Business Journal NORTHEAST
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PENNSYLVANIA
THE REGION’S AWARD-WINNING SOURCE OF BUSINESS NEWS AND INFORMATION
April 2016 VOL. 31 NO. 04
a viable alternative
Self funding helps some larger employers mitigate healthcare costs and design plans toward workforce ultimately in better control of your financial risk going Since 1970, health care spending has grown an forward. If you are relying on average of 9.8 percent annually, 2.5 percent faster health insurance companies, than the economy, according to the Kaiser Family you are at the whim of the Foundation. The numbers also show annual spend- larger healthcare marketplace ing on health care grew from $75 billion in 1970 that those health insurance to $2 trillion in 2005 and experts estimated that companies are working in. spending to reach $4 trillion last year. If they are feeling uncertain Employers who provide health insurance for about theiir situation, it ti th they their employees know first-hand how that exponen- are going to be hiking rates; tial spending continues to boost health insurance the policiees are going to offer premiums. fewer optiions.” Family premiums have grown 155 percent for Creatinng the specific small firms and 180 percent for large firms since options deesired for your 2000, according to Kaiser. Since 2010, average employees makes family premiums have grown another 25 and 28 self-fundinng a percent for small and large firms, respectively. more attraactive What can employers do to reduce or mitigate alternativee. these costs? Instead of paying monthly premiums To keep to an insurance company, many companies are eminstead choosing to hold on to those funds and ploypay employees’ medical bills directly, essentially ees becoming their own insurers. Self-funding has healthy become a viable solution for some employers. and reducce “Employers have been looking at self-insurance costs, com mpanies more now because of the added uncertainty in with olderr employthe health insurance marketplace and the spikes ees might invest more in prescription-drug benefits in the health insurance premiums,” said Michael and chronic-disease management, while those with Ferguson, president and chief executive officer of a younger workforce might invest in family-planning Self-Insurance Institute of America, Inc. (SIIA), benefits, wellness and prevention programs. based in Simpsonville, South Carolina. “You control The City of Pittsburgh recently decided to your own destiny if you go self-insurance. You are switch to self-funding. It expects to save $7 million this year by switching its 3,700 public employees to a self-insured health plan. Locally, the City of Scranton continues to reap the benefits of a self-funded medical and pharmacy Postage plan for its 500 employees that it has had in place for more than 20 years. “We tend to view the program through the general industry rule: The industry standard of By Kathy Ruff
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Healthcare Update
Progress in fighting neurological diseases is limited but care and compassion are not. SEE PAGE 19
ALSO INSIDE: ChroniC Pain Pain is what the patient says it is. It’s not “all in your head.” SEE PAGE 19
rail riders baseball On Dollar Mondays, $1 for a lawn ticket, $1 for a hotdog - and bring your dog to the game! SEE PAGE 10 savings is well over 20 percent in the first two years of a self-funded program,” said David Bulzoni,, business administrator for the City of Scranton. “Additionally, the city has realized considerable savings based on some of the cost-containment initiatives we put in place. Hence, our initiatives have included a pharmacy carve out, EGWIP (employer group waiver) program for seniors/retirees, continually managing the medical usage and targeting high cost claimants for stronger medical management.” The city’s third-party administrator aggressively manages its plan, which results in long- term benefits to both the city and its taxpayers. “We have realized many of the Affordable Care Please see COVER - VIABLE, Page 4
small business sPotlight is on Olyphant Self Storage olyphantselfstorage.com
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Made in NEPA Monroe County Machining Co. supplies aerospace industry SEE PAGE 6
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