SABC Newsletter

  Southern Administrators and Benefit Consultants, Inc.

September, 2002

In our August Newsletter, we discussed Health Reimbursement Arrangements and their  possible effect on reducing the cost of healthcare.  HRAs allow employers to adopt higher deductible health plans and offer each employee a defined amount of money (employer funded) to offset the higher deductible. These funds are set aside for the employee to use for deductibles, co-pays and/or other allowable expenses such as, vision and dental.  The goal of course, is give the employee more choice over how they spend their healthcare dollars and to reduce the overall cost.

At a recent Employers Council on Flexible Compensation (ECFC) meeting, these arrangements were a hot topic.  Not necessarily because everyone is doing them, but because it opens up another resource for employers to explore. These arrangements can be designed to allow employees to roll over unused funds. This feature give employees that do not have a lot of expenses, the opportunity to build up money for future use.

Many employers currently offer a similar arrangement through their Cafeteria Plan.  Employers are simply funding employees Unreimbursed Medical accounts (URM) to help offset higher deductible health plans.  As you know, monies  under an URM  account can be used for deductibles, co-pays, vision, dental and other qualified expenses.  Any unused funds at the end of the plan year are returned to the employer.  Employer funded URM accounts along with a higher deductible health plan can offer the same overall savings, however, the roll over option is currently unavailable.

For further information, please contact us. We will keep you informed on any future developments.

HIPAA PRIVACY REGULATIONS

In enacting the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Congress mandated the establishment of standards for the privacy of individually identifiable health information. In order to comply with that  mandate the Department of Health and Human Services (HHS), has issued  a Privacy Rule that became effective on April 14, 2001.   However, most health plans and health care providers have until April 2003 to comply.  The Privacy Rule creates a national standard to protect individuals' medical records and other personal health information, as well giving patients more control over their health information.

Employers must ensure that their health care providers are following the requirements and employees are being informed about the privacy standards set in place to comply. In certain situations, the employer is required to enter into a Business Associate agreement with any Service Providers that have access to employee health information. Because we process Unreimbursed Medical claims for many employers, it will be necessary for us to enter into a "Business Associate"  agreement.  A copy of these agreement will be sent to each affected employer before the deadline date.  In addition, we will also be sending amendments to your plan documents and summary plan descriptions.

RE- ENROLLMENTS

If your plan begins in the last quarter of this year, and you have not already set up the re-enrollment of your plan, please review enrollments dates and changes you may wish to make to your plan or insurance products. A representative from SABC will be in contact with you soon.

WE  WILL BE CLOSED SEPTEMBER 1, 2002 IN OBSERVANCE OF LABOR DAY.