Page 285 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Chapter 6. Employee Benefits and Perquisites 271

Another manner in which companies use insurance carriers when self-insured is to pur-
chase claim review and processing, or administrative services only (ASO). This approach
enables a company to place a third party between itself and its employees on difficult claim
reviews. It also gains the expertise of the carrier to ensure reasonable and customary amounts
are being charged for services performed.
Even before an individual is hired, he or she may have received a medical benefit—the
preemployment physical. In addition to wanting to know the health status of potential employ-
ees, a number of companies have ongoing physical examination programs. Due to cost,
such programs are often limited to multiphasic screening, with emphasis on urine and blood
samples. Depending on the nature of work, chest x-rays and gastrointestinal studies may
also be undertaken. Additionally, the company may have a random drug testing program to
determine substance abuse. When detected, the individual is typically counseled and put in a
program to deal with the chemical dependency.
For individuals with specific medical problems, wallet-sized cards listing allergies, blood
type, and required medications may be appropriate. For some, a bracelet or necklace identify-
ing a particular problem (e.g., allergy to penicillin) could be very helpful in case of an accident
or serious injury. Others have microfilmed their medical history highlights and carry this in
their wallet.
Mini-Medical Plans. Given the cost of medical care, some companies are cutting back to
mini-medical plans (also called limited medical plans). These plans are focused more on preven-
tion than treatment. Namely, they will cover a limited number of doctor visits and tests each
year but provide little hospital coverage.
Given the low coverage, these plans are of virtually no interest to executives.

Prescription Drugs. Prescribed medications are usually covered only while in a hospital or
after satisfying the extended medical reimbursement deductible under most medical insur-
ance programs. It is not surprising, therefore, that a number of companies have developed
plans using benefit pharmacy managers to reimburse medication expenses (normally after
a modest per-prescription deductible of a few dollars). Typically these plans cease when a
person retires, but see the section Medicare on the next page for discussion of the senior
prescription drug benefit.
Home Health Care. A win-win scenario for the health-care provider and the patient is
home health care, where hospital services are provided at home rather than the hospital. The
provider avoids costly hospital charges, and the patient is permitted to recuperate at home.
Plans may cover equipment (e.g., beds, oxygen, and wheelchairs); nursing and therapy (e.g.,
infusion, physical, and speech); and service aid (e.g., assistance in bathing and cooking).
Home health care may be provided directly through an independent contractor or indirectly
through the health-care provider. Home health care helps patients self-manage the health
issue within the friendly confines of their home. The executive may find it easier to con-
tinue work responsibilities (if medically permitted) from the home than from the hospital.
Home health care covers the range from recuperation to long-term care to terminal illnesses,
which may require hospice care. In addition to providing emotional support and pain relief,
assistance with household chores may also be included.
Insurance coverage can also be obtained to pay for long-term care in an assisted living
center, nursing home, adult day care, and in-home services for self, spouse, parents, parents-
in-law, and grandparents. The 1996 Health Insurance Portability and Accountability Act