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Conference 7.286::digital

Title:	The Digital way of working

Moderator:	QUARK::LIONELON

Created:	Fri Feb 14 1986
Last Modified:	Fri Jun 06 1997
Last Successful Update:	Fri Jun 06 1997
Number of topics:	5321
Total number of notes:	139771

1197.0. "Would real health insurance be better?" by 16BITS::DELBALSO (I (spade) my (dog face)) Fri Sep 21 1990 03:27

I've asked this question of some personnel folks several times but have never
gotten a clean answer.

The DIGITAL medical plans 1 and 2 are privately managed plans funded by DEC
and administered by John Hancock under which DEC foots all the bills for
covered employee and dependent medical costs.

Plans such as those provided by Blue Cross/Blue Shield or Mutual of Omaha
are more along the lines of what one would consider to be "health insurance",
whereby the provider (BC/BS or MoO) collects a premium on a regular basis
and pays claims according to predetermined schedules, but regardless of
how many subscribers place claims for given afflictions. (Granted their
premium costs change as their benefits dispersals change.)

My question is what would the cost differential be to DEC if they dropped
the self-funded medical plans and enrolled in some sort of group insurance
coverage instead? Granted BC/BS may not be an option for all US employees
depending on their location, but I believe that M of O, for example, is willing
to cover anybody anyplace. I would think if you wanted to start negotiating
for a group rate for tens of thousands of employees you could get some
really competitive prices.

So, why don't we try this instead of what we're doing now? (Obviously, I
would think we'd arrange for a plan with coverage similar to what the
DIGITAL Medical Plans now provide.)

-Jack

T.R	Title	User	Personal Name	Date	Lines
1197.1		ACOSTA::MIANO	John - NY Retail Banking Resource Cntr	`Fri Sep 21 1990 16:40`	11
	RE: .0 That's the way it used to be. It has only been within the past three years that Digital went to self insurance. Someone must have decided that with a company the size of Digital it was cheaper to fund the plan and have John Hancock administer it than to pay for insurance. I can't say for sure without the numbers but it is quite possible the company saves a lot of money through self insurance. John
1197.2	Self-Insurance	ICS::FALIVENA	Mike DTN 251-1404 CFO2-3/C18	`Fri Sep 21 1990 16:41`	6
	Almost all very large employers, as with Digital, self-insure their indemnity health plans. There are two main reasons for this. First, as a funding method, self-insurance is less expensive than insurance. Second, insured plans are subject to the multitude of state insurance statutes and regulations whereas sef-insured plans are subject to federal employee benefits & tax law.
1197.3		COVERT::COVERT	John R. Covert	`Fri Sep 21 1990 20:05`	6
	Not all doctors accept plans like BC/BS. In particular, Massachusetts Law does not permit the doctors to collect the extra 20% that BC/BS doesn't pay. Also, with insurance, you get coverage for what the insurance company decides to cover, not what DEC decides to cover. /john
1197.4	Self-Insurance a Better Deal	AKOV13::BIBEAULT	Bob (DTN) 244-6136	`Wed Sep 26 1990 03:14`	13
	FWIW, My previous employer, a systems consulting company with 300 employees at its peak, was self-insured as well. This was seen to be advantageous as follwos: o The employer paid for the medical cost + administrative fees BUT did not have to apy for an insurance company's profit and/or risk o The employee could negotiate with his employer directly regarding "borderline" claims. The employer would often decide in favor of a valued employee; an insurer would only consider impact to profits...
1197.5	no micro fuse / use another kybd	CAPNET::ANDERSON_R		`Tue Oct 26 1993 16:52`	3
	I left voicemail with Victor stating that there is no microfuse and that the customer should try another keyboard.
1197.6		ELWOOD::LANE	Good:Fast:Cheap: pick two	`Tue Oct 26 1993 17:25`	2
	re .5 Arn't windows wonderful? :-)