Tufts Health Plan to Offer a Defined Contribution Model to Large Employers

GoLocalWorchester.com is reporting today that Tufts Health Plan is the first insurance carrier in Rhode Island and Massachusetts to offer a defined contribution model to large employers – those with 51 or more employees. Called RightChoice, Tufts’ defined contribution model allows an employer to fix a certain dollar amount as its contribution, and employees pay or save the difference, depending on the plan they select.

According to the report,Tufts presents pre-bundled plan sets for employers with 51 to 99 employees – six in Rhode Island and eight in Massachusetts in its online marketplace. For groups with 100 or more employees, Tufts will customize bundles, giving even more plan flexibility. See the full story at GoLocalWorchester.com.

 

Analyst Sees Private Exchanges Helping Group Insurance Sales

Walgreen Co., the nation’s largest drugstore chain, said last week that it will move its coverage to a private insurance exchange run by the benefits consultant Aon Hewitt.

This approach, called defined contribution health insurance, involves giving employees a set amount of money and then letting them pick their own coverage through a private marketplace or exchange that helps them sort out the choices.

Citi analyst Carl McDonald sees the Walgreen announcement as a positive because of the type of business it could deliver to health insurers. He noted that big employers like Walgreen typically pay their own claims and hire insurers only to administer the policies. That type of coverage produces smaller revenue totals for insurers, as opposed to so-called fully insured plans where the managed care company pays the claims as well.

See the full story at LIfeHealthPro.com

 

Walgreen to Give Workers Payments to Purchase Health Plans

Walgreen Co.and another 17 large employers are turning to a new concept of giving them money to buy health benefits via private online marketplaces known as exchanges.

Aon Hewitt,  the large employee benefits consultancy, said Walgreens will be the largest employer thus far to join its Aon Hewitt Corporate Health Exchange, bringing more than 160,000 eligible employees to such coverage in 2014. Aon Hewitt said it could not yet disclose the others coming into the exchange in 2014.

See the full story at Forbes.com

Time Warner joins IBM in Moving Retirees to Private Health Insurance Exchanges to Cut Costs

Media and entertainment company Time Warner Inc. plans to move its retired workers off its health plan and provide money to them to purchase coverage on private exchanges at the beginning of next year.

The move, which was earlier reported by Reuters, is similar to a change confirmed by IBM on Saturday.

Both companies plan to allocate money to special accounts for retirees, which they can use in purchasing coverage.

See the full story at WashingtonPost.com

 

Why Payers Like Defined Contribution Programs

Low administrative costs and the capability to compete with public health insurance exchanges are driving factors. So is the promise of access to big data, which can give payers a strategic edge.

For employers, defined contribution plans take the guesswork out of budgeting for healthcare costs from year-to-year. An employer puts a cap on how much to spend on employee healthcare benefits. Each employee receives a set amount of money to spend on the exchange to purchase the health benefits that meet his or her needs.

See the full story at HealthLeadersMedia.com

 

Highmark Expands Closed Network Plans to West Virginia, Delaware

Highmark Health Services on Friday announced it is expanding its closed network product into West Virginia and Delaware in January. Private exchanges, also called defined contribution health insurance plans, allow employers to offer employees a variety of Highmark products within a fixed budget.

Highmark’s private exchange, called MyBenefits, started in 2011. As of July, nearly 80 businesses were using the product, with nearly 6,000 members enrolled, according to the company.

Read the full story at bizjournals.com

 

Highmark Health Services and Array Health form Strategic Partnership to Expand Defined Contribution Platform

PITTSBURGH, Aug. 29, 2013 /PRNewswire/ — Highmark Health Services announced today that it is making its MyBenefits defined contribution health insurance platform available to more businesses in more locations by forming a long-term strategic partnership with Seattle-based Array Health.

“Two years ago, we selected Array Health as our private exchange vendor because of its extensive experience in establishing and maintaining this kind of platform,” said Steven Nelson, senior vice president of strategy, product and marketing at Highmark Health Services. “It has been a wonderful relationship with results that exceeded our expectations. More than 14 percent of the groups choosing our defined contribution approach are new clients to Highmark Health Services, and we nearly doubled the number of supplemental products sold to existing customers. We know that to make this platform even better in the years ahead, the time is right for Highmark Health Services to enter into a more lasting partnership with Array Health.”

Read the full story at PRNewswire.com

Southland Benefit Solutions, LLC, Announces Formation of a New Company to Focus on Defined Contribution Employee Benefits Training for Agents and Brokers

Southland Benefit Solutions, LLC, (Southland) today announced that it has formed, Health Partners America, LLC, (HPA) a health insurance training and services company that offers its clients long-term solutions in a rapidly changing healthcare benefits environment. Based in Tuscaloosa, with a sales office in Birmingham, AL, HPA will operate as a subsidiary of Southland. Formerly known as Innovative Benefit Consulting, HPA has more than forty years experience in the insurance and financial services industry.

In announcing the addition of HPA to the Southland family of companies, Southland President, James Leitner said that acquiring HPA was part of a strategy to better position Southland to engage in trends currently emerging in the employee benefits industry. He noted that the purchase of HPA and its national distribution channels for delivering training programs and business services to health insurance brokers and agents will better prepare Southland to provide products and services in the evolving healthcare benefits marketplace.

Leitner pointed out that one emerging trend is something called a defined contribution health plan. He said that a defined contribution health plan is an alternative to traditional group health plans and that they are rapidly growing in popularity. Rather than paying a portion, or all of a premium, under a defined contribution health plan, an employer sets aside a fixed dollar amount each month for employees to use to pay for individual health insurance or other medical costs such as doctor visits and prescription drugs. This allows even the smallest of businesses to offer their employees health-related benefits, but it requires that insurance brokers and agents follow defined rules and guidelines to maximize the benefits to the employer and the employees.

“Health Partners America has developed one of the best defined contribution health plan training systems for agents and brokers that we have seen and they are quickly achieving a national reputation for their defined contribution health plan expertise,” said Leitner.

Josh Hilgers, president of HPA said, “The HPA defined contribution health plan training program is designed to give brokers and agents the knowledge and tools they need to help companies of all sizes maximize their health, life and other insurance benefits investment without sacrificing quality.”

About Southland Benefit Solutions:
Southland Benefit Solutions, LLC, (SBS) an employee benefits administrator began offering benefit solutions in 1983. It administers self-insured benefit programs for the Alabama Public Education Employees’ Health Insurance Plan and processes tens of thousands of claims per month with an accuracy rate of better than 99%.