HSA renewals

[ABC]

Here in my state of Indiana my HSA renewals on groups under 50 lives are at 15% on average.

In other states are the HSA plans getting hit like this?
I sold these plans on the plat form that a good year could bring a single digit increase. I think that sales pitch was a big mistake. I have been able to negoiate some of the rate increases down to 9.9%.

So if I take the cost of the premium + employer contribution to hsa account the employer after 3 years is not saving any money. I am unable to go out to market and reduce the premium so that leaves me with 2 choices.
1. keep the plan the same and suggest that the owner passes the rate increase to the employee.
2. change the plan design form 100% to 80%.

What are you brokers doing in other states with these HSA renewals?

 

[somarco]

I sold these plans on the plat form that a good year could bring a single digit increase. I think that sales pitch was a big mistake.

Uh, yeah.

Never promise anything, especially renewals.

My group renewals so far have run from 1% to 19%. I would never go out on a limb on renewals. When pressed, I qualify the response and give them a range.

So if I take the cost of the premium + employer contribution to hsa account the employer after 3 years is not saving any money.

How do you figure that?

If the premium for the copay plan is $2000 for the group, and the premium for the HDHP is $1200, then answer this.

At the end of the year, how much does the carrier refund when you pay them $2000 per month; $24,000 per year?

If they refund more than $800 per month ($9600 per year) then your client is better off with the copay plan.

 

[Delta76]

Using the simple example Somarco had above, the employer's outlay is exactly the same, however, he just gave the savings to his employees. That is why I've become a huge fan of HRA's, especially if the employer is picking up most of the tab.

 

[somarco]

Using the simple example Somarco had above, the employer's outlay is exactly the same, however, he just gave the savings to his employees.

Not really.

The example used was just premium and did not factor in HSA deposits.

Any time there is a premium savings you have the potential to come out ahead. What you do with that savings is a different issue.

Not withstanding, the HRA can be a viable alternative.

 

[ABC]

Uh, yeah.

Never promise anything, especially renewals.

My group renewals so far have run from 1% to 19%. I would never go out on a limb on renewals. When pressed, I qualify the response and give them a range.

How do you figure that?

If the premium for the copay plan is $2000 for the group, and the premium for the HDHP is $1200, then answer this.

At the end of the year, how much does the carrier refund when you pay them $2000 per month; $24,000 per year?

If they refund more than $800 per month ($9600 per year) then your client is better off with the copay plan.

I was sold on the single digit increase by the carriers in the first couple of years they were introduced. In those first years they did generate single digit rate increases. What is going on now is that the blocks of HSA plans are not running as well as the carriers expected. So now they are throwing out double digit incerease for very good groups with low loss ratios.

 

[somarco]

blocks of HSA plans are not running as well as the carriers expected.

Carriers have proved over and over again they have no clue how to manage a block. This is especially so for fully insured plans.

They are staffed by idiots.

 

[ABC]

Carriers have proved over and over again they have no clue how to manage a block. This is especially so for fully insured plans.

They are staffed by idiots.

I agree 100%

I hate when companies do state wide rate increases.
I can see large rate increase for bad group but to give out double digit rate increase for a good group is just stupid.
Now all the good groups leave and the carrier is just left with bad business. Then there new business rates go up and they can no longer write any good groups.
I have seen this happen with 2 different carriers in my state.

They wonder why they lose money on the state.

 

[JMO Fan]

Some states require group rate changes be approved. This often results in changes being required for all groups, not just groups with bad experience. Govt solution often requires the good subsidize the bad (& young subsidize old, men subsidize women, ...), because many see that as an appropriate government function (which has plenty of negative results, including discouraging any coverage).

So sometimes the carrier can't do anything about it except manage losses.

 

[NewHealthStrategies]

The numbers have been in for several years that "Consumer Driven Plans" have IMPROVED every category of medical spending... overwhelming proof.

HERE IS THE ISSUE.... Carriers know this, but have not applied it to trend or renewals for a variety of reasons... most of which is it will make up for lost premium revenue as more "screaming Mimi's" jump on the initial band wagon.

The other reason is that MOST HSA plans are written on a PPO platform and the PPO negotiated rates are no where near as strong as the HMO rates... thus why the big price disparity right now.

Give it time... it will even out. If you have a chance to talk to an underwriter or actuary... ask them this question.

If Consumer Driven plans are so great, why aren't isn't it showing in your renewal numbers or trends?

 

[somarco]

If carriers were smart, and they aren't, they would use tiered pricing on new & renewal business. Different trend & utilization factors for HDHP vs copay plans. They would also separate the two types of business into different blocks for tracking loss ratios.

But they don't.

That would be the intelligent thing to do.

Until then, you are not going to see true pricing on HDHP vs copay on the group or individual side.