Employers seek to keep health insurance costs low

South Florida Sun Sentinel (MCT) - It's time for employees to choose from the health insurance and benefits options their employers are offering for next year.

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Businesses are scurrying to communicate and educate workers about medical coverage and benefits offerings during annual open enrollment season this month.

Many companies are changing health plans in 2009 to focus on preventive care, while steering workers into high-deductible plans tied to tax-free health savings accounts. Employers say they're trying to keep premium increases down because they recognize workers already are stretched with higher costs of living.

"We look at the employee first: What is the impact going to be on their entire paycheck?" said John Heins, chief human resources officer for Spherion Corp., the national staffing company based in Fort Lauderdale.

In a survey of 34 companies by Fort Lauderdale's Seitlin Benefits, 41 percent said they would change benefit levels to keep increases in their medical plans to a minimum. Does that mean skimpier coverage? Some experts say it could, but employers say they're offering choices that turn workers into better health consumers.

Nationally, health premiums are rising by 5 percent, according to the Kaiser Family Foundation.

Mahoney & Associates, a benefits management firm in Fort Lauderdale, is urging clients to offer employees one health plan that combines a high annual deductible with a health savings account workers contribute to through payroll deduction. Employees spend healthcare dollars more cautiously when they have a financial interest in the plan, said Bill Mahoney, the firm's founder.

Healthy employees can save money on such high-deductible plans because the monthly premium is cheaper than a traditional plan. But critics question whether lower-income employees can afford to pay entire deductibles upfront before getting medical care. And those in poor health may have lower monthly premiums but be unable to afford the high deductible if they land in the hospital.

"It could really divide the risk pool and make lower-deductible plans more costly," said Edwin Park, senior fellow for the Center on Budget and Policy Priorities in Washington, D.C. "Cost-sharing has a tendency to discourage both necessary and unnecessary health services."

For 2009, Mahoney & Associates will raise the firm's contribution to $1,000 of the $1,100 deductible. Deerfield Beach, Fla.-based JM Family Enterprises is paying half the $1,250 deductible for employees in its new medical plan. The automobile business also offers a traditional plan with new co-pays of $30 for primary care doctor visits and $40 for specialists.

High-deductible plans "look scary but sometimes it's actually the better plan. The out-of-pocket maximum can be lower. The cost per pay period can be lower," said Sheryl Grey, who heads the Florida healthcare practice for consulting firm Watson Wyatt in Miami.

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An employer's contribution to a health savings account is tax-deductible and tax-free to workers, if used on medical costs. Unlike a flexible savings account, the money can rolls over from year to year. However, workers younger than 65 will get stuck with a 10 percent penalty if money in a health savings account is used for non-medical purposes.

Many workers are just learning about their health insurance options for next year. Some companies are rewarding their employees for staying fit.

Gail Ferro, senior marketing manager for Spherion, said her employer is urging workers to go to an urgent care clinic instead of the more costly hospital emergency room when appropriate. With three children ages 9 to 17 who play sports, she has made a few trips to the emergency room, including one for herself when she recently fell off a ladder.

"It does make sense when someone cuts a knee. You could go to the urgent clinic and get a couple stitches," she said.

Nick Bosse, director of creative services for JM Family, added his wife to his health plan in June and now pays the family rate. For next year, "I'm tending to stick with the original because it suits all my needs," said Bosse, 30, in comparing the traditional with the high-deductible plans.

His favorite benefit at JM Family is the on-site wellness center, where he can see the doctor for free.

At the wellness center, employees come in for flu shots, vaccines for traveling and the occasional emergency such as heart attack symptoms, said Dr. Michael Neam, a wellness center doctor.

Next year, JM Family is extending health benefits to employees' domestic partners. And, in recognition of greater stress in the workplace due to the economy, the company is tripling its mental health benefit from 20 visits to 60, said Sandra Porceng, the company's vice president of total rewards.

The company's incentives to stay healthy are catching on, too.

"We do 'lunch and learn' on nutrition, preventive medicine, packing a healthy lunch for your kids," she said.

In the employee cafeteria, workers who choose from a low-salt, low-fat menu Monday through Thursday get their lunch on Friday for free.

"There are no french fries on that menu," Porceng said.

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NEW MEDICAL INSURANCE TRENDS

These are the trends for 2009 health plans employers will offer:

_ Increased emphasis on improving personal health through financial incentives.

_ Greater access to on-site clinics and health coaches.

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_ Health savings accounts linked to high-deductible insurance plans.

_ Full coverage or low co-payments for preventive screenings and tests.

_ Surcharges for spouses who have access to other employer plans, but opt to be covered by their partner's plan.

Source: Watson Wyatt

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© 2008, Sun Sentinel.