Volume 2, Issue 1
Table of Contents

Cover Story:
For RBD, It Was
a Very Good Year

Feature Stories:
Lessons Learned
Starting a small business can be a daunting proposition
Web Masters
RBD's online presence is a natural progression

RBD Round-Up:
How's Business?
The results are in from our
first survey
RBD Business Survey
What's your take on the rising cost of healthcare?

DEPARTMENTS:

Economic Round-Up
• The Smart Investor
How to minimize the affect of the Alternative Minimum Tax
• Economic Viewpoint
Interpreting the Inverted
Yield Curve
• Visitor's Guide
Tour busses in Rockland?

Retail Round-Up
• Where the Jobs Are
Tips for students looking
for work

Business Round-Up
• PSI Health Plans
Offer flexibility and
cost savings
• Marketing By Design
The top 15 campaigns of the last 100 years - Part 2

Ask The Expert
• The Human Factor in
Human Resources

Invest in Your Community
• Looking For a Better Way
Tomorrow's Workplace
offers help
• Leadership Rockland
Graduates class of 2007
• Youth Forum & Awards
Rockland Youth Volunteers Honored

Odds & Ends
• Letters to the Editor
• Rockland Newsmakers

Dedicated Section:
Rockland Business Association:

The President’s Desk
Heart-felt Congratulations
to Rockland's only B2B resource

RBA/United Way Golf Outing
A beautiful day for all

RBA Happenings
• Committee and Council Info
• Calendar of Events
• New Members

There’s no reason why business leaders seeking to reduce their employee health care insurance costs shouldn’t be taking action now.

Recent changes in insurance regulations allow small businesses with fifty or more employees to use a self-funded form of health insurance to provide employee health care benefits previously applicable for larger corporations with 1,000 or more employees. The coverage provided is essentially the same as full-funded health care insurance (FFI) programs. The difference is in the way the programs are set-up and what you can or cannot do with them.

However, when the Federal Government surveyed businesses, they discovered that self-funded insurance programs were and still are significantly underutilized. The latest data indicate only 25%* to 48%* of companies with 50 to 999 employees are using these plans, while 85% of the larger corporations are. (Medical Care Research and Review, Vol. 57, No. 3, Sage Publications, September 2000, Table 1, page 348.)

In the recent past, taking advantage of this alternative approach involved accepting higher levels of risk. This has been resolved with program refinements that make Partial Self-Insurance (PSI) Health Insurance an acceptably safe alternative to traditional FFI.

Purchasing quality health care coverage is no longer a challenge for managers charged with this responsibility. It’s available now! It offers cost savings combined with high quality health benefits. When you include the fact that these plans are also exempt from many of the State regulatory mandates and taxes that increase the cost of FFI, the reasons to act now are compelling.

Full-funded health care insurance programs prevent management from responsibly managing health care premium costs due to the way these programs are set-up. You have no control over it. There’s no transparency. You manage this high cost center in the “dark”. This prevents you from operating in a normally responsible business-like manner.

PSI works differently. You’re given the necessary information you need to manage and administer health coverage. You design the plan. You contract with a reputable third party administrator for assistance in administering the plan.

The program is completely transparent. You will be able to analyze where your costs are high or low, where you’re getting good value for your dollar. This gives you managerial control.

PSI also gives you flexibility. Plans can be designed to fit your actual usage and allow you to make adjustments. Monthly claims reports can be evaluated for mid-term corrections in terms of usage.
PSI offers first class benefits along with the potential for saving significant sums of money. If claims come in less than expected, you keep the money, not the insurance carrier.

The major difference often cited between PSI and FFI is the risk factor. With PSI, you assume all or part of the risks of insurance coverage for your employees. If a self-insured company ends up with unhealthy employee statistics, or employees with catastrophic claims, it’s liable for the total cost. That’s where the term “partial” becomes critically important.

Risk is limited by purchasing additional insurances from a re-insurer for aggregate stop-loss for total claims; specific stop-loss for individuals or dependents; and, cash flow. This is what changes a self-insured insurance program into a partial-self-insured insurance program.

When PSI was first introduced to small businesses (with 50 to 999 employees), there was a rush to take advantage of its potential cost savings. In this “rush”, some plans were poorly designed, while others were improperly explained. Many of these firms failed to implement protective measures and suffered the consequences.

If you’ve heard of or experienced a negative situation, you should know that the PSI environment is very different today. The programs are mature and available protective insurances cover the “what-if” contingencies.

Management responsibility begins with a thorough, well-analyzed plan design. Hire an expert to advise you. Implement it right and you’ll discover PSI health insurance delivers on its promise of flexibility and cost savings. RBD

Gary Lefkowitz is President of Financial Benefits Inc, a full service employee benefits firm. He can be reached at (845) 267-5518 or by e-mail at gary@FinancialBenefitsInc.com.