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ARCHIVED NEWSLETTERS

2013

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RBS (REGULATORY BUDGET SENTINEL)

EMPLOYERS CONSIDER DROPPING HEALTH INSURANCE TO REDUCE COSTS
By: Nicola Crean, CHS Marketing Coordinator

Planning for open enrollment in the fall will force many employers to make significant decisions on health care packages. Choosing what type of coverage to offer employees will rely on cost, in addition to outside competition. As Obamacare looks to expand the insurance marketplace, companies now have increasingly more options when it comes to health care coverage.

Specific options that many companies are considering is dropping health coverage in its entirety or developing a self-insured plan in 2014. The new health care reform law has added to various provisions and attempted to grow the insurance market. In doing so, a Forbes article reports that a consequence of the law may have companies stopping coverage as a way to save on expenses.

“The new health care law created powerful incentives for smaller employers to self-insure,” said Deborah Chollet, a Mathematica Policy Research senior fellow, in an article published in the Insurance News Report. “This trend could destabilize small-group insurance markets and erode protections provided by the Affordable Care Act.”

In 2009, the Department of Health and Human Services reported that only 13 percent of companies with less than 100 employees offered health care coverage by managing a self-insured plan. In a short time, the number of companies that are self-insured or shifting over has increased considerably, reports CFO.com.

In the past, the self-insured route seemed risky to many employers. However, many companies are now considering this option in an effort to curb increasing premiums and provide greater flexibility within the health care plan. This is especially true for smaller companies, who may not be offered full coverage plans due to their smaller staff.

Previously, the employer-sponsored insurance plans were more developed than that of the independent coverage plans. However, as Obamacare looks to develop a stronger market for independent plans, companies can choose to drop coverage, while still knowing that employees have other options available to them.

The new law states that if employers chose not to provide coverage, then they will be subject to a $2,000 penalty per employee. A provision of the law allows the company to avoid charges for the first 30 employees. This is one of many provisions that experts argue may led to employers choosing to end coverage and accept the penalties, instead of paying for health care.

“It’s very, very shortsighted for an employer to drop that coverage,” said Chuck Rosen, president of the California Association of Health Underwriters, in a Ventura County Star article. “It very well may cost them more money in the long run. Number two, it’s just going to alienate their employees.”

Currently, there is no general consensus as to what action is best for companies at this time. While there are varying factors that may make dropping coverage suitable for one business over another, many experts agree that it can put the company at a competitive disadvantage within the job market. Eliminating health care coverage would now decrease the benefits that can be offered to new hires and hurt the businesses chance of retaining current employees.

“You can’t measure it in strict monetary terms,” John Nelson, co-CEO of the Warner Pacific Insurance Services, said in the Ventura article. “Moral is important. Security is important. How do you put a price on that?”

Looking to the future, it seems that employers are focused on making decisions that are centered on maintaining the business. When it comes to selecting health care, companies seem to be weighing all the options in light of the new reform. Whether more companies shift to being self-insured or drop coverage altogether, it is inevitable that there will be major changes in the years to come.

MAN'S BEST FRIEND HEADS TO THE WORKPLACE

By: Nicola Crean, CHS Marketing Coordinator

Wellness within the workplace has increasingly become an important aspect of everyday business practice. Employers continue to look for new ways to motivate their staff to lead a healthier lifestyle. While many companies tend to implement conventional wellness programs, some have taken to less traditional practices.

More and more businesses have started allowing employers to bring their pets to work on a daily basis. Evidence suggests that allowing pets can reduce stress within the workplace and at times, create more communication between coworkers.

“There’s a lot of…resetting the atmosphere so creativity can continue to flow, because a lot of the time we get uptight and we don’t really know why, or things get emotional, and it’s proven if there’s a dog around, or you even touch a dog, it lowers your blood pressure,” reported Linda Varrell, president of Broadreach Public Relations, in a Bangor Daily News article.

Recently, a study was released by Virginia Commonwealth University to prove what many pet owners already know. The results demonstrated that employees who brought their pets to work had significantly lower stress levels then other coworkers.

The research, which took place at a service-manufacturing-retail company in North Carolina, had approximately 550 employees, 30 of which brought their pet dogs daily. The study showed that stress levels fell to 11 percent in those who brought their dog, compared to 70 percent to those who did not.

“Dogs in the workplace can make a positive difference,” said professor at the VCU School and co-author of the study Randolph Barker. “The differences in perceived stress between days the dog was present and absent were significant. The employees as a whole had higher job satisfaction than industry norms.”

Beyond stress levels, employees also note other positives that a pet in the workplace can have. The reduction in stress can often have positive physical effects. Since dogs need to be taken out regularly, employees are forced to step away from the desk and get fresh air. This can help increase daily exercise in addition to lowering blood pressure, which is often caused by stress.

Janet Meyers, a nurse and director of risk management at Schneck Medical Center, said in a USA Today article that she believes she is more productive when her dog is in the office.

“If Bentley [her dog], is by my side, I am not thinking I need to be home to care for him and that he’s lonely. I often stay late of work with him snoozing away under my desk. He is a big part of my life,” Meyers said.

Purina, a company with well over 6,000 employees, advocates that their Pets at Work Program has advantages for the employers too. Allowing pets undoubtedly creates happy, more productive employees that are less likely to leave their job. In addition, it can establishes a more social atmosphere that promotes conversation between coworkers.

“Pet presence may serve as a low-cost, wellness intervention readily available to many organizations and may enhance organizational satisfaction and perceptions of support,” said Barker. “Of course, it is important to have policies in place to ensure only friendly, clean and well-behaved pets are present in the workplace.”

While bringing a pet to work may seem out of the ordinary, the positive impact it can have on the company culture as a whole is certainly something to consider. Creating a less stressful workplace and higher employee retention is an important factor to reducing costs, which is essential the primary goal at hand.

THERE ARE SOME BEHAVIORS YOU JUST CAN'T REGULATE.

By: Chacko Kurian

Regulations depend on carrots and sticks. If you don’t pay your taxes, there will be serious consequences – the stick. If you buy a home with a home loan, we’ll let you take the interest payment deduction on your taxes – the carrot. The HITECH Act has a number of sticks associated with the security of Protected Health Information (PHI). We at CHS will be addressing the issue of security of PHI in forthcoming articles. There is, under some circumstances, one link in the security chain that no regulation can affect -the uninformed behavior of the user. This article addresses one method where cyber criminals make unwitting users partners in a security breach.

Prior to founding Apple Computers, the Steves (Wozniak and Jobs) could be found ripping off Ma Bell using a blue box to make long distance phone calls (domestic and international) for free. The subculture that reveled in this activity called “phreaking” was probably the progenitor of the subculture of hackers who, today, like to hack computer systems just because they’re there. There is the story of Steve Woz(niak) actually making a “phreak” phone call to the Vatican and asking to speak to the Pope while pretending to be Henry Kissinger with a think German accent. These are the guys who later found legal ways to take your money.

Before the age of digital telephone switching systems, telephone switches reset trunk (long distance) lines with a tone at a specific frequency – 2600Hz. This meant that the trunk line was disconnected at one end and available for dialing at the other end. The dialing was also accomplished by tones at preset multiple frequencies. How did one get those frequencies? Legend has it that the 2600Hz frequency was discovered by accident by Joe Engressia, known among phreakers as ‘Joybubbles’, at the age of 7! He was apparently able to whistle at that frequency and so attach himself to the dialing end of an available long distance line.

But how does one progress from knowing that you could get a trunk line to using it to make free long distance calls. In 1954, the then undivided Bell System published an article in the Bell System Technical Journal about the basics of signaling using multi-frequency tones. This piece of information by itself was of little use. The second and final piece of the puzzle was published, again courtesy of Ma Bell, in the November 1960. Bell System Technical Journal in an article called “Signaling systems for control of telephone switching”. This article published the actual multi-frequency tones used to control the switches. From that information to the creation of the reputed “Blue Box” that became a clandestine product was a short step. With one of these boxes, anybody was able pick up a phone and make free long distance calls.

To be able to win this questionable prize, the phreaker required two pieces of information and they were found in two locations, but once they were combined, the information became quite powerful. Today – cybercriminals put two pieces of information discovered from different locations together to achieve their nefarious goals..

Spear Phishing is the technique by which pieces of information stolen from different locations are put together, by cybercriminals, to steal your identity, your money and anything of value. How does this work? Unlike the shot gun approach taken by those Nigerian scam artists who send out millions of emails, the Spear Phisher is looking for prey with a small email blast to very targeted prospects. All they need to start the process is one piece of information – your email address and sometimes your name. They don’t need anything like a credit card number, the password to your on-line bank account or your social security number– well, not yet. The attack is quick and over in less than a day, before security and software companies have an opportunity to react.

A typical Spear Phishing attack starts with an email that comes to you and looks something like this, courtesy of the Microsoft Safety and Security center

Remember they already have your email address and sometimes your name so the “Hello” salutation is not so innocuous. It looks very familiar but the highlighted items should make you suspicious. If you examine the links you will find that they link to unsecured and unfamiliar sites as shown below:

Once you click on the link and enter the information they’re asking for, they’ve got you.

Another variation of this technique is to send you an email making you an offer that sounds reasonable on the surface, but requires you to open an attachment with the details of the offer. Again, once you open that attachment, they’ve got you. What happens behind the scenes is that the attachment has a robot program that can do almost anything that they want it to do. It can install a keystroke logger and send your internet banking or credit card passwords to the cybercriminal. It can give control of your computer over to the cybercriminal and so enable more of these schemes to be run from your computer. The possibilities are endless.

Sometimes the Spear Phisher makes the email look like its coming from your boss – again remember he has email addresses and names. The email may require you to give up password and other authentication information in order to perform a “security audit” or an “account verification”.

Key to making this criminal endeavor work is that it requires your participation to either provide the missing information or open the attachment. So the best defense it to verify the email by contacting the sender by phone or alternate method if the email looks suspicious. A good antivirus program installed on your computer can help too.Remember for the scheme to work it requires your participation.

We might as well brace for a number of these email attacks. Recently Epsilon, a division of Alliance Data suffered an illegal entry on its client’s email databases. This is the company that processes marketing communications for loyalty programs like Marriott Rewards, Citibank Advantage and many other large organizations. Imagine the rich information for cybercriminals that email addresses, names and loyalty program associations can provide. If you belong to the Marriott Rewards program like I do, expect an incredibly valuable offer to come to you via email. Do not open the attachment even though the logo looks almost right and the text has only one or two spelling mistakes.

There’s lots of regulations coming from Washington DC these days, but I don’t think they can think one up for this.

CHS SOFTWARE UPDATE

CHS Software you may want to use

Often, we at CHS, are guilty of not informing you of products or features that we have implemented over the past year that you may want to use. This year we have rounded out our individual enrollment, billing and administration offering with a full cycle product. If you sell individual policies or sell voluntary products in addition to your regular employer sponsored group health offerings, this may interest you.

"Full Cycle" in this context means the following:
i) taking the application for enrollment of the individual/family on the web, after getting their responses to qualifying/underwriting questions,
ii) enrolling them in the plan of choice,,
iii) billing their credit card or bank account at the appropriate frequency, i.e. monthly, quarterly, semi-annually or annually,
iv) applying the payments received against the appropriate invoices
v) disbursing premium/commission and other payments to carriers, brokers/agents and other suppliers
vi) updates to Accounts Receivable, Accounts Payable and General Ledger without manual intervention after set-up.

We would like to say that all of the above happens "automatically" (a grossly over-used word) but it doesn't. It happens with minimal, but appropriate, human intervention. For example, there are checks and balances in place to make sure that premium billing adjustments owing to changes in family composition or product choices are made accurately. The web enrollment product, CHS iCoverNow, has to be customized with your logo, color palette, questions and response logic. Users of our product like it. It has allowed them to grow into areas where they couldn't before. We believe that this will interest administrators of individual health plans who sell to the public at large and may become a valuable tool in the context of health care reform.