Press Releases: Northwest
February 3, 2004
Oregon employees turn to new collaborative arrangement to lower health premiums, broaden coverage choices
More employee benefit choices and control for fewer dollars
PORTLAND, Ore. – When Matsushita Electronic Materials, Inc. (MEM) of Forest Grove learned it would be facing health insurance premium increases of up to 65 percent from its existing health plan in 2004, management sought alternatives. The 130-employee company, which manufactures copper clad laminate and prepreg raw materials used in the manufacturing of circuit boards, asked to see other health plan options.
"Our previous carrier was no longer offering an HMO plan, so our rates soared," said MEM's Human Resources Manager Julia Phares. "We felt we had to change plans." Phares challenged her insurance broker to find "the best possible product at the best possible price." He quickly introduced her to BENU Oregon, the benefits solutions company that has collaborated with Kaiser Permanente Northwest and CIGNA HealthCare (NYSE: CI) to form Oregon's first customized, "consumer-driven benefits exchange" for mid-sized employers. The BENU program had become available in Oregon on January 1, 2004, and offered mid-sized employers a new way to customize their benefit offerings in ways traditionally available only to larger employers.
BENU offered MEM an opportunity to lower their health premium increases substantially, while broadening plan choices for employees. "BENU was the only option that provided a choice between three insurance plans, administered under one company," said Phares. "Through BENU we were able to offer choice at a cost that was the equal to or less than other single-plan options we reviewed."
Choice was a significant factor for MEM. "While Kaiser is very economical and provides a high level of benefit, it does require employees to change physicians," Phares explained. "The Cigna HealthCare plans provide employees with the ability to retain their existing physician relationship if they choose to do so. We also liked the fact that CIGNA HealthCare is a national company, so we could offer our employees who live outside of Oregon the same CIGNA plans we offered our Oregon employees."
"The key issue facing clients today is controlling costs while delivering a benefit package that continues to attract and retain employees," said MEM's insurance broker Tim Cooper of JBL & K Risk Services. "Some employers are embracing consumerism, but others want to separate themselves from the selection aspect and simply become facilitators. I think BENU is a step in the right direction towards consumerism, offering cost controls, broad choice and employee participation in costs."
MEM employees had the opportunity to choose from three health plan options—Kaiser Permanente's group model HMO, CIGNA Healthcare's network model plan or its Preferred Provider Organization (PPO). "Based on initial enrollment figures (approximately 40 percent enrollment in the Kaiser Permanente HMO, 48 percent in the CIGNA HMO and 12 percent in the PPO), I'd say there is value in having brand and delivery network choices," said Cooper.
Launched last fall through a unique collaboration involving BENU Inc., Kaiser Permanente Northwest and CIGNA HealthCare in Oregon, BENU provides mid-size employers (those with 75-1,000 employees, which comprise a large percentage of the state's working population) with multiple health insurance options ranging from defined network plans to PPOs to combination defined network and PPO hybrids called Point-of-Service plans.
"Employers want to give their employees a health insurance plan that offers choice, but they also want their benefit plan to match their need for cost control and consumer engagement," said Robert Bray, general manager of CIGNA HealthCare in Oregon. "Our participation in BENU strengthens our ability to serve the middle market by helping employers moderate their health care costs, while providing employees with the choice and tools to become more informed consumers."
"BENU is able to give mid-size employers a true 'consumer-driven' health plan strategy because of their unique risk mechanism that eliminates carrier problems with adverse selection," said Kaiser Permanente's Vice President and Health Plan Manager Denise Honzel. "Typically, when one or two competing plans get more than 50 percent of membership, the competitor will pull out. So the employer loses access to choice for the employees. Neither the employer nor their employees benefit. BENU has mechanisms in place to deal with the 50 percent issue, so that none of the competing carriers are negatively impacted by adverse selection. In this arrangement, the employer can continue to offer the broadest choice to their employees. It's a win-win for everyone."
"Our mission is to preserve the ability of mid-sized companies like MEM to continue to offer affordable health benefits choices to their employees, and to offer carriers new opportunities to compete in today's rapidly changing healthcare marketplace," said Tim Kussie, Vice President of Sales at BENU, Inc.
MEM is a growing manufacturer for the high tech industry and currently employs 130 employees.
JBL&K Risk Services is the oldest and largest independent insurance brokerage in the state of Oregon.
Kaiser Permanente is the nation's largest nonprofit health plan, and has been providing health care in the Pacific Northwest since 1945. Kaiser Permanente Northwest has more than 700 physicians and nearly 400 affiliated clinicians who are organized in a group practice. The program operates 26 medical offices in the Northwest, owns and operates one hospital, and has relationships with various community hospitals to serve its members. Currently, the program serves the medical care needs of about 435,000 people in Oregon and Southwest Washington. Across the nation more than 8.2 million people choose Kaiser Permanente for their health care needs.
CIGNA HealthCare provides health coverage and employee benefit services to nearly 128,000 individuals throughout Oregon. The CIGNA HealthCare provider network in Oregon includes more than 4,000 medical providers and more than 49 hospitals. CIGNA HealthCare provides medical coverage through managed care and indemnity programs to approximately 12.0 million people, dental coverage to approximately 12.5 million and mental health coverage to approximately 14.3 million, and pharmacy benefits coverage to 9.4 million. "CIGNA HealthCare" refers to Connecticut General Life Insurance Company and various other operating subsidiaries of CIGNA Corporation (NYSE: CI). Products and services are provided by these operating subsidiaries and not CIGNA Corporation.
BENU, Inc. is a pioneering benefits solutions company offering mid-sized employers an expanded choice of insurance products and services and more control over health care expenditures. BENU Oregon packages the products of leading regional insurance carriers to create unprecedented benefits choices in a defined contribution environment. BENU can deliver this choice affordably because of its proprietary risk adjustment mechanism and benefit automation technologies. For more information on BENU, call 1-800-630-2368 or visit the BENU web site at www.benu.com.
