. Most people aren’t sure what it stands for or even what it means.

Well I’m here to tell you.

HIPAA is the Health Insurance Portability & Accountability Act. It governs how personal information is handled and protects your ability to acquire and retain your medical insurance.

What HIPAA does:

• HIPAA protects your personal information with a few exceptions (Hospitals, Doctors, Insurance Companies) so you can receive care.
• Limits pre-existing conditions to help you obtain new coverage and have claims paid for
• HIPAA does not allow employers to charge extra premiums based on prior health conditions or family hist
• It also guarantees that most individuals and small businesses can renew there coverage regardless of claims or history of insured’s within the plan.

What HIPAA Does NOT do:

• HIPAA does NOT require employers to offer or pay for health coverage for employees or family coverage for their spouses and dependents;
• HIPAA does NOT guarantee health coverage for all workers;
• HIPAA does NOT control the amount an insurer may charge for coverage;
• HIPAA does NOT require group and individual (non-employment based) health plans to offer specific benefits;
• HIPAA does NOT permit people to keep the same health coverage they had in their old job when they move to a new job;
• HIPAA does NOT eliminate all use of pre-existing condition exclusions; and
• HIPAA does NOT replace the State as the primary regulator of health insurance.

For more information about HIPPA http://www.hhs.gov/ocr/privacy/.

I wanted to give a brief overview so you can better understand what HIPAA does and does not do. It was enacted in 1996 to make medical coverage more accessible while protecting the information of businesses and individuals.

If you have any questions you can reach me at (631) 338-9917.

Self Insured or Fully Insured Medical plans, What you need to know

“What’s the difference between Fully Insured and Self Insured Medical Plans?”

At some point most companies have to make a decision, do I want a Fully Insured Plan or are we willing to Self Insure the plan ourselves.

Before, we can answer that question we should go over the differences.

Fully Insured Plans:

In a Fully Insured Plan, the employer pays a per employee cost of insurance for every enrolled employee. The Insurance Company is then responsible for providing coverage for those employees, and covering claims.

Most small businesses under 200 employees are “Fully Insured”. This can be the more expensive option, but is often the cleanest. As an employer you have set a “Maximum” cost for benefits, you pay the premium and that’s it.

Self Insured Plans:

In a Self Insured Plan, the employer acts as the insurance company. So, instead of paying a premium to an insurance company, the Employer sets aside the premiums it would have paid and pays the claims directly. The company contracts with a provider to administer the plan, but the claims are the employer’s responsibility.

As companies get larger 200+ they tend to shift more toward Self Insured plans because they have the capital to pay the claims, and a large number of employees to reduce the risk of a large claim. This option can be more cost affordable for businesses but it does involve a larger number of moving parts”.

So, the question arises “What happens if there’s a huge claim on a Self Insured Plan?”

Most businesses purchase “Stop Loss Coverage”.

Stop Loss Coverage, basically picks up any claim above a certain dollar amount.

For Example:

You have Stop Loss Coverage above $100,000 and an insured puts a claim in for $150,000 because of a major procedure.

You would pay the first $100,000 and the Stop Loss would pay the $50,000 above.

This is a great way for businesses to protect themselves from huge claims while still taking advantage of the possible upside of a Self Insured Plan.

The majority of the time, businesses are shocked to see how much they pay in premiums and how little the insurance companies actually pay out in claims. The best way to see what type of plan is right for your company is to contact a Health Insurance Professional and have them review your claims history and premiums.

If you have any questions you can reach me at (631) 338-9917.

What is a Health Reimbursement Account (H.R.A), and how is it different then a Health Savings Account (H.S.A.)?

A few of my clients recently asked me, “What’s a Health Reimbursement Account?” and “Should I have one?”

At this point you’re probably starting to get sick of all these acronyms, H.S.A, F.S.A, H.R.A etc…

A Health Reimbursement Account is an account maintained by an employer that reimburses employees for qualified medical expenses.

Your probably saying to yourself, “Isn’t that what an Health Savings Account does?”.

Yes & No

There are some actual differences between the two, the first being how their funded.

Health Reimbursement Accounts don’t need to be funded in advance, but Health Savings Accounts do. An employer can set a maximum amount they will reimburse their employees every year (Maximum for families is $6,150, & Individuals is $3,050 as of 2010) and pay the benefits as they come in (So there not forced to put aside funds in advance). Eligible reimbursements for example would be co-pays, co-insurance, deductibles, etc.

So in the case of a Health Reimbursement Account, the business gets the deduction and the employee gets the benefit. Where as in a Health Savings Account the employee has to make the contribution but they get the deduction.

The next difference is ownership; since the accounts don’t need to be pre-funded they are not owned by the employee. So, if an employee leaves a company he will no longer have access to their H.R.A account. This should not pose a problem because the account is not funded anyway. Where as in a Health Savings Account, the employee has set aside their own money pretax, so they own the account and they can take it with them wherever they go.

So, when comparing the two there is significant upside to both accounts:

H.R.A’s offer more Contribution Flexibility, Tax Deductions to the Business, and they allow the employee to not have to make any contributions.

H.S.A’s offer a Tax Deduction to the employee, Portability (They can take it with them if they leave their employer) but they must be funded by the employee.

Either way, both accounts help employees to pay for some of the expenses they’ll incur that are not covered by their medical plan. It simply depends on what option the employer decides to offer there employees and how its structured.

If you have any questions you can reach me at 631-338-9917.

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