SEDA Safety Scene Online
November 2002
Employees Likely to Feel Effects of Higher Costs
Washington, DC (April 8, 2002)…Data compiled March 14-22 by the National Association of Wholesaler-Distributors (NAW) reveals a sharp increase over the past year in group health insurance premiums paid by industry employers. Information was provided by more than 500 wholesale distribution companies of all sizes and across all lines of trade, 99 percent of which offer health insurance as an employee benefit.
According to NAW, the average premium increase is 19 percent. Only wholesaler-distributors with more than 500 employees deviate to any significant extent from the industry norm. The average increase for these large employers is 16 percent.
Ninety-four percent of the companies participating in the NAW study said if the current trend continues, they plan to implement a combination of cost-cutting options including higher employee premium contributions, higher deductibles, and dropping coverages, that will, at a minimum, increase employees' exposure to escalating medical costs.
"The cost of offering health insurance as an employee benefit is exerting ever-increasing pressure on the bottom lines of wholesaler-distributors," said NAW President Dirk Van Dongen. "Employers in the industry are telling us with crystal clarity that a serious search is now underway for effective ways to alleviate that pressure."
NAW is working to provide wholesaler-distributors with affordable options in the private health insurance marketplace, and recently unveiled a new association-sponsored program with Flexible Benefit Service Corporation (FBSC) as its partner. According to George Valiga, vice president and general manager of the NAW Service Corporation (NAWSC), "FBSC provides wholesaler-distributors with a powerful new healthcare alternative to combat double-digit insurance premium increases that threaten to make current coverage unaffordable.
"The NAW/FBSC Program offers industry members the opportunity to save on premiums, while gaining greater options to choose their own doctors and hospitals. FBSC can help wholesaler-distributors gain significant savings in group health plan costs through their more than 25 years of plan design experience and special agreements with some of America's leading insurance companies," Valiga said.
By visiting http://naw.flexiblebenefit.com or calling 1-888-345-7990, wholesaler-distributors can learn more about the NAW/FBSC Program, easily evaluate the health plan design alternatives, and obtain a quote.
"From a public policy perspective, there are a few things our data make obvious. The first is that government at all levels must stop imposing health insurance mandates, which drive up costs and drive down coverage. Second, Congress and the Administration should 'deep six' legislative proposals, most notably the 'Patients' Bill of Rights,' that will increase the cost, complexity and risk of employer-sponsored health insurance benefits, and inevitably increase the number of medically uninsured Americans," said Jim Anderson, NAW's vice president-government relations.
"Finally, Congress should at long last heed President Bush's call to make health insurance more affordable and available to the employees of smaller firms by enacting association health plan (AHP) legislation (H.R. 1774; S. 858). In our employer-driven health insurance system, the uninsured problem is greatest here. The affordability problem is felt most severely here, and rising premium costs are at their steepest here. Consequently, enactment of AHP legislation would offer the prospect of real, market-based solutions to a real and growing problem," Anderson added.