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by Leila Morris
• Covered California Sticks to Plan Cancellations
• LTC Costs Expected to Soar in California
• Leavitt Group Consolidates Offices
• Former Life Agent Scams His Own Aunt
• ACA Compliance Tool
• Hybrid HRA Plan
• Preventive Screenings
• Guide to Executive Compensation
• Tool Helps Employers Save Health Care Dollars
• When Corporate Wellness Programs Discriminate
• Wellness Programs Can Reduce Workers’ Comp Claims
• Highly Rated MA Plans Come with Higher Premiums
• Health Reform Not Expected to Dampen the Need for Advisors
• Fixed-Rate Deferred Annuities Soar
Covered California Sticks to Plan Cancellations
The Covered California board ruled that insurers will not be allowed to continue selling policies in 2014 that don’t meet the Affordable Care Act’s minimum coverage requirements. Insurance Commissioner Jones called Covered California’s decision a disservice to policyholders. Jones made the following comments:
Over a million Californians have received cancellation notices from their health insurer. On behalf of these policyholders, I am disappointed in Covered California’s action, which denies people and families the opportunity to keep their existing health insurance as President Obama promised.
Covered California rejected what President Obama and I asked for-that individual policyholders be allowed to keep their existing health insurance through all of 2014. Covered California’s decision denies Californians the same opportunity health insurers are giving to its small business customers who are being allowed to renew current policies throughout 2014. Covered California could have honored President Obama’s request, without causing damage to the implementation of the Affordable Care Act or the Exchange.
The preferred and more equitable course of action for California consumers is for Covered California’s unnecessary cancellation to be rescinded. Allowing existing policyholders to keep their health insurance for the duration of 2014 will not undermine the implementation of the ACA, but rather will give consumers more time to figure out what makes sense for their families.
Jones also stressed that allowing existing policyholders to renew for a full year will not undermine the risk pool since the ACA has robust features which mitigate the risk of health insurers having a disproportionate share of sick people in their risk pool in 2014. Additionally, it is estimated that 400,000 existing policyholders are eligible for subsidies.
Jamie Court, president of Consumer Watchdog said, “It’s outrageous that this board would acknowledge that half the Californians facing cancellations will pay more money for the same or worse health coverage, then block them from continuing their existing policies for another year. Shame on Covered California for representing the insurance companies, not the policyholders, and standing in the way of President Obama’s call for relief. Covered California showed why we need elected officials, accountable directly to the public, to oversee how much health insurance companies charge.”
In a prepared statement, the Covered California board said that extending the deadline does not benefit consumers and may create confusion about accessing affordable health care coverage through Covered California. The board said that maintaining the original deadline confirms Covered California’s commitment to transitioning Californians into plans that are compliant with the reforms of the Patient Protection and Affordable Care Act, protecting consumers from double deductibles, and stabilizing the risk pool to control costs for consumers beginning in 2014.
Additionally, Covered California is implementing these strategies to boost enrollment:
• Extending the deadline for enrollment for coverage taking effect on Jan. 1, 2014, from Dec. 15, 2013, to Dec. 23, 2013, and extending the deadline for payments due from Dec. 26, 2013, to Jan. 5, 2014.
• Establishing a telephone hotline for consumers to resolve enrollment questions at 855-857-0445.
• Sending information directly to nearly 1.13 million affected people, which provides clear options for coverage. The information will be sent from Covered California and the individual’s current insurance provider.
• Regularly collecting and reporting data showing the affects of conversion for people.
• Engaging consumers in their communities through the thousands of Certified insurance agents, certified enrollment counselors and certified educators now deployed statewide.
LTC Costs Expected to Soar in California
California’s elderly population is expected to expand 44% by 2023, and the total cost of care is projected to increase 88% in the next decade, according to a study by the Univ. of California, Berkeley. Demand for long-term care services and support is expected to grow — particularly since those approaching retirement age report poorer health than those born before them. Projected increases in demand for long-term care suggest that
California seniors will not be able to get the care they need or will face delays in getting care. To get the study, visit http://www.rureadyca.org/sites/default/files/images/economic_study_11-7-2013_for_web.pdf.
Leavitt Group Consolidates Offices
The Leavitt Group consolidated three of its Southern California agencies. The Covina office (Valley Insurance Service – Dennis P. Monahan, AAI, Co-Owner) and the employee benefits agency (Leavitt Benefits Insurance Services of Southern California – Kevin Garrett, Co-Owner) will be rolled into the Santa Ana office (Pridemark-Everest Insurance Services – Angelo Maroutsos, Co-Owner). All three agencies will operate as Leavitt Insurance Services of Southern California. The merger will not affect current accounts, and clients will continue to work with the same personnel. Phone numbers will remain the same. As one of the nation’s largest privately held insurance brokerages, the Leavitt Group offers property and casualty insurance, risk management, and employee benefits. For more information, visit www.leavitt.com.
Former Life Agent Scams His Own Aunt
Myles Seishin Hanashiro, 47, was arrested and booked at Los Angeles County Jail on four felony counts of financial elder abuse. As a licensed life insurance agent in 2005, Hanashiro sold a $100,000 life insurance policy to his 78-year-old aunt. Hanashiro cost his aunt more than $110,000 in loses from her life insurance policy. Between April 2009 and April 2010, he allegedly submitted four withdrawal requests to the life insurance company by forging his aunt’s signature. All four checks were mailed to Hanashiro’s home address. He forged his aunt’s signature, cashed two checks, and deposited the other two into his personal account. He concealed his crimes by changing the address, phone number, and contact information from the victim’s to his own contact information. The crime remained undetected until March 2012 when his aunt contacted the insurance company to find out about the status of her policy.
If convicted on all charges, Hanashiro faces up to four years in state prison, fines and victim restitution. Hanashiro is being held on a $200,000 dollar bond with a bail hold contingency requiring proof that bail funds are from legitimate sources.
Canceled Insurance? Pre-ACA Plans Still Available, Could Save You Money
According to a report by KQED Radio, some Californians whose policies have been canceled are finding relief in a surprising place: from insurance companies that aren’t offering plans on the Covered California marketplace. For more information, visit http://blogs.kqed.org/stateofhealth/2013/11/22/canceled-insurance-some-pre-aca-plans-still-available-in-california-possibly-saving-you-money.
ACA Compliance Tool
ADP enhanced its TotalSource solution to help small and midsized businesses manage compliance with the Affordable Care Act (ACA). It provides individual views of employees’ ACA benefit status and hours credited to determine full-time status. Visual alerts let employers know when they may be subject to penalties for non-compliance (and the potential cost of the total penalty). With the updated dashboard, employers can assess affordability of coverage through historical data or forecast affordability based on rate of pay to ensure the premium does not exceed 9.5% of the employee’s taxable income. For more information, call 800-447-3237 or visit www.adptotalsource.com.
Hybrid HRA Plan
Core Documents rolled out a new type of Health Reimbursement Arrangement (HRA) called the “Core Hybrid HRA.” Employers can reimburse individual and exchange health insurance premiums (post-tax) as well as out-of-pocket medical and Rx expenses (post-tax). They can do this while complying with Affordable Care Act (ACA) mandates, the recent IRS Notice 2013-54, and the nearly identical DOL Technical Release 2013-03. For more information, call 888-755-3373 or visit www.CoreDocuments.com.
Benefitfocus has added a preventive screenings summary to its “BENEFITFOCUS” software. It was developed to help employers comply with the Affordable Care Act (ACA) provision that requires employer-sponsored health plans to cover the full cost of certain preventive screenings, with no co-pay or coinsurance. Employers and insurance carriers can monitor participation, track the financial effect of preventive screenings, and design health plans that meet ACA coverage requirements. For more information, visit www.benefitfocus.com.
Guide to Executive Compensation
“The Complete Guide to Executive Compensation” includes extensive coverage of how pay plans encourage executive performance as well as important changes in venture capitalism; boards of directors’ responsibilities; shifts in stakeholder power; and laws, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act and healthcare reform. For more information, call 212-588-8788 or e-mail email@example.com.
Tool Helps Employers Save Health Care Dollars
The National Business Coalition on Health has developed ValuePort. The online tool includes a calculator to prioritize improvements in employee health and save money on care for 12 of the most prevalent health risks and chronic conditions. It also includes an analysis of the employer’s progress in adopting strategies to improve employees’ health and reduce costs. For more information, visit www.nbch.org/valueport.
When Corporate Wellness Programs Discriminate
Some employers may be creating wellness plans that discriminate against those with obesity in order to improve their bottom line, according to a study presented by ObesityWeek. Dr. Adam Tsai, MD of The Obesity Society said that, while wellness programs commonly set weight goals for employees, they are often paired with employer health plans that deny coverage for evidence-based obesity treatment. Dr. Tsai said, “Employers should avoid BMI targets as the basis for any financial penalty or incentive, and instead reward employees for engaging in specific behaviors. Corporations need to encourage employees to maintain healthy eating habits, increase exercise and participate in weight management programs.” The study was conducted by Ted Kyle, RPh, MBA, of ConscienHealth, and Joe Nadglowski of the Obesity Action Coalition (OAC).
Fifty-nine percent of corporate health plans don’t cover obesity treatment, even when these employers commonly set weight, diet, and exercise goals for employees. Kyle said, “A growing number of employers figured out that carefully crafted weight or body mass index (BMI) requirements can also be an effective way of making it harder for people with obesity to enjoy the full benefits of healthcare coverage, saving short-term costs while hurting employees. Our study shows how some programs can amount to a subterfuge for discrimination. All too often, a wellness plan that sets weight goals for employees is paired with a health plan that denies coverage for evidence-based obesity treatments. By doing this, an employer risks alienating more than a third of its employees.”
Robert Kushner, MD, director Northwestern’s Comprehensive Center on Obesity said, “Tackling obesity in the workplace requires a holistic approach. Doing it right includes offering well-designed workplaces that encourage activity, cafeterias that focus on healthy eating, leaders who model healthy behavior, and health plans covering a wide range of treatments.” Nadglowski said, “Without a genuine commitment to employee health, a wellness program is useless as evidenced in recent news reports about Penn State. Their faculty and staff forced the university to cancel plans for a wellness program that would have penalized employees who would not submit to being weighed for it.” For more information, visit: www.Obesity.org.
Wellness Programs Can Reduce Workers’ Comp Claims
Effective corporate wellness initiatives have shown to be successful in not only reducing the duration of lost-time workers’ compensation claims, but also in reducing a company’s workers’ compensation claims, according to a report by Lockton. The report, authored by Lockton’s Michal Gnatek, is titled “Wellness Programs: The Positive Affect on Workers’ Compensation Claims.” Gnatek says that promoting healthy behavior can inhibit unsafe or inattentive workplace behavior. “Risk managers and claims professionals should be adding employee wellness to the available arsenal of weapons to combat increasing claims,” he said. Lockton recommends that risk managers become well acquainted with their companies’ wellness program and find the data on comorbid factors captured by their insurer or third party administrator. Collaborating with internal safety, health, human resource, and environment professionals will help risk managers discover how to integrate employee wellness with workplace safety, he said. For more information, visit http://www.lockton.com.
Highly Rated MA Plans Come with Higher Premiums
Highly rated Medicare Advantage plans (with four or more stars) come with an average monthly premium of $85 versus the average of $58 for all plans, according to a study by HealthPocket. Lower out-of-pocket caps are consistent across all-star ratings, with about 30% of plans offering annual limits of $3,400 or below.
The Medicare plan quality star rating system is a key factor in helping enrollees differentiate plans. It reflects scores for treatment, preventive care, and customer satisfaction. For 2014, highly rated four and above star MA plans are available to residents of over half of U.S. counties. Steve Zaleznick of HealthPocket said, “The good news for Medicare Advantage customers is that the overall quality of these plans is rising, and their limits on out-of-pocket expenses provide good insurance protection. But not all regions in the U.S. have access to four plus star plans, and some highly rated plans have higher premiums than lesser-rated plans. Therefore, consumers would be wise to do thorough research into how the quality and costs of their available options fit their personal situation.” For more information, visit www.HealthPocket.com.
Health Reform Not Expected to Dampen the Need for Advisors
Ninety-four percent of small businesses say their need for an outside advisor will increase or stay the same in the next two years, according to a recent LIMRA study. “While the new public and private exchanges will eliminate the need for many of the administrative functions that advisors perform, such as requests for proposals, helping both employers and employees understand the options available within and outside the exchanges will be a new way for advisors to grow their business,” said Mary Boyce of LIMRA.
Companies that are most likely to see a need for an advisor in the next two years are those with 10 to 24 employees, those that are still establishing themselves, and those that are looking to expand. According to the U.S. Census Bureau, 98% of businesses in the U.S. have fewer than 100 employees, accounting for approximately 35% of the U.S. workforce. Yet only half use an advisor for business or personal needs regardless of whether they offer benefits to employees. Mary Boyce of LIMRA said, “This presents a huge opportunity for advisors who are able to demonstrate their value.”
Half of the employers surveyed who use an advisor said they were satisfied with their advisor. But there is room for improvement, as 40% of small businesses are neutral with regards to satisfaction with their advisor. Cost was the top reason small business employers gave for eliminating their advisor. Employers rely on their advisors for a variety of services. The most important include reviewing their plans to make sure that the rates are competitive and services are current and reviewing the renewal rate adjustment to ensure that it is competitive. For more information, visit limra.com.
Fixed-Rate Deferred Annuities Soar
Fixed-rate deferred annuity sales increased 66% in the third quarter of 2013, compared to the third quarter 2012, according to LIMRA. Total annuity sales for the quarter increased 9%, which is the largest year-over-year growth since the second quarter of 2011. Joseph Montminy of LIMRA explained, “In addition to the substantial growth experienced by fixed-rate deferred annuities, indexed annuities grew 15% in the third quarter to hit a new peak of $10 billion. This growth was driven by improvements in the interest rate environment, increasing the demand for accumulation-type annuity products. We are seeing broader acceptance of indexed annuities across the different distribution channels.”
Total fixed annuity sales grew 31% in the third quarter over the prior year to reach $23.5 billion – a level they have not reached since the third quarter 2009. Year-to-date, fixed annuity sales rose 6%. Fixed-rate deferred annuity sales for book value annuities and MVAs were $9.5 billion, which is the highest quarterly total since the second quarter of 2011. Year-to-date, fixed-rate deferred annuities sales grew 5%. In the third quarter, market share for fixed-rate deferred annuities rose 10% to reach 40% of total fixed annuity sales.
For the first time, quarterly indexed annuities sales reached $10 billion – an increase of $1 billion from the prior quarter. Most of this increase came from accumulation-type products. Year-to-date, indexed annuities sales increased 6%. Bank sales of indexed annuities expanded from 9% market share one year ago to 15% market share this quarter while independent B-D market share grew from 3% to 5% year over year.
Variable annuity sales declined 2% in the third quarter. Year-to-date, variable annuity sales fell 2% from the prior year. Election rates for variable annuity guaranteed living benefit (GLB) riders were 81% (when available) in the third quarter, which is down 1% from the second quarter of 2013.
Sales of deferred income annuities (DIAs) grew 106% compared to the prior year. In the first nine months of 2013, DIA sales grew 132% and are on pace to surpass $2 billion by the end of the year, which would double 2012 results. Fixed immediate annuity sales were up 5% in the third quarter to reach $2.1 billion. Year-to-date, fixed immediate annuity sales totaled $5.7 billion, matching sales from one year ago. For more information, visit limra.com.
• California Grapples With the Prospect of Not Cancelling Policies After all
• Covered California To Hold Important Board Meeting
• DMHC Stops Carriers From Denying Speech & Occupational Therapy
• Covered California To Offer Agent Quoting
• Attorney General Shuts Down Phony Covered California Sites
• Conservative Physician Group Warns Against Exchanges
• The Downside of Private Exchanges
• Nearly Half Of Small Businesses Lack Benefits
• How Employee Happiness Leads to Business Success
• Variable Annuity
• Prescription Discount Card For the Uninsured
• Indexed Universal Life Insurance
• Guidance On Legal Issues of High Deductible Health Plans
• Succession Planning Podcast
• Private Exchange Guide and Directory
• Private Exchanges
California Grapples with the Prospect of Not Cancelling Policies
President Obama announced that the administration will allow states to reverse health insurance cancellations that were set to go into effect December 31. Insurance Commissioner Dave Jones is asking California health insurers and HMOs to allow customers to renew non-grandfathered policies for 2014. Jones said, “The President’s action makes it crystal clear that health insurers and HMOs are not required by federal law to cancel existing policies. California has more than 1 million people with non-grandfathered policies facing cancellation; they should be given the opportunity to keep their existing coverage next year. I am calling on all health insurers in California to let their policyholders keep their existing coverage for an additional year if they want it.”
At a press conference in San Francisco, Jones said that health insurers in California had decided to cancel individual plans, but not group plans. They are allowing small businesses to renew their existing policies for another year although those policies don’t comply with the new 2014 requirement.
Commissioner Jones also called on Covered California to release health insurers from a contract provision that requires them to cancel plans for individual policyholders on December 31. Jones said, “Over my objections, Covered California required health insurers participating in the Exchange to cancel all non-grandfathered individual policies on December 31.” Recently Jones persuaded Anthem Blue Cross and Blue Shield to delay the December 31 policy cancellations for individual and family (non-grandfathered) policies.
The American Academy of Actuaries’ warns that allowing states to reverse health insurance cancellations could lead to higher average medical spending among those purchasing new coverage, additional program costs for the federal government, and higher health insurance premiums in 2015. Cori Uccello, the Academy’s senior health fellow says that changing the ACA provisions could alter the dynamics of the insurance market, creating two parallel markets operating under different rules.
He said that allowing consumers to retain cancelled plans could affect the composition of health insurance risk pools. In particular, if lower-cost individuals keep their coverage, and higher-cost individuals move to new coverage, the medical spending for those purchasing new coverage could be higher than expected. He added that premiums approved for 2014 may not cover the cost of providing benefits for an enrollee population that has higher claims than anticipated in the premium calculations. Insurers cannot increase premiums in future years to make up for prior losses. However, assumptions about the composition of the risk pool would reflect plan experience in 2014.
Covered California to Hold Important Board Meeting
The Covered California Board is scheduled to hold its next meeting tomorrow from 10:00 a.m. to 4:00 p.m. in Sacramento. You can catch the meeting via webcast at http://www.calspan.org/State_Webcast/HBEX/stream_index.htm. Executive director Peter V. Lee will provide the monthly executive director’s report, covering updates on legislative matters and federal rules. The board will also discuss pediatric dental policy issues, navigator program regulations and the following reports: Covered California Health Plans, Small Business Health Options Program (SHOP), marketing and outreach, eligibility and enrollment operations and financial.
The board may also take action on the identity proofing policy and the following regulations: SHOP appeals, fingerprinting and criminal background checks, the Covered California incompatible activities policy, and the quality rating system. The call-in number for teleconference comments is (800) 288-8975.
DMHC Stops Carriers from Denying Speech and Occupational Therapy
The California Department of Managed Health Care (DMHC) ordered Health Net, Anthem Blue Cross, and Blue Shield of California to cease and desist from denying their members access to medically necessary speech therapy and/or occupational therapy. DMHC said the plans denied coverage without determining whether the services were medically necessary. DMHC issued a $300,000 fine against Health Net for repeatedly mischaracterizing requests for services as coverage issues rather than medical necessity issues.
DMHC Director Brent Barnhart said, “Today’s actions will ensure that members get the care required by law. Additionally, the plans will be required to identify and reimburse members who paid out-of-pocket for medically necessary therapy after those services were inappropriately denied.”
Covered California to Offer Agent Quoting
Covered California is preparing for the first major upgrade to its website on Nov. 22. The new site will have online enrollment pages for the exchange’s Small Business Health Options Program (SHOP), designed for employers with 50 or fewer eligible employees. Those businesses can register online, check for eligibility and work with licensed certified insurance agents to get quotes. The upgraded site will allow self-service online quoting and enrollment for small employers, aligning SHOP with industry standards for the small-group market enrollments in November and December. Business owners can also continue to sign up for SHOP through certified insurance agents, or by using paper applications.
The upgrades will be in place by Monday, Nov. 25. The enrollment portal will go offline for two days while the improvements are installed, from late Friday, Nov. 22, to the early morning hours of Nov. 25. The information pages of CoveredCA.com, including the Shop and Compare Tool for individuals, will remain up and running during that time. Covered California promises faster page-loading speeds, smoother navigation paths, and changes in text to make questions easier to understand. Covered California used feedback from individuals, assisters and Service Center representatives to make the improvements, including an optional post-enrollment survey of consumers. Staff also zeroed in on areas in the website where consumers seemed to take longer or abandon the enrollment process.
For more information, visit www.CoveredCA.com.
Attorney General Shuts Down Phony Covered California Sites
Attorney General Kamala Harris announced the removal of 10 private health insurance websites that imitated Covered California. These websites were operated by private health insurance brokers or companies that were not affiliated with Covered California. Harris said, “My office will continue to investigate and shut down these kinds of sites.” Multiple website operators got cease and desist letters informing them that their websites violate state law and demanding the immediate removal of the website or transfer of the domain name to the state’s official exchange.
The websites have domain names similar to the state’s official healthcare exchange and contain unauthorized references to the official exchange’s trademarked logo and name. In several cases, websites used the phrases “Get Covered,” “Covered California,” and “California Health Benefit Advisers.” The following websites have been deactivated or redirected to the official exchange website:
Conservative Physician Group Warns Against Exchanges
The Association of American Physicians and Surgeons (AAPS) issued the following warnings about enrolling in health plans on the exchanges set up under the ACA:
• The Exchanges destroy privacy – Once entered, your information becomes available to a myriad of government agencies. Moreover, the Exchanges are susceptible to hacking by identity thieves and other criminals. Some sites posing as Exchange sites may not be ACA sites at all, just fronts for criminal operations.
• Navigators and assisters are not necessarily trustworthy – They have minimal training and do not need to undergo a criminal background check. (Editor’s note: Covered California Requires Navigators to agree to a criminal background check.) Agencies that employ them may previously have been found guilty of fraud.
• If the Exchange miscalculated your subsidy, you could get a demand from the IRS to pay it back even though the insurer got it and you didn’t.
• The doctor or hospital of your choice may not be available under the plan; Networks may be very narrow.
• Even though premiums may be much higher than what you have been paying, deductibles may also be much higher –The copayment may be even higher than stated; a 20% copay may be an average, and the copay for a particular service could be much greater. Many people may decide that the cost is so high that they would be better off putting the premium in the bank and paying out of pocket if and when they need care. Sometimes the cash price without insurance may be less than a person would pay with insurance. Some hospitals will quote a package price paid in advance for elective procedures.
• Members of Christian health-sharing ministries are exempt from the Obama penalty/tax. But for those subject to the tax, the liability can be imposed by the IRS by withholding refunds. Some have suggested that people avoid over-withholding and that they designate the purpose of estimated tax payments to be clear that they should not be re-allocated by the IRS towards any ObamaCare liability.
The Downside of Private Exchanges
Employers that pursue a private exchange/defined contribution strategy without managing healthcare costs could be engaging in elaborate cost-shifting, says Jim Blaney, CEO of Willis North America’s Human Capital Practice. In a recent blog post, he explains that the majority of private exchanges focus on aggregating volume to drive cost down, which is not a sustainable cost containment measure. Once the employer’s defined contribution is exhausted, the employee bears the entire cost. Failing to bring down health care cost inflation could lead to a situation in which employees can’t afford health care in the exchange environment, he said.
“The way to make this model sustainable is to integrate wellness programs and other health management initiatives into the exchange strategy to reduce consumption of medical resources. Employers who have invested in worksite wellness and total population health management have seen increased productivity, reduced absenteeism, and lower health care costs,” he said
According to Blaney, the private exchange model is particularly appealing to employers with seasonal workforces and those in the retail and hospitality sectors. Also interested in private exchanges are employers that will be subject to mandates to provide coverage under the Affordable Care Act. For more information, visit www.WillisWire.com.
Nearly Half of Small Businesses Lack Benefits
Forty-two percent of small business owners with full-time employees do not offer any benefits and 36% share some benefit costs with their employees, according to The Hartford’s 2013 Small Business Success Study. “We see this gap in coverage as a big opportunity for brokers and agents to discuss voluntary, or employee-paid, benefits with their small business clients. Voluntary benefits are no longer only for large companies. They can help small business owners protect their employees without added expense,” said Donato Monaco, with The Hartford’s Group Benefits.
Forty-one percent of business owners pay for life insurance completely; 36% share the costs with employees; and 23% have employees pay for it completely. Thirty-eight percent of business owners pay for short-term disability insurance completely; 47% share the costs with employees; and 14% have employees pay for it completely. For more information, visit www.thehartford.com/gbsmallbusiness.
How Employee Happiness Leads to Business Success
Companies that put employee happiness first will see higher profits, according to a whitepaper released by Lincoln Financial Group titled, “Happiness and the Bottom Line: The Happy Worker Prescription.”
Employees who are unhappy at work are seven times as likely to be absent from work, twice as likely to give themselves low performance ratings, and seven times as likely to look for a new job, according to recent findings by Healthways-Gallup. Only one in five Americans say they feel happy at work.
The whitepaper offers these tips for creating a positive workplace:
1. Make sure managers understand that employee happiness affects productivity and helps keep your workforce fully engaged and productive.
2. Hire happy people.
3. Invest in managers’ emotional intelligence.
4. Provide recognition in the way the employee values most.
5. Provide opportunities to socialize, and encourage it.
6. Provide benefits that are important to your employees and enhance their financial security–and emphasize the value of those benefits.
7. If there are issues with performance, address them directly.
8. If an employee or team shows signs of stress, listen without judgment.
9. If you have done something wrong, apologize.
10. Express interest in staff well being, including when an employee is out of work.
AXA Equitable Life launched a variable annuity offering long-term investing that’s focused on diversification, deferral, and distribution. It includes over 120 investment options, offers tax-deferred asset growth potential, and features the flexibility to access distributions in multiple ways, including taking payments that are only partially taxed. For more information, visit www.axa-equitable.com.
Long-Term Care Coordination Tool
Lincoln Financial launched “Lincoln Concierge Care Coordination” for policyholders of a Lincoln life and long-term care combination product. It provides care coordination before and during a long-term care event. For more information, visit www.LincolnFinancial.com.
Prescription Discount Card For the Uninsured
Medicationdiscountcard.com is offering prescription discounts with no eligibility requirements. Users will see discounts of up to 75% on a laundry list of medications — brand name and generic. The prescription discount cards are accepted at all major, national pharmacies, including Wal-Mart, Walgreens, CVS, and Rite Aid.
Indexed Universal Life Insurance
Principal Financial Group is offering Principal Indexed Universal Life Flex, which is designed to offer affordable protection, flexibility and consumer-friendly features. It goes beyond the traditional universal life insurance design by coupling upside accumulation potential with downside interest rate protection. It is designed to offer long-term death benefit guarantees, strong cash value accumulation potential and interest rate protection during economic downturns. For more information, visit www.principal.com.
Guidance On Legal Issues of High Deductible Health Plans
Health Partners America released a white paper titled, “Defined Contribution: What’s Legal, What’s Not?” This 15-page document answers some questions about a popular health insurance funding strategy, explains some long-awaited federal guidance on this topic, and provides some alternative ideas for employers and insurance advisors. For more information, visit healthpartnersamerica.com.
Succession Planning Podcast
The Million Dollar Round Table (MDRT) is making its succession planning podcast available to all advisors at this link: http://joinmdrt.org/media/Public-Succession-Planning-Talk-Segment.wav.
Private Exchange Guide and Directory
The Institute for HealthCare Consumerism launched the private exchange guide and directory at PrivateHealthCareExchanges.com, a new website that’s designed to help the industry navigate this emerging, innovative technology.
BB&T Insurance Holdings launched two private insurance exchanges. The CarePlus Benefits Exchanges are designed to ease employers’ transition to a fixed-budget approach to group health plans while employees gain access to more benefit options than they would under traditional arrangements. The CarePlus Benefits Exchanges – available in Standard and Custom options – let employees select their own health, dental, vision, life and disability coverage, among other benefits, from various national and regional insurance providers in an online marketplace. For more information, visit http://www.theihcc.com/en/communities/health_care_exchange_solutions/bb-t-launches-private-insurance-exchanges-aimed-at_hnvz3g1x.html.
• HHS Releases Substance Abuse Parity Rules
• Washington State Comes Out Ahead with its Health Exchange
• 50% of Calif. Voters Support ACA, but Some Wary of its Effects
• Medicare Recipients Unaware of Important Deadlines
• Webinar Explains Tax Advantages of Micro Defined Benefit Plans
• The Fallout of Cutting Health Benefits
• ACA Enrollment Extension Could Dent Insurance Industry
• Court Rules On Payment of Medical Services
• Covered California Issues Progress Report
• Anthem Will Delay Some Individual Policy Cancellations
• Many Californians Expected to Remain Uninsured
• Alameda Alliance Suspended From Insurance Exchange
• Hospital Performance Index
• Health Exchange Services
• Life Policy with Grief Counseling
• Seminars for Seniors
HHS Releases Substance Abuse Parity Rules
The Departments of Health and Human Services, Labor and the Treasury issued a final rule that increases parity between mental health/substance use benefits and medical/surgical benefits in group and individual health plans.
Under the final rule, co-pays, deductibles, and visit limits cannot be generally no more restrictive for mental health/substance abuse disorders benefits than they are for medical/surgical benefits.
The rule also includes these consumer protections:
• Ensures that parity applies to intermediate levels of care in residential treatment or intensive outpatient settings.
• Clarifies how much transparency health plans must have, including disclosing the rights of plan participants.
• Clarifies that parity applies to all plan standards, including geographic limits, facility-type limits, and network adequacy.
• Eliminates a provision that allowed insurance companies to make an exception to parity requirements for certain benefits based on “clinically appropriate standards of care.” Clinical experts have said that this exception was not necessary, was confusing, and was open to abuse.
In January, as part of the President and Vice President’s plan to reduce gun violence, the Administration committed to finalize this rule as part of a larger effort to increase access to affordable mental health services and reduce the misinformation associated with mental illness.
Washington State Comes Out Ahead with its Health Exchange
An article featured in www.politico.com looks at how well state exchanges are running. On the Obamacare racetrack, Washington, Kentucky, and New York are leading the pack. Relatively free of the technical problems that have plagued the federally run insurance exchanges, some states are charging ahead on enrollment while others have run up against roadblocks.
The leader on enrollments, so far is Washington state, with nearly 49,000 enrollees in exchange plans and Medicaid. The state has been a leader in setting up its exchange all along, and officials say the swell of enrollments has allowed them to identify the biggest website problems early on.
“The problems have ranged from error codes to difficulties reconciling state tax records with the federal government,” said Washington exchange spokesman Michael Marchand. Those problems are being fixed through regular overnight weekend maintenance, which will most likely continue through the beginning of December, he said.
Enrollment is also humming along in New York and Kentucky. More than 37,000 have enrolled in N.Y. State of Health and 31,500 have signed up through Kynect, the Kentucky exchange. It’s moving a little slower in California, Colorado, and Connecticut, where the websites are basically working, but still experiencing some glitches, according to politico.com. In California, there have been delays in authorizing enrollment counselors, which has slowed down the process for some residents who want help in-person.
In some states, glitches have been so severe that officials have been forced to postpone deadlines. The Hawaii exchange opened two weeks late and crashed when people started visiting it. But it’s been up and running since then. Vermont Gov. Peter Shumlin announced last week that residents can stay on their existing plans through March 31 because of the exchange’s technical problems. That exchange depended on the same lead contractor as the troubled federal one. Oregon’s exchange is still so spotty that Gov. John Kitzhaber urged residents to enroll using paper applications. Officials are not sure whether it will be fully operational by Dec. 15 – the deadline to sign up to be covered by Jan. 1. Oregon had embraced the president’s health law early and enthusiastically.
Tose watching the exchanges warn against scoring them too early, stressing that open enrollment lasts for another five months. For more information, visit http://www.politico.com/story/2013/11/state-health-care-exchanges-mixed-results-obamacare-affordable-care-act-99346.html#ixzz2kUNmlMn5
50% of CA Voters Support ACA, but Some Wary of Its Effects
Half of California residents support the Affordable Care Act, but many still have doubts about how it will affect health care costs and the economy, according to a recent survey by University of Southern California. Forty-two percent oppose the law in California compared to national polls that find that a majority of respondents oppose it.
The report also reveals the following:
• 44% of respondents in the individual market support the law, and 49% oppose it.
• 48% of uninsured respondents support the law, and 45% oppose it.
• Latinos support the law by a two to one margin.
• 49% of whites oppose the law, and 44% support it.
• 77% of Democrats support the law, and 80% of Republicans oppose it.
• 67% of respondents say patients will have more access to physicians and preventive care under the law.
• 65% say the ACA will decrease the number of uninsured.
• 65% say that individuals will have trouble affording coverage under the ACA.
• Nearly 60% say the law will increase health care costs and reduce hiring.
• 46% say the law will hurt the economy while 34% say it will boost the economy.
The survey also finds that 90% of respondents are happy with their health coverage.
Forty-two percent say they don’t have enough information on the law, including 50% of Latinos.
Medicare Recipients Unaware of Important Deadlines
A HealthPocket survey finds that 78% of Medicare beneficiaries don’t know when open enrollment ends. Thirty-three percent said that Medicare’s annual enrollment period ends December 31; 26% said it ends December 1; 19% said it ends December 15. Only 22% answered correctly that it ends December 7.
Medicare’s annual enrollment period runs from October 15 to December 7. These dates have been in effect since the fall of 2011. During this time, Medicare enrollees can change their coverage, including moving from one Medicare Advantage or Part D prescription drug plan to another. However, this year’s Medicare annual enrollment also overlaps with the highly publicized open enrollment for the Obamacare insurance marketplaces, which begins on October 1 and ends on March 31. “With so much public attention on Healthcare.gov, seniors may be getting lost in the shuffle,” said Steve Zaleznick, executive director for Consumer Strategy and Development of HealthPocket. For more information, visit www.HealthPocket.com.
Webinar On Tax Advantages of Micro Defined Benefit Plans
Dedicated Benefit Services is holding a free Webinar on micro defined benefit plans on Friday November 15 at 10:00 to 11:00 Pacific Time. For more information, visit http://marketing.dedicated-db.com/acton/form/2928/0039:d-0002/0/index.htm?id=0039 or call 866-269-2706.
The Fallout of Cutting Health Benefits
Thirty-five percent of workers would look for another job if their employer discontinued their health benefits without offering money to help them buy health insurance on their own, according to a survey by TNS. Also, 24% would still hit the want ads even if their employer offered some funding. Twenty-five percent would look for other work if their employers passed the costs onto them in the form of higher premiums or deductibles.
William Bruno, Vice President at TNS said, “With the ACA providing new health plan alternatives that are not employer dependent, some employees may be…more likely to move to a new employer when their current health plan becomes less desirable. The situation provides a great opportunity for employers, with the help of their benefit consultants and health insurance carriers, to stay well ahead of the curve on communicating with employees about the health insurance plans offered and advantages relative to the new alternatives.” For more information visit www.tnsglobal.com.
ACA Enrollment Extension Could Dent Insurance Industry
Extending the enrollment period for Americans seeking health coverage under the Affordable Care Act could mean pricing and logistical implications for health insurers, according to Fitch Ratings. According to the Fitch report, “We believe an extension would be a negative for health insurers. Pressure on insurers to extend existing policies is likely less problematic than extending the enrollment period. The current deadline for enrollment is March 31, 2014, although plans will take effect on Jan. 1 for those who sign up earlier.
An extension could increase the number of people who wait until they need healthcare to buy the insurance. The open enrollment period for health insurance plans offered in the insurance exchanges began on Oct. 1 and the process has been plagued with technical problems on websites including www.healthcare.gov.
Allowing more time would also create logistical issues with pricing and state participation, which could raise short-term risk for insurers.
Under normal circumstances, insurers set premium rates before the enrollment period based on cost-of-care estimates. When the enrollment period is lengthened, these estimates may no longer be as accurate.
Some state regulators are encouraging insurers to extend existing policies for three months beyond their Jan. 1, 2014 expiration date due to technological problems with exchange websites. Fitch says that this would be less problematic for health insurers than extending the current enrollment period as long as benefits and premiums on the extended policies don’t change from current levels and the extension is effective for a relatively short period.
Nevertheless, such extensions could result in a short-term increase in risk levels of business sourced through the exchanges. Consumers whose policies are extended are likely to have better risk profiles compared to early users of exchange-sourced insurance. The extension could hurt the financial results of insurers whose enrollment is weighted disproportionally toward exchange business.
Fitch also says that an extension would delay the positive benefits that hospitals would see as a result of health reform including higher patient volumes and lower bad debt expenses for treating the uninsured. For more information, visit www.fitchratings.com.
Court Rules On Payment of Medical Services
Tran Liang & Wang LLP blocked a plaintiff’s attempt to compel arbitration against a defendant who was not a party to the arbitration agreement. The firm represented the City of Long Beach in an action brought by Promise Hospital of East Los Angeles. The Hospital alleged that CIGNA and the City failed to pay for medical services that it provided to a City employee under the City’s health plan. (Promise Hospital of East Los Angeles, L.P. v. Cigna Corporation et. al., Case No. B243126). The Hospital argued that it could compel arbitration against the City, even though the City was not a party to the agreement containing the arbitration provision, which was entered into by the Hospital and CIGNA. The trial court ruled that the arbitration provision was not enforceable against the City, and the Court of Appeal affirmed. The Court’s detailed opinion adopted all of the firm’s arguments, holding that none of the grounds to compel a non-signatory to an arbitration provision applied in this case. Namely, the Court ruled that: 1) the City was not a third-party beneficiary; there were no grounds for direct-benefits; and CIGNA was not the City’s authorized agent for purposes of agreeing to arbitration. A contrary ruling could have had far-reaching effects for companies and individuals seeking to exercise their constitutional right to a jury trial. For more information, visit www.ltlw.com.
Covered California Issues Progress Report
Covered California released its fiscal year 2012 to 2013 annual “Report to the Governor and the Legislature,” detailing its progress to implement the federal Patient Protection and Affordable Care Act in California.
Enrollment in Covered California began on Oct. 1 for health coverage starting Jan. 1, 2014. Covered California, working in partnership with the California Department of Health Care Services, projects that by January 2015, more than 1 million Californians will enroll using federal subsidies, and another 1 million will be new to Medi-Cal. In addition, Covered California projects that more than 1.7 million Californians will benefit from the new insurance rules and get coverage without a subsidy – some purchasing through Covered California, and some on the individual market.
Initial Covered California marketing efforts began in September 2013 in advance of the Oct. 1, 2013, open-enrollment date. Community organizations have also begun mobilizing to educate individuals who need insurance. And on Oct. 1, Covered California started a broad marketing campaign that will go through 2014.
Anthem Will Delay Some Individual Policy Cancellations
Californians have seen 1 million insurance cancellation notices. But a small subset is getting a reprieve. Anthem Blue Cross will delay the December 31 policy cancellations for 104,000 California consumers covered by individual and family (non-grandfathered) policies.
Anthem had informed Insurance Commissioner Dave Jones that, because of a computer glitch, 104,000 policyholders had not received 90 days’ notice of cancellation as required by law. Jones asked Anthem to send out new notices to the policyholders and give them the option to extend their policies with their doctors and hospitals at the same rates until February 28. Anthem will mail out new notices by November 15. If all 104,000 policyholders chose to keep their existing coverage through February 28th, they would save an estimated $23 million from Anthem’s 2014 rates. Policyholders must notify Anthem Blue Cross by December 15 if they want to keep their existing policies through February.
Commissioner Jones said, “Neither state nor federal law allows me to stop the 1 million cancellation notices sent to Californians, despite my opposition to these cancellations. We will, however, do everything within our power to extend existing policies where health insurers are not in full compliance with notice requirements.”
Many Californians Expected to Remain Uninsured
Despite the Affordable Care Act (ACA), over 3 million Californians will remain uninsured, according to a study by Health Access. The study also reveals that California has an uneven safety net for the uninsured; and the safety net could get more uneven depending on county actions in the next few months.
“The Affordable Care Act will dramatically cut the number of uninsured, but there’s more that needs to be done at the state and county level to include everyone and improve our health system as whole. We want to spotlight those counties that are stepping up to ensure access and afford basic care,” said Anthony Wright, Executive Director of Health Access.
The report recommends support for efforts to enroll eligible populations into Covered California plans and Medi-Cal. Health Access also says that county governments should hold off on reducing any services until they get a year of information on what is available. For more information, visit www.health-access.org.
Alameda Alliance Suspended From Insurance Exchange
Covered California is dropping one of its 12 health plans – Alameda Alliance for Health. Alameda Alliance did not get approval from the state Department of Managed Health Care in time to sell health coverage in the commercial market. Covered California notified Alameda Alliance in mid-October that it needed a state-issued license to sell health coverage and set a deadline of Oct. 31.
Covered California has informed prospective enrollees that they need to sign up for another plan. However, Covered California doesn’t expect any impact on coverage in the Alameda County region since residents can choose from a mix of plans from Anthem, Blue Shield, and Kaiser Permanente, which serve nine hospitals in the region. Also, removing Alameda Alliance from the exchange portfolio will not affect the calculation of federal subsidies.
The plan is not being excluded permanently. California will retain its contract with Alameda Alliance and will continue to work with the state and the company to fulfill the requirements to modify its license. Covered California executive director Peter V. Lee said, “Alameda Alliance has a solid provider network and is a valuable asset to the community. We look forward to the company getting its commercial license, so we can welcome its plans back to the exchange.” Also, the exclusion does not affect Alameda Alliance’s license as a Medi-Cal managed care plan provider. Covered
Hospital Performance Index
Milliman launched its next generation Hospital Performance Index software. The benchmarking tool identifies opportunities for increased efficiency in patient populations. The enhanced product is designed to fit the needs of accountable-care organizations by identifying instances when care management can improve quality and increase efficiency. For more information, visit http://us.milliman.com/hpi.
Health Exchange Services
HealthPlanOne is adding its “Employer Solutions” offering to its portfolio of services. Employer Solutions is a private healthcare exchange targeted to employers that are transitioning retirees from a traditional group medical plan to a defined contribution approach. Employer Solutions contains enhanced communication and educational materials, expanded decision-making tools, HRA administration services, and reporting. It meets the needs of Medicare-eligible and pre-Medicare retirees and is available in all 50 states. HealthPlanOne partners with brokers and benefit consultants. For more information, e-mail firstname.lastname@example.org.
Life Policy with Grief Counseling
MetLife is now offering grief-counseling services on its basic group life insurance programs. Employees get access to licensed professional counselors and related services. The services will be available January 1, 2014, subject to state availability, for new and existing customers, at no additional cost to the employer or employee. Employees and their dependents can consult with a highly credentialed counselor up to five times per event. For more information, visit https://www.metlife.com.
Seminars for Seniors
Medicare beneficiaries can now search kp.org/medicare to find Kaiser Permanente Medicare seminars in their area
• Treasury Modifies FSA Use-or-Lose Rule
• Texas Agents Counter ACA Misinformation
• Middle-Income Retirees Say What’s Best and Worst About the Affordable Care Act
• 2014 Medicare Drug Plans Vary Widely in Availability of Drugs and Restrictions
• Best Medicare Advantage Plans and Medicare Part D Plans
• Alternate Payers to Compete With Traditional Health Plans
• Confusion Over Drug Kickbacks in the Exchange
• Web Portal Explains The Affordable Care Act For People With HIV
• Twitter Reveals Public Reaction to the Exchanges
• Blue Shield Steps Back From Individual Policy Cancellations
• Sutter Health Agrees to Record Settlement For Anesthesia Billing
• Supplemental Benefit for Self Funded Plans
• Group Life/AD&D Policies & EAPs
• Enhanced HSA Option
• Private Exchange Marketplace For Large Groups
• The Type of Stress That Most Affects Job Performance
Treasury Modifies FSA Use-or-Lose Rule
The Dept. of Treasury and the IRS issued a notice modifying the longstanding “use-or-lose” rule for health flexible spending arrangements (FSAs). The updated guidance permits employers to allow plan participants to carry over up to $500 of their unused health FSA balances remaining at the end of a plan year. Some plan sponsors may be eligible to adopt a carryover provision as early as plan year 2013. In addition, there are existing options for plan sponsors to allow employees a grace period after the end of the plan year. However, a health FSA cannot have both a carryover and a grace period; it can have one or the other or neither.
Jeremy Miller, president and founder of FSAstore.com said, “Changes to the use it or lose it rule present a significant growth opportunity for flexible spending accounts. The use it or lose it provision was one reason why people shied away from FSAs. This change, coupled with the major pre-tax savings on out-of-pocket expenses, should encourage many new participants to take advantage of FSAs.”
The policy change is in response to public comments. An overwhelming majority of feedback was from individuals, employers, and other organizations that wanted the health FSA use-or-lose rule to be modified. With the use-or-lose rule, any account balances at the end of the year are forfeited. Those commenting said it is difficult for employees to predict needs for medical expenditures; FSAs need to be accessible to employees of all income levels; and there should be incentives to minimize unnecessary spending at the end of the year.
Texas Agents Counter ACA Misinformation
Consumer confusion and frustration don’t appear to be subsiding one month into the roll-out of the Affordable Care Act’s health information exchanges. Mark Bellman, president of the Texas Association of Health Underwriters says that polls reflect a broad lack of understanding about the new law, confusion about the enrollment process and choices, and frustration with glitches that have plagued the rollout of the health exchanges. Increasing misinformation adds to these complexities. Bellman says that health agents hear from hundreds of Texans each day with questions that highlight the confusion. The good news is that many consumers are reaching out to a professional benefit advisor to get answers and avoid making costly mistakes, he said.
The Texas Association of Health Underwriters says these 10 areas generate the most confusion:
• Can I keep my existing coverage? Many plans will not be in compliance and will be eliminated because the ACA contains new requirements for coverage. For example, the ACA requires all policies to cover 10 essential benefits. An individual with a non-compliant plan will be forced to change coverage. Employers offering health insurance could have grandfathered their plans to avoid being forced to change their employees’ coverage. If an employer did not grandfather its plan, employee benefits change. These benefits could improve or erode depending on the employer’s ability to absorb cost changes resulting from the Affordable Care Act.
• Am I required to purchase insurance coverage through the health insurance exchange? Consumers are not required to purchase coverage through the Exchange. Most Americans will be required to carry health insurance, which can be purchased outside of the Exchange in the commercial market.
• Will insurance coverage purchased through the Exchange cost less because it provides Americans with a government subsidy? There is no guarantee that insurance purchased through the Exchange will be more affordable than coverage in the commercial market. Subsides available in the Exchange may reduce the cost. People with incomes from 100% of the poverty line (or about $23,550 for a family of four) to 400% of poverty ($94,200 for a family of four) may be eligible for a subsidy. All consumers should compare benefits, rates, as well as physician and hospital networks in the commercial market with those in the Exchange. This comparison will be particularly important for consumers who want to keep their doctor.
• Are individuals required to contact a navigator to purchase coverage in the Exchange? There is no requirement to contact a navigator. Navigators will have limited, if any, knowledge about rates outside the Exchange and are likely to have only a basic understanding of coverage benefits. Consumers who have questions about finding the best coverage for themselves and their family would be wise to contact a professional benefit adviser.
• Do the Obamacare insurance options compete with coverage from plans offered by Blue Cross Blue Shield, Aetna and United Healthcare? Obamacare refers to the entirety of the federal health care reforms or the Affordable Care Act, therefore it is not a health plan. It includes such things as the types of coverage that can be offered, rules for pricing and penalties for those who don’t purchase coverage.
• Are all employers required to provide health insurance coverage? Beginning in 2015, the federal rule is that employers with 50 full-time equivalents will have a responsibility to offer health coverage or face penalties depending on where their employees get coverage and if they get subsidies. Employers with less than 50 full-time equivalents will not face any coverage requirements.
• Am I better off letting my employees purchase their own coverage rather than purchasing a group plan for my business? This is a subject of considerable complexity. An employer must weigh a number of issues including number of employees, wages, and other financial considerations to determine what fits it’s situation. A health insurance professional will be able to guide an employer through the maze of considerations.
• Am I required to cover my children, under 26, on my insurance policy? There is no requirement that parents cover their children through age 26. Parents have the option of carrying their adult children on their health insurance plan. If a plan covers children, they can be added or kept on the health insurance policy until they turn 26 years old.
• Has the Affordable Care Act has been postponed? Portions of the bill that involve certain types of employers have been postponed, but the individual health insurance requirement goes into effect in early 2014. The open enrollment phase for individual insurance plans is underway, and the deadline to enroll remains March 31. The date to enroll and avoid a penalty has been extended from February 15 to March 31.
• Will the Exchange allow me to compare rates of policies inside and outside the Exchange? The Exchange does not provide a comparison of rates within and outside of the Exchange. For rate comparisons, consumer should seek professional guidance. Attempts to defraud consumers have already been reported as scam artists attempt to exploit the confusion and misinformation about the law and gain access to social security numbers, credit cards, bank accounts, and other personal information. Consumers should be wary about providing personal information in the process of purchasing health coverage to comply with the new law.
Middle-Income Retirees Say What’s Best and Worst about the Affordable Care Act
A majority of middle-income retirees say that the best aspects of the Affordable Care Act are that it eliminates pre-existing condition exclusions (68%); offers a free Medicare annual wellness visits (60%); and includes initiatives to make Medicare more efficient (60%).
However, 52% say that one of the worst aspects of the Affordable Care Act (ACA) is the requirement that individuals own health insurance or pay a penalty, according to a latest survey by the Bankers Life. One in six retirees are not aware that ACA caps health insurance premiums for older people relative to rates for younger people (18%) or that it will close the Medicare Part D prescription drug donut hole (18%).
Twenty-three percent of middle-income retirees say they retired due to a health issue or disability. Therefore, many retired Americans under 65 will turn to the newly formed state exchanges for health insurance coverage until they are old enough to qualify for Medicare.
Twenty-seven percent of middle-income retirees ages 55 to 64 who don’t get any government insurance coverage have purchased their own private health insurance policy (15%) or don’t have health insurance (12%). In fact, slightly more retirees ages 55 to 65 are potential beneficiaries of the state health insurance exchanges compared to those in the working population. Forty-two percent of middle-income retirees (ages 55 to 65) have looked into the cost of getting health insurance through an exchange or will do so. For more information, visit www.CenterForASecureRetirement.com.
2014 Medicare Drug Plans Vary Widely in Availability of Drugs and Restrictions
Slightly more drugs will be available under Medicare stand-alone prescription drug plans (PDPs) in 2014, and fewer will be available under the Medicare Advantage prescription drug benefit (MAPD), according to analysis by HealthPocket.
The variation is significant: MAPD plans range from 956 to 2,334, and PDP plans range from 995 to 2,333. On average, MAPD plans will include 1492 drugs on plan formularies, and PDP plans will include 1,456. An estimated 90% of Medicare enrollees have a drug benefit. As with the private health insurance market, each Medicare plan has a formulary. Consumers pay the full cost of drugs that are not on the plan formulary. Even if a drug is on the formulary, plans can restrict access by limiting the quantity, requiring prior authorization, and mandating a step therapy process for certain medications.
In 2014, MAPD plans will carry quantity limits on 0% to 32% of drugs, prior authorization on 3% to 37%, and step therapy on 0% to 11%. PDP plans will have quantity limits on 1% to 31% of drugs, prior authorization on 7% to 32%, and step therapy on 0% to 9%. Kaiser’s MAPD plan offers a high number of drugs, with 2,320 drugs on its formulary, approaching the industry maximum of 2,333. None of the drugs on its formulary carries quantity limits or step therapy restrictions, and prior authorization is required for only 3% of all drugs offered.
Steve Zaleznick of HealthPocket stressed that Medicare patients need to do their homework during open enrollment to figure out which plans give them the best deal. The most important question is whether their prescriptions are on the plan’s formulary and what hoops they may have to jump through to actually get the drugs, he added. Consumers can review Medicare plan options for free using HealthPocket’s Medicare comparison tool at http://www.healthpocket.com/medicare.
Best Medicare Advantage Plans and Medicare Part D Plans
U.S. News & World Report has expanded its health insurance site to include the Best Medicare Advantage Plans, Best Medicare Part D Plans, and Best Medicare Plans. The site presents information on the private and marketplace health insurance plans available in each state in a consumer-friendly, searchable interface. For more information, visit www.rankingsandreviews.com.
Alternate Payers to Compete With Traditional Health Plans
Traditional commercial health plans may soon face increasing competition from alternative payers. More than a third of Americans are open to trying insurance plans offered through hospitals, health systems, or state-run consumer oriented and operated plans (CO-OPs), according to research by Valence Health.
“We may be shifting away from the era where big brand, commercial insurance companies take the largest piece of the pie. Consumers are open and ready to try smaller, local systems, not only because it’s potentially easier on the wallet, but also because they perceive it to be more convenient and may lead to better overall patient healthcare outcomes,” said Kevin Weinstein, Valence Health Chief Marketing Officer.
“If only five percent of insured Americans try new insurance options, that translates to nearly 10 million people who account for more than $20 billion in healthcare spending. Imagine if we start to educate the majority of people who said they were still unsure about their options. We are talking about creating a huge monetary shift in the industry,” he added. The survey reveals the following:
• More than 31% of consumers would be very or somewhat likely to purchase health insurance through their local hospital or health system.
• 23% say hospital-sponsored plans would be less expensive and higher quality than traditional insurance plans, and 39% say provider-sponsored health plans would offer more coordinated care.
• More than 43% are very or somewhat likely to consider switching to CO-OPs.
• More than 39% are very unlikely to use online insurance exchanges; the majority prefer insurance through employers.
• Less than 10% are willing to accept salary increases or stipends to purchase out-of-pocket health insurance.
• A majority of respondents are for Obamacare while a majority says insurance rates will rise due to health reform.
Plan benefits and price drive most Americans’ health insurance choices as opposed to physician choice, according to the survey. Coverage for emergency room visits and hospital stays are top priorities while the insurance company’s brand name is the lowest priority. The complete research findings are available at http://valencehealth.com/resources/white-papers.
Confusion Over Drug Kickbacks in the Exchange
A recent memorandum by the Center for Consumer Information and Insurance Oversight (CCIIO) says that, while it has been suggested that third-party providers and companies can cover patient premiums and cost-sharing in exchange plans, there are significant concerns that this could skew the insurance risk pool and create an unlevel field. Interestingly, at the agency level, a recent letter from HHS Secretary Kathleen Sebelius states that providers, drug manufacturers, and others are not prohibited from using kickbacks to induce greater use of their products and services in Affordable Care Act (ACA) coverage.
Pharmaceutical Care Management Association (PCMA) president and CEO Mark Merritt explains that copays for brand name drugs and other kickback schemes induce patients to ignore formularies, networks, and other cost-saving tools. He urges regulators to formally determine what everyone already knows: that federal anti-kickback laws apply to the ACA.
Web Portal Explains The Affordable Care Act For People With HIV
The Kaiser Family Foundation has a new consumer web portal to help people living with HIV navigate the Affordable Care Act (ACA). People with HIV could be among those who make the greatest gains in coverage from the ACA since one in four people with HIV are uninsured and many more are underinsured. For more information, visit www.kff.org/aca-consumer-resources.
Twitter Reveals Public Reaction to the Exchanges
When it came to top Twitter hashtags last month, Obamacare was right up there with iPhone launch, MLB World Series, Justin Bieber, and The Voice. In fact, Obamacare was among the most tweeted topics in October 2013. Over 13.2 million tweets were related to Obamacare in this first month of pre-enrollment.
The California HealthCare Foundation (CHFC) looked at Twitter to get a read on how public is reacting to the rollout of the federal and state health insurance marketplaces. In the days before federal exchange (HealthCare.gov) launched, tweets containing a link to HealthCare.gov trended positively, with a score of 74/100. But the sentiment dipped significantly to 29/100 five days after the launch, after tens of thousands of people had tried to access HealthCare.gov.
A positive spike occurred on October 20 the day before President Obama’s Rose Garden speech. But the conversation quickly turned negative the next day. The volume of tweets containing search terms related to Obamacare and HealthCare.gov increased as a result of the Rose Garden speech: from 78,012 tweets within 24 hours before the speech; to 35,436 tweets during the hour of the speech itself; and then doubling to 185,184 tweets in the 24 hours after the speech.
Tweets about state-based exchanges were more positive than tweets about the federal exchange. The sentiment score of tweets containing a link to HealthCare.gov was 44 points lower than tweets containing links to the 17 state-based exchange sites combined. Since October 1, the state-based exchange sites had a positive sentiment score of 70/100. Conversely, HealthCare.gov had a negative sentiment score during this period of 26/100.
These five celebrities who were most frequently retweeted when they used #getcovered, the hashtag used by Enroll America and the White House:
Lady Gaga (40 million followers, 14.9K retweets)
Nina Dobrev (4 million followers, 1.4K retweets)
Pharrell Williams (2 million followers, 1.3K retweets)
John Legend (4 million followers, 982 retweets)
Emily VanCamp (320K followers, 499 retweets)
On October 22, the Colorado Consumer Health Initiative (CCHI) launched an irreverent spoof on the “Got Milk?” ads. Its “Got Insurance?” campaign’s message is now popularly known as “Brosurance,” a term used in one of the ads. The campaign, which was aimed at the young invincible demographic, promoted the hashtag #GotInsurance and the website doyougotinsurance.com. Although #GotInsurance was the promoted hashtag, #brosurance began to dominate the conversation after October 22, and accelerated again when it was raised during HHS Secretary Sebelius’ Congressional testimony on October 30. For more information, visit http://www.chcf.org/programs/healthreform/aca140/october#ixzz2jt6fYDtm
Blue Shield Steps Back From Individual Policy Cancellations
Insurance Commissioner Dave Jones got an agreement from Blue Shield to allow its California policyholders to keep their individual and family health insurance policies through March 31, 2014. Previously, the company announced plans to cancel these individual and family policies on December 31.
Jones said, “There is nothing in the healthcare reform law that requires insurers to narrow their provider networks, but some insurers are doing so, which means consumers will want to confirm that their doctors and hospitals are in the network before selecting new coverage.”
Blue Shield agreed to send a new notice to consumers allowing them to stay in their individual market policies if they elect to do so and to provide the existing coverage through March 31, 2014, at the existing price with the existing medical provider network. If all of the policyholders elect to stay in their existing plans until March 31, the premium savings could be as high as $28.6 million. However, policyholders who are eligible for federal premium subsidies through Covered California will likely want to select their new policies by December 15, so they can start receiving premium assistance for January 1 coverage in their new plan.
Blue Shield CEO Bruce Bodaken said, “We have long acknowledged that the individual health insurance market is broken and we are pleased that the rules will change in 2014. But health reform will succeed only if we restrain the rising cost and utilization of medical services that is driving premium increases. We are dedicated to working collaboratively with providers and regulators to address that issue. A consistent, predictable and fair regulatory environment is another key component of a thriving competitive market that will drive affordability. Constantly changing what information is requested and imposing long delays confuses consumers and threatens the long-term viability of the market. The rules should be clear and regulators should act promptly on rate filings to enable individual insurance purchasers to know what they will pay for coverage and when they will pay it.”
Blue Shield lost $27 million on individual health insurance coverage in 2010 and even with the now withdrawn rate increase, the company expected additional losses on this business in 2011. As a result of today’s decision, Blue Shield individual policyholders will save $35-40 million this year.
In October 2010, the company filed for new individual market rates with the Department of Insurance, to be effective in March 2011. In January, Insurance Commissioner Dave Jones asked Blue Shield to delay the filing for 60 days and the company complied. At the same time, Blue Shield submitted the rates to an independent actuarial review by David Axene, who had completed rate reviews for the Department of Insurance in 2010 and discovered errors in several filings. Blue Shield also promised to pay refunds to its members if Axene’s review found that the rates were too high. On March 1, Axene released his report, which concluded that the rates were appropriate. With today’s action, however, that filing is withdrawn and the new rates will not take effect.
Under rates that are already in effect, some Blue Shield members will see their premiums change in 2011 if they move to a new region, add or subtract family members from their policy, or enter a new age band. Blue Shield changes rates based on age every five years, at the time of the member’s birthday.
Sutter Health Agrees to Record Settlement For Anesthesia Billing
Sutter Health agreed to pay $46 million and implement historic changes in its billing and disclosure of anesthesia charges and services to its patients, insurers and other payers.
Sutter has over 20 hospitals in northern California, including California Pacific Medical Center in San Francisco, Sutter General Hospital in Sacramento, and Memorial Medical Center in Modesto. The settlement closes a 2011 whistleblower lawsuit brought against Sutter by billing auditor, Rockville Recovery Associates. The commissioner joined the whistleblower in that lawsuit.
This settlement with the Department of Insurance requires Sutter to disclose on its Website every component of its anesthesia billing and what those services cost Sutter. Patients, insurers, and the public will now be able to compare Sutter’s costs to what it charges for anesthesia. “This new transparency should lead to lower prices and point the way to similar billing reforms for all types of hospital services,” said Commissioner Dave Jones.
The related whistleblower lawsuit alleged that Sutter included a false and misleading charge in its surgery bills. Sutter patients or their insurers got three separate charges relating to anesthesia, including a charge by an outside anesthesiologist, a charge for the operating room and a charge under an obscure Code 37x Anesthesia. Sutter often charged thousands of dollars for Code 37x Anesthesia for each operation. Yet the services covered by that code were allegedly already captured in the operating room charge, itself a charge in the thousands of dollars. Sutter charged for anesthesia on a time-based or chronometric basis even when no Sutter employee, only the outside anesthesiologist, was present and overseeing anesthesia. Some hospitals also charged separately for anesthesia gasses using code 25x. Sutter’s contracts with insurers also included a clause alleged to unduly restrict insurers from contesting the bills.
The settlement requires Sutter to do the following:
• Pay $46 million.
• Stop billing for anesthesia in the operating room on a chronometric basis and instead charge on a fully disclosed flat-fee basis.
• Describe every component of its anesthesia billing.
• Post on its Website and provide to insurers and the commissioner the cost to each Sutter hospital of its anesthesia services, updated annually.
• Clarify the relationship between its master schedule of charges and the bills that consumers and insurers get. This change will lead to an increase of transparency and accountability in hospital billing.
• More readily permit insurers and other payers to contest Sutter’s bills.
Another defendant, Marin General Hospital, has agreed to implement the same changes to its procedures for billing anesthesia services. Marin General Hospital was a member of Sutter Health during the period of the misconduct alleged by the complaint. In 2010, Marin General Hospital became an independent hospital. The settlement also includes defendants MultiPlan (Multiplan) and Private Healthcare Systems (PHCS), whose provider contracts with Sutter included Sutter’s audit policy that allegedly unduly restricted payers’ ability to challenge Sutter’s charges. In addition to paying $925,000, MultiPlan and PHCS agreed to continue to provide notifications to payers about their audit rights.
Supplemental Benefit for Self Funded Plans
EmployerDirect now offers SurgeryPlus. The supplemental healthcare benefit reduces the costs of planned medical procedures by 30% to 50% through bundled case rates at high-quality providers. SurgeryPlus is implemented by a personalized care coordinator team and negotiates all costs before surgery, thereby empowering patients in the decision-making process. All surgeons in the SurgeryPlus Network are board certified and meet strict selection criteria. Covered procedures are mostly elective and include orthopedic, spine, cardiovascular, bariatric, general surgery and carpel tunnel surgeries, along with minor outpatient procedures such as colonoscopy, endoscopy, and arthroscopy. Most of the procedures are performed at specialty hospitals and surgery centers, where nurse-to-patient ratios and service is better, and exposure to patients with multiple medical issues is not present. Patients at high risk for a procedure like a heart valve repair or replacement get direct access to acute care hospital with SurgeryPlus. EmployerDirect collects data on local hospitals, physician-owned hospitals, and ambulatory surgery centers. When selecting medical centers, the company looks at quality comparison analysis at each site and each specialty For more information, visit www.edhc.com or call 512-651-5551.
Group Life/AD&D Policies & EAPs
Lincoln Financial Group has partnered with ComPsych to offer new services to its Employee Assistance Programs (EAPs) and Group Life/AD&D policies. Employers can offer help to employees through one of two Lincoln Employee Assistance Programs (EAPs): EmployeeConnect, offered at no additional cost with Lincoln’s Long Term Disability plans and EmployeeConnect Plus, offered as a premium standalone EAP program. At no additional cost to the employee, the programs deliver a wide range of services including confidential counseling and practical guidance. For more information, visit www.LincolnFinancial.com.
Enhanced HSA Option
Employer groups that sign up for an HSA Bank program can now add the Tango Health solution. Tango’s software offers simple and convenient online and mobile tools, including patented features. Employees can now combine the many benefits and features of their HSA Bank savings account with Tango’s solutions in an integrated, seamless manner. Employees access these features through www.hsabank.com.
Private Exchange Marketplace For Large Groups
United Benefit Advisors (UBA) launched Benefits Passport, a private insurance exchange marketplace available through The Wilson Agency, LLC. Based on a defined contribution model, Benefits Passport will serve large group employers (more than 50 employees) and provide services, such as online enrollment, an employee contact center, accounting, payroll deduction reporting, and billing. Benefits Passport is an open source program that can support all major insurance carriers as well as any carrier with a standard data feed. It is designed to help employers reduce costs, increase efficiency, simplify administration, and provide value to employees in the face of health care reform. The online exchange was set to open Nov. 1, 2013 for coverage to start Jan. 1, 2014. Benefit offerings include major medical and pharmacy, as well as ancillary (or voluntary) benefits such as dental, vision, life, disability, and critical illness. Wellness programs will also be available and customer care support is provided for all participants. For more information, visits www.UBAbenefits.com.
The Type of Stress That Most Affects Job Performance
Stress at work contributes more to poor job performance than does stress at home or financial worries, according to a study by the Integrated Benefits Institute (IBI). Employees measured their job performance based on how often they were not careful, had difficulty concentrating, got less done compared to others, or got no work done at all.
Sixty-eight percent of employees who say they never experience stress at work, perform at or above the average. Just 41% of employees who face permanent or continual workplace stress perform at that level.
“Employers are between a rock and a hard place in dealing with workplace stress. On the one hand, the challenging economy translates into employees working longer hours and experiencing more stress at work. On the other hand, employers want a high-performing workforce,” said IBI president Thomas Parry, PhD. The study also found that healthier employees are less likely to face work-related stress, with those in excellent health least likely to be stressed out. For more information, visit www.ibiweb.org.
• CFOs Expect a Shift Toward Part-Time & Temp Workers
• Exchanges to Offer Affordable Plans for Young Adults
• Consumers Mull Renewing Individual Plans
• Obamacare Could Reverse Long Trend of Uncompensated Care in ERs
• Only One in 10 Uninsured Americans Say Obamacare is Helping
• Medicare Preferred Pharmacy Networks Offer Big Savings
• Guardian Gets Customer Service Award
• California Agent Wins Woman of the Year Award
• Lincoln Gets Customer Service Award
• Covered California Stats
• ACA Implementation in California
• Settlement Reached with NY Life
LIFE INSURANCE AND FINANCIAL PLANNING
• 401(k) Balances Got a Lift
• Employers Boost Efforts to Help Workers Save for Retirement
• Americans Want to Know About Additional Life Insurance Benefits
CFOs Expect A Shift Toward Part-Time & Temp Workers
U.S. chief financial officers are concerned about a shift toward temporary and part-time workers driven by the Affordable Care Act (ACA) as well as overall economic uncertainty. In spite of all this, profits are expected to jump by more than 10%, full-time employment is expected to increase 2%, and capital spending could rise nearly 5%, according to a survey by Duke University and CFO Magazine.
Chief Financial Officers expect full-time domestic employment to rise nearly 2% in the U.S. This increase comes in spite of some reluctance to hire full-time employees due to the ACA. Fifty-nine percent of CFOs have increased the proportion of their workforce made up by temporary and part-time workers or shifted toward outside advisors and consultants. Among these firms shifting away from full-time employment, 38% say the shift has occurred, in part, due to implementation of the Affordable Care Act. Another 44% say they are hiring temporary workers in response to extreme economic uncertainty. For more information, visit http://www.cfo.com/magazine
Exchanges to Offer Affordable Plans for Young Adults
Forty-six percent of uninsured single young adults (ages 18 to 34) who are eligible for the health insurance marketplace could pay $50 or less per month for coverage in 2014, according to a statement by HHS. They can purchase a bronze plan for $50 per month or less after tax credits, based on an analysis of data in 34 states. In these states, 66% may be able to pay $100 or less for coverage in 2014. Under the Affordable Care Act, advanced payment of the premium tax credits will be available to help eligible individuals and families afford insurance coverage through the Health Insurance Marketplace. Young adults account for 41% of the uninsured population. An additional 1 million eligible uninsured single young adults may qualify for Medicaid in the states that have opted to expand the program in 2014. For more information, visit www.healthcaregov.com.
Consumers Mull Renewing Individual Plans
For consumers who are looking to avoid plan changes for a year, one strategy is to renew an individual health plan for 2014 before the end of 2013. The strategy is not available to everyone and comes with issues that need to be investigated, according to an analysis by HealthPocket.
Some say this strategy would be most desirable to healthy people who have been able to pass a health plan’s health underwriting screen. Giving people an option to enroll in the existing individual market will keep them out of the Obamacare risk pool for some or all of 2014. However, the renewal option will come to an end for plans by 2015, so people who choose this option will eventually become merged with the rest of the individual market enrollees.
California is requiring every carrier in itsexchange to have Obamacare compliant plans in 2014. Plans that will not be on the exchange may be renewed in 2013 and last until the renewed year expires.
New plans require coverage of essential health benefits. For many people, premiums for a 2013 plan will be less than the premium for 2014 plans with comparable deductibles, copayments, and out-of-pocket maximums. A plan that renews from December 1, 2013 to December 1, 2014 may have a one-month period next year in which deductibles that had been reached may be reinstated. For more information, visit www.healthpocket.com.
Obamacare Could Reverse Long Trend of Uncompensated Care in ERs
Emergency departments are likely to receive much higher reimbursements once the Affordable Care Act (ACA) is fully implemented, according to a study published in Annals of Emergency Medicine. Assuming typical reimbursement patterns continue, emergency department reimbursement may increase 17% for outpatient visits to the ER for uninsured people who go on Medicaid and 39% for uninsured people who move to the private insurance market.
Emergency departments have carried the bulk of theburden of uncompensated care, which has led to hundreds closing. Over the next few years, that picture could change substantially, said lead study author Jessica Galarraga, MD, MPH, of George Washington Univ.
About 7 million people are expected to enroll in Medicaid as a result of the Affordable Care Act and 23 million are expected to get private insurance through health insurance exchanges.
GW researcher Jesse Pines, MD, MBA says that one question is what happens in the 13 states whose governors have said they will not participate in Medicaid expansion, especially those with high rates of uninsurance? Another question is whether the reduction in disproportionate share of hospital payments will outweigh the new sources of reimbursement. For more information, visit www.annemergmed.com
Only One in 10 Uninsured Americans Say Obamacare Is Helping
Only one in 10 Americans (11% of the uninsured and 9% of the population) say their health insurance situation has improved over the past year, according to a new Bankrate.com survey. While the health insurance exchanges opened about a month ago, 47% of uninsured Americans still do not know where they can get information on how the Affordable Care Act will affect them.
Sixty-four percent have become more curious about the Affordable Care Act since the exchanges opened on October 1. Bankrate.com insurance analyst Doug Whiteman said, “The good news is that most Americans are showing interest in Obamacare. Whether or not that interest translates into sign-ups will go a long way toward determining the success or failure of Obamacare.”
Thirty-six percent of Americans say their health care costs have increased over the past 12 months. Only five percent say they have decreased. Thirty-eight percent of the uninsured are more negative about the Affordable Care Act than one year ago (versus 25% who are more positive). For more information, visit http://www.bankrate.com.
Medicare Preferred Pharmacy Networks Offer Big Savings
Preferred pharmacy networks will reduce federal Medicare Part D costs up to $9.3 billion during the next 10 years, according to a study by Milliman for the Pharmaceutical Care Management Association (PCMA). “It was never in question that seniors love low-premium, low-copay Part D plans with preferred pharmacy networks. Now this game-changing study shows that preferred pharmacy networks save the federal government billions as well,” said PCMA President and CEO Mark Merritt.
The study includes these major findings:
* Preferred pharmacy network plans are expected to reduce federal Medicare spending by about $870 million in 2014.
* Over the next 10 years, preferred pharmacy network plans are expected to reduce federal Medicare spending by $7.9 to $9.3 billion.
* The largest two-year decrease in federal direct subsidies in the history of the Part D program coincides with the rapid adoption of preferred pharmacy network plans and the increased use of generic drugs.
* Post point-of-sale price concessions cause a greater reduction in federal Part D costs than equivalent drug discounts at the point-of-sale.
Separately, Part D seniors in plans with preferred pharmacy networks are overwhelmingly satisfied, citing lower costs, convenient access to pharmacies and other benefits, according to a survey from Hart Research Associates. The survey found that 85% of seniors surveyed are satisfied with their preferred network plan. In addition, the survey found that four in five seniors would be disappointed if their preferred network plan is eliminated.
According to a recent analysis of Part D data, more than 70% of Medicare Part D plans will feature a preferred pharmacy network in 2014. There are more drugstores in the U.S. than McDonald’s, Burger Kings, Pizza Huts, Wendy’s, Taco Bells, Kentucky Fried Chickens, Domino’s Pizzas, and Dunkin’ Donuts combined, creating a highly competitive environment.
Guardian Gets Customer Service Award
J.D. Power recognized the Guardian Insurance & Annuity Company (GIAC) for the third consecutive year for outstanding customer service in its by Certified Call Center Program Guardian is committed to being the go-to 401(k) provider in the micro-small plan market, and the carrier of choice for our annuity business, said Kim Flemm, Vice President and Head of Operations, Guardian Retirement Solutions. For more information, visit www.GuardianLife.com.
Californian Wins Woman of the Year Award
Women in Insurance & Financial Services (WIFS) presented its 2013 Woman Of The Year Award to Daralee Barbera, managing principal at Waddell & Reed and incoming President for GAMA International. Daralee is a long-standing WIFS member, and a founding member of the WIFS Southern California Chapter, of which she remains an active participant. Daralee is an engaged participant and frequent conference speaker, and is involved in national initiatives. Daralee joined Waddell & Reed in 1982, and supervises fifty financial advisors in nine branch offices based out of Costa Mesa, CA.
Lincoln Gets Customer Service Award
Lincoln Financial’s Individual Annuity Customer Contact Center earned the designation of Certified Center of Excellence from BenchmarkPortal. Only the top 10% of contact centers that apply for certification earn the designation. For the certification program, experts measure operational metrics as well as customer and agent satisfaction. For more information, visit www.BenchmarkPortal.com.
Covered California Stats
Covered California reports nearly 500,000 visits to its website and more than 45,000 calls to its Service Center during the week ending October 19. Since open enrollment began Octobef 1, consumers have been shopping and comparing among 12 insurers offering health care coverage through Covered California where consumers also can determine if they are eligible to enroll for subsidies or Medi-Cal. For the first three weeks of open enrollment, more than 2.2 million visits were made to www.CoveredCA.com. The Service Center has handled more than 150,000 calls during the same period. From October 1 through October 19, about 125,929 applications were started. Total enrollment for October will be announced in November. Covered California reports that 3,143 agents are authorized to enroll and 15,907 are in the process of being authorized. For more information, visit www.CoveredCA.com.
ACA Implementation in California
The Affordable Care Act has already made a difference for millions of Californians who have new consumer protections — from removing lifetime limits and arbitrary caps on coverage to mandating coverage of preventative services without co-payments or cost sharing, according to Health Access. Hundreds of thousands of Californians have new financial help to afford care, including seniors on Medicare getting prescription drugs and small businesses getting tax credit s to continue to offer coverage to their workers.
The most recent 2013 estimates are that over one million Californians have been able to get coverage through new options provided under the Affordable Care Act. Over 21,000 Californians who were denied coverage by insurers due to their health status now have coverage through California’s ACA-funded Pre-existing Condition Insurance Program (PCIP). PCIP had 16,000 enrolled on July 31, 2012. Over 435,000 young California adults up to age 26 have coverage through their parent’s health plan under the ACA and state conforming legislation. Over 615,500 Californians in 53 counties have new coverage through Low-Income Health Programs (LIHPs) – the most expansive early expansion of coverage under the Affordable Care Act in the country.
Other provisions that have helped more people are the small employer tax credit, the early retiree reinsurance program, the financial relief and savings for the state budget, and the prevention of additional state cuts to eligibility and enrollment.
About 8,978,000 insured Californians gained new consumer protections. The over two million Californians who buy coverage as an individual now have the security that insurers are no longer permitted to rescind coverage, especially after the patient gets sick. Some ACA provisions provide direct financial assistance to allow patients and policyholders, seniors and small businesses, to get relief when paying premiums.
Health Access says the following efforts have helped consumers afford the cost of health care:
• No-Cost Preventative Care: 6,181,000 Californians now have preventative care without cost sharing, so there is no financial barrier between them are these screenings and services.
• Rebates: $73,905,280 in rebates were issued to the policyholders of 1,877,186 Californians because their insurance companies did not spend enough of their premium dollars on giving health care, under the ACA’s medical loss ratio provision.
• Rate Oversight: Over 1,507,532 Californians saved over $175.2 million as a result of the rate review process when Anthem, Blue Shield, and Aetna rate hikes that were retracted, rolled back, or withdrawn.
• Prescription Drug Help in Medicare: 319,429 California seniors and people with disabilities saved $453.8 million in prescription drug cost, under the ACA provision that begins the process to close the Medica re prescription drug donut hole.
• Small Business Tax Credit: In the 2011 tax year, over 375,000 California small businesses (70% of the total) were eligible for the tax credit to help pay for the cost of coverage of their 2,442,900 California workers. The average credit is $752 per worker. The average credit is $1,000 per worker for the 158,000 businesses that are eligible for the maximum assistance.
Other benefits include state budget savings yielded in the recent Medicaid waiver, which helped prevent further budget cuts. This list doesn’t include the millions of dollars in federal grants to enhance public health and prevention efforts, to build capacity in community clinics, to set up Covered California, and to improve consumer assistance programs — all of which have an economic impact as well.
Here are some specific examples of California’s leadership:
1. California was the first state to establish an insurance marketplace — Covered California. Covered California will also standardize benefit packages so consumers can make apples-to-apples comparisons.
2. The California Legislature passed laws requiring new essential benefits standards for coverage that will go into place in 2014. In addition, California mandated maternity coverage as a basic benefit 18 months early, in July 2012. It revived a benefit that most insurers were no longer giving in the individual insurance market.
3. With bipartisan authorship, California created the biggest pre-existing Condition Insurance Program in the country, a new option for over 16,000 Californians who were denied for private plans due to their health status. (The next highest state has around 10,000 enrollees.) PCIP became a victim of its own success, this month closing to new enrollees until 2014, when such denials will not be allowed. (MRMIP, the more limited state high-risk pool, will remain an option through 2013.)
4. California quickly implemented the ACA provision that banned denials for children with pre-existing conditions starting early in 2010. When insurers balked, state law made it clear that insurers who refused to offer policies to children would be barred from covering adults as well — bringing the major insurers back into the market. The state law also went further than federal law, to limit what children with pre-existing conditions can be charged to no more than twice any other child for the same policy.
5. California has been one of only five states to expand coverage early. The state has been the leader, using federal matching funds so that over 500,000 Californians are now getting coverage in county-run low-income health programs. (This total is more than 20 times the other states with early Medicaid expansions.) These enrollees will be shifted to full Medicaid coverage on January 2014.)
The major coverage expansions of the ACA will begin January 2014. California can cut the number of uninsured by half or even two-thirds, and provide more security for those with coverage. The Medicaid program will be expanded to cover virtually everyone around or below the poverty level, and affordable private coverage will be available for everyone who doesn’t get it through an employer. Models developed by the University of California project that, in five years, 1.2 million to 1.6 million Californians will enroll in Medi-Cal; and another 1.8 to 2.1 million will enroll in subsidized coverage in the Exchange. If done correctly, it will be the biggest expansion of coverage since the creation of Medicare and Medicaid in the 1960s. For more information, visit www.health-access.org
Settlement Reached with NY Life
Along with regulators from other states, the California Department of Insurance reached a settlement agreement with New York Life over the insurer’s use of the Social Security Administration’s Death Master File database. New York Life has agreed to a number of business practice reforms, including using the Death Master File database (DMF) to search its records for deceased life insurance policyholders so its beneficiaries will get paid. In addition, New York Life agreed to pay $15 million to insurance regulators. California the lead state in the investigation, with support from insurance regulators in Florida, Illinois, New Hampshire, North Dakota, and Pennsylvania.
LIFE INSURANCE AND FINANCIAL PLANNING
401(k) Balances Got a Lift
Ongoing contributions and market gains lifted most 401(k) balances well above pre-crisis levels, according to a report by the Employee Benefit Research Institute (EBRI). Those who participated consistently in their 401(k) plans from 2007 to 2011 saw a 23.5% increase in their average balance. These participants generally stewarded their accounts through the financial crisis, accumulating account balances that were well above 2007 levels by year-end 2011. At year-end 2011, the average account balance among consistent participants was 60% higher than the average account balance among all participants in the EBRI/ICI 401(k) database, and the consistent group’s median balance was about two and a half times the median balance across all participants at year-end 2011. For more information, visit www.ebri.org.
Employers Boost Efforts to Help Workers Save for Retirement
Employers are taking bolder actions to help employees achieve financial security, according to a survey by Aon Hewitt. Employers are making significant changes in plan structure and investments while increasing guidance to participants.
A growing number of employers have increased their company match to the 401(k) plan. The most common match is now $1.00 per $1.00 on the first 6% of employee deferrals, with 19% of employers reporting this formula, up from 10% in 2011. Previously, a match of $0.50 per $1.00 on the first 6% was the most popular. Ninety-eights of employers surveyed provided some employer contribution to the plan.
Rob Austin, director of Retirement Research at Aon Hewitt said, “In the 20 years we’ve been doing this study, this is the first time we saw the most common match increase. Our experience shows that almost three-quarters of employees save at a level equal to or above the company match threshold. Increasing the amount employers are willing to contribute may help encourage those employees to save at more robust rates.”
Employers have drastically relaxed their eligibility requirements over the past decade. Seventy-six percent of plans now allow workers to begin making pre-tax contributions immediately upon hire, up from 71% in 2011. Just 45% of employers allowed for day-one contributions in 2001. In addition, 53% of plans have corresponding immediate eligibility for employer-matching contributions, while 50% of plans that offer a non-matching employer contribution allow immediate eligibility
Austin said, “People hop from job to job with increasing frequency, and many employers find it is important from an attraction perspective to have a retirement plan that is designed to give employees the best chance at achieving retirement readiness. Providing new hires with immediate eligibility helps ensure they don’t lose ground in terms of saving.”
Over the past six years, the percentage of employers that allow Roth contributions has increased from 11% to 50%. Where Roth is available, 27% of plans allow in-plan Roth rollovers/conversions. Another 16% of companies are planning to add the feature within the next 12 months.
“The Small Business Jobs and Credit Act of 2010 and the American Taxpayer Relief Act paved the way for an increasing number of employees to reap the benefits of a Roth account. Plan sponsors are enthusiastic about making the Roth provision available to their workforce and allowing them to benefit from any tax advantages,” said Austin. ”
Three out of four plan sponsors offer access to outside investment advisory services, with the most common being one-on-one financial counseling (59%), online guidance (55%), managed accounts (52%), and online advice (46%). The largest increase came in the number of employers offering managed accounts, which stood at just 29% in 2011. Target date funds, another popular form of investment advice, are now offered by 86% of plan sponsors.
Austin said, “Some prefer to simply hand over the keys to their retirement savings to someone else — hence the growing popularity of managed accounts. But a large percentage of employees prefer a more hands-on approach…Many employers are…offering a spectrum of support, which should ultimately provide the most participants with the expert resources they need to improve their retirement readiness.” For more information, visit aonhewitt.com.
Americans Want to Know About Additional Life Insurance Benefits
Only 4% of consumers say that a top reason for buying life insurance is to have access to money for expenses like supplementing college funding, healthcare, emergencies, or supplemental retirement income, according to a recent survey from Allianz Life. However, when asked more directly about these additional benefits, 64% of say they would make a sacrifice to have a life insurance policy with such benefits. The results indicate that a better explanation of these benefits would enhance interest in life insurance.
More than 80% of recognize the traditional death benefit as the primary purpose for purchasing life insurance. Top selections were replacing lost income when the insured dies (35%), paying for final funeral/probate expenses (28%), or paying off the mortgage/debt” (18%).
Sixty-four percent say they would reduce their daily spending to have a life insurance policy that has additional benefits to help fund college education, supplement retirement income, or have assistance if they became chronically ill.
“More education is necessary about the value and availability of additional benefits within some life insurance policies. Several options are available today beyond traditional term and permanent policies, so it’s important that the industry continues to spread the word about the versatility of modern life insurance,” said Allianz Life Vice President of Advanced Markets Deb Repya.
When presented with examples of additional benefits, “access to money if I become chronically ill” was the most popular option with 62% of respondents noting it as the most valuable benefit. Half of all respondents said having access to money to supplement retirement income was most valuable, followed by having access to money to help fund college education (22%) as their top selection. For more information, visit allianzlife.com.
• Insurers Show Strong Participation in Public and Private Exchanges
• PIA Champions Using Agents to Sign Up For the Exchange
• U.S. Sees Lowest Health Care Cost Increases in More Than a Decade
• Covered California Rolls Out Asian-Language Ad Campaign
• Blue Shield’s MA Plan Gets Four Stars
• Kaiser HMO Named As A Top Performing Plan
• One of the Best Places to Work in Insurance
• Law Offers Price Protections for Oral Cancer Meds
• AARP to Promote Enrollment in Covered California
• Retirement Health Benefits Get Less Generous
• How Long-Term Care Planning Pays Off
• Guaranteed Universal Life
• Website Addresses Personal Challenges
• Social Media Compliance and Risk Management
• Whole Life
• Financial Literacy Website
Insurers Show Strong Participation in Public and Private Exchanges
Seventy percent of health insurers are expected to participate in private and public exchanges in the next six months, according to a survey by Array Health. The survey gathered feedback from attendees at the Defined Contribution Healthcare & Private Exchanges Summit in Carlsbad, Calif. and subscribers of Atlantic Information Services (AIS) health insurance publications. The survey reveals the following:
• Most employers are aware of private exchanges, but consumers are largely unaware – Eighty-nine percent of respondents said that employers were aware of private exchanges while only 30% of respondents said consumers were familiar with them.
• Private exchanges provide a great opportunity for employers to control costs and offer benefit choice – Ninety-three percent of survey respondents say more employers will choose a defined contribution funding model over the traditional defined benefit model — and nearly 70% say that will happen within the next five years.
• Most insurers will pursue a multi-channel exchange strategy – Nearly 80% of respondents say insurers will participate in private exchanges. This is likely due to increasing demand from employer groups and growing awareness about private exchanges in the marketplace.
• Young, healthy consumers coined the “young invincibles,” offer health insurers a new target market – More than three-quarters of survey respondents say that up to 50% of healthy, young consumers won’t comply with the Affordable Care Act individual coverage mandate, and more than one third of respondents say as many as 75% won’t comply. Insurers and public entities must find ways to attract and engage this young, Internet-savvy population to increase enrollment.
For more information, visit http://www.nbch.org.
PIA Champions Using Agents to Sign Up For the Exchange
Millions of consumers are looking into purchasing health insurance through the insurance marketplaces set up as part of the Affordable Care Act (ACA), and some face problems accessing the program because of failures of the government’s website. According to a statement by the Assn. of Professional Insurance Agents (PIA), these consumers may not be aware that they can consul their local independent insurance agent or broker for help in enrolling. While navigators cannot offer advice or recommend one policy over another, professional insurance agents are free to offer a much higher level of assistance. In addition, in most states navigators are not required to be licensed or to comply with state-mandated continuing education requirements; they are also not required to maintain professional liability insurance coverage. Agents and brokers must be licensed and must comply with all of these requirements, along with all state laws and regulations.
Many independent insurance agents and brokers have already been certified to help consumers enroll in exchange health plans. They can also make consumers aware of insurance choices not available through the exchanges.
PIA National President John G. Lee said, “Professional agents and brokers have the training and expertise needed to advise consumers about all of their insurance choices. We have always been licensed, regulated and required to carry professional liability insurance coverage. We recommend that people shopping for health insurance – or any kind of insurance – make the smart choice and not leave anything to chance. Consult a local ACA certified professional insurance A]agent.” For more information, visit www.pianet.com.
U.S. Sees Lowest Health Care Cost Increases in More Than a Decade
In 2013, U.S. companies and their employees saw the lowest health care premium rate increases in more than a decade, according to an analysis by Aon Hewitt. The average health care premium rate increase for large employers was 3.3% in 2013 after plan design changes and vendor negotiations. That’s down from 4.9% in 2012 and 8.5% in 2011. However, average health care premium increases are projected to move back to the 6% to 7% range in 2014.
Tim Nimmer of Aon Hewitt said that many fact0rs that helped lower rate of premium increases are not expected to continue. These include the recession and uncertainty around economic conditions and health care reform. Additionally, employers and insurers are subject to new transitional reinsurance fees and health insurance industry fees. “While we are seeing pockets of promising innovation in the health care industry, we expect to see 2014 premium increases shift back towards the 6% to 7% range overall,” he added.
The average health care cost per employee was $10,471 in 2013, up from $10,131 in 2012. Employees were asked to contribute an average of $2,303 toward the total health care premium in 2013, compared to $2,200 in 2012. Average out-of-pocket costs increased 12.8% ($2,239) in 2013, compared to just 6.2% in 2012 ($1,984).
Average health care costs are projected to increase to $11,176 per employee in 2014. Employees will be asked to contribute 22.4% of the total premium for an average of $2,499 for 2014. Average out-of-pocket costs are expected to increase to $2,470. Under these projections, employees’ share of health care costs will have increased almost 150% from $2,011 in 2004 to $4,969 in 2014.
In 2014, companies are expected to see cost increases of 7.5% for HMOs, 6.5% for PPOs, and 6.5% for POS plans. In 2013, some major U.S. markets experienced higher than average rate increases including Los Angeles (6.9%), Orange County (6.9%), and San Francisco/Oakland/San Jose (4.8%).
Jim Winkler of Aon Hewitt said that employers are realizing that a traditional managed trend approach is less effective in mitigating costs increases over time. They are exploring innovative approaches, such as requiring participants to be more active in their own health care planning, and holding health care providers more accountable for reducing unnecessary expenses and creating more efficiency in health care purchasing. As the health care landscape continues to evolve, employers will use a mix of traditional and non-traditional approaches to reduce costs
About 28% of employers plan to move into a private health care exchange over the next three-to-five years. Private health exchanges are becoming more attractive to employers that want to offer health care choice, lower cost trends, and reduce administrative burdens. With this model, employers continue to finance health insurance while employees choose from multiple group plan options and insurance carriers through a competitive marketplace.
Consumer-driven health plans (CDHPs) have surpassed HMOs as the second most popular plan option offered by employers. A growing number of employers are offering CDHPs as the only plan option. While just 10% of companies do so, another 44% are considering it in the next three to five years.
The survey reveals the following about employers:
• 54% are considering reducing subsidies across all dependent tiers in the next three-to-five years.
• 69% have implemented surcharges for adult dependents or they plan to do so.
• 47% are considering charging per dependent, compared to just 4% of employers that do so today.
• Two-thirds have conducted audits to ensure that only eligible dependents remain on the plan.
• 47% have increased participants’ deductibles and/or co-pays in the past year, and another 43% are considering doing so in the next three-to-five years. Employees’ share of the health care premium is 22%, compared to just 18.6% a decade ago.
• 75% offer health risk questionnaires and 71% offer biometric screenings.
• 53% plan to move toward provider payment models that promote cost effective, high quality health care. As many as one in five say it’s one of their three highest priorities.
In addition, employers are increasing cost sharing by altering plan designs, including shifting from fixed dollar copayments to coinsurance models, in which employees pay a percentage of the out-of-pocket costs for each health care service. Employers are also increasing deductibles, out-of-pocket limits, and cost sharing for non-network providers. For more information, visit www.aonhewitt.com.
Covered California Rolls Out Asian-Language Ad Campaign
Covered California began its marketing campaign to Asian-language consumers through airwaves, billboards, online channels, and print media. The push is designed to get information about the new health insurance marketplace to Asians in their specific languages, using a wide range of media.
Asians make up 14% of Californians eligible for federal subsidies when signing up for health care coverage that begins Jan. 1, 2014. According to census data, half of Asians in Californian speak limited English, prompting a need to communicate with them in their individual languages.
Key markets for Asian-language advertising are Los Angeles, the San Francisco Bay Area, Sacramento, San Diego, and Fresno. Asian TV spots began last week in multiple languages, including Cantonese, Mandarin, Korean, Vietnamese, and Tagalog. While some radio stations began to run ads about the state health benefit exchange in various Asian languages on Oct. 1, a heightened campaign is now underway with additional radio spots in Khmer and Lao languages.
Covered California advertising in Asian languages will hit billboards and transit shelters in early November, along with posters in key community gathering places. Chinese online ads have been in the market since September, but those efforts will be expanded to include Korean, Vietnamese, Filipino, Hmong, Lao and Khmer. Print ads in Asian languages began earlier this month, in traditional and simplified Chinese, Korean, and Vietnamese. To see the Asian language ads, visit the news section of www.CoveredCA.com.
Blue Shield’s MA Plan Gets Four Stars
For the third year in a row, Blue Shield of California’s Medicare Advantage prescription drug plan got a four-star quality award from the Centers for Medicare and Medicaid Services (CMS). CMS uses a five-star system to measure the quality and performance of Medicare health and prescription drug plans. Among prescription drug plans sold in Blue Shield’s service area, the company is among the few to consistently get an above-average rating. For more ore information, visit https://www.blueshieldca.com/sites/medicare/home.sp.
Kaiser HMO Named As A Top Performing Plan
Kaiser Northern California HMO was named as a top performing health plan, according to National Business Coalition on Health (NBCH). Cigna and Health Net were also recognized for aspects of their plans. California Health plans were recognized for the following:
- Chronic Disease Management – Kaiser Northern and Southern California HMO.
- Behavioral Health Management – Kaiser Northern California HMO
- Provider Management – Cigna California PPO.
- Plan Profile – Cigna California PPO and Health Net California HMO
For more information, visit http://www.nbch.org/2013-Annual-Conference.
One of the Best Places to Work in Insurance
EPIC was recognized for a fourth year as a “Best Place to Work in Insurance” by Business Insurance Magazine and Best Companies Group. The retail property, casualty and employee benefits insurance brokerage is one of only 65 companies awarded this honor nationwide. Based on employee feedback, the company took second place honors in the medium retail broker/agent category. Companies were judged on employee engagement and satisfaction, benefit programs, policies, practices and other general information. Mary Smith, director of human resources said, “Recognizing the value of a ‘people-first’ culture, EPIC has developed a benefits package and work environment that attracts and retains top talent.” The company offers a generous paid-time-off package, a 401(k) match, a wellness program, and an annual employee appreciation day. EPIC encourages employees to participate in charitable events while supporting these efforts financially and offering in-kind donations. For more information, visit https://www.facebook.com/EPICInsuranceBrokersAndConsultants.
Law Offers Price Protections for Oral Cancer Meds
Governor Jerry Brown signed AB 219 into law. The legislation, authored by Assembly member Henry Perea (D-Fresno), increases price protection for oral cancer medications. California joins the 26 other states that have enacted similar legislation. Insurance Commissioner Dave Jones said, “This bill, which my department urged the Governor to sign, establishes limits that will result in substantial out-of-pocket savings for cancer patients and will prevent patients from abandoning necessary oral treatments for cancer.”
AB 219 will take effect on January 1, 2015 and will apply to new, amended, or renewed health insurance policies requiring insurers to limit patient costs to $200 for a 30-day supply of covered oral anti-cancer medication. Previously these treatments could cost $10,000 per month. A 30% co-insurance rate would only reduce out-of-pocket cost to $3,000 per month. Healthcare plans and health insurers will be allowed to increase the $200 limit a year to reflect inflation.
AARP to Promote Enrollment in Covered California
The California Endowment teamed up with AARP to create awareness about Obamacare and promote health care coverage enrollment in California. The partnership is part of The California Endowment’s “Get Covered campaign,” or “Asegurate” in Spanish. During live webinars, AARP trainers will discuss the basics of Medicare and its intersection with Obamacare. For more information, visit www.GetCoveredCa.com.
Retirement Health Benefits Get Less Generous
Only 17.1% of employers offer retirement health benefits compared to 29% in 1997, according to a report by the Employee Benefit Research Institute (EBRI). Some employers have increased premium prices in addition to reducing benefits. Sam Milo of the consumer finance site, QuickLoansBadCredit.org said, “We are very concerned by the findings of the EBRI study. If employee health benefits for retirement are not comprehensive, people and families could be in for a very rude awakening. Additional costs, premiums and expenses are extremely worrying for retirees. Even despite careful planning, saving and budgeting for 30 years, employees may be getting short changed by their employers who may end health insurance benefits and other benefits so that an additional $6,000 to $10,000 per year may be needed by the retiree to plug the gap.”
How Long-Term Care Planning Pays Off
When families make long-term care arrangements before a long-term care event occurs, they can save nearly $11,000 a year in out-of-pocket expenses, according to a Genworth study. Fifty-three percent of primary caregivers have lost income due to the demands of providing care. When loved ones don’t have long-term care insurance, their caregivers face additional stresses including covering the cost of daily living, medical care, and other support-type needs.
“Most families say they can solve a long-term care crisis themselves or that a family member will bear the load of caring for an aging relative. This thinking may work for the short term, but over a longer period of time, families will start to feel the burden of stress and guilt affecting the care get, caretaker and the entire family,” said Bob Bua, president of CareScout, a Genworth company.
Forty percent of people who attended a day care facility had plans in place to cover a long-term care situation compared to only 23% of those who moved into a family member’s home.
Among the many reasons for not taking steps to plan sooner, 38% of care receivers didn’t want to admit care was needed; 28% didn’t want to talk about it; and 23% didn’t know where to start. However, 58% of those without long-term care insurance regret not having a policy. Fifty-nine percent say it would have relieved their financial burden and 59% say it would have reduced the strain on the family. For more information, visit https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html.
Guaranteed Universal Life
American General introduced Secure Lifetime GUL II. It provides increased options in case design for 1035 and shorter pay scenarios. It also includes an integrated enhanced surrender value rider (a return of premium feature). It is now available with the new Lifestyle Income Solution, which is designed to turn a life insurance product into a guaranteed stream of retirement income. For more information, visit www.agquickticket.com.
Website Addresses Personal Challenges
Cigna.com/GO YOU Hub is a new multimedia website that celebrates people overcoming life’s challenges. The site provides a gathering place where visitors can learn and be inspired by the stories of people overcoming adversity. The site also includes news articles and white papers by physicians, behaviorists and clinicians.
Social Media Compliance and Risk Management
OpenQpeople launched SafeGuard for Salesforce Communities. It allows businesses to create private social and branded communities to connect with their employees, partners, and customers while remaining compliant with laws that regulate their industry. Those in regulated industries, such as life sciences, financial services, insurance, health care, consumer goods, retail, and others can use dozens of implementation-ready policy templates and deploy out-of-the-box social compliance solutions immediately. SafeGuard also facilitates the e-discovery process by archiving all content and providing full audit trails through its standard reporting. For more information, visit www.appexchange.com.
Ohio National added two products to its Prestige whole life insurance offerings. Prestige 100 replaces the Prestige Performance and Prestige Xcel policies. It provides lifetime protection at an affordable price. It offers competitive cash accumulation and a strong death benefit while offering a full suite of optional riders ranging from a term blend rider to a chronic illness option. The Prestige 10 Pay is a limited pay whole life insurance policy. It’s an option for applicants who want to get their premiums out of the way while enjoying a lifetime of insurance protection. The purchaser can pay all premiums in the first 10 years. It provides the strongest 10-year cash values in the entire portfolio. For more information, visit www.ohionational.com for more information.
Financial Literacy Website
Guardian Life’s website (www.myretirementwalk.com) offers tools, infographics, and guidance for people at various life stages. It provides an animated, interactive experience with financial planning and retirement insights based on life’s major milestones. For more information, visit www.GuardianLife.com.
• These Mistakes Will Delay Your Exchange Certification
• California Exchange Gets An A
• Health Net Aligns with Prime Healthcare Hospitals
• AXA Advisors, LLC Opens In San Mateo
• Consumer-Driven Health Plans Have Break-Out Year
• CDHPs May Become the Most Popular Plan Type
• A Look at Off-Exchange Health Plan Premiums
• A Look At Exchange Advertising & Marketing
• How the ACA Helps Allergy and Asthma Patients
• Voluntary Educational Benefits
• Supplemental Disability
• Stop Loss Insurance for Self-Funded Health Plans
• Employee Hour Tracking
• The Argument for Bringing Back DB Retirement Plans
• A Positive Work Environment Can Improve Wellness
• The Growing Use of Non-Cash Incentives
These Mistakes Will Delay Your Exchange Certification
CAHU contacted Covered California after hearing concerns from brokers who are having trouble getting certified to sell through the exchange. CAHU president Sam Smith said, “Hundreds of agents have been certified and more are being added every day. Covered California is very aware of their software performance issues. They are as unhappy and concerned as CAHU is and they are updating their system and continue to update as issues arise. The problems are affecting everyone, not just agents.” However, Smith noted that agents may be responsible for some of the delays.
Covered California says that agents are making mistakes in 70% to 80% of all agreements submitted. Every time there is a mistake an agreement, it gets tossed back for correction. When that happens, Pinnacle/SHOP must contact each agent and ask them to correct their forms. When they cannot reach the agent, they are leaving voice mails. Smith says, “Check your voicemail to be sure they haven’t tried to reach you!” Agents are making these common mistakes:
• Agents are submitting the old draft version of the agent agreement. Agents need to check and see if what they submitted has “DRAFT” at the top. If that is what they submitted, they need to redo the form using the agent agreement that was emailed to them from Covered California after they passed the test. Using the draft, not final version, is one of the most common mistakes. Agents need to be sure to download FINAL version of agent agreement from their email to fill out and re-submit.
• The Darfur form in the Agent Agreement. — Most agents are checking every box. If they don’t have employees in Darfur, they should only check box that says, “I have no employees in Darfur” and nothing more. Do not check all the boxes!
• Forgetting to date the agreement — Make sure the agreement has dates inserted where needed.
California Exchange Gets An A
When it comes to state exchanges, California and Massachusetts are at the top of the heap. Some agents and consumers may disagree, but both states got an A grade for implementation of their state exchanges, according to a report card issued by HealthLeaders Interstudy.
HealthLeaders says that state-run and partnership exchanges are generally more advanced. Most partnership and state-run exchanges are in full marketing mode, with grants awarded to any group that can spread the word. Some states are going door-to-door, and some launched speakers’ bureaus to blanket every county. On the other end of the spectrum, some states have forbidden any state government role in promoting the exchanges.
California and Colorado ranked higher for choosing a Kaiser Permanente plan; Kaiser’s staff-model HMO allows for more concentrated benefits, a narrower formulary and promoted exchange competition. Benchmark plans set the floor for what policies sold in the exchange will look like. Most benchmark plans provided relatively robust drug benefits, and all are required to offer at least one drug per therapeutic class. Because the benchmark serves as a starting point for benefits, it will have less impact over time.
Nevada is among the few states to institute aggregate billing – meaning that regardless who provides care for different members of a family (Medicaid, CHIP or different exchange carriers); they will receive one bill from the exchange itself. California and Vermont are among the states with active purchaser models, requiring MCOs to bid to sell in the exchange. For more information, visit www.hl-isy.com/state-exchange-report-card.
In related news, 7% of Americans say that they or someone in their household has tried to sign up for health insurance through the exchanges. Seventy-five percent of them said they had problems signing up, according to an AP-GfK poll. Forty percent of Americans the launch went well and 20% said went somewhat well. The AP-GfK Poll was conducted October 3 to 7.
Health Net Aligns with Prime Healthcare Hospitals
Health Net members will now be able to receive care at in-network benefit levels from Prime Healthcare hospitals. This agreement gives Health Net’s insured commercial, Medicare and Medi-Cal members access to 14 of Prime Healthcare’s hospitals. Additionally, members enrolled in Health Net through the Covered California health insurance exchange will have in-network coverage at Prime Healthcare’s Southern California Hospitals. For more information, visit www.primehealthcare.com.
AXA Advisors, LLC Opens In San Mateo
AXA Advisors, LLC, opened a San Mateo office at 1840 Gateway Drive, Suite 150, San Mateo, CA 94404. Cindy Zheng of AXA Advisors said, “We have expanded our reach to accommodate our continued growth in the San Mateo area.” The company’s areas of focus include financial planning as well as life insurance and annuities. For more information, visit www.axa-equitable.com.
Last week, we ran a news item titled “Law Limits Self-Insured Plans for Small Employers,” which said, “A new law in California, CA SB 161, limits the ability of small employers (under 100 employees) to self-insure their health benefits.” We thank an astute reader for pointing out that the law defines small employer as two to 50 on January 1 2014 and doesn’t move that up to 100 until 2016.
Consumer-Driven Health Plans Have Break-Out Year
CDHP enrollment has had a breakout year after steady increases over the past decade. More than 12% of commercial enrollment was in consumer-driven plans as of January 2013, according to the latest census of MCOs from HealthLeaders-InterStudy.
Sheri Sellmeyer, a vice president at HealthLeaders said, “National players, such as UnitedHealth Group, Aetna, and WellPoint, are driving CDHP enrollment, but so are regional insurers. The percentage of commercial enrollment in consumer-driven plans varies on a state-by-state level. One extreme is Utah, where an important regional player and a national plan are heavily marketing CDHP, which makes up almost 21% of commercial enrollment.”
“The growth of CDHPs across the country will drive patients to influence physician prescribing as more people become motivated to own their healthcare. While some will seek lower cost care and generics, patients with chronic diseases may actually demonstrate additional adherence and compliance, as those medications are often built into CDHP benefit design. For pharmaceutical companies, understanding where each brand falls within the patient priority set will be vital to forecasting the impact of CDHP,” said John Jaeger a vice president at PharmaStrat. For more information, visit www.hl-isy.com.
CDHPs May Become the Most Popular Plan Type
Consumer Driven Health Plans (CDHPs) could become the most common plan type offered in the next three to five years, according to a study by Aon Hewitt. CDHPs are now the second most prevalent plan offered by employers after PPOs.
Fifty-six percent of employers offer CDHPs, and another 30% are considering offering one in the next three to five years. While 10% of employers offer CDHPs as the only plan option, another 44% are considering doing so in the next three to five years. In 2012, employers reported a cost trend of 4% for CDHPs compared to 6% for PPOs, 7% for HMOs, and 6% for exclusive provider networks.
Employers are using a variety of tactics to encourage enrollment, including subsidizing premiums at a higher level than they do for other plan options (44%), making the high-deductible plan the default plan option (22%), and covering preventive medicines before the deductible applies (44%).
A growing number of employers are considering offering voluntary benefits to address consumers’ fears that they will not be able to afford a catastrophic illness with a CDHP. While just 9% of employers offer voluntary benefits with a CDHP, another 44% are considering adding this type of coverage in the next three to five years.
Seventy-eight percent of CDHP consumers are satisfied with their plan and 89% say they will re-enroll, according to recent Aon Hewitt’s research. Sixty percent of employees who were enrolled in CDHPs say they have made positive health changes. Twenty-eight have gotten routine preventative care more often, 23% have sought lower-cost health care options, and 19% have researched health costs more frequently. For more information, visit www.aonhewitt.com.
A Look at Off-Exchange Health Plan Premiums
Given the technical difficulties affecting the federal health insurance exchanges, off-exchange health plans are attracting attention. Off-exchange plans are health plans that are purchased outside a state’s health exchange. Since these health plans are not sold on an exchange, lower-income enrollees cannot receive premium subsidies for them. For some well-known insurance companies, such as Aetna and United Healthcare, their individual and family health plans are only available outside the exchanges in several states.
When investigating off-exchange premiums, HealthPocket found that many insurance company web sites were not yet displaying their 2014 rates. For example, Humana has not released on its web site the off-exchange Bronze Plan rates for Milwaukee Wisconsin. The rates for Aetna are limited to 2013 plans in many states supported by the Aetna web site. United Healthcare also was not displaying 2014 off-exchange rates online for many states in which they sell insurance.
HealthPocket did uncover some 2014 off-exchange rates. In Atlanta, HealthPocket found that the lowest priced Bronze Plans for a 27 year-old nonsmoker were more expensive at Coventry ($180.26) and Aetna ($196) than for the lowest priced Bronze Plan available on Georgia’s exchange ($166). In South Dakota, the off-exchange Bronze Plans faired better with Wellmark BlueCross and Blue Shield at $171.60 for its least expensive entry for a 27 year-old nonsmoker compared to $196 for the lowest priced Bronze on the state exchange. However, the given the paucity of exchange rates, HealthPocket was unable to release a comprehensive analysis of on-exchange versus off-exchange premiums.
Kev Coleman, head of Research & Data at HealthPocket said, “For those insurance companies only offering off-exchange health insurance plans within a state, there is a need to make a compelling case to the public that their premiums are worth investigating. If off-exchange rates cannot be easily reviewed on an insurance company’s web site consumers may assume that the rates aren’t competitive.” For more information, visit www.HealthPocket.com.
A Look at Exchange Advertising & Marketing
Having launched Affordable Care Act online advertising campaigns in 39 States, Audience Partners is in a unique position to analyze the early promotional efforts. The multi-million dollar online advertising campaigns include sponsors from the federal government, state exchanges, advocacy groups, and private insurers nationwide. Interestingly enough, Audience Partners finds that no one refers to the Affordable Care Act (ACA) by name. Even the HHS only refers to the ACA as “the healthcare law.”
State exchanges are focusing their messaging around several common themes. Many focus on financial help. One ad in California that “welcomes” viewers “to the financial help” they “need to get health coverage.” An ad in Maryland that offers “$0 or low cost health coverage is now within your reach.” New York is stressing the affordable nature of the health insurance coverage with copy like “Today’s the day that a broken arm doesn’t have to break the bank.” New York also stresses quality coverage in order to overcome the objection that people may view these health plans as inferior. One ad said, “Today’s the day you can afford a quality health plan.”
The insurers seem to be taking a different route. Many are just offering general branding. One online video from Health Republic Insurance differentiates itself from the larger insurers by saying that the company doesn’t pay millions to CEOs or have to worry about shareholders. ConnectiCare focuses its ads on “budget-friendly rates” and extras like its college tuition rewards program. Many insurers’ ads stress that they have answers to what health reform means to consumers. For more information, visit health.audiencepartners.com.
How the ACA Helps Allergy and Asthma Patients
People with allergies or asthma will breathe easier under the ACA, according to a report by the Allergy & Asthma Network Mothers of Asthmatics. Under the ACA, these patients are more likely to get cost-effective preventive, primary, and specialty care services. Asthma and Allergy Patients will benefit from these key provisions:
• Health insurance companies cannot cancel health insurance arbitrarily due to a chronic illness, such as asthma, or high use of healthcare, such as immunotherapy.
• Doctor-recommended allergy and asthma screenings and tests are covered under all plans at no cost.
• Patients can buy individual health insurance policies that go into effect Jan. 1, 2014. These policies cannot charge more for pre-existing conditions.
• Parents can purchase health benefits for children on the individual health insurance market without being denied or paying significantly more due to pre-existing conditions.
• Lifetime dollar caps for all health insurance policies are now illegal. Annual caps are being phased out and will be eliminated by Jan. 1, 2014.
For more information, visit http://www.aanma.org.
Voluntary Educational Benefits
Purchasing Power’s employee purchase program recently added healthcare education and certification courses to its voluntary educational benefits. For more information, visit www.PurchasingPower.com.
Petersen International Underwriters is offering unique supplemental disability income insurance. It provides coverage for individual personal income with benefits to age 65. For more information visit www.piu.org
Stop Loss Insurance for Self-Funded Health Plans
Guardian Life introduced a stop-loss insurance product for employers that self-fund their own health plans. Guardian’s Stop Loss insurance helps mitigate employers’ financial risk when self-funding a medical plan by providing protection against catastrophic or unpredictable claims. The product is approved in 23 states with nationwide approval expected by mid-2014. For more information, visit www.GuardianLife.com.
Employee Hour Tracking
American Fidelity Administrative Services is offering a tool that helps employers continually track employee hours to determine their eligibility for health care coverage under the ACA. WorxTime monitors employee hours in real time and sends automated alerts to the employer when action is required. It also calculates whether an employee will be considered full time, provides affordability testing, offers rate of pay safe harbor testing and a penalty calculator. and captures information that will need to be reported to the IRS. For more information, visit http://www.americanfidelity.com.
The Argument for Bringing Back DB Retirement Plans
A report from Milliman recommends that private companies bring back defined benefit plans for employees. Milliman says that DB plans provide a secure and predictable benefit life that is safe from market fluctuations. DB plans also help stretch the value of retirement dollars. Numerous studies show that, on average, corporate DB plan investment returns exceed those for DC plans.
For more information, visit http://us.milliman.com.
A Positive Work Environment Can Improve Wellness
Some employers are implementing sophisticated wellness plans, but they may be overlooking an important factor in employee wellness. A study by Integrated Benefits Institute (IBI) reveals that employers can boost the health of workers by offering employees reasonable workloads, work-life balance, and better relations between workers and managers. Thomas Parry, PhD, IBI president said that by overlooking these issues, employees may be missing a more immediate source of improvements in illness-related lost productivity.
Better workplaces produce less stress and better health, which results in less illness-related lost work time and improved productivity. Workload has the strongest connection to sick days, followed by work-life balance, relations with management, and demands on workers’ time. Workers with the heaviest workloads average five more sick days a year than those with better-than-average workloads. Employees with better-than-average workloads report 7.2 sick days per year while those with the heaviest workloads average 12 sick days per year. Employees with typical workloads average 9.6 sick days per year.
Poor workplace climates that produce symptoms of stress-related illness (such as pain, gastrointestinal discomfort and hypertension) or psychological distress (such as depression or other emotional problems). These issues can also result in lost work time and reduced job performance. For more information, visit www.ibiweb.org.
The Growing Use of Non-Cash Incentives
The non-cash incentives market is thriving with 74% of U.S. businesses spending $76.9 billion annually on incentive travel, merchandise, and gift cards, according to a study by the Incentive Federation. Half of the market is driven by smaller businesses ($1 million to $10 million in annual revenue).
The study also reveals the following about employers that offer non-cash incentives:
• 98% include merchandise or gift cards, spending $54.3 billion each year.
• 46% include incentive travel, spending $22.6 billion per year.
• Non-cash employee awards are the most prevalent with 56% of U.S. businesses having programs, followed closely by corporate gift programs.
• Non-cash sales incentive programs are present in almost one-half of U.S. businesses, and non-cash customer loyalty programs are used in one-third, while only one-quarter of U.S. firms use non-cash channel programs.
• Gift cards are used more often for employee programs (88%) than for corporate gifts (55%) while merchandise is used relatively evenly.
• The incidence of all program types tends to increase with firm size.
For more information, visit www.incentivefederation.org.
• Law Limits Self-Insured Plans for Small Employers
• Covered California Enrollment Numbers
• A Californian’s Guide to Obamacare
• CaliforniaChoice Offers 2014 Private Health Insurance Exchange
• MassMutual Expands Recruiting In State Capital
• Annuity Agent’s Conviction Overturned
• Americans Divided Over Repealing Obamacare
• Factors That Drive ACOs
• Medicare Advantage Plans to Offer Much Lower Out-of-Pocket Caps
• Will Medicare Cuts Reduce the Quality of Hospital Care?
• Study Looks At WellPoint’s Post-ACA Strategies
• Absence Management
• ACA Compliant Dental Plans
• Cancer Policy
• Patient Hospital Ratings
• View Financial Planning Conference Online
Law Limits Self-Insured Plans for Small Employers
A new law in California, CA SB 161, limits the ability of small employers (under 100 employees) to self-insure their health benefits. Beginning January 1, 2014, insurers cannot issue stop loss insurance with deductibles below $35,000 to groups with one to 100 employees.
The attachment point increases to $40,000 in 2016. (The attachment point is the amount of claim dollars a company will be responsible for paying before the stop loss carrier reimburses any payouts). Also under the law, stop-loss policy cannot exclude any employee or dependent who is eligible for coverage under the employer’s self-funded group health plan.
These restrictions do not apply to stop-loss policies that were in effect for small employers before September 1, 2013. These policies may be renewed or reissued, or a stop-loss policy may be issued by another stop-loss insurer to maintain continuity of stop loss coverage. Also, SB 161 does not affect the ongoing operations of certain multiple employer welfare arrangements if they comply with small group health reforms.
Covered California Enrollment Numbers
During its first week Covered California got 16,311 completed enrollment applications and 27,300 partially completed applications. Here are the stats for October 1 to October 5:
• Call volume 59,003
• Average wait time 15:08. (The average wait time was reduced to less than
four minutes by Friday, 10/4.)
• Average handling time 16:48
• Applications 43,616
• Partially completed 27,305
• Applications completed with household eligibility determined 16,311
• Number of Californians determined eligible for coverage 28,699
• Small Business Health Options Program businesses registered as of
• Covered California’s website, www.CoveredCA.com, had 987,440 unique visits.
A Californian’s Guide to Obamacare
KQED is offering its popular guide Obamacare Explained: A Guide for Californians. The non-partisan and unbiased guide is available free of charge at kqed.org/obamacare.
CaliforniaChoice Offers 2014 Private Health Insurance Exchange
CaliforniaChoice’s 2014 carrier network will include Aetna, Anthem Blue Cross, Health Net, Kaiser Permanente, Sharp Health Plan, and Western Health Advantage. Ron Goldstein, president and CEO of CHOICE Administrators, which operates CaliforniaChoice said, “We’ve assembled a network of exceptional carriers with benefit models and price points that are consistent within the market and that make healthcare accessible and affordable for all Californians.
In 2014, CaliforniaChoice will offer 34 HMOs, two EPOs, and 13 PPOs and will continue to offer dental, vision, chiropractic and life options. CaliforniaChoise is also unveiling its Business Solutions Suite, which provides no-cost products and services to all employers, such as discount dental, voluntary vision, online human resource support, and an employee discount program. Goldstein says that CaliforniaChoices’ commitment to brokers will continue in 2014. He stressed that changes driven by the Affordable Care Act and other market forces have made the health insurance broker’s role more important than ever in helping to provide the information and unbiased recommendations that purchasers need. For more information, visit www.calchoice.com.
MassMutual Expands Recruiting in State Capital
Douglas W. Van Order will lead the management team at MassMutual Northern California in Sacramento. Van Order plans to recruit 24 financial professionals to MassMutual Northern California to help the public with their investment, insurance, and retirement needs. For more information, visit www.massmutual.com.
Annuity Agent’s Conviction Overturned
The California court of appeals overturned the conviction of insurance agent, Glenn Andrew Neasham. He had been convicted of committing theft from an elder and dependent adult. The prosecution charged that Neasham sold an annuity that was unsuitable for the age of his 83-year client, Fran Schuber. However, the California Department of Insurance approved the sale of the annuity for people up to 85.
It all started when Schuber and her 82-year-old boyfriend, Louis Jochim, visited the Neasham’s office to talk about purchasing an annuity. Jochim had been a client of Neasham for 10 years and had purchased an annuity from him, which he considered to be a good investment.
Schuber purchased an Allianz Life “MasterDex 10 Annuity.” She signed a form acknowledging that she had read the information setting out the values and factors that affect the value of the annuity, that Neasham explained the information to her, and that she understood the values shown. Neasham’s former assistant testified that Schuber, “Seemed like a very competent woman.”
Schuber and her boyfriend went to the Savings Bank of Mendocino County to withdraw the money to purchase the annuity. Bank employee, Susie Robinson, testified that she was concerned about Schuber’s competency since she observed memory problems in past dealings with the elderly bank customer. Neasham had called the bank to say Schuber was on her way. He warned that he would report the matter to the district attorney if the bank caused any delay in the withdrawal.
When Schuber and her boyfriend arrived, Robinson became concerned that Schuber was confused and was being influenced by her boyfriend. Robinson called Neasham and told him that Schuber did not understand the transaction. Nevertheless, Robinson issued a check for $175,000 payable to Allianz. Robinson then called a social worker at the Department of Social Services to report that Schuber had withdrawn $175,000 and that the bank felt that her boyfriend was exerting undue influence on her.
The appeals court found that, although there is conflicting evidence about Schuber’s ability to understand the transaction, there was no evidence that Neasham took her funds for his own use or for the benefit of anyone other than Schuber herself. Also, there was no evidence that Neasham made any misrepresentations in the sale. The appeals court also found that the jury was incorrectly instructed to convict it found that the purchase of the annuity deprived the Schuber of a major portion of the value or enjoyment of her property.
Americans Divided Over Repealing Obamacare
Americans are evenly divided about whether the Affordable Care Act should be repealed, according to a Bankrate.com report. This deadlock among Americans (46% on both sides of the issue) mirrors the divisions in Congress. Americans’ opinions of Obamacare differ greatly with age. Americans 18 to 29 are most likely to be uninsured (22%). They also respond most favorably to Obamacare, with 51% against repealing it. Americans 65 and older are the least likely to be uninsured (3%) and the most likely to object to Obamacare, with only 32% against repeal.
Sixty-four percent of rural residents would vote to repeal Obamacare versus 31% of urban residents and 48% of suburban residents. The Midwest is most in favor of repealing Obamacare (55%) while the Northeast is most in favor of keeping it (just 38% would vote to repeal). Not surprisingly, 74% of Democrats would vote to keep Obamacare and 79% of Republicans would vote to repeal. Independents sided with repealing, 49% to 41%.
Thirty-one percent of Americans say they are more negative about the Affordable Care Act compared to 12 months ago while 11% say they are feeling more positive. Upper-middle-income households (annual income $75,000 and up) are the most likely to feel worse about their health insurance situation compared to year ago. Twenty-five percent say it’s harder to handle medical expenses while 75% say it is easier). For more information, visit http://www.bankrate.com/finance/insurance/health-insurance-charts-1013.aspx
Factors That Drive ACOs
Accountable Care Organizations (ACOs) are more likely to spring up in regions of the country where doctors and hospitals are consolidated into large networks and there are medical practice structures intended to improve medical care and cut costs, according to RAND study. Accountable care organizations are networks of doctors, hospitals, and other health professions that get financial rewards for cutting costs while maintaining or improving the quality of care. The findings may help policymakers create new policies to accelerate growth of accountable care organizations, a key cost control strategy promoted under the federal Affordable Care Act.
While the Northwest is essentially empty of ACOs, the Northeast and the Midwest are dense with the groups. Factors associated with formation of accountable care organizations include a greater occurrence of payment risk sharing at hospitals, larger integrated hospital systems, and primary care physicians that practice in large groups. Factors that are not associated with the formation of ACOs are average household income, per capita Medicare spending, enrollment in Medicare Advantage Plans, and physician density. For more information, visit http://www.rand.org/newsletters.html
Medicare Advantage Plans to Offer Much Lower Out-of-Pocket Caps
In 2014, many Medicare Advantage plans will have much lower maximum out-of-pocket caps than the $6,700 limit. Some have a $3,400 or lower out-of-pocket cap and a zero premium, which ia very attractive to low-income seniors, according to a study by HealthPocket. HealthPocket looked at data from the Centers for Medicare and Medicaid Services on Medicare Advantage plans with a bundled prescription drug benefit (MAPD).
During annual enrollment, from October 15 to December 7, comsumers must chose a traditional Medicare plan augmented with a supplemental plan and Part D prescription plan or choose a Medicare Advantage plan with prescription drug coverage through a private insurance company.
MAPD plans are getting more popular. In 2014, these plans offer no premium or low premiums and a low out-of-pocket maximum. “Consumers looking to save on their direct costs under Medicare are going to have some good options heading into 2014. But Medicare enrollees need to factor in other criteria like whether their doctors and hospitals are in a plan’s network, whether their medications are covered, and the amount charged for the medical services that they may need in the coming year. Quality scores should inform a final decision, too, and as with any big purchase, it pays to do your research,” said Steve Zaleznick of HealthPocket.com. Consumers can compare traditional Medicare, Medicare Advantage, and prescription drug plans with HealthPocket’s free Medicare comparison tool at www.HealthPocket.com.
Will Medicare Cuts Reduce the Quality of Hospital Care?
The Affordable Care Act (ACA) permanently slows the growth of Medicare payment rates for inpatient hospital care, raising concerns that hospitals will raise prices for private payers in order to offset lower Medicare revenue. But if history holds true, nonprofit hospitals will reduce operating expenses instead, according to a study by the Center for Studying Health System Change (HSC).
The claim that the ACA will drive large numbers of hospitals to insolvency appears to only hold true with for-profit hospitals. For-profit hospitals, which tend to have lower operating costs, will see profits decline.
But not-for-profit hospitals will adjust their operating expenses to match lower revenues. Hospitals will offset about 90% of lost revenues by through savings on personnel and non-personnel costs. Hospitals will also delay or forgo capital improvements. According to researchers, “Newhouse (1970) describes the hospital industry as aspiring to a Cadillac level of quality. Our results suggest that hospitals, if forced to, will instead turn out Buicks.” If hospitals can maintain or improve their quality of care, the result will be improved efficiency. For more information, visit www.hschange.org/CONTENT/1385/.
Study Looks At WellPoint’s Post-ACA Strategies
The nation’s largest commercial insurer, WellPoint Inc., is transforming its products-and its provider relationships to prepare for the new healthcare market in 2014, according to an analysis by HealthLeaders-InterStudy. WellPoint has narrow provider networks in all 14 Blue Cross Blue/Shield affiliate states. This strategy supports narrow-network plans in the healthcare exchanges, which opened for enrollment October 1, 2013.
WellPoint’s previous model was based on broad networks that included almost every local provider. Because of the changes in healthcare reform, the company is offering smaller, cost-effective network options, said HealthLeaders-InterStudy Principal Analyst Paula Wade. Depending on how the larger commercial market responds to the narrow-network designs,hospitals outside of the narrow networks could face some real strain.
These narrow-network plans offer lower premiums for individuals and groups by excluding high-cost providers. The strategy allows these low-cost networks to be offered in its other commercial products. WellPoint is already offering narrow-network products and tiered-network products in its largest market, California.
WellPoint also rewards providers for managing the healthcare of patients with chronic conditions and keeping patients compliant with their medications. For more information, visit www.hl-isy.com.
The Hartford’s Workforce Safety & Absence Management Service features consultants and web-based resources to support groups with four to 49 employees. The Hartford team that will provide educational information on these topics:
• Protocols and practices on how to improve safety of employees.
• 2009 Americans with Disability Act Amendment Act (ADAAA).
• Return-to-work programs to help employees get back to work after a
• Ergonomic evaluations to make workstations safer.
In addition, small business owners will find a variety of digital resources that can help identify and address risks at their worksite, such as slips and falls. For more information, visit www.thehartford.com/group-benefits-producers/small-business
ACA Compliant Dental Plans
MetLife will be updating its affected dental plans to comply with the requirements of the Patient Protection & Affordable Care Act (ACA). MetLife will be adding pediatric dental benefits that meet essential health benefit requirements to existing dental benefit plans, in the states where MetLife is targeting on or off marketplace participation. These changes will be effective January 1, 2014 for groups with 50 or fewer employees. MetLife also plans to offer these essential health benefits to small groups in about 20 states via the public marketplaces. For those target states, businesses that purchase their dental coverage from a standalone carrier will not need to change the way they purchase coverage, as the law also allows for the pediatric dental essential health benefits to be provided by a standalone dental plan. For more information, visit www.metlife.com.
Network Hospital Ratings
Cigna is adding Patient Experience ratings for hospitals across the country to its online physician and hospital directory. The information is provided by Consumer Reports and includes results from millions of patient surveys. The new patient experience ratings are available on myCigna.com.
Sun Life’s new Stop-Loss Cancer rider offers qualifying employers a stop-loss deductible reduction up to $10,000 for a catastrophic claims associated with cancer. Sun Life’s Critical Illness policies provide a lump sum payment from $5,000 to $50,000 to employees. For more information, visit www.sunlife.com/us.
Patient Hospital Ratings
Cigna’s online directory of doctors and hospitals now includes patient-experience ratings for hospitals across the country. Provided by the leading source of consumer information and recommendations, the information includes results from millions of patient surveys. For more information, visit www.mycigna.com.
View Financial Planning Conference Online
The Financial Planning Association (FPA) launched the FPA Virtual Experience, an online version of FPA’s national conference in Orlando, October 19 to 21. FPA Virtual Experience will begin on Sunday, Oct. 20 and will offer access to most sessions, speakers and continuing education (CE) for three months after FPA Experience 2013 concludes. For more information, visit www.FPAExperience.org/Virtual.
• Many Consumers Will Pay Too Much for an Exchange Plan
• Exchange Plans are Considerably Different
• TPAs Are Ready For the ACA
• Branded Mental Health Meds Under the Exchanges
• Insurers Face Challenges in Attracting Consumers to Exchanges
• HHS Shuts Down Programs Amid Budget Standoff
• Canadians Face Financial Hardship Due to Healthcare Costs
• More People Are Becoming Insured
• Medicare Advantage Premiums Stable in 2014
• Dental Benefits for Public Exchanges
• Tool To Navigate The Affordable Care Act
• Tool For Cancer Patients in the Exchanges
• Tool for Arthritis Patients in the Exchanges
• The Evolution of ACO Partnerships in California
• Covered California is Open for Business
Many Consumers Will Pay Too Much for An Exchange Plan
More than 80% of consumers may not be able to make a clear estimate of their health insurance needs, and many will choose a higher cost plan than what they need, according to an analysis by Columbia Business School. For the analysis, Columbia looked at simulated exchanges modeled on the design of the actual exchanges.
Researchers asked people of varying education levels to choose the most cost-effective policy using websites modeled on the exchanges. The following results lead to some startling conclusions:
· The average consumer stands to lose an average of $611 by failing to choose the most cost-effective option.
· Because the federal government will subsidize many policies, American taxpayers could pay an additional $9 billion for consumer’s mistakes in choosing more costly plans.
· Providing monetary incentives did not improve outcomes. Participants were offered $1 for every correct answer and entrance into a lottery that pays one winner $200, yet 79% of participants still chose the wrong plan, adding $419 to the cost of their health insurance.
Columbia’s Professor Eric Johnson said, “If consumers can’t identify the most cost-efficient plan for their needs, the exchanges will fail to produce competitive pressures on healthcare providers and [fail to] bring down costs across the board, [which is] one of the main advantages of relying upon choice and markets.”
However, he cautioned against misusing the research. “Amid the political heat around the healthcare law, there’s going to be a great propensity for some politicians to jump on this study and misinterpret these results. This research presents no…argument for or against the Affordable Care Act. Instead, this is research about the difficulties and complexities in creating the actual delivery systems, which is being done in blue and red states.”
Researchers say that consumers should estimate their medical services before choosing a plan. Having access to tutorial links and pop-ups that explain basic terms like “deductibles” increases the chances of choosing the best plan. Adding a calculator to the process also improves the consumer’s chances of choosing the right plan and reduces the size of errors by over $216. In addition, using a tool that defaults to the most cost-effective plan drastically improves a participant’s chances at selecting the most appropriate plan by 20%. Together, calculators and defaults reduce the average mistake saving consumers and the government $453.
Exchanges that limit the number of health plan choices will reduce confusion among consumers (Utah offers 99 healthcare options for participants). Exchanges can significantly improve consumer performance by implementing tools, such as just-in-time education, smart defaults, and cost calculators. To download the full report, visit www.gsb.columbia.edu.
Exchange Plans Are Considerably Different
Health plans offered on the exchange are considerably different than what has been offered on the market, according to an analysis by HealthPocket. The new Affordable Care Act plans have considerably broader benefit coverage than do existing plans in the individual and family health insurance market. They all have coverage for 10 Essential Health Benefits. Additionally, not all Affordable Care Act health plans are available on exchanges. Some of the new health plans will only be offered off-exchange.
For the 36 states that are using some form of the federal health insurance exchange, there were records of 1,483 different Affordable Care Act health plans. This amount translated into an average of 41 health plans per state. In comparison, HealthPocket’s study found the 2013 individual and family health insurance market had 4,208 plans for the same 36 states, averaging 117 plans per state. For more information, visit
TPAs Are Ready For the ACA
Nearly 80% of third-party administrator (TPA) executives say their companies are ready to process healthcare benefit exchange transactions or are close to being ready, according to a recent poll by KPMG LLP. TPAs largely view exchanges as offering a necessary change in the business landscape and believe that exchanges can improve their business and increase their membership. While 35% of respondents say healthcare benefit exchanges offer a necessary change in America’s healthcare system.
Twenty-six percent say that having healthcare benefit exchanges is a risk management issue that needed to be managed carefully while 12% thought it provided a way to improve their business. Twenty-seven percent are still unsure. TPAs cited a mix of issues that may pose the greatest operational challenges to the exchanges including eligibility, customer service, enrollment and payment processing, and potential financial effects. One quarter singled out new patient eligibility as the biggest obstacle.
Joseph Parente of KPMG said, “With the potential of more than 30 million Americans being added to our healthcare infrastructure, determining who is eligible and what they are eligible for presents a significant short term burden to the new system. Companies must get the set up right or make quick adjustments in order to prevent future bottlenecks…when enrollment and payment processing starts to take shape.”
Forty-two percent say they will be ready for enrollment by 2014. Those who outsource their customer service say that their service partners are ready for open enrollment and will continue to work with them (26%). One quarter say they are not as prepared as they would like to be. Thirty-one percent are not sure how the exchanges will perform over the next 12 months. TPAs who expressed confidence in the exchanges say that these new marketplaces will lead to more efficient and effective cost structures, more standardized products and services, more data integration, more customers, and more upselling possibilities. For more
information, visit http://www.distilnfo.com.
Branded Mental Health Meds Under the Exchanges
There may be lower use of branded prescriptions for schizophrenia, bipolar disorder, and depression on the health insurance exchange plans that are set to launch in January 2014, according to an analysis by Decision Resources. “For their patients on exchange-based plans, physicians would like to follow the same treatment pattern they have for their commercial patients. However, formulary design may constrain this behavior as managed care organizations push for generics. This tension will become more pronounced with the launch of newer premium-priced agents over the next few years that will be competing against entrenched therapies,” said Decision Resources senior director, Roy Moore.
More than a third of managed care organizations (MCOs) with a plan on the exchange expect to have a different formulary than the one used in their largest commercial product. The exchange formulary may feature fewer branded therapies, less preferred coverage of brands, and greater restrictions as MCOs seek to reduce costs by favoring generics.
Primary-care providers and psychiatrists expect a 19% to 34% increase in the number of patients they treat for schizophrenia, bipolar disorder, and depression since Medicaid eligibility will expand under the ACA. Exchange-based plans will account for 17% of their patients in 12 months, highlighting the opportunity for the drug industry in exchanges. Expanded Medicaid eligibility will also present an opportunity for the drug industry, but more restrictive formularies in Medicaid will again favor generics. For more information, visit www.decisionresources.com.
Insurers Face Challenges in Attracting Consumers to Exchanges
Carriers will face significant challenges and new competition in attracting and retaining customers in the exchanges, according to a study by PwC’s Health Research Institute. “Large national insurers and new players, some from other industries, are jockeying for position in the new exchange market,” said Ceci Connolly, managing director, PwC’s Health. New exchange entrants will include Medicaid managed care companies, new health plans run by large provider systems, healthcare start-ups, and non-insurer players, such as web brokers and tax preparers. Their participation won’t come without challenges, as many will need to learn how to operate in the new exchange market and manage the needs of a largely unknown population.
It will be crucial for insurers to invest in retention programs to gain the loyalty of a new crop of technologically savvy buyers. Companies should think beyond initial implementation challenges and focus on building a meaningful customer experience, with an eye on cost reduction and personalized communication, said Connolly.
For the study HRI interviewed insurance executives, consumer experts, and health policy leaders about exchange strategies. The following are some key results:
- 69% plan to offer coverage on the exchanges, reflecting the rising significance of this new business opportunity
- Ten of 18 national health insurer executives say their companies won’t offer exchange coverage in all the states where they have business, and 50% expect to enter additional states after 2014.
- 63% say technology integration is a major barrier to implementation; and 61% cite coordination of subsidies.
- Only 34% say understanding newly eligible customers is a major barrier to implementation, suggesting they may not thoroughly understand the challenges.
- 91% expect premium costs and total out-of-pocket costs to be what consumers care about most. Yet, industry and consumer experts expect the ultimate differentiators to be factors, such as personalized communication, tangible rewards and health management programs, and brand recognition.
Sandra Hunt, principal with PwC’s Health Industries practice said, “Organizations that are planning to offer coverage on the exchanges should prepare to compete in new ways to earn consumers’ business and loyalty. Transparency around pricing, quality, and customer satisfaction should be foremost in their minds as consumers become much more aware of the cost of healthcare and how to access it.” For more information, visit www.pwc.com/us/hix.
HHS Shuts Down Programs Amid Budget Standoff
The Department of Health and Human Services (HHS) issued a memo announcing which programs will shut down during the standoff over the Affordable Care Act between President Barack Obama and congressional Republicans. Up to one million federal workers have been furloughed.
Indian Health Services will be unable to provide funding to tribes and Urban Indian health programs, and will not perform national policy development and issuance, oversight, and other functions, except those necessary to meet the immediate needs of the patients, medical staff, and medical facilities.
• The Health Resources and Services Administration will be unable make payments for the Children’s Hospital GME Program and vaccine injury compensation claims. The federal government will not have the funds to monitor Ryan White Grants, particularly AIDS drug assistance program grants, emergency relief grants and comprehensive care to ensure that states, cities and communities are complying with statutory guidance and necessary performance.
• The Administration for Children and Families will not continue quarterly formula grants for temporary assistance for needy families, child care, social services block grant, refugee programs, child welfare services and the community service block Grant programs. Additionally new discretionary grants, including Head Start and social services programs, will not be made.
• The Administration for Community Living will not be able to fund the senior nutrition programs, Native American Nutrition and supportive services, prevention of elder abuse and neglect, the long-term care ombudsman program, and protection and advocacy for persons with developmental disabilities.
• The National Institutes of Health will not admit new patients (unless deemed medically necessary by the NIH director), or initiate new protocols, and will discontinue some veterinary services. NIH will not take any actions on grant applications or awards.
• The Centers for Disease Control and Prevention will be unable to support the annual seasonal influenza program, outbreak detection and disease treatment and prevention recommendations (e.g., HIV, TB, STDs, hepatitis).
Canadians Face Financial Hardship Due to Healthcare Costs
Forty Percent of Canadians face financial hardship after a serious health event. In addition, 53% of 45 to 54 year olds are struggling to make ends meet after a major health incident, according to the fourth annual Sun Life Canadian Health Index conducted by Ipsos Reid. The survey found the following for those affected by a personal health crisis:
· 22% turned to credit cards or personal lines of credit.
· 22% tapped into personal savings.
· 12% borrowed from a loved one.
· 5% were forced to remortgage or sell their home.
While 82% of Canadians realize that a serious health event could affect their personal finances, only 13% have money set aside for uncovered healthcare costs. These health events are dire and include heart attack, stroke, cancer, coronary bypass, chronic diseases, degenerative disorders, terminal illnesses and serious accidents. Twenty-percent have no group insurance, personal insurance or health expense savings to help absorb the shock. For more information, visit www.sunlife.ca/CanadianHealthIndex.
More People Are Becoming Insured
As many as 82.3% of people under 65 had health insurance in 2012 compared to 81.5% in 2010. This small increase is notable because increases in health insurance coverage have been recorded in only six years since 1994. The uninsured rate for the non-elderly population was 17.7% last year, down from 18% in 2011, according to a study by the Employee Benefits Research Institute.
Employment-based health benefits remain the most common form of health coverage in the United States. In 2012, 58.5% of the non-elderly population had employment-based health benefits, down from the peak of 69.3% in 2000. However, the 2012 level was essentially the same as in 2011 (58.4%). In fact, the number of non-elderly people with employment-based coverage has declined every year since 2000 except, for 2012.
The percrentage of the non-elderly population with public-program health coverage was unchanged in 2012 at 22.6%. Enrollment in Medicaid and the State Children’s Health Insurance program also increased to a combined 47.3 million in 2012, covering 17.7% of the non-elderly population. That’s significantly above the 10.2% level of 1999. The percentage with individually purchased health coverage was slightly higher in 2012 but has basically hovered around 7% since 1994.
Medicare Advantage Premiums Stable in 2014
Medicare Advantage premiums are stable going into 2014. The key to growth in Medicare Advantage plans has been their ability to provide a reasonably stable offering, allowing retirees to predict their health coverage expenses. Also, one third of plans offer a zero premium, which is popular with many cost-conscious and low-income seniors, according to an analysis of CMS date by HealthPocket. This year, over 14.4 million Medicare beneficiaries have Medicare Advantage plans, a million more than in 2012.
In 2013, more than half of all Medicare Advantage enrollees chose a zero premium plan. In 2014, 11,725 zero premium plans will be available in counties nationally. Fifty-one percent are HMOs; 41% are PPOs; 7% are private fee-for-service plans; and 1% are Medicare cost plans.
Steve Zaleznick of HealthPocket.com said, “The good news for consumers is that most will continue to have zero premium options available to them in 2014. The Medicare annual enrollment period will run from October 15 through December 7. Consumers can already check 2014 premiums for their Medicare Advantage plan options by visiting www.HealthPocket.com.
Dental Benefits for Public Exchanges
Guardian Life is offering a comprehensive suite of dental benefits to meet requirements of the Affordable Care Act (ACA). Guardian’s dental product will be available on 48 small business exchanges. Guardian products are also available on private exchanges. In most states, employers and employees can choose Guardian plans that cover the required pediatric dental benefit or cover the whole family. For more information on dental coverage and health care reform, visit www.AboutEmployeeBenefits.com/hcr.
Tool To Navigate The Affordable Care Act
Consumer Reports launched HealthLawHelper.org, a web-based tool that offers personalized guidance to help consumers understand how they may be affected by the Affordable Care Act. The Health Law Helper is available at www.HealthLawHelper.org. The tool will also launch in Spanish at
www.AseguraTuSalud.org and across a variety of platforms, including mobile and tablet, in October.
Tool For Cancer Patients in the Exchanges
The Patient Advocate Foundation is offering an updated “User’s Guide to the Health Insurance Marketplaces.” The organization is also offering the Cancer Insurance Checklist to help cancer patients choose a plan under the exchange in 2014. For more information, visit www.patientadvocate.org/marketplaceguide.
Tool for Arthritis Patients in the Exchanges
The Arthritis Foundation launched its online Health Insurance Marketplace Toolkit. The online guide aims to help consumers, especially those with arthritis, understand the new health insurance marketplace and make informed decisions about their health care coverage and benefit needs. For more information, visit www.arthritis.org/marketplace.
The Evolution of ACO Partnerships in California
Unique market factors in California are driving interest in commercial accountable care organizations (ACO), according to a study by the Center for Studying Health System Change (HSC) on behalf of the California HealthCare Foundation. (ACOs are groups of providers that take responsibility for the cost and quality of care of a defined patient population.)
In California, large physician organizations are experienced in managing financial risk for patient care. Also, the growing dominance of Kaiser Permanente Health Plans has put more competitive pressure on insurers and providers.
Hospitals, physicians, and other providers are collaborating with public and private TPAs on reforming delivery and payment systems to slow health care spending growth and improve the quality of care. Medicare initiatives to develop ACOs have spurred interest in commercial ACO contracting arrangements among private insurers and providers.
On a national basis, most commercial ACO initiatives focus primarily on new provider payment approaches with existing insurance products. In contrast, California ACO collaborations have combined payment changes with new limited-network ACO insurance products. These limited-network products include financial incentives for enrollees to use ACO providers. They are usually structured as health HMO products that provide access only to ACO providers. Also, PPO products provide reduced patient cost sharing for using ACO providers.
Initial experiences reveals that some significant savings are possible. But ACO efforts require intensive collaboration and investment to support care management and exchange of sensitive performance data. These commitments present challenges even in California communities where market conditions are more favorable for ACOs. For more information, visit www.hschange.org/CONTENT/1383.
Covered California is Open for Business
Covered California, California’s marketplace for health care coverage, opened for business on October 1 as promised. Executive Director Peter V. Lee said, “Our phone lines are humming; our website is live; and we stand with thousands of Californians across the state as we kick off our effort to help educate and enroll millions of currently uninsured Californians,” said Covered California.
During the initial six-month open-enrollment period (ending March 31, 2014), Covered California expects to enroll 500,000 to 700,000 Californians who are eligible for premium assistance. By the end of 2014, Covered California aims to have insured about 1,050,000 Californians newly enrolled in Medi-Cal. The state expects to have 840,000 to 1.2 million who qualify for premium assistance.
Toby Douglas, director of the California Department of Health Care Services, said, “Today marks the beginning of a reform of California’s health care system, in which many of our most vulnerable and needy residents will have the opportunity to enroll in Medi-Cal.” For more information, visit www.CoveredCA.com.
• Affordable Health Coverage Key to Attracting Uninsured Young Invincibles
• Insurers in Calif. Health Exchange Limit Providers
• A Great Argument For Disability Benefits
• Stop Loss Cancer Rider
• Partnership Program for 401(k) Consultants
• Dental Plans that Meet ACA Requirements
• Health Exchange Subsidy Tool
• Lifetime GUL
• Legislative Alert
• The Role of Brokers in the Exchange
• Commissioner Warns Against ACA-Related Fraud
LONG TERM CARE
• Long-Term Care Firm Seeks Alliances 1,000 Advisers
• Webinar Demonstrates Online Enrollment Tomorrow
• Defined Contribution Forum
• Oral Care Reduces Medical Claims
Affordable Health Coverage Key to Attracting Uninsured Young Invincibles
Only 20% of uninsured adults (aged 18 to 64) who don’t have employer coverage say they are healthy enough to go without health insurance, according to a study funded by the Robert Wood Johnson Foundation. These findings suggest that well-targeted outreach and enrollment efforts may succeed. The key will be whether new coverage options will be perceived as affordable and worth the cost, according to the study. The study also reveals the following:
37% Tof uninsured people say that health insurance is not worth the money.
33% of uninsured non-elderly adults say they are risk-takers. Uninsured people who are risk-averse are more than twice as likely to say they don’t need health insurance (33%) or that it is not worth the cost (51%).
35% of uninsured adults 18 to 29 are risk-takers compared to 28% of uninsured adults aged 40 to 64. Thirty-six percent of young adult risk-takers say they don’t need insurance compared to 26.6% of older adult risk-takers.
82% of young adults who describe themselves as risk-averse agree that health insurance is important.
While more than 90% of young adults say their health is excellent or good, 73% agree that health insurance is important.
14% of African Americans say they don’t need health insurance compared to 21% of Caucasians. Also, wenty-six percent of African Americans say health insurance is not worth the cost compared to 42% of Caucasians. For more information, visit www.hschange.org/CONTENT/1379/.
Insurers in Calif. Health Exchange Limit Providers
Insurers selling health coverage through California’s insurance exchange have limited the number of doctors and hospitals available to policyholders in an effort to lower premiums, reports the Los Angeles Times.
For example, Health Net will offer the lowest cost coverage options in Southern California, but policyholders will have access to less than one-third of the insurer’s network of providers for employer-based plans. In addition, Blue Shield of California’s exchange plans will include only 50% of the insurer’s usual provider network. Some exchange plans will exclude certain large hospitals. Anthem Blue Cross officials said they are offering the only exchange plans that include UCLA Medical Center and other University of California health facilities.
A Great Argument for Disability Benefits
Most disability-insurance beneficiaries say their benefits played a critical role in preserving an adequate standard of living, according to a survey by the Consumer Federation of America (CFA) in partnership with Unum. Twenty-three missed a mortgage or rent payment, but an additional 49% said they would have missed a payment if they hadn’t received disability benefits. Fourteen percent 14% had to move out of their home because they could no longer afford to live there, but an additional 44% said they would have had to move if they hadn’t received disability benefits.
Forty-two percent missed at least one bill or consumer loan payment, but an additional 41% said they would have missed a payment if they didn’t have disability coverage. Thirty-one percent applied for community or government assistance to help pay for food, but without disability benefit an additional 33% said they would have applied if they hadn’t had disability benefits.
Beneficiaries did report a reduced standard of living since disability benefits typically replace only 60% of pre-disability income. Eighty-five percent had to cut back or stop saving for retirement; 58% skipped or delayed some medical, dental, or vision care for themselves or family members; and 57% cut back on spending to the point of having an uncomfortable lifestyle.
The following are some typical comments from beneficiaries about their disability benefits:
• “I would have been forced to declare bankruptcy. I would have probably lost my house and my cars.”
• “I would have lost my home. I would have been homeless and living in a shelter with my daughters. I wouldn’t have been able to afford food or gas for the car to get them to school.”
• “I have a neuro-muscular disease and I would not have been able to afford to pay for the medicine and support myself at the time. I would not have been able to survive.”
Beneficiaries said disability benefits helped them do the following:
• 77% avoid strain with spouse or partner.
• 78% maintain their self-esteem as a provider for their family.
• 88% maintain a healthy emotional outlook.
Sixty-eight percent said their health would have been worse without benefits.
Here are some typical comments from beneficiaries about how they would have felt if they did not have disability benefits:
• “I probably would have gone off the deep end. It would have been too much to bear with the health problems I have.”
• “I would have felt awful, scared, stressed.”
• “Without the benefit payments there would have been home pressures. I would have felt dependent, where I don’t have control of my life, trapped, child-like.”
Ninety-five percent would encourage other people to get disability insurance through their employers, and 58% said their disability benefit made them feel more favorable about their employer. Eighty-five percent said employers should automatically enroll new employees in disability insurance, allowing them to opt out of this coverage.
Eighty-eight percent of beneficiaries said that employers should do a better job of explaining disability insurance and 85% said the government should inform the public about the risk of becoming disabled and its financial impact. Workers had he following comments:
“I’m glad they made me take it. Because it wasn’t a volunteer thing, and I didn’t think that way.”
“Any employer that offers disability insurance shows that they care. To me that’s very important because your life can change.”
“Employers should sit down and explain to the employees about their long term and short term disability coverage, because they don’t know what’s going to happen, and everyone should. I’ve made sure to tell everyone about everything, to get the insurance. Because without it, I don’t know what I would have done.” For more information, visit www.unum.com.
Stop Loss Cancer Rider
Sun Life is offering its Stop-Loss Cancer rider. Qualifying employers with a stop-loss deductible will get a reduction up to $10,000 (depending on the size of the deductible) when Sun Life reimburses an employer for a catastrophic cancer-related claim. Under Sun Life’s critical illness policies, upon diagnosis of a covered condition, covered employees get a lump sum payment from $5,000 to $50,000, depending on coverage levels. For more information, visit www.sunlife.com/us.
Partnership Program for 401(k) Consultants
For every new plan that closes between September 16, 2013 and December 27, 20131, John Hancock RPS will pay the plan’s TPA according to the following scale:
A $400 payment for a 401(k) plan size of up to $250,000, an $800 payment for a plan size of $250,001 to $1 million, and $1,200 payment for a plan size of over $1 million.
For more information, visit manulife.com.
Dental Plans that Meet ACA Requirements
Guardian Life is offering dental benefits that meet affordable Care Act (ACA) requirements. Affordable plans include the required pediatric dental essential health benefits. Guardian will ensure that members get the greater benefit between the traditional coverage and the required pediatric benefit.
Employers who select medical coverage that includes the pediatric dental essential health benefit can keep their current plan or opt for Guardian’s comprehensive coverage that excludes pediatric preventative care. By excluding just preventive care, members under 19 will be covered for basic and major services under their Guardian plan without being subject to the medical plan’s deductibles and out-of-pocket maximums.
Jolynne Williamson, Assistant vice president, Group Dental Products, of Guardian said that businesses and consumers could risk losing many of the dental benefit they have come to rely on if they mistakenly say the oral health essential-health benefit is equivalent to a stand-alone dental plan, explained Williamson. The following are some hidden pitfalls:
• The oral health essential-health benefit applies to members up to age 19, but not to adults, so children may be covered for dental but not their parents. This means that adults may need to purchase separate dental insurance that could require them to go to a different dentist.
• When the pediatric dental benefit is part of a medical plan, a member may end up paying more out-of-pocket costs for dental services than with a stand-alone dental plan, due to having to meet their medical deductible or medical out-of-pocket maximum before being able to access their full dental benefit.
• Since medical insurers are not experts in dental care, they are not likely to provide the same size networks, levels of coverage, and streamlined processes for claims handling that are common with dental insurers.
• Keeping dental separate benefits lessens the effect of the Cadillac Tax, which will be imposed on medical plans beginning in 2018 – stand-alone dental carriers are exempt from the tax.
For more information about Guardian, visit www.GuardianLife.com.
Health Exchange Subsidy Tool
Experian Healthcare launched a tool that helps healthcare providers identify patients who meet the income requirements for health-insurance exchange tax credits and federal subsidies. It also helps automate the enrollment process by populating the state’s health-insurance exchange application form. For more information, visit http://www.experian.com/healthcare.
American General is offering a highly flexible guaranteed universal life insurance policy called “Secure Lifetime GUL II.” It provides increased options for 1035 and shorter pay scenarios and includes an integrated enhanced surrender value rider (a return of premium feature). It is now available with the new Lifestyle Income Solution that can turn a life insurance product into a guaranteed stream of retirement income. For more information, visit www.agquickticket.com.
California Health Underwriters is urging members to contact Governor Brown to veto SB 353 (Lieu). This bill would impose significant new translation requirements on health plans and licensed agents in the individual and small group market. Plans would have to translate letters, notices, enrollment applications, grievance information, and summaries of benefit into languages that are spoken only by a minority of a plan’s membership simply because the plan attempted to reach these communities in their own language or if one of its agents held themselves out as doing business in any of the identified languages in the bill. For more information, visit CAHU.org.
The Role of Brokers in the Exchange
CAHU’s V.P. of Communications, Meg McComb, recently interviewed Chris Patton, vice president of SHOP and Agent Management for Pinnacle. The following are some highlights of his comments:
• I don’t see cataclysmic scenarios happening in the small group market. Covered California will offer coverage through the SHOP and the individual marketplace. Agents will have the ability to offer products, and we could see more dependent coverage through the individual marketplace, depending on the employer contribution. Having the two Covered California products available to agents presents an exciting opportunity for agents and the potential insured.
• Agents who embrace the upcoming changes and tailor their marketing to meet the needs of the consumer are going to be wildly successful. The opportunity for agents is very similar to when AB 1672 got passed. It was the same reaction; everyone was freaked out. Some thought that they were going to have to change professions, but others thought, “Wow, this is an opportunity.” If an agent sees this as an opportunity to provide new product and information to business owners as a trusted advisor, I am confident that they will thrive in 2014 and beyond. Business owners are thirsty for information. There are agents and agencies out there that have embraced the upcoming changes and are communicating to their clients and prospective clients.
The ACA has prompted several new [private] exchange offerings. Competing private exchanges that offer good products at competitive prices will be a good thing for our market and will help to increase awareness for the model. Guaranteed issuance for individuals will have a significant impact in the market. It’s a huge change to policy. The real question is whether we will see small groups migrate away from purchasing group coverage and encourage their employees to individual coverage instead. Businesses that continue to provide group coverage in 2014 and beyond will enjoy employee retention, increased productivity, and reduced absenteeism. The success of SHOP is going to depend on the agent distribution system. Working with the SHOP distribution model will be no different than working with a carrier or a TPA. We are agent driven. My team is here to support agent sales. We are looking to the certified insurance zgent for distribution direct and through our general agent partners.
• The SHOP will bring a new mix of carriers at a very competitive price point. In 2014 small business must be enrolled in the SHOP to benefit from available tax credits. Not every group will benefit this since there are limits to the number of employees and average income. But there will be significant advantages for employers that fall into the sweet spot. Covered California will have a tax credit calculator available later this Fall that will allow agents to get an idea of what a tax credit would look like for a small business.
• The SHOP’s networks will represent over 80% of the doctors and acute care hospitals in California. We will have a complete picture in the coming weeks, but I think we will end up with networks that allow SHOP to be a strong competitor.
• We have seen an incredible response from the agent community to the registration and certification process with Covered California. In the coming year there will be a lot of change. Agents will have a big job to do getting information to the consumer. Agents will have an opportunity to show that they are a necessary and valuable part of those changes in their role as trusted advisors.
• The technology that will power Covered California in the small group market is going to be a big change. Online enrollment will be the primary submission method. We will accept applications by paper, phone, and fax, but online is the fastest route for a group to get issued. This technology will be a big factor for agents and their clients. Small group employers and their employees aren’t used to using iPad’s and sitting around on their computers to fill out their applications. The online enrollment feature represents a technological advance for the small group market. It will be interesting to see the adoption rate. The small group underwriting process will change in 2014. CalHEERS represents exciting technology in the small group space that we have really only seen for large group. It will be interesting to watch the early adopters change the way small group has traditionally been presented and enrolled.
Commissioner Warns Against ACA-Related Fraud
Insurance Commissioner Dave Jones is warning consumers against bogus websites attempting to associate themselves with the new health exchange. Some of these online portals instruct consumers to enter personal information to learn about new health insurance products. Insurance Commissioner Jones warns consumers who want to shop through Covered California not to enter any personal or financial information into a website without first verifying they are in fact on the official Covered California website. The department has succeeded in getting some websites taken down and others to change their misleading content. Additionally, the department’s licensing bureau has denied more than 150 license applications for business names designed to market health coverage services because the proposed names could confuse or mislead the public into believing they were actually California’s health benefit exchange – Covered California.
LONG TERM CARE
Long-Term Care Firm Seeks 1,000 Advisers
LTC Financial Partners, LLC is offering alliance opportunities to 1,000 independent advisers. Advisers may choose one of three options:
- Expand their business by referring clients who need LTCFP’s solution set.
- Join LTCFP’s network as an Associate, with a path to becoming an equity Partner. (This option is for experienced LTC advisers.)
- Enter the LTC Institute, run by LTCFP, to learn the business from scratch.
In all three options, the chosen advisers may remain independent. For more information, visit http://www.ltcinsurancecareer.com.
Webinar Demonstrates Online Enrollment Tomorrow
Covered California is hosting a Webinar to demonstrate the online enrollment application process that will be available to consumers starting Oct. 1. The demonstration will include a prerecorded session showing a person completing each page of the application for health insurance and Medi-Cal enrollment. After the demonstration, Covered California representatives will answer questions. It will be held Thursday, Sept. 26, 2013 from 10:00 11:30 a.m. Here is the Webinar link: https://goto.webcasts.com/starthere.jsp?ei=1023010
Defined Contribution Forum
Defined Contribution: The Next Frontier of Health Care Consumerism will be heldDecember 5 at Red Rock Resort & Spa in Las Vegas. It is sponsored by the The Institute for HealthCare Consumerism. For more information, visit http://www.theihccforum.com/2013-forum-west/workshops.
Oral Care Reduces Medical Claims
People with certain chronic conditions who got appropriate dental care saved an average of $1,038 on yearly medical and dental claims costs, according to a survey by United Healthcare. Among diabetics, the average annual net medical and dental claims were $1,279 lower per person for people who received treatment for gum disease compared to people who did not. The savings for all of those groups were achieved even after accounting for the additional cost of the dental care.
“This study demonstrates that employers can benefit from analyzing their medical and dental benefits collectively. By taking this approach, companies can take steps to engage employees around their dental health and improve health outcomes, potentially reducing health care costs and driving productivity with a healthier workforce,” said Michael Weitzner, DMD, MS, vice president, UnitedHealthcare Dental.