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Employer Contributions to Health Savings Accounts Decreasing

In 2014, employees saw a 10 percent decrease in their average single Health Savings Account (HSA) employer contribution from the previous year, from $574 in 2013 to $515 in 2014, according to new data released from the 2014 Health Plan Survey of United Benefit Advisors, the largest health benefits survey in the nation. Average family contributions also decreased 7 percent during the same period, from $958 to $890. Survey results reveal a correlation between enrollment in HSAs and Consumer Driven Health Plans (CDHPs), linking higher HSA contributions to increased enrollment in the cost-saving plans.

"Employer HSA funding strategies have changed in recent years in response to the Patient Protection and Affordable Care Act (PPACA) and its impact on employer-sponsored health insurance plans," says Brian M. Goff, President & CEO of Insurance Solutions, a UBA Partner Firm. "When HSA products were new, the employer could take the premium savings and fully fund the deductible. Now, however, premium reductions are not as great as they once were. As premiums increase, employers naturally opt to put their contributions toward premiums first and will slowly reduce their HSA funding to the point where, in some cases, it becomes entirely the employee's responsibility," says Goff.

There are many additional factors that will impact an employer's HSA contribution strategy, says Mark Sherman, Principal of LHD Benefit Advisors, another UBA Partner Firm. Sherman says such factors include the deductible amount, the employee premium contribution, the out-of-pocket maximum, and whether there are other types of plans offered.

"At the end of the day, employers typically have a budget that they work within," advises UBA Partner, Andrea Kinkade, President/Benefit Advisor at Kaminsky & Associates, Inc. "Either employee payroll deductions (premiums) increase or employer HSA contributions decrease to keep benefit costs within the budget."

HSA ACTIVITY BY EMPLOYER SIZE

Smaller employers (1 to 50) are exceeding the average HSA contribution for singles, while larger employers (50 to 1,000+) have been less generous, according to the survey. Even larger employers (1,000+), in fact, show the lowest average contribution at $426. Similarly, for families, HSA contributions by smaller employers tend to be above the average $890 contribution, while large employers (1,000+) fund an average of $760.

"There are a few reasons for this," says Goff, "The larger the group, the more impersonal some of these decisions are. Plus, many large groups are self-funded where premium equivalents between HSA plans, health maintenance organizations (HMOs) or preferred provider organizations (PPOs) are not as great. As a result, the expectation is that the employer contribution to the HSA will not be as great and some employees will enroll in non-HSA plans -- making the high-deductible plan not as worthwhile."

Findings show large employers also have lower CDHP enrollment. Even though 25.5 percent of large employer plans are CDHPs, only 16.6 percent of their employees are enrolled in them.

"Generous HSA contributions among small groups are typically designed to help compensate for higher deductibles than those that are offered in larger group plans," says Kinkade. 

REGIONAL HSA ACTIVITY

The correlation between high HSA contributions and high enrollment in high-deductible health plans (HDHPs) is consistent across different industries and regions, with the exception of California, which has the most generous HSA contributions ($808 for singles and $1,316 for families) yet the lowest enrollment in CDHPs: only 11.3 percent of plans in California are CDHP plans and only 8.1 percent of employees are enrolled in them.

"Market dominance of Kaiser and a strong HMO preference in California offsets the rate relief offered by CDHPs, making the high deductible not worthwhile," says Goff. 

"In the Midwest, we still see some employers continuing to offer higher HSA contributions or lower premium contributions as a way to entice employees to these cost-saving plans," says Kinkade.

New England, which typically has the most generous health care packages overall, sees average HSA contributions of $685 for singles and $1,342 for families. South Central states have the lowest contributions: $360 for singles and $554 for families. Nearly 36 percent of North Central states offer CDHP plans (the highest of any region) and more than 40 percent of employees in this region are enrolled in such plans (also the highest in the nation).

"Since the North Central region is largely comprised of Anthem BCBS states, carrier motivations play into these stats," says Sherman. "Specifically, low regional interest in HMOs and Anthem BCBS' purchase of Lumenos, a CDHP marketing specialist, made it easy for employers to move from a PPO to a CDHP." 

HSA ACTIVITY BY INDUSTRY

In looking at the survey data by industry, construction, health care/social assistance, mining/oil and gas extraction, retail and wholesale provide the lowest HSA contributions for singles and families. Conversely, government employees have the most generous HSA contributions ($791 for singles and $1,431 for families).

"Construction companies typically hire young men who demographically don't place a lot of value in benefits. Government, on the other hand, has traditionally substituted salary for benefits; one way to move those employees off an expensive plan is to fully fund their deductible," says Goff. "But carrier motivations can also be at play. Some carriers give a certain premium discount to go to the high deductible plan. So if you have a low premium, i.e., construction because of a young male demographic, the premium may only come down $800 a year to add a $1,500 deductible. On the other hand, take a nursing home that has expensive premiums, the savings may be $1,700 to add a $1,500 deductible, making it a no-brainer to switch to an HSA plan."

The strategy of attracting employees to CDHP plans with generous HSA contributions has worked in the finance and insurance industry, as well, where 32.3 percent of plans are CDHPs (the highest of any industry) and enrollment is 32.1 percent (also the highest enrollment of any industry). HSA contributions in the finance and insurance industry are at $634 for singles and $1,074 for families, 20.7 percent and 18.7 percent above average, respectively.

The opposite trend can be seen in the mining/oil and gas extraction industry, however, where only 16.7 percent of plans offered are CDHPs, and employer HSA contributions are also among the lowest. Correspondingly, CDHP enrollment in this industry is a mere 8.5 percent.

CDHP POPULARITY

CDHPs have proven to generate cost savings, according to UBA surveys. The average annual health plan cost per employee for all plan types in 2014 was $9,504. CDHPs appear to have the lowest annual costs per employee, specifically 6.4 percent less expensive than average. In contrast, PPO plans cost 9.7 percent more than CDHPs, yet they continue to dominate the market in terms of plan distribution and employee enrollment.

"While CDHP offerings are up 8 percent from 2012, they are largely unchanged from 2013," says Les McPhearson, CEO of UBA. "From an enrollment standpoint, however, CDHPs have seen increases of more than 30 percent in the last two years (15.6 percent to 20.6 percent), despite overall decreases in employer contributions to HSAs. For large employers and the mining/oil and gas extraction industry, even modest increases in HSA contributions can be a key part of the puzzle in migrating employees to lower cost CDHP plans."

"HSA based plans are still growing in popularity," continues Sherman. "In fact, for many employers (especially those who have already offered HSA-based plans), the current movement is to offer a full replacement solution, often with two or more HSA-based plans to allow for employee choice," says Sherman.

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14th January 2015 Latest International Private Medical Health Insurance Magazine News Articles

Healthy Passenger Demand in November

Global passenger traffic results for November 2014 show a continuation of the healthy demand trend of recent months. Total revenue passenger kilometers (RPKs) rose 6.0% compared to November 2013, which was ahead of the 5.7% year-over-year growth recorded in October as well as the 10-year average growth rate of 5.6%. November capacity expanded by 5.4%, leading to a 0.5 percentage point rise in the load factor to 76.7%. Growth was driven primarily by domestic markets which experienced a 6.9% increase in demand over the previous November (an acceleration over the 5.3% year-to-date average for domestic travel).

November Global Air Freight Growth Concentrates In Asia And Middle East

November 2014 data for global air freight markets showing that demand measured in freight tonne kilometers (FTK) grew 4.2% compared to November 2013. Capacity grew by 3.3% over the previous November. Compared to October 2014, air freight demand expanded by a healthy 0.8%. The most significant growth was recorded by carriers in the Asia-Pacific and Middle East regions, at 5.9% and 12.9%, respectively.

Cigna Life Insurance New Zealand Launches New Travel Insurance Cover

Cigna’s new comprehensive travel insurance provides mature customers with peace of mind and sense of security when travelling away from home. Cigna announced today its entry into the travel insurance market, with the new Cigna 50+ Travel Insurance designed specifically with the mature traveller in mind. Cigna already provides travel insurance through partner companies, but this is their first travel insurance product under the Cigna brand.

Status Global Insurance Now Offering Travel Insurance For Extensive Pre-Existing Medical Conditions

Status Global Insurance are excited to announce the ground-breaking launch of the specialised travel insurance product, Fit-4-Travel, which offers comprehensive cover, with no upper age limit to UK citizens residing throughout the EU, who have extensive pre-existing medical conditions. Many insurance companies aren’t able to provide travel insurance for pre-existing medical conditions, or if they do you end up paying an absurdly expensive premium. This can leave travellers’ well-being, and wallets dangerously exposed if they have a flare-up of an existing medical condition when abroad. Arranged in partnership with International Travel and Healthcare Ltd Fit-4-Travel provides a reasonably priced product that will cover a very wide range of pre-existing medical conditions.

Alternate Health Care Delivery Models And Payment Reform May Stall At Current Levels

A joint pulse survey between Aon Hewitt, the global talent, retirement and health solutions business of Aon (NYSE: AON), and Catalyst for Payment Reform, an independent, non-profit employer coalition pushing for better value in U.S. health care, shows that while employers find alternative provider delivery models and payment reform attractive, most admit they do not understand them or the value they provide. As a result, they may miss a significant opportunity to lead and improve results (health and financial) for their workforce and business.

Natural Catastrophe Insurance Losses Hit Five-Year Low In 2014

Impact Forecasting has launched its Annual Global Climate and Catastrophe Report, which evaluates the impact of the natural disaster events that occurred worldwide during 2014. The report reveals that 258 separate global natural disasters occurred in 2014, compared to a ten-year average of 260 events, causing a combined total insured loss of USD39 billion – 38 percent below the ten-year average of USD63 billion, and the lowest annual insured loss total since 2009. The two costliest insured loss events of the year were both a result of severe thunderstorms, in June (Europe: USD3.0 billion) and in May (United States: USD2.9 billion). Meanwhile, global economic losses from natural catastrophes in 2014 stood at USD132 billion – 37 percent below the ten-year average of USD211 billion. The September flood event in northern India and Pakistan resulted in the largest economic loss of the year, causing an estimated USD18 billion in damage and representing the fifth consecutive year that Pakistan has registered a billion-dollar flood event.

Workers Compensation Claims Will Decrease In 2015

Aon Risk Solutions has released its second Health Care Workers Compensation Barometer report. The report explores trends in frequency, severity and overall loss rates related to workers’ compensation for approximately 1,150 heath care facilities across the country. The 2014 report projects workers compensation loss rates will decrease one percent annually. The Health Care Workers Compensation Barometer report also shows that frequency of workers compensation claims has been slowly and consistently decreasing at the same one percent level over the ten year experience period analyzed.

Merger Creates One Of The Largest Providers In Canadian Travel Insurance

Allianz Worldwide Partners and The Co-operators have announced the completion of the merger of their respective Canadian travel insurance companies. The merger of Allianz Global Assistance Canada and TIC Travel Insurance Coordinators, first announced in September, has created one of the largest travel insurance providers in the country, operating as Allianz Global Assistance. The combined entity will leverage the strengths of the two organizations to offer industry-leading products and services for Canadian travellers and visitors to Canada.

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​​​RGA Receives Preparatory License from China Insurance Regulatory Commission (CIRC) for Branch Office in Shanghai, China

Reinsurance Group of America, Incorporated (NYSE: RGA) announced today that its subsidiary, RGA Reinsurance Company, has received a preparatory license from the China Insurance Regulatory Commission (CIRC) to operate as a licensed life reinsurance branch in China. The China branch office is expected to begin full operation in one year’s time.

“China is a strategically important market to RGA, and we look forward to working with the CIRC to secure our full branch license,” said Greig Woodring, President and Chief Executive Officer, RGA. “We believe China’s robust economic growth, improved risk and capital management standards, and health and pension systems reform provide a stable, favorable environment for the growth of the life and health reinsurance industry.”

Through its existing Beijing Representative Office, RGA Reinsurance Company has maintained a presence in this rapidly developing market since 2005. “The successful completion of our branch license application will provide us the flexibility to offer a full range of services and support from within China to this very important and rapidly evolving market,” said Jason Ou, Chief Representative, RGA Reinsurance Company Beijing Representative Office.

“Through our local team of experienced professionals, RGA looks forward to building upon and strengthening our reinsurance partnerships throughout the Chinese life insurance industry.”

The RGA Reinsurance Company Beijing Representative Office was approved in December 2004, and since then, RGA has continued to build its presence in China. RGA offers the Chinese market global expertise in traditional life reinsurance, facultative underwriting solutions, pricing, product development and distribution solutions, and financial reinsurance. The 2012 Asia Insurance Industry Awards named RGA “Life Reinsurer of the Year”. RGA is recognized as a leader in the Asia reinsurance market, as judged by a recent independent study of Asia Pacific life insurers conducted by NMG Consulting.

“We are grateful to the CIRC for their consideration, and for the value they place upon RGA’s ability to support the continued growth of the insurance industry in China,” said Allan O’Bryant, Executive Vice President, Head of International Markets and Operations, RGA. “We have built a solid foundation over the past eight years in the Chinese market upon which we will serve clients. RGA is firmly committed to building lasting partnerships within the Chinese insurance industry, providing innovative product development expertise and reinsurance consulting on a range of underwriting, claims management and actuarial issues.”

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Bupa Enhances Its Individual Health Insurance Product

Bupa Enhances Its Individual Health Insurance Product

Bupa has enhanced its flexible health insurance product, Bupa By You, to meet the needs of even more people. Bupa By You is a tailored health insurance product which allows people to choose what they are covered for. A number of improvements have been made to give customers even more ways to build health insurance to meet their needs and budgets, including lower-cost cancer cover and more flexible pricing options.

Out-patient limits

Customers now have the option to select an out-patient limit to bring down the cost of their premium. They can choose to cap their out-patient cover for consultations, therapies and tests at £500, £750 or £1,000. Alternatively they can still choose to have no financial limits, so that all costs are paid in full*.

New lower-cost cancer cover

Customers also have the option to choose NHS Cancer Cover Plus instead of full cancer cover**, to reduce the cost of their premium. This means that cancer treatment is provided by the NHS unless they are unable to provide the particular drug or treatment required, in which case Bupa will step in. Customers have the peace of mind that if they needed a drug or treatment which was not available on the NHS, they would be able to get help from Bupa. Bupa gives its members access to breakthrough cancer drugs and treatments. In 2012 Bupa spent £18m on cancer drugs – including £4m for breast cancer drugs and £5m for bowel cancer drugs – which are not routinely available on the NHS. Bupa By You customers will still be able to select other options, such as optical, dental and travel insurance, to further tailor their cover. They will also have the support of the Bupa Anytime HealthLine, which gives unlimited around-the-clock access to health advice from Bupa nurses and GPs.

*No financial limits: All costs are paid in full for eligible treatment on your core health insurance, when you use a healthcare facility within your chosen Bupa network, using a Bupa recognised consultant who agrees to charge within Bupa limits (a fee assured consultant). ** Full cancer cover: Where cancer is covered as part of your core health insurance, there are no time limits and all your eligible cancer treatment costs are paid in full, when you use a healthcare facility from your chosen Bupa network and a Bupa recognised consultant who agrees to charge within Bupa limits (a fee assured consultant). *** The average cost of a take away coffee in the UK on 21/01/13 according to the money saving app, OrsaveIt, was £2.20; 1 in 4 of Bupa By You Comprehensive customers pay less than this. For example: a 25 year old male in Manchester on Comprehensive cover with a £200 excess would pay £1.95 per day. Price calculated on 05/04/13.

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Medical, Healthcare, Expatriate And Travel Insurance

A guide to leading international medical, healthcare, expatriate and travel insurance underwriters, companies, providers, operating within leisure, expatriate and corporate travel business markets, globally.

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