No News and And No Action Plan: Dallas Texas Workers Facing Higher Than Average '08 Health Insurance Costs

Jason Roberson from the The Dallas Morning News has a page one business section article today that reports what local employers and employees already know:  that the cost of group health insurance is going up for Dallas Fort Worth businesses and their employees.  Mr. Roberson's quoted sources are months old reports from Towers Perrin, Inc., and The Alliance for HealthCare Reform. 

Yes, this is the time of year that many companies have open enrollment when employees must choose their health insurance plan, but higher rates for health insurance  hardly constitutes "news."

In fact, Mr. Roberson grossly underestimates the severity of the problem for area employers, especially small to medium sized businesses and their employees.  While the average national group health insurance rate increases may be near 7%, the rates in the Dallas Fort Worth metroplex are much higher than the national averages quoted.

The reasons for the higher local rates are many.  For example, the Dallas Fort Worth area has one of the highest uninsured populations in the country, and those with insurance end up paying higher rates at least partially because hospitals must charge more to cover the cost of those without insurance.

Another reason that rates are higher for area small to mid size businesses than the national average is that group health insurance costs much more for small to mid-sized businesses than for big businesses that self-fund, or self-insure their employee's health care claims.

And one BIG reason that group health insurance costs more in Dallas and Fort Worth Texas is because we tend to be BIGGER (read fatter) and UNHEALTHIER than the national average.  Fatties have a much higher likelihood of chronic diseases and expensive health insurance claims for diseases like diabetes, heart and circulatory conditions, and stroke.  The fatter us North Texans get, the more health claims, and the more insurance costs us.  Chicken fried steak and gravy, anyone?

All told, from what we've seen this year, small to mid-sized fully insured businesses of under 200 employees are experiencing group health insurance rate increases of 11 to 15% in North Texas, not the national average 7% increase reported on by Mr. Roberson.

So what can a Dallas Fort Worth employer or employee to do now about alarmingly high rate group health insurance rate increases?  For many businesses, the amount of the rate increases are greater than a company's annual profits.

Mr. Roberson throws out a few examples about how nationally, employers are reducing coverage and increasing deductibles, adding more to what employees must pay for coverage.  He also mentions national trends toward a slightly higher adaption of consumer driven health plans such as health savings accounts and health reimbursement arrangements.

But nowhere does Mr. Roberson report on an action plan or an agenda for North Texas employers who desparately want to stop the health insurance hyperinflation that is ruining their company profits. 

With that in mind, here's action items for local Dallas Fort Worth CEOs and presidents who want to tackle this inflationary threat to their business:

  • Healthy Employees (and dependents) equal Healthy Profits, and it starts at the top.  Any CEO who is not preaching the gospel according to employee wellness to their management team and employees on a regular basis is missing out on the most actionable strategy that they can adapt to reduce health care and insurance costs, as well as reduce lost time productivity losses.  A dollar spent on a corporate wellness plan can return four dollars in reduced claims and productivity improvement.  It doesn't take a rocket scientist to prove to employees that losing weight is good, and new mid-2007 changes in HIPAA regulations even allow employers to dole out moderate "rewards" and "punishments" to thin or fat employees, within reason and within legal guidelines.  Influencing one employee to lose weight and avoid a single instance of diabetes or one less triple bypass can save a company literally millions in insurance premiums over time, and it is the right thing to do for employees and their families.  And when fit employees begin to understand that fat employees can cost them a ton of money in higher health insurance premiums, wellness becomes self-enforcing in the workplace.
  • Weigh the savings of "self-insuring" for the small stuff.  Employers with fully insured health plans can now benefit from Section 105 and HRA plans, which can reduce the total cost of health insurance, and reward employees who don't meet their deductible.  Some insurance cariers now even offer free administration of Health Reimbursement Arrangements.  This now makes it affordable for smaller firms with as few as fifteen employees to save on insurance premiums by selecting a higher deductible plan for their employees, and through the HRA, reimburse employees for a portion of their deductible expenses.  Since most employees never meet their deductible, the company and employees pay less in insurance premiums, and the few that do can get reimbursed tax free through the HRA by the company.
  • Politics: Get Local, and get Vocal.  Forget about HillaryCare in 2009 or 2010.  That won't help North Texans now.  Until elected officials and government employees are personally subjected to the same type of health insurance issues that taxpayers face,  nothing will change.  Dallas Fort Worth area government employees have unbelievably "rich" health insurance benefits, many with low or no deductibles.  Dallas Fort Worth area government employees also have unbelievably high chronic illness rate and health claims, much of which is attributed to obesity.  There's probably a connection there.  Businesses and taxpayers have the right to expect local government to have the same fiscal awareness and responsibility for health care and insurance claims that they  face, and not just pass on higher government employee health care expenses in the form of higher taxes.  Ridiculously out of touch local government employee health plans with low deductibles and obese and unhealthy government workers should not be tolerated.  Perhaps then we'll see real goverment action about doing something real about the cost of group health insurance and health care.  Business leaders should check out and get involved.
  • Make your group health broker earns their double digit pay increase.  Since group health insurance agents and agencies get paid on a commission basis, there's not a whole lot of built-in incentive for them to work hard to save their clients money.  Don't accept the status quo, and expect quarterly meetings to review initiatives that can reduce health insurance inflation and save your company money.  You won't eliminate group health insurance inflation, but with action, you can take a big bite out of it.

For more information about real, local, and actionable plans that your North Texas company can implement to reduce health insurance cost increases, contact Mike Chapman at Texas Group Benefits, 888-398-6246.