April 2012

In This Issue:

• Blues Announce Rate Changes for 3^rd Quarter 2012
• Strategies to Save in 3^rd Quarter 2012
• The Value of Using a COBRA Administrator - Compliance & Penalties
• BlueHealthConnection Now Includes Provider-delivered Care Management
• Quotable Moment

Printable Archive:

Blues Announce Rate Changes for 3rd Quarter 2012

Blue Cross Blue Shield of Michigan (BCBSM) and Blue Care Network (BCN) continue to drive savings through improved quality and efficiency. Because multiple components make up your monthly health insurance premiums, it is important to understand what is driving these changes and how they affect your premiums. For third quarter 2012, overall rate changes are a composite of experience, trend and changes in base plan rates.

2012 Base Rate Changes
Based on observed trend and use rates, BCBSM has made the following adjustments to their base rates:

• Simply Blue HRA rates were reduced by 3%
• Simply Blue HSA plans with drugs were increased by 3%
• Prescription drug plans with cost-management were increased by approximately 3%

Composite Statewide Averages (BCBSM)

• Reform Groups (less than 50 employees on payroll): Overall average increase is 7%
• Non-reform Groups (more than 50 employees on payroll): Overall average increase is 10.1%

For Southeast Michigan- The BCBSM medical rate is increasing by 9.5% for Non-Reform groups and 6.6% for Reform groups.

Composite Statewide Average (BCN)
The average statewide increase is 6.7% and in Southeast Michigan it is 4.5%

NOTE: These percentages are averages. Therefore, some groups will see higher-than-average increases while other groups will see lower-than-average increases. The variations specific to your group include the average age of your group, the physical location and nature of your business.

Take a look below for strategies to save employee benefit dollars while maintaining quality coverage for your employees. Your Blues-contracted agent can provide you with quotes specific to your group and detailed information on the differences between plan designs.

Strategies To Save In 3rd Qtr 2012

If you currently have a Community Blue 1 (no deductible) plan, consider adding a small deductible:

• Community Blue 3A (deductible: $250/$500) could save you 21%.
• Simply Blue 500 (deductible: $500/$1,000) could save you 34%.

If you currently have a Community Blue 4 (deductible: $500/$1,000) plan, consider changing to a Simply Blue or Healthy Reward plan at the same deductible level:

• Simply Blue 500 (deductible: $500/$1,000) could save you 11%.
• Healthy Reward 500 (deductible: $500/$1,000) could save you 18%.

If you currently have a Community Blue 12 (deductible: $1,000/$2,000) plan, consider changing to a lower deductible Healthy Reward plan or a Simply Blue plan at the same deductible level:

• Healthy Reward 500 (LOWER deductible: $500/$1,000) could save you 11%.
• Simply Blue 1000 (deductible: $1,000/$2,000) could save you 17%.

The Value of Using A COBRA Administrator - Compliance and Penalties

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, or other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan.

Who Must Comply
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end. COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.

Determining Employee Count
To determine the number of employees, full-time and part-time employees count regardless of their eligibility for the group health plan. Part-time employees are counted as a fraction of a full-time employee. For example, if an employee works 20 hours per week and the employer uses 40 hours as a benchmark for full-time status, the 20 hour per week employee would count as one-half an employee for COBRA purposes. Self-employed individuals, independent contractors and directors are not counted. Also, employees in a foreign country are to be included in the employee count if they work for the same employer, including a company subject to common ownership.

Common Ownership of Corporations
If two or more companies are commonly owned by an individual or individuals, the employees of these companies may have to be grouped together for purposes of satisfying COBRA's 20-employee count. The common ownership rules are quite complex. You may wish to seek legal counsel if you have any questions in this area. You may also refer to Section 607(4) of ERISA.

Judging Compliance Failure & Penalties
The IRS is responsible for auditing employers and issuing penalties if an employer does not comply with COBRA's continuation health coverage requirements. COBRA includes an excise tax penalty of $100 per day, per violation, for noncompliance. Here are the four questions the IRS considers:

1. Have the individuals responsible for COBRA compliance been trained?
2. Have written instructions for administering COBRA been prepared?
3. Has the program been designed and updated based on competent professional advice?
4. Is the program monitored by independent auditors?

Association Benefits recommends that employers consider the value in using a COBRA Administrator to track and manage their COBRA compliance. Ask us how.

BlueHealthConnection Now Includes Provider-delivered Care Management

For the past decade, Blue Cross Blue Shield of Michigan (BCBSM) has offered wellness and care management programs for members at all levels of wellness. Through BlueHealth Connection®, these programs have helped you keep your employees healthy and more productive.

Next Level of Care - Care Management In the Doctor's Office
The provider-delivered option is an expansion of BlueHealthConnection, offering your employees the opportunity to receive care management services in their doctor's offices from specially trained nurse care managers. The program also builds upon the Blues' award-winning Patient-Centered Medical Home program, which helps primary care doctors better manage their patients' chronic conditions, prevent complications and reduce emergency room visits.

Did You Know
Studies have found that care management delivered in-person, under the guidance of the patient's primary care doctor, is highly effective. And when motivated patients join forces with highly engaged doctors, it leads to better health outcomes for patients. This can ultimately lower health care costs and reduce lost work time due to employee illness.

Why "provider-delivered" care management? Why now?
Blue Cross Blue Shield of Michigan has just completed a two-year pilot program with 50 primary care practices in five physician organizations across Michigan. Preliminary results of the pilot show that patients who received care management services in their doctor's offices had high engagement rates:

• Between 40% and 50% of patients contacted about the care management program decided to participate.
• Each patient had, on average, six to seven care management encounters, primarily in person but some by telephone.
• Physician organizations reported that the program had a positive impact on patient health, based on specific clinical indicators.

The Bottom Line
Patients participating in this new care management option were more motivated to improve their health.

How does the program work?
Each month, BCBSM sends participating physician organizations a list of eligible members with information about their health status and recent health care use, such as emergency department visits.

The participating physician practices then contact patients who would benefit from care management, and schedule appointments for in-person meetings at the doctor's office.

BCBSM tracks patients' experiences based on claims submitted by doctors for care management services and then shares overall program results and trends with you!

How does it differ from the current care management program?
With the current program, members receive care management services from specially trained nurses by phone. But, with the current provider-delivered option, members who are eligible for the program receive care management from nurses in their doctor’s office and by phone. NOTE: Both the BlueHealthConnection® wellness and care management programs and provider-delivered care management remain in effect.

When does provider-delivered care management become effective?
It became effective April 1, 2012, for all BCBSM groups with BlueHealthConnection coverage.

Quotable Moment

"A man's health can be judged by which he takes two at a time ...pills or stairs."-- Joan Welsh

Thank you for your continued association participation.

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