Health Care Benefits for Samaritan Centers

III.E.3

HEALTH CARE BENEFITS FOR SAMARITAN CENTERS

Introduction and Issue

Samaritan Centers find it difficult to offer quality health care benefits at a pricethe Centers can afford. Not being able to provide adequate health insurance, however, makes it difficult to hire and retain employees. Unfortunately, this situation is getting worse.

A study by the Kaiser Family Foundation and the Health Research and Educational Trust found health care premiums for families in employer-sponsored plans jumped 13.9 percent in 2003. Thisis the third year of a double-digit cost increase, and the largest since 1990. The smallest employer category, three to nine employees, experienced the greatest fee increase, 16.6 percent.

Samaritan Institute Task Force

Twelve SamaritanCenterexecutive directors met to discuss this problem during the 2003 Summer Conference and to learn about how two of the Centers were addressing their health insurance needs through the use of a PEO (Professional Employer Organization). Following the meeting the Samaritan Institute board formed a Task Force to further investigate the possibility of Centers usingPEOsas well as other alternatives.

Members of the Task Force met and/or talked withsenior representatives of twoPEO organizations,the largest international insurance brokerage incorporation, and the largest employment law/human resources association in the United States.

Task Force Conclusions

1)The difficultyof finding reasonably priced health insurance will continue for the foreseeable future. Health care cost will increase faster than the rate of inflation. Increases will be higher for smalleremployers than for larger employers. The average years of experience for Samaritan staff members (clinicians20 and support staff 11)is high,has a direct relationshiptoage, and drives up insurance premiums.

2)There is no universal answer. Each SamaritanCenter will need to find its own best solution determined by the Center’s unique needs and what is available in its community.

3)Centers need to have an established relationship with a trusted and experienced benefits expert who can advise them on their health insurance requirements. This person could be a board member, assuming there is no conflict of interest.

4)The most practical way for the Institute to help the Centers is by documenting the alternatives that we know are available andare now being used in the network. This includes PEOs and other options.

November 2003

Health Insurance Options within the Samaritan Network

Flexible Benefit Plans

Flexible benefit plans enable employees to pay for health insurance and medical expenseswith pretax dollars. They are not an insurance policy but do provide financial benefit. Here are ways flexible benefit plansare being usedby Center employees to purchase health insurance.

1)Samaritan staff memberswho can be covered through their spouses’health insuranceuse their pretax dollars topay the employee portion of their spouses’ insurance cost.

2)Ordained clergy and their families usually have an option of participating in their denomination’s benefit program. The premium is paid directly by the staff member.

3)Local and state professional and trade associations, e.g., Chambers of Commerce, United Ways, Associations of Not-for-Profit Organizations, etc., sometimes offer health insurance that can be purchased by their organizations or the organizations’ employees. These arrangements require membership or participation with the association.

On several occasions the Samaritan Institute has investigated the possibility of offering a health insurance policy for the Centers. So far there have not been enough potential participants to develop a network program. The number of Samaritan employees will need to more than double before this is viable.

4)Staff members also use their pretax dollars to purchase individual and family policies, extensions of previous insurance through COBRA, and policies to supplement Medicare.

Insurance through a Secondary Employer

There aretwo types ofthese arrangementscurrently used in the Samaritan network represented byhospital-related Centers and Centers outsourcing to PEOs.

1)Hospital-related Samaritan Centersoffer the same employee benefits as the hospital.The counseling center is a department, division, or an incorporated entity of the hospital or its holding company. Since there is direct or indirect accountability to the hospital, the Center can provide the hospital’s benefit package to its employees. This same type of arrangement could also occur with a university or denomination-related center.

2)While PEOs have existed for a number of years, they are new to Samaritan Centers. Currently, only two Centers use them, both for less than two years.

A traditional PEO serves as an outsourced, human resources department that handles personnel-related services. The PEO technically is the employer of the SamaritanCenter staff. It assumes responsibility for payment of wages, employment tax reports, benefits plans, etc. It is a co-employment relationship in which both the PEO and Center have employer responsibilities and liabilities. A contracted fee which includes the cost of employee wages and benefits is charged for the PEO service.

Employer-Sponsored Plans

LargerSamaritan Centers have developed benefit packages that include employer funded insurance. These vary considerably in coverage and employee co-payments. If a Center does not have a board member with expertise in health insurance to provide oversight of the Center’s benefit program, the Institute recommends using a Task Force including non-board members who have the necessary experience for this purpose.

Finding an Affordable Policy

It is difficult for small employerslike Samaritan Centers to find a health insurance policy that offers quality coverage, a choice of providers, and an affordable price. Additionally, it is difficult to find an insurance agent who is willing or can afford to invest much time helping small employers find a policy that meets their unique needs. There are, however, some things that can help.

1)Work with anagent or officer of an insurance firm who understands and is committed to the mission of the SamaritanCenter. Themoney he or she makes on sellingthe Centerahealth insurance policy will not be a significant amount of their income. Interest in the Center’s workwill help them justify his or her involvement of time and talent.

2)Use a local agent if he or she can provide a similar policy and price. Local representatives are more likely to become directly involved with the Center, e.g. serving on its board, contributing to fundraisers, understanding the Center’s importance,etc.

3)Contact agencies that specialize in working with small-to-middle size employers. Information about these agencies can be found through your Chamber of Commerce; a trade association of independent agencies; or the Yellow Pages.Additionally, large insurance companies sometimes have a division that specializes in serving small-to-middle size employers.

4)Investigate the possibility of working with the same agency for other parts of the Center’s benefit package and insurance needs. Not only will this represent more business for the company, it can provide cost savings through better coordination of services.

5)Consider using supplemental insurance coverage or a Medical Repricing Plan to cover the employee expense of a high deductible plan.

A Medical Repricing Plan is not health insurance but will significantly reduce health care costs. These plans allow the health care recipients to pay what the insurance companies pay for health care expenses, not what the retail clients pay.

The Samaritan Institute also shares the same challenge the Samaritan Centers have in finding quality health care benefits for its staff. We will continue to seek out and investigate potential alternatives. Meanwhile, if you have questions or would like more detailed information about what the Samaritan Institute is using, please contact your Center liaison.

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The Samaritan Institute