More employees covered by self-insured health plans
The percentage of U.S. workers in private-sector self-insured health plans has been increasing. In 2011, 58.5% of workers with employer-provided health coverage were in self-insured plans, up from 40.9% in 1998, according to a November 2012 report by the not-for-profit Employee Benefit Research Institute (EBRI).
With a self-insured plan, the employer assumes most of the financial risk related to health insurance, often securing stop-loss coverage from an insurer only to cover unexpectedly large or catastrophic claims; the plan is managed by a third-party administrator, typically an insurance company.
With a fully insured plan, an insurer is paid to assume the risk, as well as manage the plan.
Historically, large employers have been far more likely to self-insure than have been small employers, the EBRI report noted, and there are significant incentives for them to do so: Large multistate employers can provide uniform health benefits across state lines if they self-insure (lowering administrative costs) and are not required to cover state-mandated health care services — as are fully insured plans.
To date, large employers (with 1,000 or more workers) have driven the upward trend in overall self-insurance. The percentage of workers in self-insured plans in firms with fewer than 50 employees has remained close to 12% in most years examined.
Impact of healthcare reform
Following the passage and implementation of the Patient Protection and Affordable Care Act (PPACA), there has been speculation that an increasing number of smaller employers would opt for self-insurance. One reason is a widespread presumption among employers that the PPACA’s coverage requirements, and the new taxes the statute imposes, will work to drive up the cost of health coverage. “Employers generally, and small employers particularly, are concerned about the rising cost of providing health coverage and may view self-insurance as a better way to control expected cost increases,” noted Paul Fronstin, director of EBRI’s health research and education program, in a media release.
Massachusetts as bellwether
Massachusetts, the only state to have enacted health reform similar to the PPACA, has seen an increase in the percentage of workers in self-insured plans among all firm-size cohorts, except among workers in firms with fewer than 50 employees. Overall, 73.8% of workers in Massachusetts were in self-insured plans in 2011, the highest rate in the nation.
Since 2006, when Massachusetts passed its health care reform law, the percentage of workers statewide in self-insured plans has increased as follows:
• In firms with 50-99 employees, from 54.4% in 2006 to 67.2% in 2011.
• In firms with 100-999 employees, from 16.6% to 29.2%.
• In firms with 1,000 or more employees, from 74.1% to 86.4%.
If Massachusetts proves to be a model for the nation, more employers will shift to self-funding as health care reform is implemented.
©2012 SHRM. All rights reserved.
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Lebhar-Friedman venture puts building products first
New York City-based Lebhar-Friedman, the publisher of HCN and homechannelnews.com, is about to launch Residential Building Products & Technology.
The new digital magazine was the subject of a recent article in Folio.
Residential Building Products & Technology, a digital tablet and desktop magazine combined with an interactive website, will be dedicated to delivering valuable information in an exciting digital package.
The new e-zine is part of the Lebhar-Friedman Residential Products Group, which also includes HCN and HardwareStoreConnect.com. The group is led by Jack Brannigan, VP and group publisher.
Alleged shoplifters used ‘double cart’ scheme at HD
Two New York men have been arrested and accused of stealing $257,000 from Home Depot stores in an elaborate shoplifting scheme involving two shopping carts containing identical items.
According to a press release from the U.S. Attorney for the District of New Jersey, Renauld Medard and Wesly Diedonne, both of Brooklyn, N.Y., defrauded the home improvement retailer by making fraudulent returns at various Home Depot stores throughout the United States. From July 2009 through November 2011, the suspects are accused of running a “double-dipping” scheme under the following scenario:
Medard and Diedonne routinely made purchases of various items from Home Depot locations in New Jersey, New York, Maryland, Connecticut and Pennsylvania. They would allegedly assemble two shopping carts containing identical items. Leaving one cart of merchandise stashed in a location in the store ("Cart 2"), Medard and Diedonne purchased the identical set of items contained in the other cart ("Cart 1"). They would typically purchase the items in Cart 1 using cash, credit cards, fraudulently obtained store credit or a combination of the three, according to prosecutors.
Medard and Diedonne would then leave the store with the items in Cart 1, as well as the receipt issued by the store for the purchase, leaving Cart 2 inside the store.
Medard and Diedonne would return to the store almost immediately with a receipt corresponding to the items in Cart 1 and retrieve Cart 2, containing items identical to those in Cart 1. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, Medard and Diedonne would return to the register with Cart 2, and purchase only the one additional small item, investigators claim. They would present the receipt for the items previously purchased from Cart 1 in the prior transaction and attempt to deceive the cashier into believing that the items in Cart 2 had already been purchased.
Medard and Diedonne would later go back to the same Home Depot store or traveled to different Home Depot store locations to return the items. In some instances, Medard and Diedonne presented a receipt in order to effectuate the return. In other instances, defendants Medard and Diedonne obtained a refund for store credit without presenting a receipt, according to law enforcement authorities.
The U.S. Attorney’s Office believes that the suspects carried out the scheme hundreds of times at various Home Depot locations in numerous states, fraudulently obtaining Home Depot store credit and refunds totaling at least $257,462.95. The estimate is based on, among other things, the purchase receipts, return receipts, video surveillance tapes and the identification information submitted in connection with non-receipted refunds.
The U.S. Secret Service aided in the investigation, and the defendants have been charged with one count of conspiracy to commit wire fraud. They were scheduled to make their initial court appearances on Dec. 19 in a Newark, N.J., federal court.