Union and employer trustees at the annual meeting of the Graphic Communications National Health and Welfare Fund received good news about the fund's financial health that included no increases in medical insurance premiums.

Following a decade of heavy premium increases by traditional insurance carriers, health and welfare fund trustees restructured the fund in 1997 to self-insure medical coverage with experience shared on a national basis and to allow groups other than jointly trusteed Taft-Hartley funds into the program. Under the previous pooling structure, the participating Taft-Hartley health and welfare funds were rated on their individual experience.

The new fund offers several medical plan options that include a preferred provider network of doctors and hospitals. Other options include prescription drug, dental and vision plans. Also offered are accidental death and disability and life insurance coverage through Aetna.

Philadelphia 14M Pres. Andrew Douglas welcomed the newest group to the fund – 1,500 workers at Quebecor World (Color) plants represented by Effingham 391C and 39B and Salem 787C and 554M. The fund is administering the GCIU members' negotiated health and welfare benefits.

Douglas said the health and welfare fund "is looking at all sizes of groups, from World Color with 1,500 employees to companies with about 20 employees. If we spread the risk, I think we have a good chance of growing the fund."

With fund assets now at more than $8.7 million – a gain of $1.3 million over the past year, fund consultant William A. Rivers of The Segal Company said: "It was a very good year. The fund beat our expectations" and is in a "sound financial position and continues to operate that way."

The fund's good health led the executive board to recommend and the trustees to approve no medical premium increases.

GCIU Vice Pres. Lawrence Martinez, who serves as secretary of the health and welfare fund, noted participants often took average annual increases of some 20 percent under commercial insurance before the fund was restructured.

Trustees can be proud of the fund's record since it self-insured – "three years without a rate increase and only a slight increase last year," Martinez said. At the same time, the fund built its reserves and saved about 12 percent on administrative expenses, he said.

From left are Robert Lingren of Printing Industries of America, employer trustee for the Los Angeles 404M fund; Indianapolis 303M Pres. Woody Van Note; GCIU Secy.-Treas. Gerald H. Deneau; and Washington 449S Pres. Robert Barber.

GCIU Secy.-Treas. Gerald H. Deneau, who assisted with restructuring the fund while he served as its secretary, noted the "tremendous changes" in the health care industry in the past two decades.

"It underlines a natural process that holds true with so many things – either you evolve and change or you die off," Deneau said. "It's hard to keep track of, and it's hard to keep on top of it. I think this group has managed to work their way through it. And it really is a credit to all the trustees – both labor and management – that they were able to work their way through tremendous changes and to really remake the fund."

Citing the addition of the Quebecor World group to the fund, Deneau observed: "It's just the beginning of many programs that are out there that are healthy, and we can get them into the [fund]. It's good for the companies because it's a reasonable cost for what you're purchasing. It's tremendous for our members because they're getting good service. They're getting their claims processed promptly and with respect. . . ."

In other business, the trustees heard reports from the appeals committee, elected executive committee members, and heard reports from program administrators.

Evansville 571M Pres. Robert Lacey, who chairs the appeals committee for medical claims, said the appeals committee was expanded last year to six fund trustees. The committee handled 79 appeals in 1999 – down from the 114 appeals in 1998. He said the appeals process has served the plan well by helping to clarify plan language and revealing areas of needed communication. It also revealed deficiencies in networks and providers, such as the need for urgent care centers to be included in the network, he said.

One of the recurrent problems solved during the past year, Lacey said, involved doctors who use multiple tax identification numbers. He said PHCS is now administering claims from such doctors as network claims, even when the doctor supplies the wrong identification number.

Lacey urged participants "to take ownership in this process. They must check every step of the way that doctors and hospitals are in the network."

In the rotation of terms on the fund's executive committee, trustees from Philadelphia 14M were elected to a three-year term. Douglas was elected union co-chairman of the fund and Chris Feagans of the Keller Crescent Co. was elected employer co-chair of the fund. Feagans is the employer trustee for the Local 571M fund.

Administrator reports

Charles W. Breitsman of central data services (cds) in Pittsburgh – the fund's third party administrator – said the average time for claims administration by cds was about five to 10 days. He said cds has seven full-time employees who work on health and welfare fund claims.

Nick Zaffiris and Stephanie Wentworth of Private Health Care Systems (PHCS), which operates a national preferred provider network, reported that the company had doubled its customer base in the past two years and added more hospitals and providers. PHCS now includes more than 2,700 hospitals and 300,000 doctors around the United States, they said.

Zaffiris said PHCS hired a specialist on urgent care centers and is beginning to recruit centers into its network. In response to a question from the trustees, Zaffiris said he would check on the possibility of more frequent updates for the PHCS website (http://www.phcs.com) where participants can locate network doctors, hospitals, and other providers in their areas.

Prescription drugs

Mary Kay McLane of National Prescription Administrators addressed the trend of soaring prescription drug costs – the highest medical inflation area today.

Prescription drugs made up 2 percent of total medical bills in 1990 but are now more than 15 percent. She said the average cost per 30-day prescription was $3.00 in 1970, $7.00 in 1980 and $40.00 today. Total sales of prescription drugs doubled in a decade – from $55 billion in 1990 to more than $100 billion today.

McLane said there are many factors affecting the drug companies' push for profits. Effective advertising for high cost name brands is one. The drug industry is expected to spend some $1.5 billion on drug advertising in 2000, compared with $55 million in 1991.

Another factor in prescription drug inflation involves antitrust issues. McLane said drug companies are paying other companies to not produce generics. She said this issue has moved into the political arena, and drug companies are now fighting the possibility of increased government regulation on the drug industry.

McLane said the health and welfare fund's 25.26 percent increase in prescription drug costs for the year ending September 1999 was high but was still trending lower than the national average.

McLane asked local funds to urge their participants to ask for formularies – drugs for which NPA, which is independently owned, has negotiated discounts – and use NPA's discount mail order option for prescriptions used for chronic, long-term health problems.

Greeting trustees from the new Quebecor World group is GCIU Vice Pres. Lawrence Martinez, far left. Next from left are Salem 554M Pres. Gerald Hartwell; Salem 787C Secy.-Treas. Michael A. Basham; Robert Saxer, Quebecor World's Salem division labor relations director; James Miller, Effingham 391C union trustee; Dennis Hicks, Effingham 39B union trustee; and Shari Davidson, Quebecor World director of benefits.