A survey of 600 large and small U.S. businesses found that 92 percent say they are likely to increase the amount that their employees pay for health insurance. Companies expect costs to jump 18 percent this year, after an increase of approximately 14 percent in 2002. According to the survey, businesses predict an average yearly increase of 17 percent in health care costs for the next five years.

Over the years, insurers and employs alike have trumpeted the virtues "bundled" benefits, the practice of obtaining all insurance-based employee benefits -- such as health, disability, vision, dental, and life coverages -- from a single, multi-line carrier.

Proponents of bundled benefits tout the ease of administration that such plans can offer: One contact, one bill, one set of reports, and other administrative materials. They also stress the importance of being able to work with one company that understands the employer's complete benefits picture and could provide counsel and support based upon a universal relationship with the employer. Because dental, vision, life, and disability insurance cost so much less than medical insurance, many employers assume these benefits are corollary and therefore contract with their medical carrier to provide them.

But the rise in health care costs is causing many employers to scrutinize their bundled plans and to re-evaluate their efficiency and cost effectiveness. They are finding that the most frustrating aspect of bundled coverages is the difficulty in determining exactly what they are paying to underwrite and administer each individual benefit.

When an employer buys all of its insurance-based benefits from one carrier, the costs of the program inefficiency may often be camouflaged by total costs or shifted to other programs.

In contrast, when an employer purchases various coverages from different carriers, it knows exactly what it is paying for the underwriting and administration of each program, making it less likely for the costs of one type of benefit to be offset against the premiums of other benefits.

Unbundling makes carriers compete harder for each line of business, resulting in more competitive pricing. Unbundling can also enhance the quality of coverage. The employer can select the best each carrier has to offer. It does not make sense to settle for mediocre dental, medical, life, or vision coverage from one carrier just because it has, for example, an excellent disability plan.

Different types of insurance require each carrier to take a different approach to claims processing, service, and risk analysis. Unbundling enables the employer to contract with carriers who specialize in each type of coverage. A carrier specializing in one coverage can dedicate its sales and claims staff, actuarial department; and data processing systems to understanding and anticipating the needs of the clients of its niche, and to customizing programs to the needs of each customer.

If your organization -- like many others these days -- is looking at the possibility of unbundling its dental plan from its medical benefit, there are a number of steps you should take.

First, obtain the following information on current usage from your present carrier:

* Number of eligible employees per month over the past three years;

* Total claims cost by month over the same period and frequency of payment;

* Breakdown on amounts spent on various service categories, including diagnostic, fillings and crowns, endodontic, periodontic, prosthodontic, and orthodontic;

* The carrier's fees for administering the program.

These numbers will show how employees have used the benefit and how much program administration has cost. If possible, obtain information that quantifies the cost-management programs of the current carrier. Such programs include benefit coordination for employees with a working spouse, review of complicated procedures by consultants, and dental history of all claims.

All carriers should be able to produce this information, but most do not. If your current carrier cannot, or can do so only with great difficulty or cost, it probably focuses on other lines of insurance. It is also possible that program tracking, administration, and cost containment are not a priority for the carrier.

The information you have gathered will enable you to determine a baseline of coverage and service you need. You will also be able to determine if performance in these areas is satisfactory or if improvements are needed.

Bid specifications should quantify the goals your organization wants to meet in each of these areas. Some performance parameters are fairly standard. For example, the carrier should be able to pay 90% of its claims within 15 days. The loss ratio -- the amount of claims paid as a percentage of premiums -- should exceed 80%, except for very small purchasers.

You should include these various items in a request for proposals and distribute that RFP to several carriers. Your current carrier should share data from the past three years on a confidential basis. As part of sharing basic information, you can insist that all bidders guarantee that their bid meet all specifications for the quoted premium.

Add Blue Cross and Blue Shield to the list of companies thriving in our capital city.

The mega insurer recently completed remodeling of its offices in downtown Topeka to the tune of $25 million. A formal ribbon-cutting took place earlier this week.

The project involved construction of a four-story building that houses a new cafeteria and a fitness center plus the demolition and reconstruction of its building at 1133 S.W. Topeka Blvd., considered the front door to BCBS.

The buildings were designed around a central campus area with park benches and trees and a circle drive.

A new entry and reception area has also been constructed in Building A. A 20-foot atrium area is included.

The new entry moves from the east side of the building to the north side.

"We really designed this building to be around another 50 years," said Bob Young, human resources manager and building project manager.

Those words may be as much reason for celebration as the actual remodeling.

Blue Cross, long a pillar in the Topeka business community, looks like it's here to stay, and in quite a big way.

Work on the $25 million project actually began in August 2004 and was funded largely by $21 million in industrial revenue bonds issued through Shawnee County.

A good investment, indeed.

BCBS currently has 1,699 employees in Topeka - 1,427 on the main campus and 242 at other facilities.

And this story may get even better.

BCBS is competing for a federal Medicare contract that would retain 370 jobs and add another 250 jobs. The company will know whether it will win that contract by July.

If BCBS gets the contract, it will be a huge win for our community. If it doesn't, we can't fault the efforts of BCBS and our local political and economic development leaders.

The Joint Economic Development Organization, a seven-member city- county body that administers proceeds from a countywide sales tax, voted 7-0 last May to approve a five-year contract with BCBS to provide the company $1 million in incentives to help it land the Medicare deals.

This 14-page report on health benefits serves as a guide to the types of health insurance coverage widely available to employers, displayed in a format designed for comparisons of various plans' features.

To learn about this most important benefit, start here: You'll find a concise overview of how employer-sponsored health coverage took hold in the workplace and what it has become today. The tables display facts about health benefits and the rules that frame them, and summarize the major types of health plans and tax-favored health accounts that employers can offer their employees.

In addition, review the list of terms used by health benefits professionals and the lists of services that the U.S. Internal Revenue Service approves or rejects for tax advantages.

The information in this special report is not specific to the plans provided by each insurer, however, and is not intended to be a sole source of information.

Health insurance.

Morrisey, Michael A.

Health Administration Press

2008

409 pages

$90.00

Hardcover

HG9396

This book is designed to be a comprehensive guide to how health insurance is implemented in the United States, and explains in detail how these policies are written and how they perform. Written primarily for students of health care policy and management, Morrisey (U. of Alabama, Birmingham) covers all of the basics of health insurance, including the history of these policies, Medicaid and Medicare, adverse selection and moral hazard, health savings accounts and the relationship between employees and employers in respect to these programs.