While the complexities of health insurance may have boosted sales for some brokers, many got out of the business last year figuring they won’t be able to compete with Healthcare.gov. Unlike the advent of consumer-friendly shopping sites like Amazon or the myriad airline ticket sites, uninsured people didn’t cut out the middle man when looking for health coverage because they needed help figuring out what plan was best for them, brokers said.“It’s hard to believe that I sold more insurance in six months than I did in five years,” said Insurance Agent Bob Nelson, referring to the October-March open enrollment period on Healthcare.gov, according to a recent story at www.triblive.com.
When asked how they like their benefits, employees gave the lowest rating in six years, according to a survey from Unum. Only 47% say their benefits are excellent or very good. Only 33% say that the benefit education their employer provides is excellent or very good, and 28% say their benefit education is fair or poor. This is a reversal to the upward trend in ratings since 2009. Only 49% say their workplace is excellent or very good. Seventy-seven percent of workers who say their benefit package is excellent or very good also say the same of their employer. In contrast, only 17% of employees who say their benefit package is fair or poor also say that their workplace is excellent or very good. And 79% who say their employer’s benefit education is excellent or very good say the same of their employer — compared to only 30% of those who say their benefit education is fair or poor. Bill Dalicandro, vice president of the consumer solutions group at Unum said, “This research underscores the value of an effective benefit education plan because when an employee understands their benefits, they tend to value them more and…may value their employers more for providing access to them.” For more information, visit www.unum.com. Voluntary Sales by Employer Size A survey by the Eastbridge Consulting finds that employers with over 2,500 employees accounted for the largest volume of voluntary sales again last year. This segment accounted for 36% of all voluntary sales, up from 33% in 2012. The following are voluntary sales broken by employer size: • Less than 10 employees 4% • 10 to 25 employees 7% • 26 to 99 employees 12% • 100 to 499 employees 17% • 500 to 999 employees 11% • 1,000 to 2,500 employees 13% • Less than 2,500 employees 36% Gil Lowerre, president, Eastbridge, said, “For 2013, the 500 to 999 segment continues to have the highest sales, followed closely by the 1,000 to 2,500 segment, indicating both have good penetration. The least penetrated segments are the two smallest ones — under 10 lives and 10 to 25 lives. “This comes as no surprise since many carriers and brokers do not write in these smaller segments. However, it is interesting that the 2,500 or more employee segment had the third lowest [sales]. This segment is obviously still under-penetrated despite having the highest sales,” said Bonnie Brazzell, Eastbridge vice president. For more information, visit eastbridge.com 401(K) Plans Put Retirement Readiness Within Reach Americans who have access to 401(k) plans can achieve a more secure retirement if they start early and save consistently, according to new research sponsored by Prudential Financial. “This latest research shows if saving starts earlier and retirement occurs a few years later, the required savings rate becomes even more achievable,” says George Castineiras, senior vice president, Total Retirement Solutions at Prudential Retirement and one of the authors of the Prudential paper. For people with a workplace-based retirement plan an average of 35% of their retirement income should come from a 401(k) or other retirement savings plan. And the average required savings rate to achieve that level of targeted income is 14% — if savings starts at age 35 and retirement occurs at age 65. “What’s particularly compelling is that this research helps to highlight the strength of the existing retirement system. Modern plan design allows individuals to get tax-advantaged savings and the ease of payroll deduction as well as investment education, advice and institutionally priced products,” said James McInnes, senior vice president of product management and development at Prudential Retirement, the paper’s co-author. The research finds that the required savings rate for an average wage earner in a single income household drops from 15% to 10% if the individual starts saving at age 25, instead of age 35. When the target retirement age is changed to age 67 — the retirement age of Social Security for those born after 1959 — the average required savings rate (starting at age 35) is lowered from 15% to 12%. When the retirement age is further delayed to age 70, the average rate drops to 6%. If savings start at age 25 and retirement occurs at age 70, the required savings rate drops to 4%. For more information, visit prudential.com. ANNUITIES New Regulations Boost Annuities The Treasury Dept. has enacted new rules allowing employees to convert a portion of their IRA or 401k retirement funds into a qualifying deferred income annuity. The value of longevity annuities can now be excluded from calculations of required minimum distributions. Ken Nuss, founder of AnnuityAdvantage, sees this as an opportunity for near-retirees to hedge against the possibility of outliving their retirement savings. As the name implies, deferred income annuity payouts begin at a later date — at age 80 or 85. Deferred income annuities function much like an individual pension plan, creating a lifelong and predictable income stream. The final rules allow for a return of premium option for heirs. Since insurance companies introduced these annuity products three years ago, growth has been strong. For more information, visit http://www.annuityadvantage.com or call 1-800-239-0356. Americans Are Interested in Annuities Seventy-one percent of Americans would consider buying an annuity to meet a variety of needs, including having predictable monthly income, being able to provide an inheritance, meeting chronic care expenses, and achieving asset accumulation. However, 53% are not familiar with annuities, and only 20% plan to use an annuity to convert their retirement savings into an income stream, according to a survey by the Phoenix Companies. “The majority of Americans don’t have a deep understanding of today’s annuities. They don’t necessarily understand the basic income protection traditionally offered on all annuities; and they are not aware of the range of benefits available on newer products, such as accumulation and chronic care features. At the same time, when these newer types of features are described, a lot of people say they would consider buying the product,” said Mark Fitzgerald, national sales manager for Saybrus Partners, Phoenix’s distribution subsidiary. Consumers would purchase an annuity to get these benefits: • 49% having predictable monthly income in retirement. • 41% being able leave money for a spouse or heirs. • 36% having money for chronic healthcare expenses. • 31% having asset accumulation opportunities. For more information, visit http://www.phoenixwm.com. IN CALIFORNIA Burnham Benefits Hires Senior Account Exec Burnham Benefits Insurance Services hired Helen Vits as a senior account executive. Vits’ career in employee benefits first began at Baker, Thomsen Associates, where she climbed the ranks and remained with the firm as it was acquired by Brown & Brown and exhibited adaptability to the changing tides of the industry. In addition to consultation, Vits launched and led a webinar series at Brown & Brown, managed partner relationships, served as a technical lead and pursued new business opportunities. For more information, visit www.burnhambenefits.com EPIC purchases Jenkins Insurance Services The shareholders of Jenkins Insurance Services (Jenkins), a Leavitt Group agency, have sold 100% of their shares in Jenkins to Edgewood Partners Insurance Center (EPIC). Jenkins, which has offices in Concord, Sacramento, San Jose, Orange County, and in Reno, Nevada, employs 160 and has about $34 million in annual revenue. While the terms of the deal were not disclosed, Jenkins shareholders Curt Perata, John Connell, and Mark Karpenko became shareholders of EPIC. Leavitt Group Enterprises, the Leavitt Group’s parent company, received cash for its majority ownership in Jenkins. Eric Leavitt, the Leavitt Group’s CEO said, “EPIC’s offer made all four Jenkins shareholders interested in doing a transaction we did not anticipate or previously desire. The deal was compelling and will open new vistas for all four Jenkins shareholders. We are in a very unique time in the market cycle and we expect this transaction, as it pertains to the Leavitt Group, to be just that — unique. The Leavitt Group has been built through acquiring, forming, and fostering independent insurance agencies. We remain committed to this course. However, in this instance, it just made good sense to sell.” For more information, visit www.edgewoodins.com. HEALTHCARE HSAs Provide Financial Flexibility Fifty-two percent of HSA account holders spent more than 80% of their HSA funds for health care expenses during 2012, according to a survey by America’s Health Insurance Plans (AHIP) and the American Bankers Assn. Since Congress authorized HSA plans in 2004, AHIP has conducted three surveys on HSA banking activity. This latest report measuring the financial activity of more than 1.4 million HSAs, shows consumers taking an active role in managing their health care dollars. Fifty-five percent of HSAs received personal contributions during 2012. While end of the year account balances varied, roughly 80% of accounts had a positive balance that could be carried over to the next year to help pay for future expenses. Fifty-eight percent of accounts had withdrawals during the year. Of those accounts, the average withdrawal during 2012 was $2,081. For more information, visit http://www.hsaalliance.org. Latinos Benefitted Most from In-Person Enrollment Assistance During the first open enrollment period for plans under the Affordable Care Act, Latinos benefitted most from free in-person enrollment assistance, according to a survey by PerryUndem, a health care research firm. Thirty-four percent used enrollment experts compared to 12% of non-Latino whites. Seventy percent of Latino enrollees plan to get a check-up in the next few months thanks to their new health plans compared to only half of non-Latino whites. The survey found the following about Latino consumers who remained uninsured: • 41% thought they could not afford health insurance. • 26% thought that they would not be eligible. • 78% did not know about financial assistance or subsidies, underscoring the need for continued education in this community. • 66% did not know that free in-person enrollment assistance is available. • 66% did not know that they could not be denied because of a pre-existing condition. • 20% found the enrollment process to be confusing compared to 9% of non-Latino whites. For more information, visit www.enrollamerica.org Appeals Court “Cuts the Heart Out of the ACA” In the case, Halbig v. Burwell, The U.S. Court of Appeals for the District of Columbia Circuit ruled that the Affordable Care Act’s (ACA) tax credits are only available to persons in state-run marketplaces. Elizabeth Taylor, executive director of The National Health Law Program (NHeLP) said, “Today’s ruling is misguided and, if not corrected, will cut the heart out of the ACA. Only 14 states established their own Marketplace.” As noted in the amicus brief filed by AARP Foundation Litigation and NHeLP, tax credits are crucial to achieving the law’s mission of providing near universal health care coverage. According to analysis by the Urban Institute, 7.3 million people could lose their subsidies. Jane Perkins, NHeLP legal director said, “If today’s decision stands…older adults, the chronically ill, and those with low to moderate incomes would feel the brunt. Without the financial help required by the ACA, quality coverage will be out of reach. These Americans will be too poor for private coverage, but not eligible for public programs — the very situation the ACA was designed to avoid.” The ruling does not immediately affect the availability of financial assistance in the federal Marketplace. The government is likely to petition the appeals court for review by the full 11 judge panel. More Patients Are Visiting Retail Clinics Retail clinics are playing a growing role in health care delivery, according to a study from Walgreens. Patients are relying more on nurse practitioners at retail clinics to provide chronic and preventive health services. The study also reveals marked increases in the number of patients who are making return visits to clinics. Visits to healthcare clinics for preventive services, screening, and chronic care increased from 4% in 2007 to 17% in 2013. The annual percentage of return patient visits to Healthcare Clinic climbed from 15% in 2007 to more than 50% in 2012 and 2013. For patients age 17 and under, visits for preventive services and vaccinations increased 180% For patients ages 18 to 64, visits for health testing increased 90% while preventive health service visits increased 66%. Acute visits increased 84% for patients 65 and older. The Convenient Care Association estimates that 33% of Americans live within 10 minutes of a retail healthcare clinic. Walgreens has increased the variety of services at select Walgreens clinics from providing vaccinations to diagnosing and treating a number of chronic conditions. Clinics at select locations are open seven days a week, with extended evening and weekend hours, and offer walk-in service. Healthcare Clinics accept most major insurance plans and Medicare and Medicaid, and offer affordable, transparent pricing for those without insurance coverage. Healthcare Clinic’s board-certified nurse practitioners and physician assistants deliver patient-centric care, driving patient satisfaction rates that are consistently greater than 90%. For more information, visit www.walgreens.com. Most Medicare Beneficiaries Have Modest Means A small share of the 52.4 million elderly and people with disabilities on Medicare have relatively high incomes, but most are of modest means, according to a survey by the Kaiser Family Foundation. Half live on less than $23,500 last year. Although the majority of beneficiaries have some savings, the value of their assets varies dramatically, and is much lower for black and Hispanics, widows, younger Medicare beneficiaries with disabilities, and seniors over 85. For more information, visit http://kff.org/interactive/visualizing-income-and-assets-among-medicare-beneficiaries-now-and-in-the-future. NEW PRODUCTS Retirement Plan Monitoring Tools The companies of OneAmerica introduced OneCheck, a set of plan health monitoring tools and reports for participants and sponsors. OneCheck analyzes an employee group’s average income replacement ratio. This can help indicate how successful the plan is and whether employees are on track for adequate retirement savings. For more information, visit www.oneamerica.com. FSRI Designation The LOMA Secure Retirement Institute launched the third course of the Fellow, Secure Retirement Institute (FSRI) designation program, Planning for a Secure Retirement (SRI 131). For more information, visit www.FSRIdesignation.org. About LIMRA LOMA Secure Retirement Institute Affordable Long Term Care Insurance Genworth introduced affordable long-term care insurance that addresses the primary barriers to purchasing long term care insurance – price and complexity. The FlexFit Premium package starts at $1,000 annually. The FlexFit Coverage package starts at $100,000 of initial coverage to protect a certain amount of income and/or assets. Both packages include the following: • 3% compound inflation to protect against rising costs of long term care services. • First day home care so you don’t have to satisfy a waiting period for care received in your home (90 day waiting period for covered facility care). • Privileged Care Coordination services with a registered nurse who can help the insured find appropriate care services from local home care agencies. • Caregiver support services offering information and referral services available to non-insured immediate family members For more information, visit www.genworth.com/costofcare. INSURANCE SALES Many Americans Say They Don’t Have the Right Level of Insurance A survey by PolicyGenius reveals that 50% of Americans say don’t have the right level of insurance. The survey also reveals the following: • Women are less comfortable than men about their protection against financial risks, with 41% of women not too confident and 61% of men pretty confident. • Most respondents take an online, DIY approach to getting their insurance questions answered and associate a negative shopping experience to feeling underinsured. • Fifty-nine percent conduct online research as their first step when shopping for insurance • Forty-eight percent who say they have less insurance than they need also said that their latest experience dealing with insurance was negative. • 25- to 34 year olds are the least confident in their insurance decisions (54% said too much or not enough insurance. The group is six times more likely to turn to online sources for insurance information than consulting family or friends For more information, visit www.PolicyGenius.com. ... Continue Reading →
The health insurance industry has been going through a number of challenges including legislative and regulatory reform, demands from more price- and service-conscious consumers, fierce competition, shift of customer mix, and uncertain economic conditions in the United Stats and abroad. Yet the industry is thriving under stress, according to a report by Zacks Investment Research. Big players, such as CIGNA, WellPoint, Humana, UnitedHealth, Molina Healthcare and others, have reported unfaltering growth in premium as well as fees and other income over the years. In the first quarter of 2014, these insurers had a combined 14% increase in revenues. So far, the carriers have handled some of the less onerous provisions of health care reform fairly well including MLR requirements, a ban on denial of coverage due to pre-existing ailments, dependent coverage up to the age of 26, and the annual rate review. The question is how provisions of the law will affect the industry, such as those relating to insurance exchanges, the individual mandate, ICD-10 requirements, pre-existing conditions, Medicaid expansion, and an annual insurance industry assessment of $8 billion for 2014 with increasing annual amounts thereafter. Investor sentiment toward the reform this year and beyond will be the driving factor for managed care stocks. Several health reform provisions are likely to increase insurers’ medical costs, such as the excise tax on medical devices, annual fees on prescription drug manufacturers, enhanced coverage requirements, and the prohibition of pre-existing condition exclusions. Also, the annual insurance industry assessment will increase insurers’ operating costs. Confined to national boundaries until recently, the industry is flocking to international markets with fewer regulations, higher margins, greater demand, and lower competition. With a wide overseas presence, Cigna and Aetna view their international business as a positive differentiator and key driver of growth. Both companies intend to penetrate deeper into the emerging economies of Asia and the Middle East. In April 2014, Aetna bought U.K.-based InterGlobal, which offers private medical insurance to groups and individuals in the Middle East, Asia, Africa and Europe. UnitedHealth expanded its reach from Australia, the Middle East, and U.K. to Brazil with its buyout of AmilParticipacoes. Data from Kaiser Family Foundation and the Congressional Budget Office indicates rapid growth in individual exchange markets, with approximately 22 million purchasing coverage online by 2016 and 24 million by 2023. The exchanges seem to have been well received. Moreover, 35% of new exchange insurers below age 35 led to a favorable mix. Insurers that were initially averse to participating on exchanges are planning to jump on the bandwagon for 2015 and beyond. However, with comparative shopping options and easy access to consumer information, the exchanges are likely to heighten competition among private insurers. For more information, visit www.Zacks.com. AMAC Applauds the SAVE Medicare Home Healthcare Act The Association of Mature American Citizens (AMAC) is applauding the Securing Access Via Excellence (SAVE) Medicare Home Health Act, which was introduced in the House. It provides relief to American seniors who are at risk due to Medicare cuts of 14% to home health services. The Act achieves the same level of Medicare savings as the Obamacare cuts by creating a program to reduce hospital readmissions through incentives for positive patient outcomes. The goals is to allow mature Americans to remain in their homes. AMAC says that Obamacare’s Medicare home health cut will force thousands of small businesses to close, costing nearly 500,000 home health professionals to lose their jobs. AMAC says these cuts affect the Medicare population’s most vulnerable demographic — older, sicker and poorer mature Americans. Some will be forced to seek care in an institutional setting, driving up patient and Medicare costs and putting patients at risk for poorer health outcomes. For more information, visit www.amac.us/medicarecuts. The Uninsured Remain Underserved by Health Exchanges Despite the goals of the Affordable Care Act, many U.S. citizens still are uninsured and underserved due to technical problems and lack of information from health insurance companies and health exchanges, according to a study by J.D. Power. However, cost is the key reason that shoppers wanted health insurance, but were unable to get it (89%). Other reasons include having pre-existing conditions (26%) and not knowing where to buy insurance (10%). (Shoppers were able to select multiple reasons during the survey.) Many shoppers had problems enrolling because of technical problems (40%); the application process taking too long (19%); and the website not having enough information about the plans (18%). Additionally, 49% of shoppers who did not complete enrollment had not decided on a plan. Rick Johnson, senior director of the healthcare practice at J.D. Power said, “For health insurance providers to thrive in this new environment, they will need to retool their marketing, information and enrollment efforts toward a new generation of uninsured to serve their needs.” Fifty-nine percent of enrollees cite monthly premiums as an important reason for their plan selection; 36% cite doctor visit co-pays, 32% cite out-of-pocket maximums, and 32% cite annual deductibles. The study does not find a significant difference in the enrollment experience for federal and state exchanges. Fifty percent of consumers say their top reason for shopping through an exchange is to comply with the law while 40% shop because they want health insurance but haven’t been able to get it. Fifty-five percent of shoppers first heard about the Marketplace through the news media while only 4% learned about it in a notification from a state or federal agency. For more information, visit jdpower.com. 2015 Obamacare Rate Filings Reveal Out-of-Pocket Cost Changes A recent HealthPocket study finds that deductibles and other out-of-pocket costs are changing inconsistently among the four categories of Obamacare plans: bronze, silver, gold, and platinum plans. Bronze plans had a decrease in deductible with an increase in specialist copayments, and a higher maximum for annual out-of-pocket costs. Silver plans had decreases in deductibles, doctor copayments, specialist copayments, and maximum annual out-of-pocket costs. Gold plans had decreases in deductible, doctor copayments, and specialist copayments, but an increase in maximum for annual out-of-pocket costs. Platinum plans had increases in deductible, doctor copayments, and specialist copayments, but a decrease in maximum annual out-of-pocket costs. Actuarial values requirements for the different categories plans have not simplified the health plan shopping process as originally intended. While the actuarial value changes evenly among the different categories of Obamacare plans, the resulting changes in deductibles and physician copayments did not change proportionally with the actuarial value changes. “Early media attention of the 2015 Obamacare plans has focused on premiums, but out-of-pocket costs are just as important…they can represent thousands of dollars in annual expenses for a consumer who uses healthcare services regularly,” said Kev Coleman, Head of Research & Data at HealthPocket For more information, visit HealthPocket.com. HSA Accounts Provide Financial Flexibility An HSA plan is a valuable financial tool for consumers, providing flexibility to cover immediate medical expenses and save for health care costs, according to a study by the American Bankers Association (ABA) and America’s Health Insurance Plans (AHIP.) Fifty-five percent of HSAs received personal contributions during 2012. Roughly 80% of accounts had a positive balance that could be carried over to the next year. “This study confirms that HSAs are being used as they were designed: to pay for routine health care needs and to save towards future medical expenses. HSAs have the advantage of offering consumers greater choice and control over their health care,” said Kevin McKechnie of the ABA. The study also reveals the following: • 44% of the accounts received employer contributions. Of those accounts, the average personal contribution was $2,337, and the average contribution from employers was $1,142. • 58% of accounts had withdrawals during the year. Of those accounts, the average withdrawal during 2012 was $2,081. • 19% of accounts had $0 available at the end of the year; 31% had $1 to $499; 11% had $500 to $999; 12% had $1,000 to $1,999; 14% had $2,000 to $4,999; and 12% had at least $5,000. For more information, visit http://www.hsaalliance.org. The Uninsured State-by-State A report by WalletHub projects uninsured rates by state post-Obamacare. The following are these states with the States with Lowest Uninsured Rate Post-Obamacare: Uninsured Rank State Name Uninsured Rate Pre-Obamacare Projected Uninsured Rate Post-Obamacare Difference Before and After 1 Massachusetts 4.35% 1.20% -3.16% 2 Rhode Island 14.34% 5.60% -8.73% 3 District of Columbia 9.09% 6.29% -2.80% 4 Hawaii 9.11% 6.35% -2.75% 5 Oregon 16.91% 6.38% -10.54% 6 West Virginia 17.34% 6.59% -10.74% 7 Minnesota 10.07% 6.61% -3.47% 8 Iowa 11.58% 7.47% -4.11% 9 Washington 16.01% 8.27% -7.73% 10 Kentucky 17.30% 8.95% -8.35% 11 Colorado 16.54% 9.02% -7.52% 12 Maryland 14.91% 9.13% -5.77% 13 Wisconsin 11.64% 9.75% -1.89% 14 New York 13.39% 10.16% -3.23% 15 Pennsylvania 13.27% 11.05% -2.22% 16 Ohio 15.19% 11.27% -3.92% 17 Virginia 14.91% 12.45% -2.46% 18 Tennessee 15.70% 12.46% -3.24% 19 Indiana 14.80% 12.78% -2.02% 20 Kansas 15.46% 12.91% -2.55% 21 Missouri 16.49% 12.95% -3.55% 22 New Jersey 16.83% 13.54% -3.29% 23 Utah 15.96% 13.57% -2.38% 24 Nebraska 14.71% 13.69% -1.02% 25 Arkansas 20.87% 13.77% -7.10% 26 South Carolina 19.25% 13.97% -5.28% 27 Illinois 16.16% 14.16% -2.01% 28 California 21.00% 14.26% -6.74% 29 Idaho 19.12% 14.41% -4.72% 30 South Dakota 15.88% 14.71% -1.17% 31 Alabama 15.97% 15.44% -0.53% 32 Arizona 20.13% 16.38% -3.74% 33 North Carolina 19.64% 16.68% -2.96% 34 Montana 21.98% 17.65% -4.34% 35 Georgia 21.66% 18.16% -3.50% 36 Wyoming 18.92% 18.29% -0.63% 37 Oklahoma 19.76% 18.33% -1.43% 38 Alaska 20.48% 18.96% -1.52% 39 Nevada 26.52% 19.58% -6.94% 40 New Mexico 24.29% 19.59% -4.69% 41 Florida 24.73% 19.61% -5.12% 42 Louisiana 22.41% 20.91% -1.50% 43 Mississippi 18.11% 21.46% 3.34% 44 Texas 26.80% 24.81% -1.99% N/A Connecticut 9.50% N/A N/A N/A Delaware 12.22% N/A N/A N/A Maine 11.53% N/A N/A N/A Michigan 13.46% N/A N/A N/A New Hampshire 14.16% N/A N/A N/A North Dakota 11.80% N/A N/A N/A Vermont 9.28% N/A N/A NATIONAL 17.87% 14.22% -3.66% For more information, visit http://wallethub.com/edu/rates-of-uninsured-by-state-before-after-obamacare/4800/ IN CALIFORNIA PacifiCare Files Suit to Overturn A Huge Fine PacifiCare sued California Insurance Commissioner Dave Jones, seeking to overturn what it says is an egregious, overreaching action stemming from a series of long-resolved administrative errors. The lawsuit, filed by PacifiCare in Orange County Superior Court, seeks judicial review of the Commissioner’s decision to impose a fine of $173.6 million against the company. That decision ignored the state administrative law judge’s August 2013 finding that the penalty should be $11.5 million, sharply lower than the Commissioner’s proposal. Stephen Scheneman, president of PacifiCare said, “By treating errors in standard health insurance paperwork more severely than errors directly affecting patient health or the integrity of their policies, the Commissioner threatens to make California’s health care system slower, less efficient, more bureaucratic and more expensive. PacifiCare says that the case involved largely technical and administrative issues that arose in 2007, which PacifiCare self-disclosed to the CDI. These issues caused no harm to members or providers, and were resolved within months. The Commissioner’s unprecedented decision to pursue an enforcement action even though all of the issues had been resolved resulted in more than three years of hearings on the matter, hearings that included hundreds of hours of testimony, the review of thousands of pages of exhibits, and more than $10 million in Californians’ tax money spent by CDI on outside lawyers. After all that, even the Commissioner acknowledged there is no basis for paying restitution to members or providers, according to PacifiCare. The Commissioner, who did not attend one day of the three-year hearing, has not explained why he waited nearly a year – until June 9, 2014 – to issue a fine fifteen times what the California administrative law judge determined. This ruling threatens to paralyze the health care system in the state, resulting in more costs and bureaucracy for Californians. We are taking this action to protect the interests of our customers who depend on the availability of affordable health insurance. Access to affordable health care depends on balanced regulation that does not impose irrational costs [and is not] potentially disruptive to the market. As we have done since 2008, we plan to continue to vigorously defend ourselves and our members in this matter.” For more information, visit www.phs.com. Covered California to Offer Grants for Navigator Program Covered California will award up to $16.9 million in grants for the launch of its Navigator Program, the next phase in the agency’s outreach, education, and enrollment efforts. Covered California will award grants for programs that educate consumers about Covered California health insurance plans and about how to get financial assistance to help pay for them. Navigator activities will also include informing consumers about the benefits of getting health care coverage, motivating consumers to act, helping consumers shop for and compare plans, and helping consumers in enrollment and renewals. The goal of the Navigator Program is to enroll more than 130,000 subsidy-eligible consumers during the second open-enrollment period from November 15, 2014 to February 15, 2015. Navigators also will help enrollees renew their health insurance coverage. Covered California is seeking proposals from grant applicants with a statewide and regional scope. Covered California seeks organizations that have experience providing outreach to California’s diverse populations and proven success enrolling consumers in health care programs. As many as 135 organizations could get grants, which will be based on recipients enrolling a predetermined number of consumers. Grants will cover the period of Oct. 1, 2014, through June 30, 2015. The grant application deadline is July 28, 2014. Awards will be made starting August 27, 2014. Organizations will be selected through a competitive grant application process. Applications will be evaluated based on the best value and most effective enrollment strategies. Grant applicants must comply with the Enrollment Assistance Program regulations. For more information, visit www.coveredca.com. CAHU Health Care Summit CAHU’s Health Care Summit will be held in Universal City on October 7 and 8. For more information, visit www.cahu.org. Covered California Hires Blue Shield Exec Covered California appointed Anne Price as director of the Plan Management Division and James D. Lombard as chief financial officer. Price recently joined Covered California from Blue Shield of California. She has more than 20 years of financial and management experience in the health care industry, including commercial insurance, Medicare and Medicaid. At Blue Shield, she was director of finance and strategic partnerships with the California Public Employees’ Retirement System. Lombard has 20 years of public finance experience, including budgeting and policy analysis, administration and program operations. He most recently was chief administrative officer in the California State Controller’s Office, where he supervised human resources, budgets, accounting, facilities and information technology. He will start his new job in the coming weeks. For more information, visit www.CoveredCA.com. Heffernan Insurance Brokers Hires Assistant Vice President Heffernan Insurance Brokers, one of the largest full-service, independent insurance brokerage firms in the United States, recently hired Lawrence Thomas as assistant vice president for its Orange County branch. Thomas will focus on building the nonprofit, entertainment and fashion apparel manufacturing niches for Heffernan in Southern California. Thomas has spent over seven years in major market development throughout southern California, including direct sales for a multi-national document management corporation. His duties at Heffernan will include new business development and client service. Heffernan provides insurance and financial services products to a range of businesses and individuals. Headquartered in Walnut Creek, Calif., Heffernan has offices in San Francisco, Petaluma, Menlo Park, Los Angeles and Orange County, CA; Portland, OR; St. Louis, MO and New York, NY. For more information, visit www.heffins.com or call 800-234-6787. NEW PRODUCTS Fixed Deferred Annuity Guardian Life introduced the Guardian Fixed Target Annuity. It allows customers to select from multiple guaranteed interest periods and provides flexible renewal and withdrawal options to help generate income for retirement. Unlike many fixed annuities, it does not have market value adjustments on withdrawals made before maturity. This lets customers know what to expect from their retirement income stream. For more information, visit www.GuardianLife.com. LIFE INSURANCE Life Insurance Sales Were Flat in June Year-over-year, applications for individually underwritten life insurance were flat at 0.3% in June, according to the MIB Life Index. The first six months of 2014 have shown progressively lower monthly losses. U.S. life insurance application activity was flat (0%) in the second quarter copared to a negative first quarter, which was down 5.4%. At the close of second quarter 2014, applications were down 2.7%. However, in June the number of applications increases 1.2% from the previous May, which is consistent with seasonal averages. Applications by age group were mixed in June. Applications ages birth to 44 were down 1.7%; ages 45 to 59 were flat at 0.3%; and ages 60 plus were up 2.8%. Second quarter activity, by age group, mirrored the improvements in the composite index: ages birth to 44 were down 1.2%; ages 45 to 59 were down 0.5%; and ages 60 plus were up 2.9%. For the first six months of 2014, ages birth to 44 are down 3.8%; ages 45-59 are down 2.8%; and ages 60 plus are up 0.6%, compared to the same period last year. For more information, visit www.mibsolutions.com/regLI. EMPLOYEE BENEFITS Study Unveils Small Businesses’ Approach to Benefits Small-business are concerned about taking care of employees and continuing their benefit options, according to a recent Aflac study. Businesses with to 99 employees took these actions in 2013: • 45% of small businesses hired full-time workers, compared to 71% of mid-sized companies, and 60% of large organizations. • 12% changed employee hours from full-time to part-time. • 34% gave employees smaller raises than in previous years, but only 24% plan to do the same this year, and only 18% plan to eliminate or delay raises in 2014. Only 12% of employees at small businesses are extremely satisfied with their benefits, and only 14% say their benefit package meets their family needs extremely well. Fifty percent of employees at small companies saying they’re likely to look for new jobs in the next 12 months; 57% say they’re likely to accept jobs with slightly lower compensation, but better benefits; and 47% say improving their benefit packages is one thing their employers could do to keep them in their job. Thirty-eight percent of small-business employees say that maintaining their health care benefits is their most important benefit concern. Eighty-five percent of small-business employees consider voluntary benefits to be part of a comprehensive benefit program. In fact, 62% of workers at small companies see a growing need for voluntary insurance benefits compared to year’s past, driven by these trends: • Rising medical costs (71%). • Increasing price of medical coverage (63%). • Increasing deductibles and copays (58%). • Reduced number of benefits and/or amount of coverage by their employers (29%). For more information, visit AflacWorkForcesReport.com. Videos Are Highly Effective Enrollment A report by Flimp Media finds that employee benefit video communication campaigns had exceptionally high employee engagement and response rates. Seventy-nine percent of employee recipients watched the digital video postcard content. The average employee spent 3.5 minutes engaged with their video postcard message. For more information, visit www.flimpcommunications.net. EVENTS Webcast on Annuity Sales The National Association for Fixed Annuities is holding a Webcast on Thursday, July 24 on annuity sales secrets. It will be held 8:30 a.m. PT. For more information, visit https://nafa.com. ... Continue Reading →
It is not enough for retirement funds to set default investment options and then expect employees to “sleepwalk” to a financially secure retirement, Alexander Forbes said this week, when it released its annual Benefits Barometer research report on retirement funds and other employee benefits. Fund members should be involved in retirement planning to ensure that it is suitable for their needs, senior executives of Alexander Forbes say. And they say your employee benefits should provide you with protection to ensure that your journey to retirement is not jeopardised by events, such as disability, that could affect your ability to save. he key issue is not to maximise retirement savings, but to optimise the allocation of your resources across short-term consumption, long-term savings and income protection, Anne Cabot-Alletzhauser, the head of the Alexander Forbes Research Institute, and John Anderson, the managing director of research and product development at Alexander Forbes, says in a recent post at PersonalFinance.com ... Continue Reading →