December 19, 2001 (PLANSPONSOR.com) - Yet another
employer with troubled stock could find itself under the
piercing scrutiny of a participant lawsuit, as law firm
Keller Rohrback says it is currently looking into potential
ERISA claims on behalf of participants and beneficiaries of
Providian's retirement and 401(k) plans.
The investigation period covers June 6, 2001 through
October 18, 2001 and focuses on concerns that Providian and
its plan administrators may have breached their fiduciary
duties under ERISA, by failing to disclose information
about the company’s operations to retirement plan
participants, according to the law firm.
The firm will investigate whether the company encouraged
participants to continue to investments in its company
stock and retirement plans, by allegedly manipulating its
financial statements for second quarter 2001.
Providian grew to become the nation’s fifth-largest
credit-card issuer largely by lending to clients with
spotty credit histories, according to the Wall Street
Journal. As a consequence, the company has been
racking up credit losses, or loan defaults, far more
rapidly than most of its competitors, reaching an
annualized 10.33% of loans outstanding in the third
quarter.
The Office of the Comptroller of the Currency and the
Federal Deposit Insurance Corp. are reportedly trying to
rein in some of that lending, in an attempt to ensure that
the firm maintains adequate capital.
During the period under investigation, certain of
Providian’s officers and directors sold almost $22 million
worth of their own company stock at artificially inflated
prices – sales that were out of line with their prior
trading history, according to the law firm.
November 7, 2002 (PLANSPONSOR.com) - Odds are you
are in the middle of annual health-care enrollment - or soon
will be. This week, we asked our readers to share - what they
were sharing - with workers. The annual healthcare
increase.
Perhaps not surprisingly given the surveys we have
been covering of late, nearly 22% of this week’s
respondents said – “you don’t want to know”, with increases
ranging from the low 20% range to, well lots more than
20%.
Those dealing with 10-15% increases were next most
prevalent, cited by roughly 20.5%, while nearly 18% are
looking at increases in the 5-10% range.
Incredibly, about 16.5% said workers will not see ANY
increase this year – but only because they have made a
conscious decision to absorb the increases.
Absorb the increases again, according to most.
Meanwhile nearly 14% are looking at 15-20% increases
– with many of those noting a fair amount of negotiation to
get down to that level.
A little more than 8% are looking at an increase of
1-5%, but a number of those apparently suffered through a
much higher increase a year ago.
As is often the case, the gems of this survey are in
your verbatim comments.
Employee reactions to the increases ranged from
thankful to angry to – well, some apparently haven’t been
able to figure out what they are going to be dealing with.
As one reader noted,
“It depends. Overall company increase was 10-15%. We
self-insured a couple HMO’s so they stayed flat; they were
a few decreases and some moderate to huge increases. Our
base plan is going from $0 to $10/mo. As a former math
major I know you can’t calculate that increase.
One of our employees wrote in and said it was a 2600%
increase (must be new math).”Or as another noted,
“G but I’m going to tell you any way. 37% for
family coverage!!!!!!!!
OE ends on Friday. I do not think that the employees
truly get it yet.”
Perhaps emphasizing the confusion, another noted,
“I’m going to select (h) for HA, HA, HA.
20% would have been great. Premiums in our Point of
Service plan increased about 25%, in our PPO plan the
increases ranged from 71% to 320%, this does not take
into consideration the reduction in benefits that
accompanied this pleasant surprise.
To add insult to injury the benefits department responded
to a question by saying that overall the premiums only
went up 14%!?
In another sign of the (tough) times, a surprising
number of plans are still trying to work their way
through the negotiations.”
In another sign of (tough) times, negotiations are
apparently still underway at a surprising number of
employers.
As one noted,
“We’re going to keep it under 10 if humanly possible.
With all our back and forth with the vendors and benefits
broker, we still don’t have the exact increase nailed
down.”
Then there was the reader who said,
“Guessing (f) – 15-20%- , and hoping for no
worse…”
But this week’s Editor’s Choice summed up the ultimate
challenge for plan sponsors everywhere:
“Creativity counts.
What will i do next year?
Put panty hose over my head And rob
7-11’s?”
Thanks to everyone who participated in our survey!
Don’t miss out on more VERBATIMS on the pages that
follow.
The question was: Odds are you are in the middle of
annual health-care enrollment - or soon will be. This
week, we'd like to know: "What kind of increase will
employees at your firm be looking at? Will it be:
(a) a decrease,
(b) flat,
(c) 1-5%,
(d) 5%-10%,
(e) 10%-15%
(f) 15%-20%, or
(g) you don't want to know?
Sadly (f) is what came in from our insurer.
(it's not as bad as last year.)
We are trying to reconfigure the insurance,
to keep the office visit co Pays at $10.00
(lots of employee activity in the doctor's office), and
Reduce the percentage increase.
One thing we are considering is increasing the emergency room
and in-hospital co pays (much less employee activity,
In-hospital) and self-insuring the increase.
Guess who gets to administer That?
Creativity counts.
What will i do next year?
Put panty hose over my head And rob
7-11's?
Think my answer to the survey will ultimately turn
out to be "g" although I'm hoping we can get it to
"f". Our initial renewal came in at 28% and we are
trying to get that down. It is a sad commentary
though when I would be considered a success if I can keep
our increase to only 20%. I am very afraid for the
future of employee benefits....
Happily, luckily, thankfully the answer is (b) flat for
next year. We've been a pretty healthy bunch this year
so our rates are not going up.
The employee portion of our monthly healthcare premium has
risen by 74.36%!!!
I'm going to select (h) for HA, HA, HA.
20% would have been great. Premiums in our Point of Service
plan increased about 25%, in our PPO plan the increases
ranged from 71% to 320%, this does not take into
consideration the reduction in benefits that accompanied this
pleasant surprise.
To add insult to injury the benefits department responded to
a question by saying that overall the premiums only went up
14%!?
It doesn't appear the employer is willing to subsidize as
much of the premium anymore, so I guess the premiums really
didn't increase that much it was that wonderful thing called
Cost Shifting.
We are a non-profit hospital (6,000 ee's) and for the last
five years our primary medical plan has been a 3-tiered plan
(like everyone in Calif. Is talking about).
In our plan, the highest level of benefit is received for
using our own providers and facilities. ($10 copay and
inpatient at 100%). The mid-tier is using the BCBS providers
and facilities ($10 PCP and $25 spec.; w/$500 copay and 20%
for inpatient services) The third tier is totally out of
network. It has a stiff deductible and co-insurance.
Because we can document that we are the lowest cost
provider in the area (eventhough we are teaching hospital) we
steer our employees' utilization by the spread in the
benefits level (1st tier vs
2nd tier) - although, they have the option of using any tier
at any time. We also give employees priority appointments in
specialty areas.
The plan also has a lot of bells and whistles such as
disease management, pre-natal management, and a $300/person
wellness benefit outside the normal mammography, obgyn
benefit limits.
Unfortunately, we as a group aren't any healthier than any
other group and as medical providers, we should know better.
Personally, I think it has just been luck.
G., You really don't want to know and neither do I..., We
received a 52% increase last year and 28% this year.
A small non-profit group with some serious health concerns
and we just keep facing bigger and bigger premiums.
At some point, we will be forced to phase out the
benefit.
(e) - 10-15%
Very anxious to see the results of the survey!
we were hit hard. (f)
I guess my answer would be both A and B, since my
company pays for our premiums and they included dental and
vision this time around, plus gave us a new life insurance
policy. What can I say? I love everything about my
company!
One plan is flat (b) and the other 4% (c).
Our answer is "d" - 10%.
We've had the happy surprise of having our medical
experience come in better than budget this year, and
therefore, are projecting total medical cost increases of
about 10 -11% next year.
We usually apply the same increase in employee
contributions as we expect the company to pay.
F.
(15-20%) category.
We had an increase of 16%.
Our increase to employee contributions is going to be
23%!
Medical and Dental premiums will be flat.
We're going to keep it under 10 if humanly possible.
With all our back and forth with the vendors and benefits
broker, we still don't have the exact increase nailed
down.
While our healthcare costs are expected to rise by 20%
next year, we are only passing on a 9% increase to our
employees.
Zero increase, as our firm pays 100% of the cost of
health insurance for employees and dependents.
We're very, very fortunate that we work for a company with
such great benefits!
Our original medical increase was 15% and I had a hard
time convincing my CEO and CFO what a great deal that was!
In the end, we reduced the benefits by increasing the
deductible and co-pays and got the final increase down to
6% of which the company picked up 100% of that increase.
Employees will be paying more when they access medical
services through increased co-pays and deductibles, but
will not be paying more through payroll deduction for
premiums for 2003.
The increase will be hard for them to determine because
we are going to a flexible benefit plan.
Our employees will be faced with a 25% increase in
monthly premiums! It's that or decrease benefit
coverage......
This is our final week of enrollment for 2003 and yes,
like most employers we have struggled with pushing cost
down to employees and what the company could absorb.
We came to the conclusion that we needed to push some of
the costs down, commence an education of employees for
usage and costs and try to turn a very expensive benefit
away from entitlement and forward looking to health
management.
Whether we will be success will be seen in the next year or
two.
The changes were to move the specialist co-pays to $15
regardless of whether you were in the self-insured HMO/EPO
or PPO.
We also decided that a drug was a drug regardless of which
plan you were in (prior all HMO/EPO received a smaller
co-payment for drugs).
We have now moved to the 3 tier with a $10/generic, $15
formulary brand name and a $20 non-formulary brand name for
each 30 day supply.
Mail order is cheaper.
It is 1 1/2 times the 30 day supply.
We have also announced to employees that as of 2004.
We will no longer provide local HMO services, one National
provider will be utilized.
Aetna our current National provider did work very hard
with us to hold costs, provide creative ideas on costs and
actually locked costs in for us for the next 3 years if we
choose to stay.
Our hope is that an educated employee will begin to see the
benefit of getting yearly physicals, purchasing generics vs
name brands and utilizing the PCP.
Projected increases for medical plans for all salaried
employees:
Self-insured PPO (19%)
Fully insured HMO's - average (7.5%)
Combined average (12.9%)
Projected increase for Prescription drugs for salaried
employees: (20%)
Projected increases for medical plans for all union
employees:
Self-insured PPO (10%)
Projected increase for Prescription drugs for union
employees: (20%)
(g) you don't want to know.
My share has increased 25%.
If I wasn't married with kids I would just take my credit
towards the premium and cancel the health insurance.
but I know with others counting on the benefits that isn't
the smart thing to do.
our answer is 'e' and we negotiated down to that.
g) you don't want to know.
With fewer than 50 employees and some pretty serious
health concerns, we've seen increases over 20% for the last
few years.
The company picks up most of the tab, but the increases
still hit our employees hard.
The healthy ones complain about the costs, but the less
healthy people don't.
I remind everyone that there's nothing more important than
their health and it's not guaranteed.
When you view health insurance as a protection from risk
instead of a prepayment for services, almost any premiums
seem justified.
f. but on the lower side
We will experience a rate increase of 12.7% for 2003,
and employee cost is going up 15.7% for single coverage.
The employees' single coverage cost will be $46.92/month
next year.
This is for a self-insured BlueCross Blue Shield of
Minnesota "Cadillac" plan.
We also are adding a new plan with a low premium, but high
cost sharing option for 2003.
Employee cost for that plan will be $7.29/month with a
maximum out-of-pocket of $1,200.
We have had our employee meetings, which were well
attended.
Now we sit back & wait for the enrollment forms to come
in, to see if our new option is well received.
We anticipate about 10%-15% of our employees will migrate
to the new plan.
The struggle to balance my roles as an "employee
advocate" and "university steward" gets more difficult each
year.
Where, oh where, is that magic answer?
We are looking at a 5% increase in the employee
contribution to our health care premiums.
Actually, we just had really good experience this
year, along with some rate guarantees from the
carrier. Last year, we mugged employees with a 72%
increase- that sounds really bad- but actually the
company was paying 100% of the cost of the dental
premiums (who has ever heard of that?!- I just joined the
company in November of last year when the 100% coverage
of the premiums for the dental plan had been in place for
a while), and we dropped that to 50% for 2002. We
also raised the medical premiums by 20-22% for plan year
2002. The cost sharing was way out of line for the
company, so I am happy to say that we are back on track,
and the minimal increase this year proves it. I am
anxious to know the results from other companies who
respond to the survey, as I will use it as evidence
for employees who complain about the 5% increase
🙂
We don't have the official rates yet but the word
is 12 - 15% increase in premiums. We are expecting
the latter.
Overall our rates increased by 22%.
However, we offer an HMO, POS and PPO - the POS took the
smallest hit.
As a cost saving measure, co-payments for prescriptions
were increased from 20% of cost to 25% of cost with a
minimum $8 co-pay.
Based on the blip that appeared today, I am very interested
in seeing how that affects our participant's behavior.
b (flat).
It amazes me that our company continues to pick up the full
cost of medical coverage for employees and their families
(although spouses are eligible only if they don't have
coverage elsewhere).
After shopping our health coverage [once again] we were
able to move our 75 lives to a new carrier and only absorb
a 27% increase as compared to the 41.9% increase proposed
by our then current carrier.
This is the 3rd renewal in excess of 25% for our medical
practice.
Healthcare and employee benefits are very important to
the owners of this firm.
We have never had an employee contribution, and it will
continue to be that way next year, so the answer is (b)
flat at zero contribution.
Our employees are looking at a 5-10% increase for
medical and dental contributions. Lower than last year.
Rather than increase the amount employees share in
premiums, we opted to change the cost sharing of certain
services.
For example, we increased deductibles and out of pocket
limits, increased brand and mail order prescription copays,
etc.
We did this because the bulk of a plan's cost comes from a
small percentage of participants who are chronically or
terminally ill.
We felt it was unfair for everyone suffer in increased
premiums to cover those who drive the cost, so we are
instead impacting those who drive the cost by increased
cost sharing when services are rendered.
We also eliminated all HMOs except where contractually
required, or where projected claims on a self-insured PPO
basis would exceed actual premium costs for the HMO.
This resulted in full elimination of 4 HMOs, partial
elimination of 2 HMOs, and complete renewal for 1 HMO.
Adding these employees back to the PPO, plus folding in a
subsidiary's employees into our program will result in more
PPO participants over which the risk is spread, and in
theory will help control costs.
All of these changes will mean a much smaller increase
for overall medical insurance for our company than most
(approx. 5-10% increase vs. 15-25% or more had we continued
the HMOs).
Try $327.00, 26 times a year for family coverage.
I think it went up about 45%.
Single coverage is $109 per pay (26 pays) and by the way
these rates are for 90% coverage.
EEEK!
I'm glad I don't have children!
We do have some less expensive coverage levels 80%, 70%
etc.
Our answer is G) You really don't want to know.
Our insurance increase is 28.2% and we are increasing EE
contributions by the same percentage.
Interestingly, we didn't get any negative response.
I believe it is because the media has been screaming so
much about the high cost of healthcare and the increases
that others are facing, so our employees figured they were
lucky it wasn't higher.
The only comments we received were from people who had
needed to really use the insurance (which bumped up our
increase since we are experience rated) who said they were
grateful to have the insurance.
I hate to use wimp words with it but I have to put us in
the (g) don't know category.
This year was the first year we had employee contributions
and it wasn't received well because deferring some of the
costs to employees was not matched with increased benefits
and it wasn't necessary for company survival.
The increase was viewed as a company gouge to employee
paychecks.
The roll out of the new employee contribution concept was
also matched with a very low annual pay increase so some
actually saw a lower check after pay raise.
Currently the company is rolling out a new benefit of
medical savings plans and section 125 for employee
contributions.
It hasn't been spoken yet but I do expect to hear about an
increase buy the end of summer or some time post July 4.
Hopefully there will be a better more complete presentation
of the overall vision rather than a piece meal roll out.
My observations have always shown every time someone
assumes the masses are fools and not sophisticated enough
to understand the "vision" the brilliant person who made
that decision is closer to the fool status.
a) about 5% plus a slight bump in benefit---miracles do
happen!
We are anticipating a 15% increase (which is better than
the initial proposal for 28% increase that we started
with).
Company pays 85% of premium costs so employer and employee
increase will be 15%.
Our increase was last year - none this year
- but we are still hearing about last year's increase.
The sad part is they still aren't paying that much -
$20/week for single and $35/week for family.
That includes medical, dental, prescriptions, vision and
hospitalization - although there is no choice in upgrade
your level coverage.
I would like to see that as your next survey question to
see how we compare to other companies.
Unlike our health insurance - our companies liability
insurance increased by 300% - we are a trucking company and
as a result of 9/11 insuring a trucking company is very
very expensive now.
We are currently in our open enrollment period, and our
rates have stayed flat.
However, that good news is only skin deep.
In order to keep rates steady, we now have increased
deductibles, increased out of pocket maximums, increased
co-payments, and increased co-insurance.
Considering our family rate is over $500.00 per month,
there is no good news here.
We're looking at (e) 10-15%...........and we've had to
change our plan design somewhat to keep it that low! The
insurance industry PR has prepared us well...........we're
actually THANKFUL it's not any higher!!!
As a company we decided to absorb the increase of the
health insurance this year and not pass it on to the
employees.
We are still early in the process, but we do anticipate
a 5-10% increase.
A few pending large claims could change that in a
hurry.
(d) about 9% overall. The actual increases in the
various products we offer ranged from 5% to 19%, but the
Firm chose to increase flexible benefit credits to offset
the worst of this and subsidize certain plans to keep the
increases more even. We didn't want anyone having to bear
the burden of a 19% increase - which, incidentally, was
originally proposed at 21%. We are fortunate in that unlike
many employers, we are having a good year and were able to
absorb some in the increase impact without hurting the
Firm's results.
We haven't decided yet.
Our employee/employer split has crept up as we have limited
employee contribution increases, and some of the decision
makers are concerned.
Some want to hold the increase to single digits, since we
have gone three straight years with double digit increases
to participants. But the impact on the shift to employer
cost and the split beyond what our original target was,
causes others concern.
The delays will mean a lot of last minute work for us in
trying to get whatever is decided out in time for our open
enrollment...oh well, that's what they pay me the "big
bucks" for.