A survey conducted by the Society for Human Resource Management (SHRM) reveals that current economic conditions have led some employers to take a long-term approach to employee health: scaling back certain health care benefits while encouraging worksite wellness.

Based on the responses of 996 randomly selected employers, businesses are providing a consistent level of employee benefits despite the recent financial downturn. But to accomplish this, they have decreased some costlier health care and financial benefits while increasing the availability of less expensive perks, such as telecommuting and job cross-training.

In response to these benefit changes, the SHRM survey indicates that employers are increasingly taking a proactive approach to employee health and medical cost reduction by offering wellness programs. Among the key study findings:

• 72% of employers surveyed offer wellness resources and information;
• 40% offer smoking cessation programs;
• 31% offer weight-loss programs; and
• 21% offer obesity procedure coverage, such as gastric bypass surgery.

Other lower-cost worksite wellness benefits, such as health club discounts and on-site vaccinations, also gained in popularity.

Read about the survey here at the Employee Benefit News website.

Yet another reason for employers to promote worksite wellness: The New York Times reports that drugs designed to lower blood pressure are losing their effectiveness, as patients are becoming sicker overall.

An American Heart Association panel of experts found that when high blood pressure is accompanied by other conditions, such as diabetes and obesity, it requires additional medications to keep it in check. 20-30% of the hypertension patients in the panel’s study could not control their blood pressure with three or more drugs, and the panel warns that percentage may continue to increase. High blood pressure is a contributing factor to heart disease, heart attacks and strokes.

The complete article is available here.

An Employee Benefit News article states that more employers are learning what MedBen clients have known for some time now: Prepaid benefit cards are a smart accessory to many consumer-driven health products. Plan participants with a flexible spending account (FSA), health reimbursement arrangement (HRA) or health savings account (HSA) can use these special debit cards to make a variety of medical purchases, from paying physician bills to buying a bottle of cough syrup. And, many vendors now offer automatic substantiation, so card users do not need to provide a receipt to their employers afterward.

According to the article, employers that offer a debit card typically see a spike in plan participation, often doubling or tripling the number of employees who use their FSA or HRA. This in turn benefits employers by saving money on FICA taxes. You can read the full article here.

MedBen can provide prepaid benefit cards for FSA, HRA and HSA participants at the request of the employer. We also offer instructional materials for proper and effiective use of the card. Click here to learn more about our debit card services.

Promoting preventive care in the workplace is one of the most important steps an employer can take to maintain good health while helping to keep medical costs in line, says Dr. Luke Burchard, Vice President of Cost Containment and Medical Director for iHealth. “By practicing a focused approach to employee wellness, employers can produce real claims savings for health plans,” he emphasized.

At a recent MedBen wellness conference, Dr. Burchard recommended six annual screenings that benefit both employee and employer:

• Wellness exam from a primary care provider. A yearly checkup allows the provider to better monitor changes in your physical condition.
• Cholesterol screening. Keeping “bad” cholesterol in check reduces the risk of stroke and heart disease.
• Mammography. An annual mammogram for women over 40 increases the likelihood of detecting breast cancer early.
• PSA blood test. A high prostate-specific antigen (PSA) level is an early warning sign of prostate cancer.
• Colonoscopy. Regular screenings are key to the early detection of colon cancer, the second highest cause of cancer for both men and women.
• Pap smear. Typically performed during a gynecological exam, this test checks for signs of cancer of the cervix.

MedBen offers medical plans that encourage preventive care, such as low patient co-payments for standard screenings. We also can assist self-funded employers in developing a fully-rounded wellness program.

During a recent Wellness Conference held at MedBen, employers learned some tricks of the trade from life-long fitness center manager, Larry Miller. Among the information shared were some important “not-to-dos” when starting up a worksite fitness facility:

1. Overbuying Equipment. According to Miller, who has managed The Advantage Club in Newark, Ohio for 20-plus years, employers tend to overbuy, when typically only 5% of any given workforce will actually use the equipment.
2. Equipment Crowding. It’s better to have less equipment in a space than too much, according to Miller. “If people feel cramped, they will be uncomfortable exercising in the space. Plus, extra space allows room for using exercise balls and floor mats.”
3. Mix and Matching Equipment. Donated equipment is not a good idea. It’s better to purchase basic equipment for cardiovascular activity and weight training. “Make sure the equipment is intended for heavy usage,” cautions Miller.
4. Purchasing Complicated Equipment. Keep equipment easy to use, and easy to maintain. A self-contained unit accomplishes both, Miller points out.
5. Programming. Programming. Programming. Installing equipment is not enough to create an effective fitness center. Miller strongly advises that employers work with a professional to create programming that will help educate and motivate employees to work out regularly.

MedBen can provide clients with professional consultation on worksite fitness facility start-up, ongoing management and fitness programming through its BeneFitness service, which is short for the Benefit of Fitness.

In an industry where buyouts and mergers are a common occurrence, MedBen is something of an anomaly – growing and thriving as a benefits management company while remaining independent throughout its many years. In fact, MedBen’s 70th Anniversary coincides with its most successful period ever.

The Newark, Ohio-based organization began operations on May 6, 1938. MedBen started as a Hospital Service Association in 1938 by Licking Memorial Hospital, a group of local physicians and some forward-thinking Industry leaders. Today, MedBen serves about 450 employers in Ohio, West Virginia, Kentucky, Michigan and Indiana. Health benefit services are delivered to 200,000 employees spanning all 50 states.

“MedBen has relied on continuous change and innovation in order to remain a leader in such a highly competitive industry,” explains President Doug Freeman, who has led the company for 20 years. In recent years, this has meant developing a wide range of Internet self-serve tools where employers can access reports and other decision-making information and employees can check on a personal medical claim or find out the lowest cost prescription option. “Like most industries today, our clients require around-the-clock access to service,” Freeman pointed out.

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Makes sense but National Geographic has laid it out in a neat little chart. Your odds of dying from a variety of causes:

“You know what it is?” she said. “Everybody’s got to die. You always want to write about what’s going to affect somebody, and nobody gets off the hook for that.”

Read the article here at The Wall Street Journal Health Blog.

While MedBen employs a full arsenal of claims savings tools, we believe there is always more that can be done. For this reason, we joined the AWAC® Alliance in September of 2007. This allows MedBen to take advantage of some groundbreaking, forward-thinking cost savings methods, which have saved our clients more than $1 million in five short months. And, we mean savings that are beyond any network discounts.

AWAC® is a physician-powered organization that enhances our claims processing system. MedBen still conducts an initial claims scrub using 300 system autochecks and staff claim reviews to identify potential billing errors and to ensure that network discounts are applied.

Then our clients’ claims are scrubbed a second time – and we mean every single claim regardless of size or type – and analyzed against 60,000 financial and clinical algorithms to determine additional potential for large loss, inappropriate billing or fraud, and cost reduction opportunities. This analysis is conducted within 48 hours by AWAC® PRIOR to the claim being paid – and for NO additional charge. All flagged claims are reviewed by physicians to see where further savings may be possible. With the client’s permission, these physicians will negotiate on the client’s behalf and save on average 43% per selected claim.

While loss control is something we typically associate with property and casualty insurance, it is every bit as important when looking for effective health coverage for your employees.

Employers are playing out the conflicts produced by using big sticks versus carrots to encourage employees on their health plan to make important lifestyle changes. The experience of one such company, Clarian Health Partners in Indianapolis, Indiana, was featured in the Chicago Tribune this week. This employer and others often find the animosity created by the stick builds a barrier to accomplishing the very goal they set out to reach. Clarion switched from a stick to a carrot and is now rewarding positive health indicators, such as normal blood pressure and cholesterol levels, by providing $30 in the paycheck and has 95% voluntary program participation.

MedBen works with employers throughout the Midwest to design wellness initiatives that are linked to the employer’s health plan in a way that promotes an employee-employer partnership. Regardless of the approach, however, employee communication is key and should be done well in advance, repeated often and should always include the reasons why the employer is putting the initiatives in place. See story, www.chicagotribune.com/business/chi-sun_health_0210feb10,0,1758041.story

Individuals with diabetes incur health care costs that are 2.3 times higher than those without the disease, according to a recent American Diabetes Association report. Further, the cost of diabetes has increased significantly over the last several years, totalling $174 billion annually:

“The findings suggest that out of the $174 billion, $116 billion is spent on medical expenditures and $58 billion in reduced national productivity, such as work-related absenteeism, reduced productivity at work and at home, unemployment form chronic disability and premature mortality.

The largest cost for care under medical expenditures includes:

- Hospital impatient care (50% of cost);
- Diabetes medication and supplies (12%);
- Retail prescriptions to treat diabetes complications (11%); and
- Physician costs (9%).”

A summary of the report is available from the America’s Health Insurance Plans (AHIP) here.

The full report is available here.

In case you missed it, this year’s flu shot missed the mark. The Wall Street Journal health blog has the story here.

“This year, the CDC said it has found that most so–called influenza B viruses that are running around the country aren’t fazed by the current edition of the flu vaccine. That’s because two of three components in the vaccine were aiming for the wrong target.”

For the eighth consecutive year, MedBen has no findings from their annual SAS 70 Type II Audit.

SAS 70 is short for “Statement on Auditing Standards No. 70: Service Organizations”, and defines the standards an auditor uses to measure a company’s internal controls – the safeguards it has put in place to ensure policies and procedures are followed. A SAS 70 Type I service auditor’s report assesses if the company’s description of these controls accurately reflects the safeguards actually used and whether they are suitable to meet control objectives. A Type II service auditor’s report goes one step further, including with Type I information the auditor’s opinion as to the operating effectiveness of the controls during the period under review.

The Sarbanes-Oxley Act of 2002 requires public company boards and management to undergo an annual Type II audit. As a privately held company, Sarbanes-Oxley rules do not apply to MedBen. However, we voluntarily submit to SAS 70 audits in order to establish and maintain our claims processing standards.

The SAS 70 Type II Audit is only one of the ways MedBen upholds claims accuracy. Our dedicated software performs over 300 “auto checks” on every claim, flagging any inconsistencies and errors. And internal staff members review 5% of each examiner’s claims everyday.

Clients and brokers can download a copy from the password-protected “Plan Design” blog tab above (simply click on the regulatory tab). Registering is easy.

HCC Life Insurance Company has profiled MedBen’s Advanced Warning and Containment (AWAC) initiative in their January, 2008 newsletter. The HCC Voice does a nice job of summarizing AWAC’s offerings.

The Wall Street Journal reports on the recent Chantix advisory issued by the FDA.

Expect health care costs to rise by an average of 6%, says Towers Perrin in their 2008 Health Care Cost Survey (available here). Most of MedBen’s stop-loss carriers are using a 13%-15% trend and MedBen Mutual is using a 15.5% medical trend.

While Towers Perrin’s increase may seem small, they also start from a much higher cost level. Their 2008 projected average – $9,144 for health care costs – is derived from a “premium equivalent” but would translate to between $7,500 and $8,300 in medical and prescription claim costs, depending on administrative costs.

MedBen’s self-funded block averaged $7,498 in medical and prescription costs in 2007, up 11% from 2006.

“How do we increase our value to our clients this year?” As a benefits company devoted to quality, we continually question how we can perform better, provide more and cost less. We want to deliver to each of our clients a level of service - competitively priced - that is available from no other administrator or insurer … no matter which one or how big. Period. Our focus is on making our clients love how smoothly their plan works and how satisfied their employees are while we find cutting-edge ways to reduce the claim expense that comprises on average about 90% of total plan costs. We want you to see that you’ve never gotten so much service and expertise for that 4%, on average, we cost you.

MedBen’s approach brought about some big client success stories in 2007. One such story is a large health care system that saved $2 million in annual claims cost in their first year with MedBen. These savings came through targeted plan design changes and aggressive claims control, coupled with the introduction of two MedBen consumer-driven products, the Flexible Spending Account (FSA) and Health Reimbursement Arrangement (HRA). A government employer showed how cost savings could be sustained with this same FSA/HRA combination by experiencing claims expenses reduction for the fourth consecutive year. Total savings for this 100-life employer has topped $1 million. These are just two examples of real claims savings produced this past year. In fact, the majority of our clients with a consumer-driven product were below the national average employee health care cost of $7,861.

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The Wall Street Journal Health Blog clues us in on the simple things in life: How to increase your chances of surviving a fall from 47 stories and how to live an extra 14 years - separately, of course. Here is the article.

Auto suppliers are among the leading industries exploring worksite wellness options for their associates. MedBen Vice President Cindy Steen recently met with several Midwest auto supplier groups for Honda of America to discuss ways to make their worksite wellness programs most successful. Among the points emphasized was the importance of linking wellness initiatives to your Health Plan.

“We see more employers directly tying wellness program participation to specific health benefits,” Steen said, sharing the six most common qualifying wellness activities for such designated health benefits:

• Completion of a Health Risk Assessment
• Completion of a blood screen
• Maintenance of a blood pressure within an acceptable range
• Maintenance of a cholesterol level within an acceptable range
• Maintenance of a body mass index (BMI) within an acceptable range
• Not smoking

Steen went on to explain how employers typically use several qualifying activities as opposed to just one. “Some employers will include a discretionary activity that the employee can select based on the results of their Health Risk Assessment. In these cases, the activity must meet with the approval of a physician or other representative of their worksite wellness program,” she explained. “This approach allows the participant to focus some attention on a personal health goal and yet be rewarded for their efforts.”

Discussion with the auto suppliers also included the types of benefit rewards employers are providing for achievement of specified wellness activities, such as: enhanced benefits, reduced co-pays, reduced employee contributions and the distribution of health benefit dollars into a health reimbursement arrangement, or other health savings account.

Steen cautioned that whenever self-funded employers link health benefits to wellness, they must be mindful of the HIPAA wellness rules. “Employers should always make sure that they design their program so everyone can participate or that they offer a reasonable alternative or the opportunity to use a medical waiver,” she said.
MedBen is planning more wellness conferences in 2008. If you are interested in being placed on the mailing list, just e-mail csteen@medben.com.

Happy holidays to MedBen clients, brokers, consultants and vendors. Please note our holiday hours here.

The Houston Chronicle’s business section recently included a good overview of the differences between Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs). The article can be found here.

MedBen tends to recommend HRAs more often to our partially self-funded clients because of the flexibility of HRAs over HSAs – although we administer both types of programs.

As The Chronicle article notes:

“The main difference involves who keeps money earmarked for health care but not spent. It’s the employee under HSAs, the company under HRAs.

HRAs emerged as a way to help cover deductibles — the money patients have to spend before an insurance plan kicks in. As employers wrangled with rising health care costs, HRAs used in conjunction with high-deductible health plans gained traction.

Austin-based Whole Foods Market offers HRAs to its employees. Full-time workers don’t pay any health insurance premium out of their own paychecks, but are covered under a high deductible insurance plan coupled with an HRA. Whole Foods funds the accounts; the more years of service, the greater the contribution.

“Team members can choose what eligible expenses they want to pay for with their HRA dollars,” spokeswoman Ashley Hawkins said.”

If you are considering moving to an HRA or an HSA, don’t hesitate to contact either your broker or your Regional Sales Director.