Thu, Mar 30, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds' health insurance premiums rise while coverage gets watered down - SKCG Group

Tuesday, January 11, 2011

David Parker
Opalesque Industry Update - A survey by SKCG Group, an independent U.S. insurance broker with a worldwide hedge fund practice, shows that the hedge fund industry is paying higher health insurance premiums but getting less for the money. Premiums for hedge funds increased between 6% and 18% in 2010, according to a survey of more than 100 SKCG Group hedge fund clients. The higher costs are attributable to the Affordable Care Act of 2010 and higher healthcare costs generally, according to SKCG. But as premiums continue to climb, coverage has become less comprehensive.

SKCG conducted the survey using proprietary, aggregated data on the health insurance premiums of a sampling of their hedge fund clients. The funds’ assets under management (AUM) range from $250 million to $20 billion, with an average AUM of approximately $2 billion. At the same time rates are soaring, the coverage is being watered down, according to David Parker, President of the Employee Benefits Division at SKCG Group. Typical of this trend is a schedule of benefits that was presented in recent weeks to a multi-billion dollar hedge fund by a large insurance carrier. This plan saw 300% year-over-year increases in out of network deductibles. Some line-items which had once been fully covered now also require deductibles. Moreover, these increases take place while services such as the maximum allowable number of home healthcare visits are being slashed in half.

Insurance companies say they must raise rates in response to rapidly-rising healthcare costs and other expenses relating to the new HRA / Patient Protection and Affordable Care Act (PPACA).

“What’s really troubling is that some insurance companies are asking for rate hikes twice in one year. That’s a huge break with tradition,” says David Parker. Normally, rates are locked in for one year. “To reduce the impact of these rate hikes on their bottom line, hedge fund managers need to retain a firm that can use superior information and experience to construct fine-tuned, custom coverage and negotiate lesser increases on their behalf,” Parker advised.

(press release)

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: FS Investments launches energy fund[more]

    Bailey McCann, Opalesque New York: $19 billion Philadelphia-based FS Investments has launched a new interval fund which will invest in energy. The FS Energy Total Return Fund is the firm's first closed-end interval fund and will invest opportunistically in energy companies and assets. FS

  2. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  3. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He

  4. Opalesque Exclusive: Swiss start-up and German fund manager to launch AI hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: NNAISENSE, a Swiss start-up that develops artificial intelligence (AI) and machine learning applications, and

  5. Eric Mindich to shutter hedge fund Eton Park after difficult 2016[more]

    Komfie Manalo, Opalesque Asia: Erich Mindich is shutting down his hedge fund Eton Park after losing 9% in 2016 and its assets falling by $2bn to the current $7bn, Reuters reported. Mindich told investors