We're in the final stage of our discussions with our consultants and health insurance providers, and will wrap up our 2010 benefits planning in the next two weeks.  That will give us time to prepare for the annual Open Enrollment period in November.

As I suspected when the process started back in August, our terrific HR/Benefits team of Felicia White and Tom Kiley--with a great assist from our consultants at PricewaterhouseCoopers--have done a great job in the negotiations.  In the process, I've learned a few things about health insurance that I thought I would pass along.

1.  There is absolutely no question that competition in the insurance industry is a good thing and keeps prices down. As I listen to the discussions in Washington about healthcare reform, I don't know whether the public option or exchanges or some other mechanism is the best way to go--but fostering competition is a powerful way to reduce insurance premiums.  And those who live in states with monopoly insurance providers would do well to have additional options available to them, if only as a negotiating tactic.

2.  As health insurance costs rise, the biggest increases are going to be seen in the most expensive plans.  At the same time, the incentive to move into so-called catastrophic insurance plans, which feature low premiums and high deductibles, is going to grow over time.  Right now relatively few members of our staff are in our CMP Plan.  As the other plans go up in cost, there is no question that the CMP Plan will look more attractive to more members of our staff, particularly those who are light or even moderate users of health care services.  I encourage everyone to look seriously at the CMP Plan when the time comes next month, and really think about what level of health insurance you and your family really needs.

3.  At the same time, the total insurance premium we pay (70% by the company, 30% by employees) is a function of actual healthcare claims.  When claims go up, the total premium needs to go up in order to cover those costs.  When claims go down, the argument for reducing the premium is much stronger.  As pointed out in an earlier post, our history of healthcare claims has not been good, and that works against us as we try to keep our benefits increases down.

As a company, we have been relatively passive about wellness programs, and I think that will need to change.  Some companies are instituting disease screening programs to provide early identification of health problems and allow for preventative care.  Others are rewarding those who actively address healthcare issues, whether through smoking cessation or weight-loss or other programs.  I don't know yet what's right for ALM, but we need to address overall healthcare claims if we are to keep our health insurance premiums at a reasonable level.

There'll be more to say about our specific plan once the loose ends are tied up, and there will be plenty of time during Open Enrollment to address questions.  Until then, I hope you stay healthy!

Addendum (posted 10/16):  This article in today's Washington Post expands on the direction of corporate wellness programs.  http://tinyurl.com/ygpts6v.  Some are clearly more expansive than others and, as I said above, we need to figure out what the right approach would be at ALM.  Clearly we are not the only company that needs to find a way to reduce overall health costs.  And the idea of focusing more energy on prevention rather than treating disease is an attractive one.