Premiums for health insurance are likely to increase in the coming months, but if you can entice your employees to share the costs of their coverage, you can offer them something valuable in exchange--and keep the damage to your own budget to a minimum.
Health insurers aren't ready to say so publicly yet, but they know that the cost-containment benefits of managed care have just about run their course.
For the Record
Los Angeles Times Saturday October 7, 2000 Home Edition Business Part C Page 3 Financial Desk 2 inches; 56 words Type of Material: Correction
Health Insurance--The Financing and Insurance column Wednesday incorrectly reported that the Pacific Business Group on Health negotiates health insurance coverage for the University of California, the California Public Employees Retirement System, Bank of America and Chevron. All four organizations belong to PBGH, but only Chevron obtains its health insurance coverage through PBGH.
For the Record
Los Angeles Times Wednesday October 11, 2000 Home Edition Business Part C Page 7 Financial Desk 2 inches; 56 words Type of Material: Correction
Health insurance--The Financing and Insurance column last Wednesday incorrectly reported that the Pacific Business Group on Health negotiates health insurance coverage for the University of California, the California Public Employees' Retirement System, Bank of America and Chevron. All four organizations belong to PBGH, but only Chevron obtains its health insurance coverage through PBGH.
Privately, they say they see double-digit increases in health insurance premiums in the offing for businesses of all sizes, mirroring the increases already showing up on workers' compensation insurance and many property-casualty risks.
The good news comes in the form of something relatively new to the insurance industry but not widely known among employers--consumer-choice health purchasing groups, or CHPGs, of which two now operate in California.
For business owners, the attraction of CHPGs is that they make employees share the costs of health insurance. For employees, the attraction is that they can tailor their coverage to suit their needs and pocketbook.
CHPGs target employers of fewer than 50 people and, by pooling risk, give small-business employers the cost-cutting clout of big business in negotiating premiums and coverages with health insurers. In essence, CHPGs enable small businesses to negotiate with health insurers as if they were big buyers.
In fact, one of California's two CHPGs, PacAdvantage,
(http://www.pacadvantage.org) is a unit of the San Francisco nonprofit Pacific Business Group on Health, which negotiates health insurance packages for such big employers as the California Public Employees Retirement System, the University of California, Bank of America and Chevron.
Like its private-sector competitor, CaliforniaChoice, launched in 1996 by the Orange insurance firm Word & Brown, PacAdvantage has its roots in 1994 legislation intended to remedy two problems:
* Many small businesses don't offer their employees health coverage at all because they can't afford it.
* Those that do offer coverage commonly get it from one carrier--a one-size-fits-all solution that doesn't meet the needs of many employees.
The 1994 legislation established the government-run Health Insurance Plan of California to test whether small-business employers could gain clout in negotiating with health insurers by pooling the risk. The state privatized the effort by turning it over to the Pacific Business Group on Health a year ago last July.
