New Government Website For HSA's

This week, the Treasury Department and Small Business Administration announced a new website, www.HSA.gov/hsa to assist small businesses and consumers in understanding the value of HSA's. The website provides business owners with information on how HSA's can help them help their employees. The press release which announced the new website also had some interesting facts about HSA growth:

• Today more than 6.1 million people are covered by HSA plans, up 35% since 2007.
• Low- and moderate-income Americans and those previously uninsured are enrolling in HSA plans. In 2005, (the most recent data available) more than one-third of HSA policyholders had incomes under $50,000 per year, and one-third of individual HSA policyholders in 2005 were previously uninsured.
• As of January 2008, more than 1.8 million small business workers and their dependents were covered in HSA plans, up 72% since 2007.
• The latest survey data also indicates that almost one-third of those newly insured through small-group coverage were enrolled in and HSA plan.

Yes, HSA's are growing in popularity. But education is key to the long term success of HSA's. You cannot just look at premiums when deciding on which health plan you want. They are NOT like our more traditional health insurance products in a lot of ways - some of them significant. If employees and individuals who choose HSA's are not aware of these differences, they could be in for a big shock down the road. Got questions? We have answers. Contact us for more information.

Life Insurance Awareness Month

September is Life Insurance Awareness Month (just gives me goosebumps thinking about it). Ok, so maybe not so much. But life insurance is something that most people need, but do not want to talk about. Two things that surprise people the most when discussing life insurance are:

1) Term insurance can very inexpensive
2) The pricing can vary greatly depending on your health

Those two items led us to create the chart below (click on the chart for a bigger version) that shows sample premiums for term insurance for a 35 year old male for different health categories and different term lengths. Addressing the two surprises mentioned above, the chart shows that a very healthy non-smoker can get $1,000,000 of term insurance with a guaranteed level premium for 10 years for $260/year (that addresses item 1 above). If that same individual is a smoker, the rate increases to $1,240/year (that addresses item 2). If you were looking for a reason to quit smoking...

Now, I am not here to argue the virtues of term insurance versus whole life insurance. I can make a good case for both of them. But I am saying that if you have not looked at you life insurance needs in a while, contact us and let's talk about it. And if you are signing up for group life insurance at work, don't assume that the group insurance is cheaper than what you can get on you own. (click on the chart for a bigger version, or contact us for a PDF version of the image below)

Overheard...

There are a host of reasons why healthcare in America is expensive. One of the reasons that is often left out of the discussion (especially in the political arena) is the advancement of technology. Below is an excerpt from a book I read recently that addresses this point and gives a vivid example of a 'cost' that is accepted today (dare I say, expected) that was not available a generation ago.

"Most of the rise in health care spending stems not from the prices of medical goods and services, most of which have been declining in real-dollars, but from increase utilization. The population is aging, and the aging require more care than the young. New drugs, medical devices, and procedures have been developed that reduce pain, extend longevity, and enable those who suffer from various conditions to lead better lives; people naturally want to use these new drugs and devices, incurring new costs.

A generation ago, a doctor would tell a patient with chronic nonspecific knee pain to take aspirin and avoid strenuous activity first thing in the morning; the standard was that you lived with such things. Today, the notion of living with any treatable discomfort is unthinkable. Patients with knee pain might receive anything from cartilage-growth medication to arthroscopic surgery to a complete artificial knee. Some 200,000 knee replacements were performed in the United States in 2001, at an average cost of $26,000. That’s $5.2 billion in health care spending just for artificial knees, a category of treatment that did not even exist a generation ago. Medicare will provide artificial knees at taxpayer expense to patients in their eighties who do not have much longer to live. As available healthcare technology increases and society feels everyone should have access to the best care under all circumstances, we should expect health care spending to rise even if the prices of individual goods and services are declining. The essential result is that most people are better off."

Gregg Easterbrook, The Progress Paradox: How Life Gets Better While People Feel Worse (New York, NY: Random House, Inc., 2003) 1

Health Care Costs On The Way Down?

Not exactly. But health care costs are expected to increase on average 10.6% in the next 12 months, according to Aon Consulting -- the lowest increase since the study began in 2001.

Unlike several other health care cost studies, Aon reports the expected future increase in claims cost before any plan changes. Based on the company's survey of more than 70 leading health care insurers, representing more than 100 million insured individuals, health care costs are projected to increase:

• 10.6% for HMOs (10.9% was projected in 2007)
• 10.5% for POS plans (10.8% was projected in 2007)
• 10.7% for PPOs (11.2% was projected in 2007)
• 10.5% for CDH plans (10.7% was projected in 2007)

"While the medical trend rate is still more than twice the consumer price index, it is encouraging to see that health care cost rate increases are continuing to slow down," says Bill Sharon, senior VP with Aon and director of the study. Sharon attributes the decrease in the medical trend rate to more employers and employees taking advantage of wellness, health promotion and consumer driven programs.

Follow this link for more on this report: http://aon.mediaroom.com/index.php?s=43&item=1285

Source: Employee Benefit News