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A recently completed benchmark survey that tracks insurance costs for Bay Area companies found that wineries in the North Bay spend significantly less on employee benefits while contributing more to employee premiums than other companies in other industries.

Cost for wineries’ health plans have increased at a lower rate than the rest of the Bay Area as a whole, and plan designs tend to be richer than other companies, meaning a better benefit level is provided, according to the Wine Industry Health and Welfare Benchmarking Survey.

[caption id="attachment_20525" align="alignright" width="97" caption="Chris Reiter"][/caption]

“So that basically means less cost and better benefits,” is how Chris Reiter, vice president of the employee benefits practice at Woodruff Saywer & Company, described the findings.

The Bay Area results of the survey, conducted as part of a national effort to track costs at the national level, were found by Novato-based Woodruff Sawyer & Company, which will present the full scale of its survey results at two upcoming seminars in mid June.

While the findings will detail costs from about 250 Northern California companies within a multitude of industries, Woodruff Sawyer & Company will focus specifically on the wine industry. The company counts several high-profile wineries among its clients, including Francis Ford Coppala Presents, Trinchero Family Estates and Opus One, all of which participated in the survey.

Of the companies surveyed in the Bay Area, 40 were wineries. But unlike previous surveys, this year the company did something different.

“Something new we did this year was separate a break-out for larger wineries,” Mr. Reiter said, noting that companies with more than 500,000 cases met the criteria for large-scale wineries.

“We thought it would be relevant to separate them because [the large wineries] have told us they don’t find much value in being compared to smaller companies.”

The 40 wineries in the survey account for 15,000 employees and approximately $150 million dollars spent on health care, Mr. Reiter said.

Compared to other industries, wineries have a higher level of benefits, including co-pays and deductibles, and employee contributions are lower than other industries, according to the survey. The results take into account costs for insurance services that include health, dental, vision, disability, life and retirement as well as factoring in paid sick days and time off, Mr. Reiter said.

Wineries paid less than other industries for both PPOs and HMOs. The median for Bay Area companies for PPOs is $456 per employee, compared with $406 for wineries, and $381 compared with $350 for wineries on HMOs. Wineries, in general, contribute about five percent more on employee premiums versus other industries as well.

“The net of all of this is when you’re looking at the three main things of the report – benefits levels, premiums and employee contributions – compared to other industries wineries tend to have richer benefits and the cost for premiums is less than other industries, and the percentage is higher for employee benefits,” Mr. Reiter said.

Although the numbers are clear on costs, Mr. Reiter said it’s difficult to determine precisely why wineries manage to spend less while providing more – with one possible exception. Compared with other companies with similar levels of employees, many of which are corporations, wineries, on average, are more often family businesses.

“One thing for sure is that wineries tend to be a little more paternalistic. A lot are still family-run businesses,” he said. “Because of that, they may place a lot of value on taking care of their employees and that translates into what to what benefits they provide for employees. I think that plays a part.”

Results from the survey, including the nationwide findings, will be presented at the Hyatt Vineyard Creek in Santa Rosa on June 15 and in Napa at the Napa Valley Marriot on June 16. Other topics that will be addressed include measures being used to cope with current and future medical inflation costs, cost control strategies and alternate plan designs and the ramifications of health care reform. Information can be obtained by e-mailing seminar@wsandco.com or at www.sandco.com.

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New rules have been issued by the Department of Treasury, Health and Human Services and the Department of Labor in May on the requirement that health benefits be provided to adult children under 26 years of age, as mandated by the Patient Protection and Affordable Care Act.

The provision has been among the most talked-about aspects of the massive health overhaul, as it becomes effective in July of this year.

According to the new rules, which have a 90-day comment period, children younger than 26 years old who were previously dropped because of age will be allowed to re-enroll, so long as they aren’t receiving employer-based benefits. Re-enrollment will only apply to plans that currently offer dependent coverage, and the policy applies to those under 26 if they are married or unmarried, although it will not extend to their spouses or children.

Although the provision provides further access, insurers say the measure – as well as other measures of the bill – will likely increase the cost of premiums in some capacity. Experts said the costs could increase by 1 percent or 2 percent, but not necessarily immediately. Rather, it is likely that when polices go for renewal, premiums will increase as insurers seek ways to offset the influx of under 26 year olds, which will add some amount of risk.

One element of the bill that has yet to be clarified, and which insurers also say will increase costs, is how plans will be grandfathered from before the passage of the health overhaul. Experts said this provision, which is expected to be clarified within the next month or so, could raise premium costs as well. Without any guidelines, many companies that offer employee benefits are not making any changes to avoid having to potentially make further changes upon clarification, experts said.

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Submit items for this column to Dan Verel at dverel@busjrnl.com, 707-521-4257 or fax 707-521-5292.