Don't be Fooled by Rhetoric

Choice and Competition. The new tag line from Washington. As I was doing some research on the Texas Department of Insurance web-site I learned something very interesting. We have a lot of choice when it comes to group health insurance providers. I have been involved in the insurance industry for almost twenty years. What I have learned over that time is that most people have never heard of most insurance companies. When I would be making a presentation on a policy the prospect might say "I have never heard of this company." Well, they probably have never heard of over 95% of the insurance carriers out there. I knew there were a vast number of insurance companies doing business in Texas. The Texas Department of Insurance has 1960,THATS one-thousand nine hundred and 60 insurance companies authorized to do business in Texas. Over 600 of those are listed as life and health companies. Do we really need more choice? Listen to the supporters of government run health care and you would be led to believe that there are only a few providers available to buy insurance from. Would it really be more competition? I believe it would be unfair competition at best. Just like the Post Office is advertising to carry your packages for one price, if it fits in the box. That is one government subsidized price that the competition, UPS, FedEx etc, cannot offer. IS that fair competition Is it smart competition? The Post Office is predicting it will lose eight billion dollars this year. Can we believe that ANY further involvement in our health care situation will make it better?

Don't be fooled by rhetoric. There is a solution out there to help insure Americans without insurance. One thing is certain. It won't be done for less. It won't increase the number of providers of the quality of care. We all just need to take a step back and come up with some real solutions that aim at solving the actual problem.

Don't play games with Health Insurance!

While I agree that improvements need to be made in the way we pay for health care, I don't believe that a government option is an attractive solution. It is fashionable to talk about the "huge profits" of insurance carriers although they don't really exist. According to Rick Newman of US News and World Report "Overall, the profit margin for health insurance companies was a modest 3.4 percent over the past year, according to data provided by Morningstar. That ranks 87th out of 215 industries and slightly above the median of 2.2 percent."

One reason that makes a government run option frighteningly unattractive is the flip side of the profit coin; waste, fraud and abuse. The budgeting philosophy of the federal government, spend it or you don't get it next year, would make certain that a government health insurance option would bankrupt the country in a very short period of time. The sheer size of the bureaucracy would be staggering. The waste and inefficiency of the government run system, if it were run like all other government agencies, would make insurance company profits look like pocket change.

Let me put this delicately, anyone that believes that a government run health insurance option would make more competition must be smoking crack! (I am sure that at some point crack might be covered under a government run plan like "medicinal" marijuana) Can you think of a single other industry, association, organization or anything where allowing the entity that makes the rules, play in the game, creates fair competition? What if the NFL allowed the referees to form their own team. Would anyone want to play them if they kept switching the officials of the game from team referee's own bench? What if each team got to hire their own officials and when you came to play the Dallas Cowboys the referees were on Jerry Jones' payroll? Would that be fair competition? I think we have forgotten what free market competition is. There will be no "additional" competition" if the government becomes one of the players in the health insurance game. There are thousands of insurance carriers playing in the game now! Maybe we should keep the main point the main point, getting the uninsured insured!

There are far simpler and less costly alternatives that could be put into place immediately if this were really about getting Americans health insurance coverage. Bringing more people into the private health insurance system would reduce the premiums for everyone if everyone were paying them. Tax credits and other monetary incentives would get more people into the system without destroying it. The latest "co-op' idea from Washington already exists to some degree. Professional Employer Organizations already group employees together to mitigate the rise in health insurance premiums. PEO's offer cost savings on administration because they enjoy economies of scale when purchasing health insurance, workers compensation, compliance services and payroll. Depending on which number of "uninsured" you subscribe to, simply buying an individual policy for the "so called 15 million uninsured" citizens at $2000 annual premium would cost $30 billion per year. That is a large number in my pocketbook, but not for Uncle Sam! Is this discussion really about getting Americans health care coverage, or could it be something else? The folks in Washington only have our best interest at heart, right????

Look around, all of the innovations that have made our lives better in every way have been a result of free enterprise. No problem we have ever faced has been greater than the capacity of our free enterprise system's ability to solve. The government can help solve the problem, but government is not the THE solution.

Have a winning day!

Steve

Benefits that fit.

When it comes to providing benefits for your employees, making the right decision may be impossible, because there may not be one right decision. Individuals have different needs than a family. Financial means also weighs heavily into the picture. Choice and providers cause business owners to really have to fight to balance the needs of the employees and the the financial constraints of the business.

In my experience, group health insurance decisions are often times made based on the preferences and preconceptions of the business owner or executive. When I ask, why do you have this particular policy often the answer is "because that is what I wanted." If I ask again, why did you want that particular policy the answer is generally "because that is what we have always had."

A recent survey by the National Association of Insurance Commissioners uncovered a knowledge gap when it comes to finding and providing health insurance to employees. Many times business owners have people in the chain of command that are responsible for making decisions on benefits for the company that do not have an intimate knowledge of the inner workings of a health plan. This can be dangerous and expensive. Proper due diligence must be exercised to procure and implement appropriate benefits for you and your employees. If you do not have functional expertise on your staff, you should definitely be careful and ask questions. For the sake of your company you should ask tough questions and lots of them concerning the coverage. It is so expensive, it must meet the needs that you have and nothing more.

Finding the right plan(s) can be much less risky and gut wrenching by employing the expertise of a Professional Employer Organization. Using a co-employment strategy can assure that the people making the recommendations on plan design share in the consequences of overuse or under effectiveness. You probably did not go into business to be an employer, but rather to promote a great idea, service or product. Business schools should have a warning label like medicines. WARNING A SUCCESSFUL BUSINESS CAN HAVE SERIOUS SIDE EFFECTS INCLUDING: EMPLOYMENT OF LARGE NUMBERS OF HUMANS, EXCESSIVE AND INVOLUNTARY GOVERNMENT INTERACTION, EXTREME DIFFICULTY SWALLOWING (fees and charges associated with being and employer) and INSOMNIA. Owning a small business is no laughing matter. The sheer number of hurdles that are placed in the path of entrepreneurs on daily basis are mind boggling. Do yourself a favor, get some help!

We all have a stake in controlling the cost of health care. Make sure your employees use the plan as it was intended and we will all pay less in the long run.

To read the full article reference in this posting visit http://www.naic.org/Releases/2009_docs/small_business_iq_survey.htm

Have a winning day!

Steve

HR that could cause an emergency!

Here is a timely article I came across.

New president, new Congress: 5 new employment laws could reshape HR.

President-elect Barrack Obama will be sworn in on Jan. 20, a Tuesday. By Wednesday, the HR world could well be on its way to one of the most turbulent periods of change in the profession’s recent history.

On tap from the new Democratic president—with support from a 111th Congress firmly controlled by Democratic allies—is an array of legislative and regulatory changes that will likely rewrite the employment law rule book, affecting everything from union organizing to FMLA protections to the federal minimum wage.

HR must start preparing now

“It’s critical for HR people to be aware of what’s coming down the pike,” said Michael Fox, a shareholder in the Austin, Texas, office of the employment law firm Ogletree Deakins. “Top management and the C-Suite, too. The next four years will be one of the most interesting and challenging times any of us have ever faced.”

Speaking during an HR Specialist audio conference just two days after the election, Fox laid out the employment law agenda the Obama administration will probably pursue—and offered advice on how HR should start preparing now.

According to Fox, five initiatives—all backed by Obama during the presidential campaign—will almost certainly become law early in the president-elect’s first term.

Not only did Obama campaign on the following issues; they are also politically popular measures that House and Senate Democrats can pass without risking middle-class voter backlash. “These are all easy in concept for Congress to embrace,” Fox said.

1. Employee Free Choice Act (EFCA)

“The EFCA is organized labor’s No. 1 agenda item,” Fox said. The bill would amend the National Labor Relations Act (NLRA), fundamentally overhauling how unions gain the right to represent a workforce and bargain for worker rights.

It would require the National Labor Relations Board (NLRB) to certify a union as the exclusive collective bargaining representative of employees once the union demonstrated that a simple majority of employees had signed union authorization cards—a so-called “card check.”

That’s a significant change that would almost certainly result in certification of more unions. In the past, Fox said, unions have often had little difficulty getting employees to sign authorization cards, but have lost support when employees cast secret ballots.

The EFCA also mandates binding arbitration of initial union contracts if the union and the employer cannot reach a collective bargaining agreement within 90 days. And bargaining would have to begin within 10 days of union certification. Those first 100 days bracket an extremely tight time frame that virtually ensures that many contracts will wind up being finalized through arbitration. Initial contracts would be in force for two years.

The EFCA would also mandate significantly higher penalties for employers found to have violated the NLRA.

Fox isn’t sure the EFCA will be enacted without changes, and the card-check provision may be stripped out as Congress negotiates. Business groups are already lobbying hard to kill it.

“There has been significant push back to taking away the secret ballot. There may be compromises on that front,” Fox said. “However, there will be resistance to weakening the binding arbitration requirements, which in many ways is the most significant part of the EFCA.”

2. Expanded employee FMLA rights

A suite of bills would extend FMLA leave to more employees—and affect more employers. Among the proposals:

• Reducing from 50 to 25 the number of employees an employer must have to be covered by the FMLA
• Mandating seven days of paid sick leave for all employees
• Explicitly authorizing FMLA leave for employees affected by domestic violence
• Providing 24 hours of annual FMLA leave for parents to participate in children’s school activities

In addition, the Family Leave Insurance Act would create an employer-paid insurance program to create what amounts to paid FMLA leave.

3. Lilly Ledbetter Fair Pay Act

This legislation, a Congressional response to the U.S. Supreme Court’s landmark 2007 Ledbetter v. Goodyear Tire & Rubber decision, would liberalize statutes of limitations on when employees could file pay discrimination lawsuits.

In Ledbetter, the Supreme Court affirmed a Title VII provision requiring employees to file pay discrimination complaints within 180 days of the alleged discriminatory act (300 days in cases covered by a state or local anti-discrimination law). Lilly Ledbetter argued that each low paycheck she received over the years constituted a new discriminatory act. But the court said the discriminatory act happened decades earlier, when Goodyear first hired her at a pay rate below that of male employees. Since more than 180 days had passed since then, the court said Ledbetter could not sue her employer.

The Lilly Ledbetter Fair Pay Act, a platform centerpiece at the Democratic National Convention in August, would amend Title VII to make clear that each allegedly unfair paycheck could be considered a fresh incident of discrimination.

4. Employment Non-Discrimination Act (ENDA)

ENDA would create a federal prohibition on discrimination based on sexual orientation. Essentially, ENDA would place discrimination against gay and lesbian employees on a par with discrimination on the basis of race, ethnicity, national origin, gender and other characteristics already prohibited by Title VII and other federal laws.

An alternative version of ENDA would also prohibit discrimination based on gender identity, providing workplace protection to transgender people.

Thirteen states and the District of Columbia already have laws banning discrimination based on sexual orientation and gender identity. Seven other states prohibit sexual orientation discrimination only.

5. Arbitration Fairness Act

Look for legislation prohibiting employers from requiring employees to arbitrate employment-related disputes instead of filing lawsuits in court. Although many of the bill’s provisions are aimed at protecting consumers, it would also apply to employment contracts.

How to pay?

Fox listed several other legislative initiatives likely to find favor in the Obama White House and in the Democrat-controlled House and Senate. Among them: an increase in the federal minimum wage, the redefinition of many supervisors as employees for union-organizing purposes, higher caps on punitive damage awards in discrimination cases and greater protection for employee whistle-blowers.

Fox says the nation’s current financial crisis is unlikely to slow down passage of many of these bills, simply because they won’t directly affect the federal budget.

“Some people may think that the financial crisis so constrains Congress that they don’t pass much of this legislation. I don’t believe that,” he said. “In an ironic way, this may open the door to shifting expenses to employers that Congress itself will not be free to appropriate. It will be easier to ask employers to pay for seven days of paid sick leave, for example, than it will be for Congress to legislate greater federal spending.

“One of my concerns,” he continued, “has always been that Congress does not really understand how much it costs to comply with many employment laws—or to litigate cases that result from noncompliance.”

Business groups have begun mounting vigorous opposition to many of these measures.

Expect some of these sweeping changes to happen very quickly, Fox warned. “Recall that the FMLA was passed and signed into law within two weeks of President Clinton’s inauguration,” he said. “Very few will recognize the labor and employment law world that we will soon be facing.”

What is Health Insurance?

In my dealings with business owners and executives over the years I have noticed quite a lot of confusion or misunderstanding when it comes to health insurance. The answer to what health insurance is may be better answered by asking, why do we have health insurance? The answer is going to vary widely. For a person of considerable financial means the answer will be quite different from the person that has little. At the end of the day they though, they both would likely want to have the same result in case they have a significant illness; no major financial disaster. No one wants to be ruined by a health crisis. Health insurance should save the day, right? You get sick, the insurance pays. Benefits between policies can vary widely, but in general when it comes to group health insurance avoiding financial distress is what we expect, and that is what the plan will generally deliver.

The expectations of the public has changed over the years as it relates to what they want from their health insurance. It mirrors what we want in other purchases. We want the best and we want to pay the least for it. The days of low cost insurance are gone. It is expensive. It is however a choice. We can pay the high cost of insurance or gamble with our future on the chance that we can stay healthy and avoid the doctor. It is just a rule of the universe, you cannot get something for nothing.

I am reminded of a story I heard that goes like this. Many years ago a great king called in his most wise servants and scholars asked them to boil down all the wisdom in the universe. In two weeks they came back and presented the king with a volume of books that looked like a set of encyclopedias. "Well done" said the king, "but this is too cumbersome, reduce all the worlds wisdom to a single book." The wise men were very perplexed, but fearing for their lives they went back to the drawing board to consolidate all the worlds wisdom into a single book. Two weeks later they returned and presented the king with single book. "Well done said the king." After reading the book the king was convinced that the wisdom could be reduced to a single sentence. One sentence that would give one all the wisdom needed. He called the wise men back and told them, "reduce the wisdom of the world to a single sentence and you will have completed your duty." Scared for their lives and fearing they could not complete the task they begged the king to reconsider, but the king insisted that the task could be done. So the wise men went to work. Two weeks later they returned to the king with a single sentence on a piece of paper. Reluctantly, they handed the paper to the king. The king read the words and sat silently. After pondering it's meaning a few moments he said "well done my servants. You have reduced all the wisdom in the world into a single statement. You truly are wise."

It is hard to believe that a single sentence could contain so much wisdom, but it is as true today as it was all those years ago. I guess you're wondering what that statement was. What was presented to the king simply said, "There ain't no free lunch!" I don't know if that is all of the wisdom in the world, but there is certainly a lot in that sentence.

When we buy things we are usually very careful to make sure that what we buy will fill the need we have. If we are going hiking we need hiking shoes. We don't use a shovel to hang a picture. Can you imagine how much auto insurance would cost if it included car washes and oil changes? What if it included your inspections and registrations? What if it included coverage to repair the engine when it wears out? It would be extremely expensive! It would cost as much as, well health insurance. Imagine that. We carry the minimum insurance possible on our car. We need to apply the same logic to our health insurance. We used to refer to it as major medical. It would pay for major things. Now we ask it to pay for everything and we are surprised that the cost is escalating and it is becoming difficult to pay for.

Insurance companies all want to deliver a good quality product for the money. They could not stay in business if they didn't. That is free enterprise. If you are the owner of a small business you have a lot of good choices when it comes to purchasing a plan for your employees. There are rules in most states however that divide small group plans from large group plans. Any insurance company will analyze a census and determine the associated risk. If a company is under 50 employees then it is a small group, over 50 large group. There is no choice in which group you go into. Insurance is about spreading risk. The more people you have paying in premiums the better. The main differences you will get in price in small group is the difference in coverage. All of the carriers understand the risk equally. There aren't too many variables. "Shopping" your group to multiple carriers will get different rates, but be careful that you are getting what you think you are paying for. You do have one alternative if you in the small group plans that would put you in a large group plan and pricing model. A Professional Employer Organization will aggregate your employees with their group of employees and possibly improve your plan's benefits and produce pricing stability that you cannot achieve on your own.

When looking for your next insurance plan for your employees do yourself a favor, make sure the plan does what you want it to. I recently saw a statistic that said over 90% of Americans use less than $1,000.00 per year of medical treatment. I saw another statistic that says the average annual premium for a family is over $12,000. Is it possible that we have a breakdown between what we pay for and what we get or need? Health plans need to be carefully considered, but make sure you are not paying for benefits in the plan that you don't want or won't use. There ain't no free lunch! This I know for sure.

I invite your comments.

Have a winning day!

Steve

The definition of change

Webster's defines change in multiple ways. To make the form, content, nature, future course, etc., of (something) different from what it is or from what it would be if left alone: to change one's name; to change one's opinion; to change the course of history.

Technology has dramatically changed our lives and most of us did not have any input on when and where this change would occur. Our TVs are better, our cars are better, our computers certainly are better. Everything that has a micro-chip of some sort runs faster, jumps higher, does more for less etc. Instead of writing a check most of us whisk the money we pay for things from our bank account to the sellers bank account in the blink of an eye and never think twice about it? We change our clothes, our oil, our hair style, the channel, the filter, the Presdient, the Congress and thousands of other things day in and day out!

When we change things, we usually do it to improve something. We certainly don't intend to change for the worse. Can you imagine telling your spouse, "let's change our favorite restaurant. This one is good and I really enjoy it, but it is awfully dependable and the food is good. Let's find something not quite so dependable and maybe a little more expensive." Your spouse would look at you like you had lost your mind.

We accept change every day without a second thought if the change is made for us. If some sales person like oh say.....me calls, heaven forbid that the person on the other end of the phone would consider changing. I hear "I have all that covered thank you very much! Everything is good and I don't want to try and make it better." I really had a guy tell me that the other day. I don't have time to try and improve. REALLY he said that! After a pause on my part that seemed like an eternity, I said thank you, hung up the phone and slammed my hand in the drawer just to make sure I was not dreaming. I do have time to improve. If you stop getting better, you will stop being good.

Some of the best things I have ever bought I changed from something I loved to something I loved even more! In any aspect of your life or business the object surely should be to make things better and that after all will require change!

I invite your coments!

Have a winning day!

Change YOU can believe in.

These days I hear the words, “were are not going to make a change,” a lot! The Status Quo seems to have quite a following. When I hear these words I really want to say…OH REALLY!?? When it comes to running a business, business owners like to maintain control and the “if something ain’t broke, don’t fix it” philosophy reigns supreme. But what do they really have control of when it comes to managing their employees? People come and go, rules change, government intervenes, swine flu, traffic, the internet, email, family issues really, what do they have control of? The rent? No that changes at some point too. Hmmmm.

Providing health insurance benefits for employees is one of the areas that a business owner certainly does not have control over and government is doing it’s level best to leave even less control in the hands of the private sector, but that is a discussion for another day. Every year the health plan renews, new rates are proposed, the agent goes out for new competitive bids, negotiations ensue, agreement is reached and baam! Everything is under control again. WHAT? Is that process I just mentioned a choice that the owner would take on willingly? I think not. The definition of insanity is doing the same thing over and over and expecting a different result, yet 95% of businesses go through this process year after year usually taking two or more months to complete and expecting to come out a winner in the process. Few actually win. The rates go up, the benefits go down and the business owner continues to lose ground both financially and morally as they deliver the less than exciting news to employees who generally expect things to go up for everyone except them! According to the latest news, since 2000 the cost of insurance has increased 95% while incomes have increased 17.5% I'm not so sure this process "ain't broke!"

There are alternative ways to approach this predicament and actually get a different result! Outsource!

I invite your comments. If you are a business owner, let me know what you like most about the process I described above J I really would like to hear from you.

Have a winning day!