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CLSA Wire

No 2014 Medical Rate Increase For Life Science Employers in the Beyond Benefits Trust

Medical insurance rates will not rise for life science member companies using Beyond Benefits, the exclusive offering from Barney & Barney, LLC. The results have exceeded expectations for BayBio and BIOCOM.

The Beyond Benefits Life Science Association Trust launched on January 1, 2012 under the dual sponsorship of BayBio and BIOCOM for their member employers. Thanks to the health demographics and positive risk factors of the employees, the Trust has seen low utilization and noteworthy claims experience since the Trust’s foundation.  This has helped participating companies see great value and savings. More specifically:

  • The Health Risk Index of the Beyond Benefits member population is nearly twice as favorable compared to that of Anthem Blue Cross’ projection data;
  • Doctor’s visit utilization of Beyond Benefits’ members are 52% below Anthem’s normal;
  • The Inpatient Facility admission rate for Beyond Benefits is 53% below that of Anthem’s;
  • The Length of Stay for those hospital admissions are 60% below Anthem’s standard;
  • Additionally, High Cost Claims are 75% below Anthem’s normal.

The 55 participating employers have collectively saved $1.8 million since the inception of the Trust from what they would have spent on health insurance for their employees.  That is an average savings of 9.3% or $1,300 per employee!

Altogether, the renewal with no increase will save participating employers $2 million dollars in 2014. This savings is based on what an employer would have paid for their group insurance if they were to receive what can be considered to be a conservative industry trend increase of 10% outside of the Beyond Benefits Trust. Per employee, the projected annual savings amounts to over $1,400.

A Positive Outcome Under Health Care Reform
As the exclusive health benefits program for California life science employers, Beyond Benefits provides relief from several Health Care Reform requirements, even for participating member companies with less than 50 total employees.

Thanks to the positive claims utilization of Beyond Benefits, the 3.25% Affordable Care Act tax that employers must pay starting in 2014 has been absorbed into the renewal action.  That represents a savings of almost $700K that would have otherwise been charged to the Beyond Benefits participating employers’ health insurance premium.

Beginning January 1, 2014, younger and healthier employers, like many of those in the life science industry, will disproportionately pay higher rates as a result of Health Care Reform. Not only will Risk Adjustment Factors (RAF) be eliminated, but California will move from 9 to 19 geographical rating areas.  Urban areas will likely see even higher rates.

To cause further concern, age-based rate tiers will be restricted to a 3:1 ratio for the oldest to youngest individuals.  This will result in younger groups paying more to subsidize the costs of older groups. It is estimated that the youngest and healthiest groups will see health care expenses increase by 50 percent or more.

Because our aggregate rating is not based solely on age, the Trust maintains rates that take into account the favorable risk and demographics of life science employers, resulting in more competitive pricing than is available in the open market.

Small employers participating in the Trust will be exempt from having to comply with the small employer medical loss ratio limits and the essential health benefits (EHB) requirements of the Affordable Care Act.

Continued Savings & Gratitude
We anticipate total savings for Beyond Benefits to remain on the upswing for years to come, even in the midst of the changing health care landscape. We value the continued participation of BayBio and BIOCOM’s member companies and look forward to growing the membership of the Beyond Benefits Trust.

For more information regarding the Beyond Benefits Trust, please visit www.beyond-benefits.org.