Tue, Sep 2, 2014
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. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing Square, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the

  2. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  3. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  4. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius

  5. Big hedge funds tighten grip amid consolidation[more]

    From Asianinvestor.net: The hedge fund industry consolidated last year with the number of funds falling by around a tenth from 2012 but assets under management rising $248.8 billion to $2.6 trillion, finds a new report from research firm eVestment. Firms with more than $1 billion in hedge fund A