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Employers view options to health insurer Highmark

Kennametal Inc. employees in Western Pennsylvania had plans from Aetna Inc. as an option for their company-sponsored-health insurance coverage during open enrollment last month — the first time that Highmark was not the sole provider.

The Unity toolmaker’s decision to move away from an exclusive relationship with Highmark for employee medical coverage highlights the choices companies face as a contract between the state’s biggest health insurance carrier and UPMC expires at the end of the year.

“We added Aetna as an option for local employees in response to concerns they expressed about in-network coverage and the ability to continue with providers of their choice,” said Lorrie Paul Crum, Kennametal’s vice president of corporate relations. She declined to comment further.

A third of Pittsburgh’s largest employers are shaking up their health plan offerings, which could cost the state’s biggest health insurer some of its subscribers who may be concerned about losing in-network access to UPMC, a survey by the Pittsburgh Business Group on Health found.

The business group, which represents about 90 of the region’s largest employers, said the survey of its members found 52 percent are expected to use Highmark as their health insurer next year, down from 68 percent who had coverage from the company this year. The nonprofit group said 70 percent of its members responded to the unscientific survey. Kennametal is not a member.

Kennametal’s decision to offer an option to Highmark, which provides health coverage to about 3.2 million people in Western Pennsylvania, came down to ensuring employees would not have to pay costly out-of-network rates for UPMC hospitals and doctors next year, Crum said.

The company has about 1,200 employees in Western Pennsylvania, out of a workforce of 14,000.

Hartford, Conn.-based Aetna is the biggest beneficiary of the turmoil fomented by the more than three-year contract battle between Highmark and the region’s dominant hospital system, according to the survey.

Twenty-eight percent of Pittsburgh Business Group on Health members expect to offer health plans from Aetna, including its HealthAmerica subsidiary, up from 16 percent, the group said. Cigna Corp. was unchanged at 6 percent. United Healthcare was 5 percent, up from zero.

The three insurers offer full in-network access to all UPMC hospitals and doctors, as well as to Highmark’s Allegheny Health Network.

Despite the business group’s finding, Highmark spokesman Aaron Billger said overall enrollment in the company’s health plans for 2015 is higher than expected.

“We have a very good feel for our January enrollment and are very pleased with where we stand,” he said.

UPMC Health Plan, the second-largest health insurer in Western Pennsylvania behind Highmark, could see its use among business group members slip to 9 percent, down from 10 percent, according to the survey.

UPMC spokesman Paul Wood said many employers are offering UPMC Health Plan as an option to Highmark, and he doesn’t expect the company to lose business overall.

“UPMC Health Plan sign-ups are proceeding at an unprecedented pace in this open enrollment period,” he said.

Several large employers this fall announced they were switching from Highmark to preserve full access to UPMC, including Erie Insurance and Port Authority of Allegheny County. Others, meanwhile, have said they would stick with Highmark and save money, including the United Steelworkers union, Allegheny County and two consortia of public school employees.

While some large companies are offering a choice with Highmark, the survey found that half of the business group’s members that responded are not making a change.

Fifty-one percent said they won’t make a change in their insurance provider; 12 percent were undecided; and 37 percent were planning to make a change, including offering employees a choice of more than one carrier.

“We’re seeing employers struggle with how to best maintain the best and highest-quality health care plans for their employees, which also provide access to desired doctors and hospitals,” said Jessica Brooks, executive director of the group. “Some employers are adding insurance carriers to their existing insurer relationships to address employee concerns.”

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or [email protected].

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