Foraker, Alaska chamber partner to provide insurance to small businesses

Posted: Thursday, March 18, 2010

A small group health insurance program being offered to nonprofit organizations by Premera Blue Cross through the Foraker Group has now been expanded to include members of the Alaska State Chamber of Commerce, which are mostly for-profit firms.

The agreement was announced in Juneau Feb. 23 during the chamber's annual legislative "fly-in" for its members.

This won't initially lower health insurance costs, although there are likely to be reductions over the long term, state chamber President Wayne Stevens said.

The immediate benefit is that small businesses will at least be able to get insurance at an affordable cost through association with the chamber and the Foraker Group, Stevens said.

Having the chamber join the Foraker's plan will help reach a critical mass of enrollees so the program could be classified as an association by Premera, Foraker Group President Dennis McMillian said.

Achieving association status will allow the employees of the nonprofits and chamber members enrolled to be combined into a single pool under the insurance plan, which means that the high cost of a medical emergency or procedure would be spread across a wide pool of people enrolled.

Until this happens the firms and nonprofits have individual plans, so that a high-cost medical problem within the smaller group can raise the premiums for the group. Once the association forms, those costs are spread more widely.

"When we started the Foraker Group program for nonprofits in October 2008, we thought it would take about two years for us to get to the critical mass of forming an association. Having the chamber join our program will help us get there a lot faster," McMillian said.

What's unique about the Foraker-chamber initiative is that it will likely be the first association in the nation where employee wellness programs are required for employers that join the plan.

Large employers have long promoted wellness for employees, McMillian said. For example the city and borough of Juneau has had such a program for 17 years, and as a result, its employees pay some of the lowest health insurance premiums in the state, he said.

Stevens said employees of firms enrolled in the program will be able to do confidential online health risk assessments and qualify for coaching if they spot problems in the assessment. Employers in the program are required to participate in a one-day training session to learn how to set up wellness programs for their workers.

Employers who enroll will receive a reduction of premiums of $30 per employee per month if there is 100 percent employee participation in the health risk assessment.

McMillian said that wellness programs are shown to be effective in reducing health costs over time. They are typically offered by larger employers, but are rare among smaller employers because of the costs of doing them.

Premera is working to change that by making wellness plans available to its small group customers, and the Foraker-chamber association will enlarge the number of Alaska small employers promoting wellness.

McMillian said studies by the state Division of Insurance show Alaska's health care costs ranging from 50 percent to 100 percent or more above costs in Seattle.

"In addition, we're at the top of the list with a number of bad health statistics," he said, which directly affects health costs and health insurance. Wellness programs can help that.

"If we smoke less, drink less and walk more, over time we will bend the curve," of the health cost increases, he said.

Jeff Ranf, a broker with Wallace Insurance Group, which helped Foraker put together its insurance package, said the experience of employers working with wellness programs have seen significant benefits in cost reductions over time.

The health plans being offered through Foraker, and now the state chamber, include two high deductible plans that include provisions for health savings accounts, or HSAs, where employees can set aside money, tax-free, to pay the deductibles, co-pays and other out-of-pocket costs, according to Rebecca Savidis, Foraker Group's human resources director.

A third option is a traditional health insurance plan that offers a lower deductible option but no HSA.

Enrollment in the wellness programs is required in all three options. The high deductible plan is combined with the health savings account to get employees enrolled the option of lower premiums possible combined with the tax-free benefit of the HSA.

McMillian said one advantage of the high deductible plan is that people will be more aware of the total cost of what they are paying for health care and will therefore be more cautious in using health care services. Over time that will reduce use of the services, and help control the growth of costs.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.



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