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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer's Benefits Reports: Consumer-driven health plans (CDHPs) yield cost savings that are “only modestly better” than non-CDHPs, according to an actuarial study prepared by Milliman. In a summary of the study, published in Milliman’s Benefits Perspectives, Summer/Fall 2008, issue, the actual savings found was 4.8% when compared with non-CDHP plans. Slightly more than 3% of that figure was due to utilization savings much like those that a similar high-deductible health plan would yield without the consumer tools, leaving 1.5% in additional savings, Milliman noted.
Unlike other studies released by firms that sell CDHPs, the Milliman study was actuarially adjusted for risk, age, gender, morbidity, and geography data from employers that offered both CDHPs and traditional health care plans. Milliman found that employees who chose CDHPs were younger and healthier than the non-CDHP enrollees.
Milliman also examined allowed claims in CDHPs as opposed to per-member per-month paid claims, which tend to be low in the CDHPs due to the high deductible. Understandably, the high cost sharing in CDHPs discourages utilization of health care services. Allowed claims (the total that the plan and the member pay to medical providers) were 41% lower for the CDHPs than for the traditional health care plans, but this result was not adjusted for risk factors of the CDHP enrollees, who tend to be younger and healthier, Milliman found.
Despite their intended role, CDHPs do not yet have available the necessary tools to allow members to be effective, informed purchasers of health care services. None of the employers whose plans were reviewed agreed that their employees had access to information on provider quality, and only one agreed that its employees had access to information on provider cost. These employers also understood that the promise of CDHPs to significantly improve costs, delivery, and quality of health care would not be fully realized until easy-to-use consumer research tools are available to determine quality and costs.
Another concern for plan sponsors is the potential shift of the younger, healthier employee population to CDHPs, leaving the older, sicker, and more costly population behind in the traditional plans. “Using experience reports to set employee premiums by product rather than by actuarial difference in plan design can lead to a ‘death spiral’ if not adjusted for risk,” Milliman warned.
For more information, visit http://www.milliman.com.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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