Health insurance changes for 1,200 Aspen Skiing Co. employees
June 9, 2012
ASPEN – The Roaring Fork Valley’s largest private-sector employer switched its health insurance plan June 1 for 2,600 employees and dependents with the goal of getting a grip on rising medical costs.
Aspen Skiing Co. switched to a plan designed to get its employees and their families “more involved” in medical decisions and more interested in preventative care, said Jim Laing, Skico vice president, human resources. If successful, that will ultimately result in healthier employees who, in theory, won’t need as much medical treatment, he said.
Prior to June 1, Skico operated under a plan in which it designed coverage, and an outside party administered it. Now the Skico plan is designed and administered by Cigna, an industry giant.
“We picked them because we feel they’re the best out there,” Laing said.
There is a common perception that changes by an employer in health care coverage usually translate into less coverage and higher costs for employees, Laing said. But in this case, there will be no reduction in Skico’s health care budget due to the change, he said.
The new plan does usher in several significant changes in how Skico employees and dependents pursue medical care. Previously, they would pay $25 for a doctor’s visit, and Skico would pay the rest. Now, the cost of a visit is covered equally by the employee and Skico.
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Skico employees also have a deductible now. They didn’t under the old plan. The changes mean that employees and dependents who need frequent medical care or have a major injury, like a blown knee, will pay more out of pocket then under the old plan.
But Skico is helping employees and dependents cover their share of costs. Skico created a Health Reimbursement Account (HRA), through which it contributes $1,000 to each individual employee or $2,500 to those on a family plan for medical care. Employees also have the option of contributing their own funds to flex accounts that can be used for medical care. Funds applied to HRAs and flex accounts aren’t taxed.
Laing’s hope is that employees and dependents will use the funds in their HRAs and flex accounts on wellness, preventative medicine and exams that lead to early detection of issues rather than letting problems linger and grow.
“Use it on what you need to use it on,” Laing said.
In the past, many employees paid their premium but never used their insurance. It was essentially a hedge against catastrophe.
Skico will spend more than $1.5 million per year on the HRA accounts alone, according to Laing, plus it will “continue covering the great majority of the cost of the health plan,” Laing said.
Skico was self-insured under the old plan and remains so now. Cigna simply administers the plan. That means Skico covers the vast majority of the medical costs after an employee meets an individual or family deductible.
If a worker blows out a knee and has a $25,000 procedure to repair it, for example, Skico covers 90 percent of the cost after the employee meets a deductible. The employee also has a 10 percent co-pay beyond the deductible.
Skico employees are paying about the same for the new play as they did for the old plan. “Premiums went up, on average, less than three percent year-over-year for comparable coverage,” Laing said.
About 1,200 employees get coverage through Skico, along with 1,400 spouses and dependents. Company-subsidized coverage is available year-round for seasonal workers.
Skico held 42 meetings for small groups in the months before the health insurance plan changed, discussing the changes with roughly 700 employees. “Generally the feedback is favorable,” Laing said. It’s been in place only since June 1, so many employees haven’t tested it yet.
Aaron Nickamin, a licensed acupuncturist with a practice at the Aspen Airport Business Center, said one portion of Cigna’s plan hurts him and Skico employees who are his patients. He said he has worked with some Skico employees for nine years as an acupuncturist and message therapist. It is excellent preventative medicine, he said. He was considered a covered provider under the Skico’s old plan.
But the new plan only covers acupuncture when provided by a medical doctor or a doctor of osteopathic medicine. That strategy makes no sense to Nickamin because he said he has far more training in acupuncture than virtually all MDs or DOs. He trained for four years to get his master’s degree in Oriental Medicine. He said he is now completing a two-year program to obtain his doctorate.
Skico employees will be covered for visits to doctors with less experience and training in acupuncture, Nickamin said. “To me, that’s when it gets to the ‘not good for the public’ stage,” he said.
“It’s not a judgment,” Laing said of the Skico’s health insurance plan on acupuncture. “It’s just a deferment to a company we believe has expertise.”
Skico employees and their dependents who want acupuncture from someone other than a medical doctor can still do so by using their own funds in a flex account. They cannot use funds from their HRA accounts.
Laing said the policy affects less than one-half of one percent of the Skico’s covered employees and dependents.
But for Nickamin, the policy switch is huge. He estimated 29 percent of his business comes from patients under the Skico health insurance plan. He wants more insurance coverage designers and administrators to change their policies to recognize the value of licensed acupuncturists.
“I want the public to understand what’s happening, not just in our valley, but all over the country,” Nickamin said.