ANNUAL SURVEY SAYS HEALTH PLANS IN WESTERN PA. PROVIDE 17 PERCENT
MORE VALUE TO EMPLOYEES WHEN COMPARED TO NATIONAL AVERAGES
  Survey Highlights Areas Where Regional Employees Fare Better Than National
Counterparts; Cautions on Tax Implications of Domestic Partner Benefits

PITTSBURGH — JULY 31, 2008 – According to results released today as part of the Henderson Brothers Fourth Annual Mid-Market Employee Benefits Survey, western Pennsylvania employees enjoy health care benefit programs significantly more valuable than their national counterparts. Results show that area health care plans, especially Preferred Provider Organizations (PPOs), which account for 80 percent of the plans in place, provide benefits worth over 17 percent more to employees than those across the country, according to Jim Stewart, PHR, benefits division manager for Henderson Brothers, Inc. 

“While there’s been an increase in the cost of health care premiums here and nationwide, employers and employees can take comfort in knowing their dollars are buying more in western Pennsylvania than they are across the country,” said Stewart. “However, we’re also starting to see those premium increases lead more regional companies to consider offering a consumer directed health plan (CDHP) in 2009. CDHPs will involve employees in the process of ‘shopping and comparing’ the cost of health care services, just as they do with other considered purchases. Consumer directed plans drive employees to spend more carefully and generally result in a reduction in overall spending,” Stewart added.

Rising Costs
According to the survey, medical costs are still outpacing inflation, with a six percent jump regionally in 2008 compared to a five percent increase in 2007. This compares to a national increase of 7 percent in 2008 (to date) and a 7 percent increase last year, as well.

Employers are paying about 61 percent of these costs, with employees sharing the cost of the remaining 39 percent with employers (22 percent through payroll deduction and 17 percent through employee cost-sharing). Forty-two percent of survey participants expect a six to ten percent increase in premiums in 2009, while 25 percent expect a bump of one to five percent.

Among those surveyed, the median PPO health care plan premiums this year are:

REGIONALLY		NATIONWIDE
$342 for an individual		$362 for an individual
$1,008 for a family		$1,042 for a family

Cost Saving Strategies
Employers regionally and nationally are doing everything they can to save money without severely impacting key benefits provided to employees. Among their cost-saving strategies:

• Increase the share of premiums paid by the employee or the deductibles paid
• Negotiate lower costs with their current provider
• Implement wellness or disease management programs
• Research new PPO plans or change their current provider

Domestic Partner Status Can Increase Taxes
Given the recent enactment of the Domestic Partner Registry, allowing straight or gay couples who are Pittsburgh city residents to secure recognition of their relationships and use it to gain benefits coverage for a partner, such couples will be pleased that the survey shows an increase in the number of area employers paying benefits for domestic partners.

However, according to Stewart, the IRS does not recognize domestic partnerships, and as such, any benefits paid to a non-spouse/non-employee, would be fully taxable as income. “A lot of people don’t realize the tax implications, so they should take that into account when applying for employer-paid benefits for a domestic partner.”

Additional Findings
Other benefits where the survey found regional employers providing better or more coverage than their national counterparts (followed by the percentage above the national findings):

• Vision care:  +25%
• Smoking cessation programs: +10% 
• Obesity management programs:  +9%
• Long-term disability:  +9%
• Flex time schedules:  +9%
• Wellness incentives: +6% 
• Paid time off: +5%
• Long-term Care:  +5%
• Paid university tuition:  +5%
• Free parking: +4%
• More medical information provided to employees: +3%

Benefits where the regional area lags behind the national findings (followed by the percentage below the national numbers)

• Employee assistance programs:  – 5%
• Telecommuting: – 5%
• Health club membership discounts: – 2%
• Cholesterol screenings: – 2%
• Chronic disease management programs: – 2%

In 2007, nearly 4,000 companies participated in mid-market surveys nationwide, representing more than 2.5 million employees in a variety of industries from healthcare, to manufacturing, transportation, education, finance and others, in 30 major markets across the country. Total healthcare spending for the group was $21.5 billion. The 2008 survey will remain open to local employers through mid-October, who can still secure benchmarking results for their company at no cost. To participate in the survey, go to the “2008 Mid-Market Benefits Survey” at www.hendersonbrothers.com

About Henderson Brothers
Henderson Brothers, founded in 1893 in Pittsburgh, was formed primarily to serve the insurance needs of the river industry. Since that time, the company has diversified into virtually all areas of insurance and risk management, employee benefits and all lines of commercial, personal property and casualty insurance. The company offers insurance and services through nearly 100 of the nation’s largest and most respected insurance companies. For more information about Henderson Brothers, visit www.hendersonbrothers.com.

EDITOR’S NOTE:  Jim Stewart will be available for interviews today, Thursday, by phone or at his office at 920 Ft. Duquesne Boulevard, Downtown, from 1:30 until 4:00 p.m. 

Please contact Mary Ann Miller at 412-366-6122 or mamiller17@comcast.net or Jim Stewart at 412-261-1842 or jjstewart@hendersonbrothers.com to arrange an interview with Jim or if you would like additional information.

Thank you.

For more specifics about the survey, click here.