Past Issues
-October 2006Contact us:
Ed Bates
952.944.5044
Mary Bates
952.942.8355
Jereme Bates
952.944.2919
Did you know?
As of July 1st,
HealthPartners
and Medica have
added Health Sav-
ings and
Reimbursement
Accounts to their
plan design op-
tions, joining Blue
Cross and
PreferredOne in
offering consumer
driven products. Contact Bates & Associates to learn more.
Quarterly Quote
“No bird soars too high if he soars within his own wings."
- William Blake
There is More to Workers Compensation than Lowest Price
Written by Ed Bates
If you are like most, you have been caught up in the pursuit of saving money on your insurance coverages over the past several years. Worker’s Compensation is no different. In 1995 the insurance industry viewed Minnesota worker’s compensation as a business opportunity. Prices were high and a few laws had changed to help keep the insurance company’s costs lower due to fraudulent claims or excessive treatment of injuries. This perceived business opportunity lead to 5 years of tumbling prices for most.
With this welcomed time, came a subtle cost effect. Worker’s compensation premiums tumbled, but the average claim cost per employer did not. This caused loss ratios (percentage of claims to premium paid) to slowly increase. This in turn, had an affect of increasing worker’s compensation experience modifications. That, if you’re not familiar with the term, is a three year calculation designed to create a comparison of your worker’s compensation losses with that of others in your industry. If your ex- perience modification is 1.0 you are average for your industry. If it is less than 1.0, you are better. The opposite is also true. Think of it this way, after they calculate your premiums for worker’s compensation they then apply the experience modification to that amount. If you are greater than 1.0 you pay more.
Over recent years, many have had a sense that if they went with the lowest premium for worker’s compensation, that they were saving money. Realize however that as the premium went down and claims did not, the experience modification went up, thus possibly negating most or all of the savings. In fact, it may have cost you less to have taken a higher premium alternative initially. Many of the lowest priced insurance companies offer no loss control services to the insured. They may in fact not have particularly good claims payment practices or even reserve higher on occasion than what you might see with alternative companies. This all leads to increased cost to you, and for numerous years, not just for this one particular year in question. Call us to discuss further this challenging insurance coverage.
Written by Mary Bates
When you reach that golden age, or perhaps are helping a parent make these choices, it’s good to know some of the rules and time frame of Medicare options. Medicare is a federal health insurance program that covers people age 65 and older. There are two parts, A and B, and most people who have worked or whose spouse worked and paid Medicare taxes, automatically qualify for Part A. Part A covers inpatient hospital care, critical care, limited skilled nursing facility stays, hospice care and some home health care. There is no premium for Part A. Part B covers outpatient hospital services, doctor’s care, physical and occupational therapy, and home health that is not covered under Part A. There is a premium for Part B, which in 2004 is $66.60 per month.
If the 65 year old is still working and has coverage through their employer, they may waive their Medicare Part B option and continue their group insurance. The key here is to formally “waive” their Part B rights, so that the “open 6 month enrollment” is not lost when they cease working. W hen the over 65 year old does want the Medicare Part B coverage, either at their birthday or ceasing employer group coverage, and has applied and been notified by Social Security that they have Part B coverage, the person has a 6 month open enrollment period for supplemental Medicare coverage at guarantee issue. This means one is eligible for supplemental coverage through a Blue Cross, Medica, or HealthPartners’, without proving insurability (passing health history). If one applies after they have had Part B Medicare for 6 months, or did not formally waive at an earlier time, supplemental coverage could be denied due to health history. There is however, an annual open enrollment period.
Finally, regarding the federal Medicare approved Drug Discount Cards, which advertise discounts of 10-25%, and cost around $30 a year, be advised that many of the supplement plans already have access to similar drug discounts, without the added cost. Members who have not purchased an extra drug rider automatically have access to a “Medica’s Rx Savings Program" or “Blue Cross’ Rx Advantage”, and therefore would already have access to these discounts. Always feel free to call me with questions or concerns…
Written by Jereme Bates
I wanted to take a moment to share with everyone a brief excerpt from one our new marketing letters, that I feel sums up our business approach.
… Bates & Associates is a Minneapolis based insurance agency, which specializes in group health insurance and additional ancillary products. Our firm has been in the business of assisting employers with the often difficult decisions associated with corporate benefit insurance coverages, since 1988. We specialize in the needs of employers, 2-100 employees, and believe strongly that product research, along with strong market representation, are the two essential elements in keeping benefit costs under control. By continually staying proactive on your behalf we provide you confidence in knowing your benefit program is minimizing total dollars spent and maximizing employee satisfaction…
As an employer, you want your employees to be happy, but you want to maintain control of your expense as well. What some employers may not know, is that all insurance brokers receive the exact same rates from the respective health insurance carriers. This is not always true with commercial insurance coverages, and can sometimes create some confusion. Rest assured that Bates & Associates will be more than willing to go that extra mile to ensure your satisfaction. Bates & Associates believes strongly that insurance is a relationship oriented business. With that said, I would like to offer to you, on behalf of our firm, my appreciation for the business you have entrusted to us. We will continue to work proactively on your behalf and hope that our business relationship continues to grow for many years to come.