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Top Headlines

For Immediate Release
August 25, 2000

Contact:

Beryl Wolfe
(207) 775-5115

Web Site: http://www.ghsinc.com

Maine Companies Advised to 'Self-Insure' to Remain Competitive in Tight Job Market

Self-insured companies more prepared to handle escalating insurance costs, HR expert says

AUGUSTA, Maine - Companies looking to ease the current insurance crunch have one more reason to "self-insure," according to Deborah Whitworth, a human resources expert and vice president at GHS, a statewide data-management firm based in Augusta. Not only do self-insured companies save money, but they also hold a decisive edge when it comes to hiring and retaining key personnel.

"While some companies limit benefits to limit risk, some HR professionals, particularly those in the high-tech arena like myself, are finding that in order to recruit and retain qualified professionals, we're not only increasing employee benefits, but drastically shortening the initial waiting period for new employees," said Whitworth, who in her 21-year career has designed self- insured medical and dental programs for GHS as well as a software developer, a financial services company, a restaurant group and a mental health agency.

A lengthy waiting period is an outdated and unnecessary precaution taken by "traditional" insurance companies to protect themselves from hypothetical employees who supposedly take jobs just to get medical benefits, and then quit once they've received treatment, Whitworth said. But this model was made obsolete by the Health Insurance Portability and Accountability Act of 1996 (HIPPA), she said.

"Basically, (HIPPA) limits exclusions for preexisting medical conditions and gives a new employee credit for prior health coverage," she said. "So, if the reason to implement a waiting period was to limit the risk of buying preexisting conditions, and that risk is no longer valid, then it would seem to make sense to shorten the waiting period."

Whitworth said she now puts in a 30-day waiting period, giving her company enough time to complete paperwork and get new employees' insurance cards to them.

"You may be thinking, 'Why not just let the new employee elect COBRA coverage until my company's benefits are effective?'," said Whitworth. "Sure, a new employee can elect COBRA to fill the gap until your company's benefits kick in, but when a new employee is recruited from a start-up company or any company with fewer than 50 employees COBRA isn't usually an option. If you have a traditional program, your new employee is then left with no insurance until yours becomes effective. And if you have a lengthy waiting period, that could be a long time."

Whitworth outlined the steps necessary to design and implement a partially self-funded insurance plan. In addition to a realistic assessment of the need for a waiting period, those steps include finding an insurance broker with a proven track record, avoiding off-the-shelf solutions, and making sure that the broker is sufficiently familiar with the company's needs.

"Be prepared to share sensitive information with your broker candidates," she said. "They will need a complete and accurate census in order to provide you with realistic numbers."

Whitworth's observations are based on a wealth of first-hand experience. A resident of Raymond, Maine, she joined GHS in 1999 Ñ a period in which the company experienced phenomenal growth Ñ and established the company's human resources, marketing and public relations departments. She is president of the board of directors of the Foster Family Connection, secretary of the board of the Human Resources Association of Southern Maine, a member of the Society for Human Resources Management, and co-legislative director for the Maine State Council of SHRM. She also is a former member of the Maine Society for Healthcare Human Resources Administration. A native of Kent, Ohio, Whitworth is a 1979 graduate of Kent State University.

GHS manages, tracks, assesses and archives data for businesses, health care and state government, and employs several unique technologies in its delivery of services. For example, the DEL system, which provides discounted prescriptions for the elderly, was designed by GHS, as was the data management system of the state's tuberculosis control program. GHS also manages the state's Community Assessment Program. In 1999, the company introduced GHS/Rx, a prescription drug program for companies with self-insured medical benefits. GHS also began offering data card production services in 1999, to make medical and prescription drug cards for its clients. The cards, which also can be formatted for identification cards and other uses, are manufactured at the company's headquarters, and the data management systems are housed there as well.

GHS also provides extensive, state-of-the art archiving services to help companies reduce, reorganize and manage or delete old files, and thereby "reclaim office space." The company's data capture department provides rapid turnaround of raw data for its clients, from forms and reports to basic data entry. The company has been in business for more than 25 years and has 112 employees with clients from all across Maine and throughout New England. For more information, visit www.ghsinc.com.

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