Blues' new health plan locks rate increases for 3 years

Minnesota's biggest health insurer is offering a new three-year health plan that locks in premium increases for the second and third years while raising employee deductibles and copays.

Blue Cross and Blue Shield of Minnesota's new plan, "SureBlue," sets a 6 percent premium increase for years two and three.

It's aimed at employers with 51 to 249 workers and is designed to provide certainty to frazzled business owners who've been slapped with unpredictable premium increases, usually in the double digits.

"This really meets the needs of businesses," said Shawn Patterson, Blue Cross vice president of marketing.

Employers who sign up for SureBlue will have to commit to switching to high-deductible plans, which could be linked to health savings accounts.

As part of the plan, employees will have to complete a health risk assessment and participate in wellness coaching and other programs to stay healthy. They will also switch to a tiered network with higher out-of-pocket charges for certain providers.

In year one, a company undergoes the normal underwriting process to set a premium. Increases are then set at 6 percent for the second and third years.

However, "there's no free lunch," said Michael Maguire, president of RJ Ahmann Benefits in Eden Prairie.

"What they're saying is, 'We'll give you rate stability but your employees are going to have to ... bite off a little bit more of deductible and co-insurance every year.'"

The plan includes four options for employers. The cost to employees would vary with the plan. The lowest annual out-of-pocket maximum would start at $1,000 and go up to $2,000 in year three. The highest would start at $4,000 and end at $5,000.

HealthPartners, the third-largest health insurer in the state, said that for several years it has offered rate guarantees on a case-by-case basis to large groups. It's looking at offering a similar product soon, said Doug Smith, senior vice president of sales.

Medica, the second-biggest insurer, said it had no plans to introduce a similar guarantee and that employers who switched to its high-deductible plans would slow premium increases anyway.

David Martin, president of the David Martin Agency, a large benefits consultancy in Edina, said SureBlue could be useful for companies looking to transition to high-deductible plans or in cases such as union negotiations to negotiate changes in benefits.

"But I don't think it's going to apply to everybody," Martin said. Also, he said, "I would prefer a cap instead of a guarantee."