UBP blog


New report from Attorney General sheds light on main health care cost driver in Massachusetts

Just last Friday, Massachusetts Attorney General Martha Coakley released a report pinpointing the main driver of the Commonwealth’s rapidly spiraling health care costs—the market clout of highest paid providers. Simply stated, Massachusetts insurance companies are paying certain doctors and hospitals significantly more than others for the same patient care.

Coakley’s year-long investigation leading up to this report revealed that a small group of roughly 10 hospitals statewide commanded anywhere from 10 to 100 percent higher payments than their competitors for similar work.

The study also found no evidence that this higher pay was due to better quality of patient care or treatment of more complex cases. In fact, the study revealed that:

  • Eight in 10 of the best paid hospitals in one insurer’s network were community hospitals. These hospitals tend to have less complex cases than teaching hospitals and also do not have the added cost of training future doctors.
  • One major teaching hospital that treats some of the Commonwealth’s sickest patients is paid significantly less than dozens of other hospitals that treat healthier patients.

Coakley’s team did discover that the hospitals commanding higher payments were able to do so because of market leverage from factors such as brand-name recognition and geographic isolation.

What the investigation has done:

At the end of the day, Coakley’s investigation had one major accomplishment. It shed light on the true cause of Massachusetts’ health care cost increases.  Over the past several years, it was revealed that provider rate increases, not higher patient utilization rates, were the main contributors to higher health care costs.

The Attorney General’s office will release the above as well as other related findings in a series of reports over the next several weeks.  From March 16 through the 31st, hearings will be held on the issue and state officials will ask hospitals, physicians, insurers, employers and consumer groups to testify on factors contributing to health care cost increases and what could be done to make health care affordable.

As the reports are released and hearings go under way, we’ll make certain to keep you up-to-date on all findings and developments you’ll need to know.


Could the encryption law go nationwide?

As many employers know, Massachusetts Regulation 201 CMR 17.00—enforceable as of March 1, 2010 requires all businesses that “own, license, store or maintain” personal information on Massachusetts residents to:

  1. Digitally encrypt all records containing personal information
  2. Create and implement a Written Information Security Plan (WISP) outlining administrative, technical and physical safeguards for personal information protection
  3. Update all firewalls and system security measures on all computers that store and process personal information

Although Massachusetts’ identity theft law is the strictest in our nation to date, there could soon be a Federal law not too unlike 201 CMR 17.00—although the details of this law haven’t quite been ironed out yet.

The Personal Data Privacy and Security Act of 2009:

Senator Patrick Leahy, a Vermont Democrat, is sponsoring a bill called the Personal Data Privacy and Security Act of 2009.

The bill contains the following provisions:

  • New Data Protection Standards: Private and government entities that keep personal data would be required to establish effective programs for ensuring that it’s kept confidential. These requirements include risk assessment and vulnerability testing as well as measures for controlling access to sensitive information, detecting and logging unauthorized personal information access, and protecting personal data both in transit and at rest.
  • New Federal Breach-Notification Standard: If a breach were to happen, companies would not only need to notify all individuals whose data was compromised, but in some cases, credit reporting agencies and the United States Secret Service as well.
  • An Office of Federal Identity Protection would be established as part of the Federal Trade Commission (FTC) to monitor data breaches and enforce identity theft law.
  • Breach notification exemptions: The law would provide private and government entities that have taken adequate measures to protect sensitive data (i.e. encryption) some exemptions from data breach notification requirements. Also, companies would not be required to immediately make a data breach notification if it gets in the way of a criminal investigation. However, both of these exemptions will need to be vetted by the US Secret Service.
  • Criminal penalties for executives that willfully conceal a data breach: Executives of companies that experience a data breach and willfully avoid notifying affected parties would be subject to criminal penalties under this new law.

Federal ID theft law will likely pre-empt state laws:

One major point to note about this bill is that if passed, it would pre-empt (i.e. nullify) state identity theft and data breach notification laws. This means that the rules of data security could change quite a lot for Massachusetts employers, although it hasn’t been established quite how much they’d change.

The Personal Data Privacy and Security Act of 2009 was approved November 2009 by the Senate Judiciary Committee and is currently under consideration by the full Senate.

We will keep very close tabs on Congress’ progress with this law and keep you posted on any major changes that occur.


6 Need-to-know Items for Preventing Holiday Shopping ID Theft

Filed under: Uncategorized — ubpblogger @ 9:30 am

Take our recession economy, combine it with our population becoming more and more tech-savvy by the day add yet another holiday shopping season and what do you get? You guessed it, a perfect storm for identity theft.

Identity theft costs businesses over $221 billion a year and claimed nearly 10 million victims in 2008. On top of this, when an individual becomes a victim of identity theft they’re not the only affected by the damages—their employer is too.

Employers whose workers become victims of identity theft are vulnerable to huge productivity losses.

Studies show it takes 330 hours on average to clear up all the damages after an identity is stolen—a figure that’s very hard to stomach in this day and age where we’re all doing more with less.

For employers, preventing employee identity theft starts with awareness:

That’s because 80 percent of identity theft is not related to breaches within credit card and/or bank accounts, but improper use of personal information.

To make sure your employees keep their personal data safe and secure, especially throughout the holiday shopping season, share with them the following tips:

When shopping online:

  1. Only use a secure website (you’ll know if the web address says “https” and not “http”).
  2. Use a credit card, not a debit card. Debit cards don’t have the same protections as credit cards and can be used immediately by a their to take funds from accounts.
  3. Research the web site and read all fine print before making an order. A legitimate company should have at least one phone number and physical business address posted on their website.

When shopping in physical stores:

  1. Leave your social security cards at home
  2. Keep an eye on your credit card at all times—Don’t walk away from the cashier holding your card to grab one last item. Also, don’t let the store clerk or another accomplice distract you from your transaction. In the time it takes you to look away and focus on something else, they could swipe your card through a second terminal and use the information for counterfeit purposes.
  3. Take the time to “shoulder-surf”—Take a few extra moments to protect your driver’s licenses and information on checks from wandering eyes. You never really know who’s standing behind you in line.


New genetic non-discrimination law GINA took effect December 7, 2009

Title II, the employment-related provision of the Genetic Information Non-Discrimination Act of 2008 (GINA) took effect yesterday, December 7, 2009.

This provision prohibits employers from:

  • Using genetic information to make decisions in “hiring, promotion, discharge, pay, fringe benefits, job training, classification, referral, and other aspects of employment” for all employees and/or job applicants
  • Requesting or requiring employees and/or job applicants to undergo genetic testing

 According to the EEOC, genetic information includes the following:

  • Information about an individual’s genetic tests
  • Genetic tests of an individual’s family member
  • Family medical history (Do any of your insurers ask if you are aware of employees whose family history includes certain diseases?)

Genetic information does not include:

  • Information about the age and gender of an individual and his or her family members
  • Information that an individual currently has a disease or disorder
  • Tests for alcohol or drug use

In addition to prohibiting genetic testing requirements, GINA also comes with confidentiality requirements for any genetic information that an employer possesses.

To comply with GINA, employers must do the following two things:

  1. Post a notice with GINA information: The EEOC has released a poster to help employers comply with the new GINA requirements.
  2. Update their nondiscrimination policies to include GINA’s employer provisions.



“Tis the season for giving”, just be careful who you give to and how

With the holidays just around the corner, just about everyone is in a giving mood. Now more than ever we find ourselves dropping our extra change in the Salvation Army bucket outside the grocery store or giving that extra dollar to St. Jude’s whenever we buy something at CVS. Unfortunately, identity thieves are out there taking advantage of all this goodwill.

Every year, natural disasters such as floods, hurricanes and wildfires cause many people to lose their property, homes, loved ones or even lives. Thankfully, there are many compassionate people who donate a great deal of time and money to charities that help these victims. Several identity thieves are taking full advantage of this eagerness to help and are using it as an opportunity to capture personal information of unsuspecting individuals.

These scam artists pose as legitimate charitable organizations and send emails out with links to very legitimate looking websites. When individuals click on the sites, they’re asked to submit personal data such as credit card and social security numbers. On top of this, many of these emails contain attachments that when downloaded, install spyware and viruses that are designed to collect sensitive data from individuals’ computers.

To keep the holiday season merry and not fall victim to identity thieves’ charity scams, you and your employees both should take the following precautions:

  • Only make charitable donations to a known organization using a published phone number, address or website.  Also, always make donations directly to the organization, never through a third-party.
  • When you donate to a charity online, always go directly to the charity’s website by typing the URL in your browser or searching for the charity’s name on your search engine.
  • Use various Internet search tools such as Google and Yahoo to verify the legitimacy of the charitable organization before donating to them online.


“What’s fair is fair” may not always be the case

Two years after Massachusetts’ landmark health insurance law became effective in 2006, the state’s 4 Division of Unemployment Assistance auditors began knocking on business’ doors.

Their targets were employers who provided incomplete or inconsistent information to the state in earlier reports on their offering of and contribution to employees’ insurance.

As most of us, if not all of us know, the Commonwealth of Massachusetts requires companies with 11-50 full-time employees to either:

  • Have at least 25% of full-time employees enrolled in the employer’s group health plan

-or –

  • Offer to pay at least 33% of health plan premium costs for full-time employees working 90 days or more. 

Companies with 51 or more full-time employees are required to meet both of the above requirements or have at least 75% of their full-time employees enrolled in their group health plan.

As of late, the Commonwealth has audited 426 companies and found 172 (or 40%) had violated the above requirements and thus owed an additional $5 million to their workers’ health insurance premiums.

But is it really their fault?

The easy answer to this question is “yes”, however, the issue we are dealing with here is a complicated one. Here are a couple of reasons why.

Laws are confusing for employers:

Fair Share Contribution rules are so confusing that employers are having a very difficult time complying with them. 38 of the 172 companies who failed the audit have appealed.

On top of keeping their businesses afloat in a downturn economy, employers need to stay on top of very dynamic Federal and State laws and very often find themselves in way over their heads.

Some industries (and companies) have a harder time complying than others:

Companies in the staffing, restaurant and retail industries are among those struggling the most to comply with this law. Here’s an example how for some businesses it can be difficult, if not nearly impossible, to comply with these rules.

Let’s say you’re the owner of a local restaurant chain with 3 locations in Massachusetts and a total of 55 full-time employees as defined by the Commonwealth. Of these 55 employees, 28 are students and young adults still covered under their parents’ plans and 13 are ages 65+ and covered by Medicare. Of the 14 remaining employees, more than half are married to spouses that have employer-sponsored insurance.

What this all means is that employers such as this restaurant owner could offer to pay anywhere from 33 to 100 percent of employees’ premiums but if just one of the 14 employees not covered under their parents’ plans or Medicare waives coverage, they will not be in compliance with just a bit shy of 24% plan participation.

Consumer advocates are encouraging the state to make exceptions for employers that cannot entice 25% of their workforce to enroll in their plan but the state has yet to follow their advice. What are your thoughts on this?

Should employers be “penalized” for hiring workers that are covered elsewhere?


Quality Improvement and Market Reform top Employers’ health care wish list

In a recent survey done by HR consultancy firm Mercer, employers selected quality improvement and market reform as their top priorities for our nation’s health care overhaul.

First on the list of priorities was quality improvement. It was listed by 60 percent of respondents as a top priority and includes among other things:

  • Building more credible databases for evaluating provider performance and paying providers for outcomes
  • Adopting health information technology
  • Improving coordination of care for people with complex illnesses
  • Increasing primary care resources, especially in underserved locations

Linda Havlin, a Mercer worldwide partner stated that quality improvement is the number one option employers have for controlling rising health care costs. She suggested that the government can support this cost-control need “by aligning government-sponsored programs with private sector initiatives”.

The second item on employers’ wish list was the enactment of insurance market reforms. Fifty percent of employers cited market reforms such as elimination or pre-existing conditions exclusions and lifetime benefit caps as a high priority.

Two items that didn’t make the “wish list”

Within the healthcare reform proposals, two of the items employers oppose the most are:

  • Limits to the favorable tax-treatments of employer-sponsored health benefits (i.e. the proposed taxes on “Cadillac plans”)
  • Mandates for employers to offer coverage

Mercer’s survey results showed that 59 and 52% of employers respectively do not want these two items included in the final reform.

Massachusetts Senator John Kerry, who recently proposed a “play or pay” mandate for employers to offer health insurance coverage, recently stated his belief that more employers would terminate their offering of health care coverage if it wasn’t mandatory.

 As Massachusetts employers, has the statewide mandate for employers (with 11+ full-time equivalent employees) to offer (and pay at least 33% of) coverage or make a Fair Share Contribution to employees’ health insurance costs, affected your decision to offer insurance?

Also, how do you think lawmakers should define the so-called “Cadillac health plans”?

Should the upper limit for favorable tax treatment be the same in places with the highest costs of living as they are in places with the lowest or should there be no difference?


Are your employees financially ready for retirement?

Filed under: Uncategorized — ubpblogger @ 9:02 am
Tags: ,

And are they equipped with the financial planning tools and know-how that will help them out along the way?


According to the recent Study of Consumer Finances (SCF), 30% of U.S. households have no retirement wealth whatsoever. On top of all this, most of the people in these households are adults over age 50 who believe that they’re financially prepared for retirement.


From these results it’s safe to assume the following:


  •  Many  employees ages 50+ are ill-prepared and under-educated on financial preparedness for retirement


  • They lack the skills to plan for their future fiscal well-being 


What can employers do?


A possible  solution for employers to consider is providing  employees with the noncash benefit of financial planning.

Here are three possible options to offer to your employees to help them plan for and achieve a healthy retirement:


–          Bring in a third-party professional to educate and assist your employees with their personal financial needs

–          Hold a mandatory orientation meeting for new employees to ensure they understanding their own financial needs, and are aware of the retirement plan your company provides

–          Provide tangible information for your employees to learn about the benefits of proactive financial planning for their futures (i.e. pamphlets, memos, etc.)

When it comes to your prescription drugs, don’t let the brand-name labels fool you

That’s  because if you do, you’ll end up paying a lot more money than you have to every time you go to the pharmacy.


Did you know that one of out three employees doesn’t realize that generic drugs are equally as effective as their brand-name counterparts?


Recent results from a PBM Prescription Solutions and UnitedHealth Group survey  show that many people are  misled to believe that brand-name prescription  drugs have different and superior active ingredients than generics. 


However, the only true differences between a brand-name and generic prescription drug is  the label;and the higher price that goes along with it.. 


One thing employers can do to help their employee reap cost-savings in a down economy is to educate them on the benefits of using generic prescription drugs. Their generic drugs will have the same effectiveness as brand-name drugs, just a lower co-pay.


Stay tuned for more tips on cost-savings in a down economy as our team will keep them coming over the next few weeks.


Can employers demand access to tax and bank records to determine benefits eligibility?

This question was raised recently in The Boston Globe by an employee of a large private company. Employees there were told not too long ago that they’d have to submit tax returns and bank statements to verify their dependents’ benefits eligibility.

The employee who raised the question expressed concerns that it wasn’t legal and/or appropriate for employers to demand access to these private documents. He or she also cited the fact that employees can choose not to comply with this employer request, but was concerned about the possibility of losing health coverage as a result.

Reason for concern:

As web technology becomes more advanced both proving and protecting identities will get more challenging. This will be an issue for both employees and employers.

Verifying benefits eligibility involves several different parties (employers, employees, insurers and various government entities at times) all with different needs for information. Employers will need to find a way to prove their employees’ (and their employees’ dependents) benefits eligibility while protecting their identities at the same time.

The issue discussed in The Globe calls into question a couple of things:

1. Can (and should) an employer demand access to tax and bank documents to verify benefits eligibility?

According to an employment lawyer cited by The Boston Globe, employers may demand access to these documents, but can only get access with an employees’ consent, the attorney also suggested that before giving their employers consent to access private information, employees should first consider the purpose behind the information request. What is the employer trying to verify?

Are there other documents employees can present that will verify this?

For the particular case in question, employees can offer to present documents such as birth certificates and marriage licenses to verify benefits eligibility of their spouses and dependents.

They could also present the required documents but request that their employers not make and retain a copy of it. Or, they could give employers copies of the documents with personal information (i.e. bank account numbers) blacked out.

2. Can employers deny health insurance coverage to employees who don’t comply with this demand?

The answer to this question is technically “yes.” Employers are not required by federal law to offer health insurance to their employees. However, in Massachusetts, if they don’t offer employees coverage (or similarly if they take away an offer of coverage), they’ll need to pay a penalty.

Another tactic for discouraging employees to take health insurance that covers spouses and dependents is to subsidize as little as legally required of the premium. Employers who approach “family” health insurance in this way want their employees’ family members to get health insurance elsewhere, perhaps through a spouse or state programs. That is a different agenda than employers who simply want to verify spouses’ and dependents’ eligibility so they are not unnecessarily paying to insure people who don’t qualify for their plan.

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