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by Leila Morris
• Private Health Exchange Survey in the Works
• Initiative Brings Specialty Care to Rural Markets
• Employers Hit With More Cost Sharing For Expensive Drugs
• Study Reveals Medical Value of Eye Exams
• Exchange Customers Favor Narrow Networks
• Health Reform Update
• African American Health Alliance Promotes ACA
NEW PRODUCTS AND SERVICES
• Benefitfocus Is Now A Web-Based Entity
• ERISA Database
• Long-Term Care Rider
• Health Reform in Translation
• A Clear Explanation of LTC and Retirement Issues
• Tool Reduces 401(k) Risks
• Premium Financing Webinar
• Agents Overlook LTC Tax Advantages
• The Most Overlooked Benefits of Travel Insurance
Private Health Exchange Survey in the Works
In the May issue, California Broker Magazine will feature the first annual private health exchange survey. Please email email@example.com if you want your company to be included.
Initiative Brings Specialty Care to Rural Markets
Blue Shield of California and Adventist Health launched a telehealth initiative to increase access to specialty care in rural areas. Blue Shield members can be diagnosed and treated by specialists from across the state through interactive video technology available at a local Adventist Health site. Blue Shield individual and family plan customers, can seek specialty care that’s not available in their areas through the telehealth network — including those who purchased coverage through Covered California. Specialties include cardiology, dermatology, endocrinology (diabetes), pulmonology, rheumatology (arthritis), orthopedics, infectious disease, nephrology, gastroenterology, general surgery and spine surgery. The specialists are Adventist Health physicians who are contracted in the Blue Shield network. Patients can be referred by their local primary physician or can self-refer, make an appointment through a centralized care coordination call center, and go to their local Adventist Health location for their office visit.The Adventist Health sites are in the following cities in Covered California regions one and two: Paradise, Clearlake, Ukiah, Willits, Fort Bragg, St. Helena, Napa, and Sonora. For more information, visit www.blueshieldca.com/telehealth.
Employers Hit With More Cost Sharing for Expensive Drugs
Twenty-eight percent of employees now offer four-tier drug plans compared to only 12% that had these plans in 2012, according to a survey by United Benefit Advisors. With a four-tier plan design, employers can put the most expensive drugs in a category with significantly higher copays — thus passing along the costs to employees. The fourth tier pays for biotech or the highest cost drugs. Median pharmacy retail copays for fourth-tier drugs increased 25% from $80 in 2012 to $100 in 2013, and many are charging 10% to 30% of the cost of tier four drugs.
Carol Taylor, an employee benefit advisor with a UBA partner Firm said, “We are seeing more and more employers, small and large, raising copays substantially on fourth-tier drugs. With some of these drugs, the cost ranges from $1,200 to $20,000 per month (the cost of some cancer drugs). It is very costly for the plans, which in turn affects their premium rates. We’ve seen this for quite some time with self-funded plans, but we expect it will become more popular among small and large employers with group health insurance.”
The average tier-four median copay was $52 for small employers (less than 100 employees), from $45 to $60 for mid-size employers (100-499), and $80 to $100 for large employers (500+).
Larger groups are rated more independently, so they have a much bigger incentive to raise copays, especially for items that will cause rate increases. This might shift some as employers are forced to come into compliance with health care reform in 2015 since the prescription copays/deductibles, etc. must all track to the out-of-pocket maximum, said Rob Calise, UBA Board chairman noted that, he said.
Seventy-three percent of prescription plans had a copay and/or coinsurance after the major medical deductible compared to 68% in 2012. “It used to be that all drugs were applied to the deductible, then coinsurance on major medical. Now, quite a few carriers require deductible and then copays, particularly on high-deductible health plans. We’re also seeing small group and mid-market employers place generic brands before the deductible, but brand names after. The ultimate goal of shifting more cost to employees is to drive behavior to create better health care consumers. It is very possible we could see copays disappear completely, with everything falling under the major medical deductible,” he added. For more information, visit www.UBAbenefits.com.
Study Reveals Medical Value of Eye Exams
Eye care professionals can play a key role in identifying diseases and working with primary care physicians to deliver care, according to a study by UnitedHealthcare. The company looked at claims for plan participants with medical and vision benefits. Eye care professionals identified nearly 6% of the chronic conditions diagnosed among the study population. Also, eye care professionals identified 15% of certain diseases, such as multiple sclerosis and diabetes. They also found common conditions, such as high cholesterol and hypertension, rheumatoid arthritis, juvenile rheumatoid arthritis, Crohn’s disease, and Graves disease. Linda Chous, O.D., chief eye care officer, UnitedHealthcare Vision, said, “When eye care professionals share information about diseases with patients and other care providers, it can lead to better information, better decisions and better health outcomes.” For more information, visit www.Bridge2Health.com.
Exchange Customers Favor Narrow Networks
Fifty-four percent of those who are most likely to purchase an exchange plan (the uninsured and individuals) prefer less costly plans with narrow networks. Those who said they wanted a more expensive plan with a broader network were told that they could save up to 25% on health care costs with a narrow network plan. The share continuing to prefer the more expensive option dropped from 51% to 37% among the public, and from 35% to 22% among the uninsured and individuals. For more information, visit www.kff.org.
Health Reform Update
The following is a recent health reform update from Mark Hobraczk on behalf of Patient Services Inc.:
Conservative groups lose their second court battle seeking to block Affordable Care Act premium subsidies for consumers in federally facilitated Marketplaces while several Republican lawmakers seek probes into how three state-based Marketplaces continue to have little or no online enrollment capability.
The Centers for Medicare and Medicaid Services may have to scale back controversial new limits on Medicare Part D drug plans after Republicans and Democrats fret over having to explain them to constituents during an election year.
An Avalere Health study confirms that despite new out-of-pocket limits under the ACA, specialty tier coinsurance remains a barrier to access for Marketplace consumers relying on high-cost prescription drugs. Several state lawmakers propose even lower drug cost-sharing limits.
The novel Medicaid expansion alternative in Arkansas barely survives a repeal effort, while Mississippi, Pennsylvania, Utah, and Virginia struggle to find consensus on any expansion alternative. For more information, visit patientservicesinc.org.
African American Health Alliance Promotes ACA
On March 3, the African American Health Alliance released a public-service announcement to promote prevention and care benefits of the Affordable Care Act. The PSA highlights screening and preventions services and how to sign up by the March 31st deadline for the health insurance marketplaces. The effort responds also to the ongoing needs of the approximately 1.1 million people living with HIV, including the one in six who don’t know they are infected. “The…law that will go a long way toward furthering the elimination of racial and ethnic health disparities,” said Fredette West director of the Alliance. West participated in President Obama’s 2009 White House summit on Health Care and Health Reform. To view the video, visit
NEW PRODUCTS AND SERVICES
Benefitfocus Is Now A Web-Based Entity
BenefitStore is now a Web-Based Entity (WBE) with the Centers for Medicare & Medicaid Services. Benefitfocus offers a channel for employers to facilitate enrollment in Qualified Health Plans (QHPs) for employees who are eligible for an advanced premium tax credit For more information, visit www.benefitfocus.com
The FreeERISA database has redesigned its plan dashboard and research tools. It now highlights the most important plan facts in a graphical and easily understood dashboard. It calculates critical plan figures and points out red flags. For more information, visit
Long-Term Care Rider
John Hancock launched an improved long-term care (LTC) rider on many of its life insurance products. The rider now provides greater design flexibility when insuring against rising costs of long-term care. It offers more coverage for retirement planning with an increasing death benefit option and more flexibility to specify the LTC coverage needed, helping balance LTC and estate planning needs. For more information, visit http://www.johnhancock.com.
Health Reform in Translation
The California Healthcare Foundation is offering a series of fact sheets and infographics demystify technical topics that are central to understanding the implementation of health reform in California. They explain the following:
* What is actuarial value?
* What is the premium tax credit?
* Individual coverage before and after ACA
* Small group coverage before and after ACA
* What is Modified Adjusted Gross Income?
For more information, visit http://www.chcf.org/publications/2013/08/health-reform-translation
A Clear Explanation of LTC and Retirement Issues
The American Academy of Actuaries launched its Essential Elements series of papers. The first two are “Long-Term Care Financing” and “Raising Social Security’s Retirement Age.” The series is designed to boil down complex content for a broader audience. For more information, visit www.actuary.org.
Tool Reduces 401(k) Risks
OTB Strategic Consulting launched an online 401(k) self-assessment tool for plan fiduciaries. It helps them find areas of non-compliance and provides solutions to correct them. For more information, visit http://www.thefiresystem.com/article-irs-vs-dol.
Premium Financing Webinar
Succession Capital Alliance is sponsoring a premium-financing webninar March 18, at 11:00 am PST. It will focus on how consumers can use intelligent leverage to purchase an indexed universal life policy that provides a future tax-free supplemental retirement income. Space is limited to the first 100 people who register. For more information, visit www.successioncapital.com.
Agents Overlook LTC Tax Advantages
Many agents overlook the tax advantages of long-term care insurance premiums for their Baby Boomer clients, says Jesse Slome, director of the American Association for Long-term care Insurance (AALTCI).
An individual can deduct as much as $4,660 for long-term care insurance premiums paid in 2014. The maximum amount for 2013 is $4,550. People rarely qualify for the long-term care insurance tax deduction During their working years, but it typically gets easier after retirement, says Slome.
The IRS considers tax-qualified long-term care insurance premiums a medical expense. The yearly maximum amount depends on the insured’s attained age at the close of the taxable year. Someone older than 50 but younger than 60 can deduct up to $1,400 ($2,800 for a same-age couple), Slome notes. An individual age 70 or older can include up to $4,660 ($9,320 for a same-age couple). The amounts are indexed for inflation and increase each year.
After retirement owning long-term care insurance can help lower your tax bill. But, it’s best to get this coverage before retirement because the costs are lower and you are more likely to meet health qualification requirements. The future tax deduction is an extra benefit for your post-retirement years, he adds. For more information, visit www.aaltci.org/tax
The Most Overlooked Benefits of Travel Insurance
One of the most overlooked travel insurance benefits is primary versus secondary coverage, explains Frank Trigo, general manager of InsureandGo. The vast majority of travel insurance policies offer secondary medical coverage, which is coverage in excess of all other valid and collectible insurance.
If you already have a private or group health plan, the travel insurance medical policy with secondary medical will only pay the expenses in excess or over the amount covered by the other primary health insurance policy that you have at home. “With primary coverage, you won’t have to jump through hoops to find out if your private or group health care plan will cover you when travelling internationally, you won’t have to incur out of pocket expenses and you won’t risk being denied medical care in a foreign country due to payment. Some cheaper policies may have higher medical coverage limits but if the coverage is secondary, that high limit might not be as valuable as a primary policy with a lower limit,” he adds.
Many policies cover your personal property regardless of where the loss occurs: be it in a cafe, on a tour, or from your hotel room. But many policies don’t cover electronics, such as tablets, phones, or computers so it’s important to check each policy carefully under the baggage and personal property section.
Since the cost of getting airlifted from a cruise ship or flown to a hospital in air ambulance for care is astronomical, travelers should look for policies that have a minimum of $100,000 in medical evacuation. “Also, the travel insurance company will make all the arrangements with the provider which is a tremendous benefit in itself,” says Trigo.
Transportation of beside support person in case you are hospitalized is another overlooked benefit. “Imagine you are hospitalized and alone in a foreign country. A good travel insurance policy will cover the costs to bring a person selected by you to your bedside if you are hospitalized for seven consecutive days,” he adds.
Trigo says that 24-hour emergency travel assistance is one of the most valuable, but under-marketed benefits of a travel insurance policy. The company can coordinate all aspects of your emergency, such as directing you to a proper medical facility, guarantying your admittance, coordinating care, monitoring your condition, and keeping loved ones back home apprised. For more information, visit http://www.insureandgousa.com.
CMS Plans Medicare Advantage Cuts
Study Questions the Effectiveness of Medical Homes
Americans Don’t Understand HSAs
Employers Will Change the Way They Deliver Health Benefits
California Must Make a Sustained Enrollment Effort
Consumers’ Well-Being Is Improving
Covered California Exceeds Enrollment Projections
IRAs Make up Nearly Half of an Advisor’s Book of Business
Employees Value Their Benefits More Than Ever
Electronic Signature Capability for Life Insurance
ERISA Online Database
Financial Diversification Weimar Tomorrow
Direct Enrollment Capabilities for Individual Health Agents
Fixed Indexed Annuity
Permanent Life Insurance Product Portfolio
CMS Plans Medicare Advantage Cuts
The Centers for Medicare and Medicaid Services (CMS) is proposing a 3.55% cut in payment rates to Medicare Advantage insurers. A bipartisan group of 40 senators sent a letter to CMS protesting the cuts. A broad array of organizations also sent letters urging the agency to keep rates flat to protect seniors.
Medicare Advantage payments were cut 6% last year, which resulted in cost increases and benefit cuts of $30 to $70 per month for beneficiaries, according to an Oliver Wyman report. With another six percent cut in 2015, seniors would experience additional benefit reductions and premium increases of $35 to $75 per month, or $420 to $900 for the year, the report estimates. The Affordable Care Act already includes more than $200 billion in payment cuts — the vast majority of which have not gone into effect yet. The ACA also imposes a new health insurance tax, which begins this year.
Another round of payment cuts would mean seniors learning that out-of-pocket costs are higher, benefits have been cut, provider access is restricted, and choice of plans is more limited. These are real cuts in payments, not reductions in rates of projected growth, according to a statement by America’s Health Insurance Plans (AHIP). Seniors will see the effect of any new payment cuts in late October 2014 when they begin enrolling in their 2015 Medicare Advantage coverage.
As CMS prepares to set 2015 Medicare Advantage payment rates, AHIP is launching its largest-ever mobilization to remind Washington that seniors are following this issue closely and to urge the Medicare agency to protect them from further harm by maintaining payment levels.
Study Questions the Effectiveness of Medical Homes
The medical home has become a new model to produce better and lower-cost primary health care. But a Rand study found that medical homes yielded few improvements in the quality of care and no reductions in hospitalizations, emergency department visits, or total costs of care.
Medical homes are primary care practices that are designed to provide comprehensive, personalized, team-based care using patient registries, electronic health records, and other advanced capabilities. Recent medical home initiatives have encouraged primary care practices to invest in these new capabilities, participate in learning collaboratives, and achieve medical home recognition. Health plans offer to pay more to the practices that achieve recognition.
Researchers evaluated the Southeastern Pennsylvania Chronic Care Initiative. Thirty-two primary care practices and six health plans participated in the pilot from 2008 to 2011. Pilot practices adopted medical home capabilities, such as creating lists of patients who are overdue for the services they need. The medical homes did see improved rates for monitoring for kidney disease in diabetes patients, and there were signs that quality improved for some other aspects of diabetes care. However, there were no improvements in the quality measures for asthma care, cancer screening, and control of diabetes. Also, there was no reduction in the use of hospitals or emergency departments, or the total costs of medical care.
Researchers say there are several reasons that the medical home pilot did not show broader improvements in cost and quality. The pilot emphasized quality of care for diabetes and asthma. But practices did not have the financial incentives to contain costs. While most participating practices adopted new capabilities that targeted quality of care, fewer increased night and weekend hours, which could have reduced unnecessary visits to the emergency room. Because the pilot practices volunteered for the medical home experiment, they may have been more quality-conscious than other practices even before the pilot began, which would limit possible improvements. For more information, visit http://www.rand.org/newsletters.html.
Americans Don’t Understand HSAs
With the advent of Obamacare, more Americans are eligible for a health-savings account (HSA), but most don’t have the information they need to take advantage of them, according to a survey by insuranceQuotes.com. In fact, 86% say they don’t understand HSAs. Fifty percent of Americans say they are somewhat or very likely to use an HSA to cut their taxes. But only 8% have an HSA.
Many Americans are confused about eligibility and benefits. For example, only 14% know that an HSA has to be paired with a high-deductible health insurance plan. Many Americans are confused about which medical expenses HSAs can be used for; 52% think they can use HSAs to pay for over-the-counter medications, and 51% think they can use HSAs to pay health insurance premiums, both of which are untrue. Popular expenses that HSAs can be used for include prescription medications, doctor visits, dentist visits and eyeglasses.
People who buy coverage on the public health insurance exchanges are especially good candidates for HSAs, since most of the purchased plans under Obamacare are high-deductible plans including Silver and Bronze plans. For more information, visit http://www.insurancequotes.com/health/HSA-and-high-deductible-health-plans.
Employers Will Change the Way They Deliver Health Benefits
Ninety-five percent of employers that provide health care benefits to active employees and retirees plan to continue doing so for the next three-to-five years. But they will change the way the benefits are managed and delivered, according to a survey by Aon Hewitt,
Almost 40% of employers expect to require employees to take a more active role in their health by offering them a few plan options, plus initiatives designed to improve health and reduce costs. Thirty-three percent say that the preferred approach in the next three-to-five years will be to offer group-based health benefits through a private health exchange.
The following is a breakout of employer strategies:
* Require employees to take a more active role in their health by offering them a few plan options, plus initiatives designed to improve health and reduce costs — 40% now and 36% in three to five years.
* Move to a private health exchange – 5% now and 33% in three to five years.
* Exit health care completely — 1% now and 5% in three to five years.
* Maintain traditional trend mitigation approaches — 52% now and 21% in three to five years.
Almost two-thirds of employers plan to continue offering the same level of benefits to part-time employees as they do to full-time employees, with or without an employer subsidy. Just 38% plan to offer no benefits to part-time workers in the next three-to-five years.
Twenty percent favor moving all or a portion of their pre-65 retiree population to the individual market/state exchanges in the next three-to-five years. Just 3% of employers do so today. Employers will be moving at least some portion of their pre-65 retiree populations to state and federal exchanges, but they are waiting for the marketplaces to become more competitive and mature. John Grosso of Aon Hewitt said, “This movement will be slow and methodical as the public marketplaces evolve and as employers understand the implications of the 2018 excise tax, which will only affect group-based health insurance plans.”
The number of employers offering subsidized retiree health benefits has declined over the past decade, with just 25% of large employers doing so today, compared to about 50% in 2004. A growing number of companies that offer health benefits to post-65 retirees are considering providing coverage through the individual Medicare plan market. In fact, 30% of companies have already sourced benefits through the individual market –most through a multi-carrier private health exchange. Two-thirds of employers that are considering changing their post-65 retiree strategies are considering this approach.
A growing number of employers are leveraging multi-carrier private exchanges for Medicare beneficiaries. They see the value in having the competitive mix of plans, the navigational tools, and the advocacy that these private exchanges offer. Winkler said, “As health insurers regain control for creating a competitive market that is accountable to the consumers within it, we expect to see similar cost moderation across the system, including the new competitive markets emerging for pre-65 retirees and active employees.” For more information, visit www.aon.com.
Covered California Exceeds Enrollment Projections
Covered California has exceeded its projected base enrollment for the 2014 open-enrollment period. As of Jan. 31, 2014, more than 1.6 million Californians have signed up for Covered California health insurance plans or for low-cost or no-cost Medi-Cal. Nearly half selected a Covered California health insurance plan. In the first two weeks of February more than 100,000 people enrolled in Covered California, increasing total enrollment to 828,638.
Of those enrolled through Jan. 31, 626,210 are eligible for subsidies. Insurance companies report that 80% of enrollees have paid their first month’s premium. Additionally, 877,000 applicants have been determined to be likely eligible for Medi-Cal coverage. DHCS has transitioned 652,000 people into the Medi-Cal program from the state’s low-income health program. Automated enrollment has allowed county human services agencies to enroll 106,000 people into Medi-Cal coverage, and another 65,000 were enrolled through the Express Lane program.
January also saw a significant increase in the number of Latinos enrolled. For the month of January, Latino enrollment in Covered California reached 28%, compared to a about 18% for October through December. The enrollment rate of Spanish-speaking Californians increased, representing about 11.5% in January, compared to 5% during the first three months of open enrollment. DHCS also reported improved Latino participation among those likely to be eligible for Medi-Cal enrollment. The percentage of Latinos within the applicant pool increased from 32% as of Dec. 31 to 38% through Jan. 31.
Enrollment of young adults 18 to 34 years old is trending slightly upward, at 26% of the consumers who have selected a Covered California health insurance plan. This age group represents about 25% of the state’s population but about 36% of those who are eligible for subsidies. Most subsidy-eligible consumers who enrolled — 451,074, or about 62% – signed up for a Silver plan, the second-lowest-costing plan of the four plan tiers. About 86% of consumers across all tiers got some sort of financial assistance.
Anthem Blue Cross of California, Blue Shield of California, Kaiser Permanente and Health Net lead the way among plans chosen, collectively reflecting almost 92% of total enrollment. In Covered California’s Small Business Health Options Program (SHOP), 571 small businesses — representing nearly 5,000 employees and their dependents — have enrolled for coverage.
Consumer response to the application process for Covered California and Medi-Cal has been positive. In the first three months, at least 60% of those who completed enrollment said it was easy. About 82% of consumers said they found the information needed to choose the right health plan for them.
California Must Make a Sustained Enrollment Effort
Covered California is touting positive enrollment figures leading up to the enrollment deadline. But, the state needs to make a continuous effort to enroll people and keep people in coverage, according to a Kaiser Family Foundation report. People will continue to move around within the insurance system as their income or job situations change. With this challenge in mind, California has sought federal grants and other investments for ongoing outreach, enrollment, and education efforts.
Californians may face challenges in comparing costs, services, and provider networks, which have typically varied greatly across plans in the past. Insured adults in California say they did not have difficulty comparing their plan choices, but 38% found some aspect of plan choice to be difficult, such as comparing services, comparing costs, and comparing providers.
Eighty-five percent of insured adults in California rate their pre-ACA coverage as excellent or good. But 20% have needed a service that was not covered by their plan — typically ancillary services, such as dental, vision care, and chiropractor services. Twenty-four percent have been denied coverage for a service they thought was covered, and 35% say out-of-pocket costs were higher than expected.
The ACA requires exchange plans to provide detailed, standardized plan information so consumers can compare coverage options. As a result, uninsured Californians should have fewer challenges making plan choices. The state is also trying to improve the Medi-Cal enrollment process. It calls for reorienting Medicaid management, systems, and caseworker training away from having welfare-style gate keeping toward encouraging participation.
Given the health profile of California’s uninsured population, there is likely to be some pent-up demand for health care services. Some people who have relied on emergency rooms or urgent care centers may need help navigating the primary care system. But clinics and hospitals that already see a large share of uninsured adults may still play an important role in serving this population once they gain insurance. Newly insured Californians may be surprised to learn that some ancillary services, such as dental coverage, are not included in their plan.
While Covered California plans must accept various forms of payment, direct withdrawal from a checking account is a simple and reliable way to ensure that premiums are paid on time. However, 21% of uninsured adults in the income range for Covered California subsidies don’t have a bank account. For more information, visit http://kff.org.
Consumers’ Well-Being Is Improving
When it comes to well-being, U.S. consumers are in a better position in 2014 than they were in the previous two years, according to the Temkin Group’s well-being index, which is based on surveys of 10,000 U.S. consumers. The index averages the percentage of consumers who agree with the following statements:
* I am typically happy.
* I am healthy.
* I am financially secure.
In 2014, 77% of consumers say that they are typically happy compared to 75% last year; 69% say that they are healthy compared to 68% last year; and 46% say that they are financially secure compared to 42% last year. For more information, visit http://www.temkingroup.com.
IRAs Make up Nearly Half of an Advisor’s Book of Business
Retail individual retirement accounts (IRAs, SEP) make up nearly half of the average financial advisor’s book of business, according to research from Cerulli Associates. Even though rollover assets are key components of an asset manager’s retirement strategy, advisors view them as just another source of funds for their practice, instead of making up a key market to be cultivated.
Financial advisors capture larger rollovers than direct providers, with the largest balances going to existing advisory relationships. “Financial advisors play a key role in asset managers’ abilities to win flows from rollovers. However, these rollover assets are hard to acquire,” said Bing Waldert, director at Cerulli.
Cerulli expects advisors to continue to win rollovers. Although investors typically manage multiple advice relationships, financial advisors who deliver a holistic view of a client’s financial picture will benefit from integrating all assets into an overall financial plan. For more information, visit www.cerulli.com.
Employees Value Their Benefits More Than Ever
On a scale of one to 10, employees give an average score of 7.1 on how much they value their workplace benefits. That compares to 6.8 in 2012, according to a Guardian study conducted in September 2013.
Eighty percent of employees surveyed get all health insurance, disability insurance, and retirement savings through their employer. Seventy-nine percent say that their benefits are crucial to staying with a job.
The study uncovers a growing disconnect between employers and their workers. Employers are seeking opportunities to shift more costs and responsibilities to employees at a time when these benefits are becoming more critical to their workers’ financial security and well-being. In fact, 47% of employers are planning to ask employees to bear more of their benefits cost in 2014 in anticipation of the enactment of the Affordable Care Act.
Just over half of employers surveyed say they’ve been successful in preparing for a post-health care reform era of benefits, but only 22% say they are well prepared to discuss these changes with employees.
While the responsibility of benefit costs may be shifting, it’s still essential for companies to make sure that employees have expert financial planning advice and a clear understanding of which workplace benefits are best for them. Increasingly employers are seeking assistance in these areas from experts outside the company. For more information, visit www.GuardianLife.com.
Electronic Signature Capability for Life Insurance
John Hancock Insurance introduced electronic signatures, which eliminates the need for customers to print, sign and mail the most common life insurance forms. The electronic forms also guide the client to complete the form properly. For more information, visit wwwJHSalesNet.com.
ERISA Online Database
FreeERISA has redesigned its plan dashboard and research tools to make it easier to locate and understand plan data. FreeERISA now highlights the most important plan facts in a dashboard that’s easy to understand. For more information, visit www.benefitspro.com.
E-Signatures for New Business & Enrollment
Andesa Services and Silanis Technology introduced a cloud-based offering to help life insurance agents to process applications in real time rather than waiting days or weeks to get completed paperwork from the customer. Enforced data validation and workflow rules ensure that all signatures and data are captured correctly, greatly reducing the risk to the carrier. For more information, visit http://www.andesaservices.com.
Financial Diversification Weimar Tomorrow
The National Assn. for Fixed Annuities is sponsoring a webinar to help advisors find optimal financial diversification strategies for their clients. It will be held February 27 at 8:30 a.m. For more information, visit www.nafa.com.
Direct Enrollment Capabilities for Individual Health Agents
Individual licensed health insurance agents can now leverage Web-Broker Entity status through the GoHealth Marketplace. The platform helps agents manage customers, quote plans in 50 states, and enroll consumers in on-exchange plans in 36 states. With GoHealth’s Web-Broker Entity status, agents can instantly get subsidy-eligibility information and sell on-exchange plans to subsidy-eligible people. For more information, visit www.Norvax.com/Marketplace.
Fixed Indexed Annuity
Phoenix Companies introduced Personal Retirement Choice. The single premium fixed indexed annuity has an optional guaranteed lifetime income benefit rider. It is designed to address retirement risks with a variety of features and options for accumulation, protection, and income. It is primarily an accumulation annuity that provides an upfront premium bonus that vests over time. The bonus is eligible to earn interest credits, thereby increasing growth potential. The premium bonus available ranges from 8% to 15%, depending on whether an income rider is elected. For more information, visit www.phoenixwm.com.
John Hancock redesigned its indexed universal life insurance product –Accumulation IUL. It provides strong death benefit protection and the potential for significant cash value accumulation. Accumulation IUL offers downside protection with the potential for growth through returns linked to the index. The product features a simple and straightforward design with the flexibility of three indexed allocation options.
For more information, visit http://www.jhancock.com.
Permanent Life Insurance Product Portfolio
Pruco Life Insurance Company, a subsidiary of Prudential Financial, introduced a tax-advantaged universal life insurance product. PruLife Founders Plus UL provides cost-effective death benefit protection with an extended no-lapse guarantee, and offers a choice between two interest crediting account options that can help build cash value in the policy. An optional BenefitAccess Rider, available for an additional cost, allows consumers to advance up to 100% of the death benefit should they become chronically or terminally ill. For more information, visit http://www.news.prudential.com.
• Copayments and Coinsurance Rise Under The ACA
• Most Providers Like the ACA
• Americans Lack Faith in Primary Care
• Group Wants Extension for Open Enrollment for Individuals
• Overcoming Coverage Denials for Weight Loss Surgery
• Young Adults Lead Exchange Enrollment Trends
• Patients Are in Denial About Diabetes Risks
• Value Based Design the Right Way
• Bill Would Extend Coverage to the Undocumented
• Pressing Issues For HR Professionals
• Medicare Smartphone Quoting
• Term Life Insurance
• Growing Interest For Fiduciary Services
• Many Older Workers Have No Plan for Their DC Plan Assets
• DC Plan Sponsors Are Adding Alternatives
Copayments and Coinsurance Rise Under the ACA
Copayments and co-insurance fees for drugs in the individual insurance market increased 34% compared to before the Affordable Care Act (ACA). All of the four metal health plan categories under the ACA had drug cost-sharing increases. Bronze health insurance plans had the highest increase at 58% while Platinum health insurance plans had the lowest increase at 15%.
Plan enrollees who use brand name drugs and specialty drugs face the greatest burden from the increases in copayments and co-insurance fees while enrollees who use medications infrequently are not likely to notice the cost-sharing increases.
The 34% increase in copayments and co-insurance fees does not mean that consumers will spend 34% more on drugs. Drug spending is also affected by deductible amounts, out-of-pocket caps, and what drugs are included within a health plan’s list of covered medications.
Before the Affordable Care Act, nearly one-out-of-five private individual health insurance plans had no prescription drug coverage while all new health plans in the individual market include a drug benefit. In addition, patients can get over-the-counter drugs, such as aspirin, folic acid, and iron supplements, with no out-of-pocket cost when used as preventive medicine.
“With copayments and co-insurance fees rising, consumers must shop health plans more carefully. Copayments, deductible amounts, and limits on annual drug spending should not be ignored. Consumers can also discuss with their doctors whether there are alternative drugs that have lower costs but equivalent therapeutic results,” said Kev Coleman, Head of Research & Data at HealthPocket. For more information, visit www.HealthPocket.com.
Most Providers Like the ACA
Nine out of 10 healthcare providers say that, once it is fully established, the Affordable Care Act (ACA) will be a step forward in addressing long-term health issues, and 83% say it is good for Americans, according to a survey by Mortenson Construction. However, 86% say the ACA needs major revisions.
Seventy-nine percent of providers say health reform creates significant uncertainty for the healthcare industry. Seventy-four percent predict that it will challenge their organization’s financial condition, and 72% say it already has. The survey also reveals the following:
• In 2013 60% of healthcare providers were optimistic about the future of U.S. health care compared to 85% in 2012.
• Four out of five say the ACA will shift reimbursements to pay for the quality of outcomes.
• 71% say the ACA will improve quality and outcomes, and 65% say it will lower the cost of care
• 95% say that specialized facilities, such as MRI centers, cancer centers, and urgent care centers, will grow in prominence in the next three years.
For more information, visit mortenson.com.
Americans Lack Faith in Primary Care
Americans are deeply skeptical about the viability of the primary-care physician model, which is the predominant health care delivery system in the United States, according to survey commissioned by PartnerMD. Sixty-nine percent are worried about the future of the traditional primary-care model. They are also worried that the Affordable Care Act (ACA) will severely limit their contact with doctors.
Fifty-one percent are worried about rising health care costs and 23% are worried about new health care regulations. Only 10% of expect the ACA to improve their care while one-third are concerned about its negative effects on care. PartnerMD CEO Linda Nash said, “I am a strong supporter of implementing an affordable national health care system, but as millions of new patients are entering the system, increased workloads and shrinking reimbursements are driving physicians out of it. The result is a care model that’s falling short.”
The following survey data confirms the bleak state of the traditional primary-care model:
• More than one-third of patients have to wait four or more days to see their doctor, and nearly one-quarter have to wait longer than a week.
• 93% of Americans spend less than 30 minutes with their doctor at appointments, and nearly one-third see them for less than 10 minutes.
“The traditional model puts doctors under tremendous pressure to treat huge numbers of patients at light speed. And full appointment schedules leave those with acute care needs without many options. It’s understandable that many patients and physicians are looking for a better care model,” said Dr. Jim Mumper, a PartnerMD physician and the company’s chief medical officer.
One such model that has seen tremendous growth is concierge medicine. PartnerMD’s survey found that 13% of Americans are willing to pay an annual fee for increased access to their physician, which could represent more than 31 million more patients in the concierge model. “While we have seen tremendous expansion, there’s still a huge opportunity for growth in the membership-based model,” said Nash. For more information, visit www.PartnerMD.com.
Group Wants Extension for Open Enrollment for Individuals
Chairman of Communicating for America, Jeff Smedsrud is calling on President Obama to extend the health exchange open enrollment period for individuals, which is set to end on March 31. Individuals who miss the deadline generally can’t enroll until the next open enrollment period, which begins November 15, 2014.
Smedsrud wants the open enrollment period to be extended until May 15, 2014. Individuals who don’t find suitable coverage by then should be encouraged to enroll in a short-term medical plan. Although there are some coverage limitations with short-term medical plans, they are available from a variety of companies in every state for at least a six-month duration, he said.
Smedsrud added that the Administration has given businesses more time by delaying certain mandates, and has given insurers more time by letting companies change certain policy cancellations. “It’s not the fault of consumers that state and federal exchanges had technical problems upon the roll-out, nor are they to blame for ongoing problems with billing, collection and verification, making it difficult to know… if they have coverage. And it is not the consumer’s fault that millions of health policies were cancelled…Don’t make individuals suffer for mistakes made by institutions.”
Smedsrud is calling the Administration to take three actions:
1. Extend the open enrollment period until May 15.
2. Delay the start date for the individual mandate penalty until May 15.
3. Allow short-term medical plans purchased in 2014 to meet the definition of credible coverage, thus allowing those enrolled in such plans to switch at any time during 2014 to a more comprehensive plan under Special Enrollment rules.
For more information, visit http://communicatingforamerica.org
Overcoming Coverage Denials for Weight Loss Surgery
Despite the medical need for weight loss surgery, Beverly Hills Physicians issued a statement that it has seen its fair share of insurance claims rejections. So the medical group rounded up advice from around the Internet for those hoping that their insurance will cover weight loss surgery. A recent article published on CNNMoney suggests a three steps those who have been denied by their insurer:
1. Look for errors in the request for surgery.
2. Get your doctor to provide a written note in order to make a stronger case for an appeal.
3. Ask again if you are rejected. You have the right to request a review by an independent panel after your second denial. .
Providers, such Beverly Hills Physicians, are willing to help patients with these steps. For more information, visit www.facebook.com/beverlyhillsphysicians.
Young Adults Lead Exchange Enrollment Trends
Enrollment in the Health Insurance Marketplace continued to rise in January, with a 53% increase in enrollment over the previous three-month reporting period, with young adult enrollment outpacing all other age groups combined, announced HHS Secretary Kathleen Sebelius.
Nearly 3.3 million people enrolled in the Health Insurance Marketplace plans by Feb. 1, 2014 (the end of the fourth reporting period for open enrollment). January accounting for 1.1 million plan selections in state and federal marketplaces. In January, 27% of those who selected plans in the federally facilitated marketplace are 18 to 34, a three percentage point increase over the figure said for the previous three month period. Young adult enrollment grew 65% in January, from 489,460 at the end of December to 807,515 as of February 1st. All other age groups combined grew by 55%. Eighty-one percent of young adults (18 to 34) selected plans at the Silver metal level or higher (Silver, Gold and Platinum plans).
Nearly 3.3 million people selected Marketplace plans from Oct. 1, 2013, through Feb. 1, 2014, including 1.4 million in the State-based marketplaces and 1.9 million in the federally facilitated marketplace.
• Of the almost 3.3 million:
• 55% are female and 45% are male.
• 31% are age 34 and under.
• 25% are between the ages of 18 and 34.
• 62% selected a Silver plan while 19% selected a Bronze plan.
• 82% selected a plan and are eligible to receive Financial Assistance, up from 79% during the Oct. 1 through Dec. 28, 2013 reporting period.
To read the report visit: http://aspe.hhs.gov/health/reports/2014/MarketPlaceEnrollment/Feb2014/ib_2014feb_enrollment.pdf.
Patients Are in Denial About Diabetes Risks
Nearly 80% of patients who are at elevated risk for Type 2 Diabetes seem to be deluding themselves by assuming that they are in excellent or very good health, according to a survey from the American Diabetes Association (ADA). “These findings suggest it is critical for providers to connect the dots with patients between risk factors and disease development,” said Virginia Peragallo-Dittko, R.N., C.D.E., incoming chair of the ADA’s Prevention Committee. For more information, visit www.ada.org
Value Based Design the Right Way
A survey by CVS Caremark finds that value based insurance design plans are more successful in increasing patients’ medication adherence when they have these features:
* Plans with no cost sharing for generic drugs and low monthly copayments of $10 or less and co-insurance rates of $15 or less for brand-name medications.
* Plans that target high-risk patients.
* Plans with wellness programs.
* Plans that offer the benefit only by mail order and offer 90-day prescriptions.
William H. Shrank, MD, MSHS of CVS Caremark said, “These findings encourage more generous coverage for generics, greater use of 90-day prescriptions, more careful intervention targeting, and expansion of wellness programs.” For more information, visit info.cvscaremark.com.
Bill Would Extend Coverage to the Undocumented
Senator Ricardo Lara (D-Huntington Park/Long Beach) introduced Senate Bill 1005, the Health For All Act. The bill would give undocumented residents access to the Covered California exchange and Medi-Cal. The Affordable Care Act (ACA) excludes undocumented immigrants from the Covered California exchange. An estimated three to four million people in the state will remain uninsured in spite of ACA, and almost a million of those will be undocumented residents ineligible for coverage. “Excluding people from access to care hurts the health of our communities, and does not reflect California values,” said Lara. The estimated annual tax contribution of undocumented immigrants in California is $2.7 billion and 92% of this population live in working families. For more information, visit http://www.senate.ca.gov/lara.
Covered California Attempts to Boost Latino Enrollment
With six weeks to the end of open enrollment on March 31, Covered California has a grassroots outreach campaign in major Latino communities. Since December, the exchange has nearly doubled its advertising campaign targeting Spanish- and English-speaking Latinos; improved its Spanish-language website and informational materials; and increased the number of bilingual certified enrollment counselors and service center representatives. The grassroots outreach campaign targets Los Angeles (the San Gabriel Valley, the San Fernando Valley and South Los Angeles), the Inland Empire (San Bernardino and Riverside counties), and the Central
Valley and the San Joaquin Valley (Stockton/Modesto and Fresno/Bakersfield).
This approach will coordinate outreach and education grantees, certified enrollment entities and certified enrollment counselors, certified insurance agents, county human services offices, elected officials, health care providers, nonprofit organizations and health insurance companies to jointly meet the health coverage needs of the local community.
Messages will encourage people to seek help through thousands of local enrollment counselors and agents who can help them confidentially and at no cost. To date, there are 4,180 Spanish-speaking certified enrollment counselors and certified insurance agents available throughout California. Partnerships are also being developed with Southern California Latino supermarkets to host enrollment events in stores and to include Covered California information in their weekly advertising circulars.
Covered California will spend $8.2 million in Spanish-language media from January to March 2014, an increase of 73% from the October-December 2013 media spend. A new advertising campaign highlights Covered California Latino enrollees who describe how getting coverage through Covered California has affected them.
Covered California has been airing radio advertisements offering consumers no-cost, private, one-on-one consultations with qualified representatives who will answer questions from consumers and help them enroll in quality, affordable health insurance.
For more information, visit www.CoveredCA.com.
Pressing Issues For HR Professionals
Mary Tavarozzi, a practice leader for Absence and Disability Management at Towers Watson offers her take on important issues for HR professionals. In the summary below, she also covers some of what she’ll be presenting on at the 2014 IBI Annual Forum March 3 to 5 in San Francisco):
• ACA benefits and challenges for employers – The upcoming excise tax on Cadillac health plans forces employers to question the design of their programs as they fight to attract and retain employees. They have to weigh having the most competitive and attractive program against reducing the tax consequences.
• Wellness programs – The challenge is whether employers can offer the financial incentives that are needed to produce outcomes.
• Consumer driven health plans – All of the preventive health care that is part of the ACA encourages healthy consumer behavior. Employers are facing the decision to build or buy a platform for delivering employee choice and engagement. With private exchanges, employees can choose among different levels of coverage and different health plans. Increased transparency means that employees can make good choices based on information about cost and quality. This is all very beneficial in moving the needle toward consumer-driven health care.
• Large Employers — Large employers will always have some financial responsibility for employees’ health benefits. If employers send workers to a public exchange, they can still promote health by sponsoring health risk assessments for employees and their families; making health concierge services available; joining with other companies in their area to sponsor urgent center clinics; offering healthy food in the cafeteria and vending machines; hosting health screening trucks; and encouraging employees to get preventive care. For more information, visit http://www.towerswatson.com/en-US.
Medicare Smartphone Quoting
Cigna introduced a texting and smartphone quoting process along with other mobile enhancements for agents selling its Cigna Medicare Supplement Solutions and Cigna Supplemental Solutions insurance products. When agents can send a text message with a customer’s zip code, age, and gender, they immediately receive premium rates for available Medigap insurance plans as well as a quote for final expense whole life insurance. Agents can also get alerts to follow the status of the applications they have submitted. For more information, email CSBMarketing@Cigna.com or visit www.cigna.com.
Term Life Insurance
MetLife launched simplified issue term life insurance for anyone from 18 to 70. It can be purchased over the phone with same-day approval. The product is offered in face amounts from $10,000 to $100,000. It renews automatically each year, up to age 90 and renews without additional underwriting as long as premiums are paid. For more information, visit www.metlife.com.
Growing Interest For Fiduciary Services
Nationwide Financial reports growing interest in third-party fiduciary services. Since introducing its 3(38) investment fiduciary service from IRON Financial, approximately 400 plans with more than $600 million in assets have opted to outsource the investment selection and monitoring process. Changing market dynamics and evolving regulations around the role and definition of a fiduciary has led many plan sponsors to seek help from outside professionals to ensure they are meeting their fiduciary obligations. Under section 3(38) of the Employee Retirement Income Security Act of 1974 (ERISA), an investment manager is defined as one who has full discretion for selecting, monitoring and replacing plan investments. This type of fiduciary assumes the legal responsibility and liability for the investment decisions it makes, which enables the plan sponsor to better manage and mitigate its fiduciary risk.
Joe Frustaglio for Nationwide Financial said, “Investment selection and ongoing due diligence are important and often intimidating fiduciary responsibilities for a plan sponsor. Plan sponsors, especially America’s small businesses, have many time constraints. Working with an expert not only reduces risk, but also gives them more time to focus on running their business.
While there is growing demand for outside fiduciary support, ERISA has always permitted plan sponsors to delegate some fiduciary responsibilities and liabilities. Nationwide provides its clients a full array of fiduciary education and support services. For more information, visit www.nationwide.com/401k-fiduciary-education.jsp.
Many Older Workers Have No Plan for Their DC Plan Assets
A LIMRA study reveals that 27% of workers, age 55 to 64 don’t know how they will use their defined contribution (DC) plan savings after they retire. Women are much more likely than men not to have planned how they will use their DC assets (38% versus 19%).
Matthew Drinkwater of LIMRA SRI Research said, “Many believe that they can delay retirement indefinitely, or work in retirement, so it’s possible they feel that there’s no near-term need to engage in this kind of planning. But that belief is risky. People often retire earlier than anticipated. It makes sense to give thought to how you will use your DC plan balances sooner rather than later.”
Two-thirds of workers ages 55 to 64 plan to make withdrawals directly from their DC accounts or make withdrawals after rolling over the assets into an IRA. Only one in six plans to convert some or all of their balance into a guaranteed lifetime income.
Twenty-four percent of workers age 55 to 64 who have income-generation strategies plan to take systematic withdraws from their retirement savings. Sixty-five percent plan to withdraw money on an occasional basis or when needed. Simple procrastination is the top reason given for people to have no income strategy. For more information, visit www.secureretirementinstitute.com.
DC Plan Sponsors Are Adding Alternatives
John Hancock Investments’ defined contribution (DC) clients are adding alternative mutual funds to their menu of plan options at a rapid pace. Since the end of 2012, more than 400 plans have added John Hancocks’ alternative strategies including John Hancock Global Absolute Return Strategies Fund and John Hancock Alternative Asset Allocation Fund.
Andrew Arnott, president and CEO of John Hancock Investments explained, “After the heightened volatility of the past few years, plan sponsors and record-keepers are starting to embrace investments and strategies that are less correlated with traditional stock and bond markets.” These strategies offer the potential for deeper diversification and a way to manage volatility. At the same time, the mutual fund structure offers lower fees, daily liquidity, and stringent oversight that investors don’t typically get through hedge funds, he added.
Respondents in a January Ignites reader poll predicted that liquid alternatives would be the top asset-gathering category in 2014, due to their potential to generate returns and to the lukewarm outlook for traditional equity and fixed-income products.
Todd Cassler, president of Institutional Distribution for John Hancock Investments said “Retirement plan sponsors and participants are finding multiple benefits in this all-in-one approach. Participants don’t need to worry about being conversant with all the details of all the strategies because the assets are professionally allocated among multiple alternative strategies and managers. At the same time, plan sponsors are able to add this varied alternative asset category in a single, diversified option.” For more information, visit johnhancock.com.
• Domestic Violence Victims Face Grim Health Outcomes
• Diabetes is a Ticking Time Bomb in the Workforce
• Legislation Would Tie Subsidies to Cost of Living
• Final Regulations on Employer Shared Responsibility
• Small Business Report Plan Cost Hikes
• Covered California Boosts Staffing to Meet Demands
• Employee Leave Laws Continue to Challenge Employers
• IRAs Comprise Nearly Half of an Advisor’s Book of Business
NEW PRODUCTS & EVENTS
• One Medical Group Expands Primary Care Service to Employers
• Retirement Seminar Series
• NAHU Capitol Conference
• Individual Health Enrollment Platform
• Flexible Premium Universal Life
• Whole & Term Life
• Single Premium Group Annuity
• Fixed Indexed Annuity
Domestic Violence Victims Face Grim Health Outcomes
A survey by the National Family Justice Center Alliance finds that domestic violence victims and their children are often uninsured or underinsured; they rarely receive needed medical, dental, and vision services; and they often fail to understand the profound short and long-term effects of the violence and abuse. Major findings include the following:
• Abused women are 70% more likely to have heart disease, 80% more likely to experience a stroke, and 60% more likely to develop asthma.
• Abused women are three times more likely to have reproductive health complications.
• The trauma of growing up in an abusive home has a dramatic effect on a child’s life expectancy. The life expectancy of a child with a score of six (multiple adverse childhood experiences) in the Adverse Childhood Experiences study is reduced by 19 years compared to a child with no adverse childhood experiences.
• Less than one in four victims attributes their health problems to abuse. Many survivors of domestic violence do not realize the possible health effects from near-fatal strangulation assaults.
• The primary barriers to care are lack of insurance and the cost of insurance. Forty-four percent have no insurance. Sixty-five percent of those with insurance have public insurance, such as Medicaid or Medicare.
• 70% of survivors reported at least one physical health need, but only 49% had a primary care provider, and only 30% saw a doctor in 2013.
• Victims are more likely to use emergency rooms for regular health care. Half went to an emergency room to meet their medical needs while only 30% saw their primary care provider in 2013.
• Forty percent would like to have dental services, and 43% would like to have vision services available in Family Justice Centers or domestic violence agencies rather than going to hospitals or doctor’s offices.
• Twenty-four percent of women will experience intimate partner violence in the United States. It is the most common cause of injury for women ages 18 to 44.
• The economic impact of violence is estimated at $5.8 – $8.3 billion each year; the vast majority attributed to healthcare costs and lost productivity (CDC, 2013).
Alliance CEO Gael Strack said, “Most community-based domestic violence agencies do not have the capacity to meet these needs. Criminal justice interventions, social services, civil legal services, mental health counseling, and other assistance is available in many communities, and multi-agency and multi-disciplinary approaches, such as Family Justice Centers, are bringing together more accessible services under one roof. But health related services are not generally included even in the most dynamic multi-agency, multi-disciplinary service approaches.”
The National Family Justice Center Alliance is working with the Verizon Foundation, Blue Shield of California Foundation, and other allied national organizations to address health needs of survivors of domestic violence and their children, particularly in Family Justice Centers or other types of multi-agency, multi-disciplinary service approaches that serve victims of domestic violence. The Alliance is calling for all domestic violence agencies, Family Justice Centers, and other community-based service providers to do the following:
• Screen survivors for pressing health needs in their intake and case management services.
• Build partnerships with community-based health clinics, hospitals, and health service providers to make sure that victims get the medical services they need.
• Help get survivors signed up for health insurance immediately pursuant to the Affordable Care Act.
For more information, visit www.familyjusticecenter.org.
Diabetes is a Ticking Time Bomb in the Workforce
Diabetes is a workforce time bomb. Employees with diabetes report more lost work time due to absence and impaired performance than do workers with normal blood glucose, according to research by the Integrated Benefits Institute. If current trends continue, one in three adult Americans will have diabetes by 2050.
“Given the ever-increasing rate of diabetes and its consequences, the time for employers to act is now. Introduce clinical screening programs; adopt lifestyle intervention programs for those in the pre-diabetic stage; and provide targeted disease management for those already diagnosed. Finally, broadly measure the results of your interventions so you can show the full value of your programs,” said IBI Research Director Kim Jinnett, PhD.
The odds of missing at least one day of work in the last month were 47% higher for workers with diabetes than for employees with normal fasting blood glucose. In contrast, the odds for a worker with pre-diabetes were only 16% higher than the odds for a worker with normal blood glucose.
Diabetic employees report slightly lower job performance than employees with normal blood glucose levels even after adjusting for other health conditions. Performance for employees with pre-diabetes levels of blood glucose is not discernibly different from that of employees with normal blood glucose, underscoring the potential for positive outcomes by achieving moderate blood glucose improvements.
IBI president Thomas Parry, PhD said, “Treatment could help limit the toll of the disease, but many employees with diabetes may be unaware of their condition. Employers could benefit by improving diabetes awareness, encouraging healthy lifestyles and facilitating disease management.”
Employers can take the following steps to help prevent Type 2 diabetes and help control the effects of diabetes among workers:
• Improve access to blood glucose testing, paying special attention to employees with a high likelihood of elevated blood glucose levels. Work with supplier partners to ensure that employees have access to education and services.
• Promote weight loss among employees with unhealthy body mass. Even moderate weight loss can improve blood glucose levels.
• Promote disease management. Diet, exercise and coping skills can be effective for people who have been diagnosed with Type 2 diabetes. Different types of insulin control mechanisms and medication may also be added. Employers should be aware that, for proper disease management, multiple providers must have excellent care coordination, and diabetic employees must be involved in their treatment.
For more information, visit www.ibiweb.org.
Legislation Would Tie Subsidies to Cost of Living
U.S. Reps. Mike Thompson (CA-5) and Anna Eshoo (CA-18) introduced H.R. 3986, the Fair Access to Health Care Act. The legislation would tie health insurance subsidies to the cost of living of a geographic area instead of to the national federal poverty level.
Under the ACA, those earning 138% to 400% of the federal poverty level qualify for premium tax credits to purchase health insurance through the exchanges. A person who earning up to $45,960 and a family of four earning up to $94,200 qualify for premium tax credits.
However, the income threshold doesn’t take into account the cost of living in different geographic areas. A family living in New York City or San Francisco is treated the same as a family living in a small town in South Carolina or Texas.
Thompson explained, “In some California cities, the cost of living is far higher than the national average…Some hard working families in high-cost areas like ours don’t qualify for subsides and therefore can’t get affordable insurance. This bill will help make affordable health insurance a reality, no matter where someone lives.”
Under the bill, the federal poverty level threshold will increase proportionally based on an area’s cost of living above the national average. The cost-of-living is determined using the Census Bureau’s Supplemental Poverty Measure. Using this calculation would yield the following results:
• In San Francisco-Oakland-Freemont, Calif., a family of four earning up to $125,757 and individuals earning up to $61,356 could qualify for premium tax credits to purchase health insurance through the ACA’s exchanges.
• In tVallejo-Fairfield, Calif., a family of four earning up to $109,743 and an individual earning up to $53,543 could qualify for premium tax credits.
• In the Napa, Calif., a family of four earning up to $116,808 and individuals earning up to$56,990 could qualify for premium tax credits.
• In the Santa Rosa-Petaluma, Calif., a family of four earning up to $113,746 and individuals earning up to $55,496 could qualify for premium tax credits.
There is precedent for such cost-of-living adjustments. The ACA accounts for the cost-of-living differences in Alaska and Hawaii by using a higher income threshold to determine subsidy eligibility. The Fair Access to Health Care Act would provide similar adjustments to the other 48 states. Individuals and families from low-cost geographical areas would not be affected by this legislation. Those earning up to 400% of the FPL would still be eligible for subsides and no region would see a reduction from their current subsidy level.
Final Regulations on Employer Shared Responsibility
The Dept. of Treasury and the IRS issued final regulations implementing the employer responsibility provisions under the Affordable Care Act (ACA) that take effect in 2015. In addition, the Administration will issue final regulations shortly that aim to streamline employer-reporting requirements for employers that offer highly affordable coverage to all or virtually all full-time employees.
This is how the policy affects employers:
• Small Businesses with fewer than 50 employees (about 96% of all employers): Under the Affordable Care Act, companies with fewer than 50 employees are not required to provide coverage or fill out any forms under the Affordable Care Act.
• Larger employers with 100 or more employees (about 2% of employers): The overwhelming majority of these companies with 100 or more employees already offer quality coverage. The rules phase in the percentage of full-time workers that employers need to offer coverage to from 70% in 2015 to 95% in 2016 and beyond. Employers in this category that do not meet these standards will make an employer responsibility payment for 2015.
• Employers with 50 to 99 employees (about 2% of employers): Companies with 50 to 99 employees that do not yet provide quality, affordable health insurance to their full-time workers will report on their workers and coverage in 2015, but have until 2016 before any employer responsibility payments could apply.
Small Business Report Plan Cost Hikes
Ninety-one percent of small businesses surveyed by the National Small Business Assn. (NSBA) were hit with cost increases during their most recent health insurance renewal. Twenty-five percent were hit with increases exceeding 20%. NSBA President Todd McCracken said, “These costs have real-world implications: one-third of small businesses held off on hiring a new employee and more than half say they held off on salary increases for employees.”
While the majority of employers say that offering health insurance is very important to recruiting good employees, just 51% of the smallest firms offer health benefits. Among the 70% of small firms that offer health insurance, the majority pay for more than half of the cost of their employees’ plans.
The average monthly per-employee cost of health insurance premiums for a small firm is $1,121 compared to just $590 in 2009. Small businesses spend an average of 13 hours and $1,274a month on the administrative side of understanding the Affordable Care Act. For more information, visit www.nsba.biz
Covered California Boosts Staffing to Meet Demands
Covered California is increasing staff to answer consumer calls, adding phone lines, improving its website efficiency, expanding its live Web chat function, and upgrading its Spanish-language Web pages. The improvements are in response to a flurry of signups in the new state health exchange over the past two months and in preparation for even stronger consumer interest as the March 31 enrollment deadline approaches.
A large-scale hiring wave is now under way to add 350 Covered California Service Center representatives by the end of March, including more bilingual staff. As part of that expansion, more than 250 new representatives recently began training at the Fresno Service Center, including 28 representatives who are Spanish speaking. Covered California is dedicating more representatives to its live Web chat function, available in English and Spanish; expanding phone line capacity; and adding self-service online tools, such as the ability to reset passwords and change user names.
Covered California will post subsidy-eligible applications in Spanish, Chinese, Vietnamese, and Korean on its website. Consumers can also use a search tool to find information, including frequently asked questions. The exchange also launched dedicated support phone lines for its certified enrollment counselors and, this week, will establish a dedicated support phone line for licensed certified insurance agents.
Employee Leave Laws Continue to Challenge Employers
The Family and Medical Leave Act (FMLA) and other leave laws have been integrated into corporate processes. However, legal and regulatory changes present challenges for employers. These changes also offer new sources of business for their vendors, according to a recent survey by the Disability Management Employer Coalition (DMEC).
New rights for same-sex spouses are driving changes in corporate leave practices. These rights arise from the 2013 Supreme Court decision (United States v. Windsor) on the Defense of Marriage Act (DOMA) . Employees who live in states that recognize same-sex marriage must be allowed to take FMLA leave to care for a same-sex spouse who has a serious health condition or attend to child care and related activities when a same-sex spouse is called to active duty. Key survey results include the following:
• Almost half of employers say that it is extremely difficult to train supervisors in leave processes.
• More than half of employers say that the relationship between HR/benefits and risk management functions is successful or positive
• More than half of employers use internal legal resources to manage leave laws.
• 68% of employers centralize leave management
• 90% of employers say that HR is involved in tracking and managing leave
• Leave outsourcing has increased by 16% over 2012 with 34% of employers outsourcing FMLA leaves.
• Employers with 500 to 999 employees are most likely to use externally developed leave tracking systems, but run them internally.
• A new trend is that 5% of employers outsource ADA accommodation leaves
For more information, visit www.dmec.org.
IRAs Comprise Nearly Half of an Advisor’s Book of Business
Retail individual retirement accounts (IRAs, SEP) make up nearly half of a financial advisor’s book of business, according to a survey by Cerulli Associates. Financial advisors play a key role in the ability of asset managers to win flows from rollovers. However, these rollover assets are hard to acquire, according to Bing Waldert, director at Cerulli.
Financial advisors, on average, capture larger rollovers than direct providers, with the largest balances going to existing advisory relationships. Rollover assets are a key component of an asset manager’s retirement strategy. However, advisors view rollovers as just another source of funds for their practice instead of as a key market to be cultivated.
Cerulli expects that advisors will continue winning rollovers. Financial advisors who deliver a holistic view of a client’s financial picture will benefit from integrating all assets into an overall financial plan. As a result, asset managers working closely with advisors should continue to benefit. For more information, visit cerulli.com
NEW PRODUCTS & EVENTS
One Medical Group Expands Primary Care Service to Employers
One Medical Group, a primary care network, will allow companies nationwide to offer the One Medical service as an employee health benefit. Over 40 companies have already enrolled in One Medical’s enterprise program, including Adobe, NBC Universal, and Quantcast. Employees of participating companies enjoy access to top primary care physicians, as well as same-day appointments, online and mobile scheduling, 24/7 telehealth services, and integrated health and wellness solutions. For more information, http://www.onemedical.com.
Retirement Seminar Series
MassMutual is offering a new lineup for its RetireSmart educational series. The series opens Feb. 26 with a focus on helping participants understand how the stock market, fiscal policy, and the global economy affect retirement planning. The RetireSmart seminar series will include the following topics:
* April 9: Retirement Planning for the Ages.
* June 11: Strategies for Pre-Retirees.
* Aug. 6: The Art of Negotiating a Deal.
* Dec. 3: Maximizing your Workplace Benefits.
For more information visit massmutual.com/retire.
NAHU Capitol Conference
NAHU’s annual Conference in Washington, D.C. will be held
February 25 to 26. For more information, visit http://www.nahu.org/meetings/capitol/2014/index.cfm.
Individual Health Enrollment Platform
Through GoHealth Marketplace, individual licensed health insurance agents can now quote health insurance rates instantly, calculate tax subsidies, and enroll Americans in insurance plans under the Affordable Care Act. Norvax, a GoHealth company, is using the GoHealth Marketplace to provide these capabilities to licensed insurance agents nationwide. It streamlines the enrollment process to offer an enhanced experience for both insurance agents and individuals. The platform helps agents manage customers, quote plans in 50 states, and enroll consumers in on-exchange plans in 36 states. Agents can get instant subsidy-eligibility information and sell on-exchange plans to subsidy-eligible individuals. For more information, visit www.Norvax.com/Marketplace.
Flexible Premium Universal Life
AXA launched BrightLife Protect, an affordable universal life insurance policy for individuals, families, and businesses. The flexible, premium universal life insurance policy with an index-linked interest option, offers the following: premiums can be allocated to a fixed account (guaranteed interest account) that offers a guaranteed rate of return and/or to a select account, an index-linked interest option tied to the S&P 500 price return index, subject to a cap, that offers upside cash value accumulation potential, and a guaranteed 0% floor which protects from losses due to market performance. It also features flexible premium payments and a long-term care rider. For more information visit http://www.axa-equitable.com.
Whole & Term Life
Aflac is offering two newly enhanced insurance plans: Aflac Whole Life and Aflac Term Life. Plan highlights include face amounts up to $500,000 and a guaranteed-issue option. Cash benefits can be used for a variety of financial needs, including replacing lost income, funding a college education, and paying for a mortgage or final expenses. Aflac’s Whole Life insurance plan provides coverage and builds cash value for the life of the policy. The Term Life insurance plan offers coverage at a fixed rate, typically for a 10, 20, or 30-year plan. Aflac’s whole life and term life insurance face amount options are offered for up to $500,000 for individuals under 50 and up to $200,000 for people 51 to 70 or 51 to 68 for the whole and term plans. Guaranteed-issue is also available for the primary insured for $20,000 or $25,000 of term life coverage. For more information, visit aflac.com
Single Premium Group Annuity
American United Life introduced Pension Risk Transfer, a single premium group annuity. The guaranteed buy-out product allows plan sponsors to transfer pension risk to AUL. The pension risk transfer offered by AUL includes record keeping of individual employee data and tax withholding and reporting administrative services and is supported by professionals with extensive experience in defined benefit administration. Enrolled actuaries and compliance attorneys are also available for consultation. For more information, call 877-285-3863.
Fixed Indexed Annuity
Nationwide Financial and Annexus launched Nationwide New Heights, a fixed indexed annuity product built to capitalize on what companies see as a market poised for robust growth. New Heights offers uncapped earning potential, a rarity in the fixed indexed annuity world, said Eric Henderson, senior vice president of Life Insurance and Annuities for Nationwide Financial.
Annexus, a leading fixed indexed annuity product designer, will market and distribute the product through independent marketing organizations. New Heights will also be available to Nationwide’s exclusive agents, independent distributors and bank and wirehouse channels next month. For more information, visit www.annexusgroup.com.
• Employers’ Top Five Questions About the ACA
• Obamacare May Cause Employees to Work Less
• Patients Face Long Wait Times
• Bill Would Establish Collection of Health Cost Data
• A Snapshot of Covered California Enrollees
• Delta Dental Names Executive VP & Chief Legal Counsel
• Kaiser Permanente Rated Highest in Quality
• Affordable Term Life
• Private Exchange
• LTC Shareability
• Health Reform Knowledge Center
• Plan Cost Estimator for Brokers
• Living Benefit Riders
• Retirement Plan for Non-Profits
• Many Employees Don’t Know How to Handle A Disability
• Life Partners Prevails in SEC Lawsuit
Employers’ Top Five Questions About the ACA
Paychex has identified these top five questions from business owners about the ACA; and has provided answers:
1. How do the Employer Shared Responsibility provisions affect a business that is part of a controlled group? A controlled group consists of two or more corporations under common control. There are several types of controlled groups including parent-child, brother-sister, and affiliated service groups, which are created based on common ownership/control. All employees in each entity in a controlled group are taken into account when determining whether the controlled group is an applicable large employer and subject to the Employer Shared Responsibility provisions. If these provisions do apply, each company within the controlled group will be looked at individually when calculating what payments or fees may apply, if any. Employers should consult with their legal or financial advisor to determine if they are in a controlled group.
2. What fees are associated with the Affordable Care Act and who is responsible for them? Business owners need to be aware of the Patient Centered Outcomes Research Institutes fee, the Health Insurance Industry fee, and the Transitional Reinsurance fee.
* The Transitional Reinsurance fee is charged to the health insurer for fully insured health plans and to plan sponsors for self-insured plans. (Effective since 2012 and continuing until 2019).
* The Health Insurance Industry fee is charged to health insurers. (Effective January 1, 2014.)
* The Transitional Reinsurance fee will be charged to health insurers and plan sponsors. They are allowed to pass along the fee to employees. (Effective January 1, 2014 and applicable until 2016).
3. How can a plan determine whether it meets the minimum value requirement of the Employer Shared Responsibility provisions? A plan that covers at least 60% of the total allowed cost of plan benefits is considered to provide minimum value. An HHS final rule, issued in February 2013, provides four approaches for plans to determine whether they meet the minimum value requirement:
I. Any plan in the small group market that meets any of the metal levels of coverage provides minimum value (Bronze, Silver, Gold, or Platinum).
II. CMS developed a calculator to determine a plan’s minimum value (http://www.cms.gov/cciio/resources/regulations-and-guidance/index.html.)
III. A plan can get an actuarial certification from a member of the American Academy of Actuaries.
IV. HHS and the IRS are developing checklists for employers to compare their plans’ coverage. If an employer’s plan is consistent with one of these checklists or more generous, the plan will be treated as providing minimum value.
Applicable large employers that do not provide minimum value health plans may be subject to an annualized penalty of $3,000 per affected employee.
4. How is the small business tax credit changing for 2014? For tax years beginning in 2014, the maximum credit will increase to 50% of small business employers’ contributions to health insurance. The maximum tax credit will increase to 35% for small business tax-exempt employers’ contributions. To be eligible for the credit, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) marketplace. The credit will only be available for two consecutive taxable years.
5. How are a full-time employee and full-time equivalent employee defined under the Employer Shared Responsibility provisions? A full-time employee is employed an average of at least 30 hours per week or 130 hours in a calendar month. A full-time equivalent employee is a combination of employees who are counted as the equivalent of a full-time employee. Each of these employees is not employed, on average, at least 30 hours of service per week or 130 hours per month. To calculate the total number of employees in a calendar month, take the total hours worked by full-time equivalent employees during the month (capped at 120 hours for each employee) divide by 120, and add it to the total number of full-time employees.
For more information, visit http://www.paychex.com/health-reform.
Obamacare May Cause Employees to Work Less
The Affordable Care Act could reduce the labor force by 2.5 million workers in 2024, according to the non-partisan Congressional Budget Office’s annual outlook. More people are likely to reduce their hours or leave the workforce in order to stay under the income caps for Medicaid and federal subsidies. President Obama gave the following remarks in response to the report:
Since the Affordable Care Act passed into law in March 2010 the private sector has added 8.1 million jobs. That is the strongest 45-month job growth since the late 1990s and contrasts with the 3.8 million private sector jobs lost in the decade before the Affordable Care Act passed.
Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report. CBO’s findings are not driven by an assumption that ACA will lead employers to eliminate jobs or reduce hours, in fact, the report itself says that there is no compelling evidence that part-time employment has increased as a result of the ACA.
While many factors affect job growth, the actual performance of businesses refutes those who predicted that the Affordable Care Act would dramatically hurt the economy.
What the CBO report does find is one key immediate effect of the Affordable Care Act is to induce some employers to hire more workers or to increase the hours of employees during the 2014 to 2016 period. Over the longer run, CBO finds that because of this law, individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years or choosing to spend more time with their families. At the beginning of this year, we noted that as part of this new day in health care, Americans would no longer be trapped in a job just to provide coverage for their families, and would have the opportunity to pursue their dreams. This CBO report bears that out, and the Republican plan to repeal the ACA would strip those hard-working Americans of that opportunity.
In addition, the CBO itself confirms that this analysis of the implications of the ACA on the labor force is incomplete, does not take into account the impact that ACA’s slowing health care cost growth which experts have estimated that slower growth in health costs due to the ACA will cause the economy to add an additional 250,000 to 400,000 jobs per year by the end of the decade. Moreover, CBO does not take into account positive impacts on worker productivity due to the ACA’s role in improving workers’ health, including reduced absenteeism. Finally, as it has since the enactment of the ACA, CBO continues to confirm that the ACA is projected to reduce the deficit by more than $1 trillion over the next two decades.
Patients Face Long Wait Times
It takes an average of 19 days to schedule a doctor’s appointment, according to a survey by Merritt Hawkins and AMN Healthcare. It takes 28 days to see a cardiologist in Denver, 49 days to see a dermatologist in Philadelphia, 35 days to see an ob/gyn in Portland, 18 days to see an orthopedic surgeon in San Diego, and 26 days to see a family physician in New York. Physician appointment wait times varied from as little as one day to over eight months. Mark Smith, president of Merritt Hawkins said, “Finding a physician who can see you can be a challenge, even in urban areas where there is a high ratio of physicians per population. The demand for doctors is simply outstripping the supply.” The average rate of Medicaid acceptance for all five specialties in all 15 markets is 45.7%. For more information, visit www.merritthawkins.com.
Bill Would Establish Collection of Health Cost Data
Assembly member Roger Hernández (D – West Covina) announced the introduction of AB 1558. This bill would ensure public access to comprehensive and uniform information on healthcare costs and prices via a website while protecting patient confidentiality and respecting providers of care. All-payer claims databases have been established in several states including Maine, Colorado, Massachusetts, Connecticut and Kansas.
A Snapshot of Covered California Enrollees
Covered California offers these facts on enrollees so far:
* Of the 395,614 consumers who identified their ethnicity, nearly 20% are of Hispanic, Latino, or Spanish origin. In addition, an estimated 30% of consumers who have applied but haven’t selected a health plan self-identified as Hispanic, Latino, or Spanish origin. This figure compares to the estimate that about 46% of subsidy-eligible Californians are Latino.
* Through Dec. 31, 125,033 consumers ages 18 to 34 enrolled for coverage, or 25% of the consumers enrolled. This age group represents about 25% of the state’s population, but approximately 36% of those who are eligible for subsidies.
* Sixty-one percent of consumers signed up for a Silver plan, the second lowest cost of the four plan tiers. About 85% of consumers across all metal tiers got some sort of financial assistance.
* Anthem Blue Cross of California, Blue Shield of California, Kaiser Permanente, and Health Net lead the way among plans chosen, reflecting almost 96% of total enrollment.
* In Covered California’s Small Business Health Options Programs (SHOP), more than 289 small businesses have applied for coverage, with all successfully completing their enrollment. A total of 2,155 employees and their dependents were provided coverage by their employer.
* Consumer response to the application process for Covered California and Medi-Cal has been positive. In the first three months, at least 60% of those who completed enrollment said it was easy.
Delta Dental Names Executive VP & Chief Legal Counsel
Delta Dental of California promoted Michael Hankinson to executive vice president and chief legal officer. Hankinson will oversee legal, regulatory, and compliance activities and human resources and public and government affairs in 15 states plus the District of Columbia. He replaces Charles Lamont, who retired after 28 years at Delta Dental. Hankinson most recently served as chief compliance officer and senior vice president of the legal division. A cum laude graduate of the Pace University School of Law, he also holds an MBA in finance from Fordham University and has extensive experience as a general counsel in the insurance and health care technology industries, dealing with corporate and commercial transactions, risk management, compliance and regulatory matters.
Kaiser Permanente Rated Highest in Quality
For the sixth consecutive year, Kaiser Permanente is the only health plan in California to earn a 4-star rating for quality of care in the annual Healthcare Quality Report Card from the California Office of the Patient Advocate. The annual report card (opa.ca.gov/report_card) provides California consumers with side-by-side comparisons of the largest health plans in the state (10 HMOs and six PPOs), ranking them on several national quality of care and member care experience measures.
Affordable Term Life
MetLife introduced simplified issue term life insurance, which is easy to qualify for and easy to afford. Simplified Issue Term is term life insurance, available to anyone from age 18 to 70, and can be purchased over the phone with same-day approval. The product is offered in face amounts from $10,000 to $100,000. No medical exam is necessary; applicants just answer a few simple health questions. A $50,000 face value policy for a female aged 43 costs $30 per month. For more information, visit www.metlife.com.
Cigna established a private retail exchange offering employers a new benefit marketplace and employees more options and convenience for health improvement. Cigna’s private exchange is available to smaller employers in Atlanta, Dallas, Washington, D.C. metro area, and San Francisco, and will be expanded to other markets and larger employer groups throughout 2014. For more information, visit Cigna.com.
LifeSecure launched its LTC II with Shareability Option to the individual and multi-life markets. It includes a shared-care benefit rider for couples. It also includes a standard international coverage benefit, improved online tools, and two new distinct multi-life programs that allow a more competitive solution for different sized groups. For more information, visit www.YourLifeSecure.com.
Health Reform Knowledge Center
Wolters Kluwer Law & Business introduced its the Health Reform KnowlEDGE Center. For a subscription fee, it offers news and analysis of the Affordable Care Act (ACA) from attorneys and industry experts. For more information, visit http://www.wolterskluwerlb.com/health-reform-knowledge-center.
Plan Cost Estimator for Brokers
Health Insurance Innovations launched its Health Insurance Plan Cost Estimator.
It gives insurance agents the ability to determine the health insurance plan most suitable to their clients’ budget and coverage needs. For more information, visit www.hiiquote.com.
Living Benefit Riders
AIG launched AG Asset Protector. Two riders allow policyholders to access their death benefit while they are still living. They can access the Accelerated Access Solution in the event of a chronic illness, and the Lifestyle Income Solution that offers customers more financial control during uncertain economic times and affordable protection against outliving retirement income. For more information, visit www.RetireStronger.com.
Retirement Plan for Non-Profits
OneAmerica, launched Index (b), an indexed investing option designed for nonprofit organizations. The new retirement plan offering arrives on the heels of OneAmerica’s successful rollout of Index(k), a similar program designed for for-profit corporations, last year. Index (k) and Index (b) were created in response to an increased focus by the defined contribution retirement plan industry on management fees, total investment expenses and transparency. An index investment option will generally return an investment performance similar to the index it is based on, such as benchmarks by S&P, Russell or MSCI, and often requires less time for investment performance attribution, manager selection and ongoing evaluation. Index (b) helps reduce the cost to plan participants and allows nonprofits to spend less time managing their investments. For more information, visit www.tiaa-cref.org for details.
Many Employees Don’t Know How to Handle A Disability
Twenty-three percent of employers are not sure of how to handle disability absences and or accommodate disabled employees, according to a report by the Standard. Only 37% of employers have worked with their disability insurance carrier to find employee accommodations. Based on a series of case studies, the report found that employers make these common mistakes when it comes to employee disability issues:
• Strictly enforcing policies
• Believing that employee accommodations are too expensive
• Not considering new approaches
• Devaluing an aging workforce
• Not asking for help
The authors note that mishandling or refusing reasonable accommodations can result in a complaint with the Equal Employment Opportunity Commission or even a lawsuit for failing to accommodate a disabled employee. For more information, visit www.workplacepossibilities.com.
Life Partners Prevails in SEC Lawsuit
A federal jury has found that Life Partners did not commit fraud and its officers did not engage in insider trading as the Securities and Exchange Commission had claimed. The SEC made these claims in SEC v. Life Partners Holdings et al., which was tried in the United States District Court for the Western District of Texas, Austin Division.
The SEC had claimed that Life Partners violated Rule 10b-5 by intentionally underestimating the life expectancies of the insureds in the life settlements it facilitated and that it hid this practice from the investing public. Life Partners disputed these claims arguing that it described the process of estimating life expectancies in detail, the life expectancies were independently sourced and the life expectancies were not underestimated when taken as a whole.
The jury also found that Life Partners’ CEO, Brian Pardo, and its General Counsel, Scott Peden, did not engage in insider trading. The jury did find for the SEC regarding its claim that Life Partners had misstated its revenue recognition policy. This finding also supported the SEC claims that the Life Partners books and records were misstated. Life Partners denied that it had intentionally misstated its policies or financial statements. Before trial, the SEC had represented to the court that it was not pursuing the revenue recognition claims, and it did not present evidence regarding these claims. As a result, Life Partners has requested that the court dismiss these claims as a matter of law. The court is expected to rule on this motion before issuing a judgment.
Life Partners’ CEO, Brian Pardo said, “We are extremely pleased that the jury has exonerated our company, our business practices and the life settlement asset class itself. As we demonstrated to the jury, life settlements as transacted through Life Partners provide a valuable service to senior Americans who want to sell their unwanted life insurance policies and are a tremendous alternative asset class for accredited investors seeking to avoid the volatility of the stock market. We provide a win-win transaction for everyone involved and, when put to the test, the jury could see the SEC’s allegations were not true.”
• Americans Are in the Dark About ACA Deadlines
• Enrollment Trends a Key Risk to Health Insurers
• Towers Watson Expands Exchange Solutions Segment
• HSA Asset Levels Are Growing
• Covered California Offers Quality Rating System
• Covered California Lands Federal Grant
• Prime and United Expand Hospital Agreements
• Vision Problems Lead Employees to Take Multiple Breaks
• Employees Are Confused about How the ACA Affects Vision Coverage
LONG TERM CARE
• LTC Price Index
• Long-Term Care Conference
• Whole & Term Life
• Universal Life
• Term Life
• ACA Education Tool
• Out-of-Pocket Calculator
• Wellness Tool
Americans Are in the Dark About ACA Deadlines
Fifty-five percent of Americans don’t know the deadline to sign up for health insurance under the Affordable Care Act, according to a Bankrate.com report. In fact, 24% said that the deadline had already passed on January 1, 2014, and 11% wrongly assume that they have until December 31, 2014 to sign up, a full nine months after the March 31, 2014 deadline.
More than three in five of Americans think the government will push the deadline back. While the Obama Administration has changed many of the other Affordable Care Act deadlines, Americans should not assume that the March 31st deadline will be moved, said Bankrate.com insurance analyst Doug Whiteman.
Despite major efforts to inform young adults about the Affordable Care Act and the upcoming deadline to sign up for health insurance, 18- to 29-year olds are the most confused about the cutoff date and the most likely to think the government will push back the deadline. Whiteman said that it’s especially worrisome that young adults — who are the most likely to be uninsured — are the least informed about the deadline and the most likely to think it will be moved. Obamacare’s success hinges on young, healthy Americans signing up, so if they continue to procrastinate past the deadline, it could cause insurance premiums to increase.
Also, people who miss the March 31st deadline will have to wait until next year’s open enrollment period if they decide they want health insurance unless they experience a qualifying event in the interim, such as marriage , he said.
Thirty-six percent of Americans say their health care spending is higher than it was 12 months ago while only 7% say it is lower. Americans with annual household incomes of $30,000 to $49,999 are the most likely to know the correct Obamacare sign-up deadline. So far, about 80% of those who have signed up for coverage under the Affordable Care Act have received a subsidy from the federal government.
The survey also reveals that 33% of Americans are more negative about Obamacare than they were one year ago while only 12% are more positive. This is the largest spread since Bankrate started conducting these monthly surveys in August 2013. Bankrate.com has a free calculator that helps consumers determine their eligibility and compare costs at www.bankrate.com/calculators/consumer-subsidy/consumer-subsidy-calculator.aspx.
Enrollment Trends a Key Risk to Health Insurers
The difference between the age distribution assumptions made when insurers set premium rates on their exchange products and the actual age distribution will be a key determinant of the products’ financial results, according to Fitch. The more these pricing assumptions skew younger than actual experience, the greater the potential is for health insurers to experience adverse financial results from exchange-sourced business. It also increases the importance of risk sharing programs built into the ACA. This is especially true for insurers offering individual and small group products on state or Health and Human Services Department (HHS) managed health insurance exchanges.
According to HHS, as off Dec. 28, 2013, 24% of exchange enrollees were 18 to 34 years old. A Kaiser Foundation Family report estimates that number at 40%. Fitch says that healthy 18-34-year-olds who are eligible for exchange enrollment are more likely to delay their enrollment compared to older, less healthy people. The 2014 enrollment period remains open until March 31, 2014.
The HHS report indicates that eight times as many 18 to 34 year olds enrolled in an exchange-sponsored health insurance plan in December than in October and November. For more information, visit www.fitchratings.com.
Towers Watson Expands Exchange Solutions Segment
Towers Watson is uniting its health care exchange and administration resources. Towers Watson will combine the operations and associates of Extend Health, which it acquired in 2012; Liazon, which it acquired in late 2013; much of its North American Technology and Administration Solutions health care business, and other consultants dedicated to integrating health care exchanges into the existing Exchange Solutions segment. The result will be a much larger and broader business unit dedicated to helping employers deliver health care benefits to their employees and retirees through private exchanges and administration. For more information, visit towerswatson.com.
HSA Asset Levels Are Growing
HSA asset levels are growing, according to a study by the Employee Benefit Research Institute. In 2013, there was $23.8 billion in health savings accounts (HSAs) compared to $18 billion in 2012. The number of health reimbursement arrangements (HRAs) fell for the first time since 2005. In 2013, there were 4.7 million HRA accounts, down from 5.1 million in 2012. The number of people with HSAs increased from 6.6 million to 7.2 million. Assets in HRAs fell slightly at about $5.8 billion in 2013. Assets in HSAs increased from $11.3 billion to $16.6 billion from 2012 to 2013. Average account balances increased after leveling off. The combined average HRA and HSA account balance increased to $2,010 in 2013. It was $2,311 among HSA participants and $1,236 among HRA participants. People with an HRA or HSA for five years or more had $3,491 in their account. Those with an account for less than a year had less than $2,000 in their account.
Average rollover amounts decreased from $1,206 in 2012 to $1,165 in 2013. Total assets being rolled over also decreased: $9.2 billion was rolled over in 2013, down from $9.8 billion in 2012. The percentage of people without a rollover who had an account for more than a year was 10% in 2013. For more information, visit http://www.ebri.org
Covered California Offers Plan Quality Ratings
California consumers can now get performance ratings on the vast majority of health insurance plans offered through Covered California. The state health insurance exchange recently added a quality rating system to its website to help consumers chose plans. The ratings are based on reported experiences of members.
The quality-rating system gives an easy-to-understand rating of one to four stars. The system is in place well ahead of the 2016 federal mandate and will be improved over the next two years as the exchange gets more comprehensive performance ratings for plans. “Covered California is now among the first exchanges in the nation to offer its consumers a quality rating system. Many states, along with the federal exchange, are awaiting federal guidelines for establishing a rating system, but Covered California wanted to give existing scoring information beginning in 2014,” said Covered California executive director Peter V. Lee. For more information, visit https://www.CoveredCA.com/hbex/insurance-companies/qrs.html.
Covered California Lands Federal Grant
After a successful launch that enrolled nearly a half-million Californians in health insurance plans, Covered California received additional federal funding. The $155 million grant will allow Covered California to expand marketing and outreach activities, especially aimed at young adults and uninsured Hispanics. The grant will also be used to bolster the small-group employer market; build more robust data analysis; support health plan renewal; hire and train staff in enrollment assistance, communications and consumer protection areas; and augment existing enrollment system technology to improve the consumer experience and to keep up with emerging state and federal requirements. Covered California’s previous federal grants total about $910 million for planning and development of the exchange. The new funding, called a “supplemental grant,” will go toward sustaining and extending these programs. For more information, visit www.CoveredCA.com.
Prime and United Expanded Hospital Agreements
Prime Healthcare has expanded its contractual agreements with United Healthcare, which now includes 14 Prime Healthcare hospitals in its coverage. United Healthcare members will be able to get care at in-network benefit levels from Alvarado Hospital Medical Center in San Diego, Centinela Hospital Medical Center in Inglewood, Chino Valley Medical Center in Chino, Desert Valley Hospital in Victorville, Encino Hospital Medical Center in Encino, Garden Grove Medical Center in Garden Grove, Huntington Beach Hospital in Huntington Beach, La Palma Intercommunity Hospital in La Palma, Montclair Hospital Medical Center in Montclair, Paradise Valley Hospital in National City, San Dimas Community Hospital in San Dimas, Shasta Regional Medical Center in Redding, Sherman Oaks Hospital in Sherman Oaks and West Anaheim Medical Center in Anaheim. This agreement gives United Healthcare’s insured commercial and Medicare members access to all of Prime Healthcare’s 14 California hospitals. Previously, only Alvarado Hospital Medical Center, Garden Grove Hospital Medical Center, and San Dimas Community Hospital had contracts with United Healthcare.
Vision Problems Lead Employees to Take Multiple Breaks
Many employees regularly face at least one visual disturbance that could diminish their work performance, with most taking multiple breaks to rest their eyes, according to new research sponsored by Transitions Optical. The company’s annual survey reveals that 79% of employees encounter at least one visual disturbance, and 53% take at least one break daily to rest their eyes because they hurt or feel uncomfortable. The top visual complaint is tired eyes, with 47% of employees reporting this. About a third of employees are bothered by other problems, including light reflecting off of their computer screen, bright, glaring light, dry eyes, and blurry vision. Another 18% say their eyes tear while 16% have trouble with light reflected off of personal devices; and another 16% are bothered by reflections off of outdoor surfaces.
Twenty-nine percent of workers say that visual disturbances give them headaches. According to the National Headache Foundation, headaches cost the nation $17 billion dollars in absenteeism, lost productivity, and medical expenses. While 90% of employees say headaches affect their work performance, only 33% tell their employers, indicating that this may be a bigger issue than employers realize. Thirty-two percent of employees say their eyes bother them most in the afternoon, followed by 24% in the evening, and 8% in the morning. An additional 17% say their eyes bother them throughout the day.
With so many workers reporting visual disturbances, it’s not surprising that 53% take breaks during the workday to rest their eyes. In 2011, only 29% were reporting breaks. Smith Wyckoff of Transitions Optical said, “That means there has been a 45% increase in people taking breaks from their workday to rest their eyes in the past two years, potentially a result of employees working longer hours and being exposed to more electronic devices.”
Further demonstrating the negative affect on productivity, most employees are taking multiple breaks throughout the day on account of vision problems. The average employee takes two breaks per day, but 32% are taking three or more breaks, and 13% are taking more than five. While women are more likely to say they suffer from visual disturbances at work, men are more likely to say they take breaks because of them.
One study shows that eye-focusing problems, which can occur with eyestrain and fatigue, may cause employees to lose up to 15 minutes of working time a day. This translates into employers losing more than $2,000 per year per employee who suffers from this issue. Many visual disturbances can be alleviated with wearing the right eyewear with anti-reflective coatings and lenses to reduce glare. For more information, visit HealthySightWorkingforYou.org.
Employees Are Confused about How the ACA Affects Vision Coverage
There is confusion and concern among the majority of Americans when it comes to how health care reform will affect vision benefits, according to a recent survey supported by Transitions Optical. According to the survey, conducted in November 2013, nearly six out of 10 employees don’t understand how health care reform will affect their vision insurance coverage; and more than half are worried about changes to vision coverage due to the Affordable Care Act.
Smith Wyckoff of Transitions Optical said, “The fact that this lack of knowledge is translating into concern is something worth addressing, as vision plans and employers have the opportunity to enhance their relationships with employees by keeping them informed and alleviating their fears.” Employee are concerned about experiencing cost increases, having different vision coverage than their children, and not understanding how to get covered or reimbursed.
Four out of 10 employees expect their human resources representative to be knowledgeable on this topic while nearly half expect their vision insurance carrier to be knowledgeable. The source most employees (59%) expect to be knowledgeable is their eye care professional. Fewer (30%) expect their primary care physician to be informed.
Despite employee confusion about health care reform, interest in vision benefits is higher than ever, according to the survey, with 83% of employees choosing to enroll – a significant increase over previous years (78% in 2012 and 76% in 2011). Use of the plans for an eye exam is also significantly higher than in previous years — 79% in 2013 versus 64% in 2012. This suggests that education on the importance of preventive eye care may be having a positive effect. But, there is still room for improvement since more than one in five still are not using their benefits for a comprehensive eye exam for themselves or their children. This is a bit surprising, according to Wyckoff, since 92% of employees agree that having vision insurance would make them more likely to take their child for an eye exam. For more information, visit HealthySightWorkingforYou.org.
LONG TERM CARE
LTC Price Index
Costs for long-term care insurance have risen slightly for couples, and increased more significantly for single women, but have actually decreased for men according to a 2014 report by the American Association for Long-Term Care Insurance (AALTCI). A 55-year-old single man can expect to pay $925-per-year for $164,000 of long-term care insurance benefits according to the AALTCI report. He’ll pay $1,765 for coverage that increases the benefit pool to $365,000 at age 85, a 14.5% decline from last year’s average.
Jesse Slome, director of the national trade group said, “We advocate a good, better, best approach to long-term care planning for those in their 50s and 60s. Good coverage provides $164,000 of available benefits for each spouse. Better coverage includes an option to add future coverage. The Best option, also the most costly, includes an automatic inflation growth feature.” Today’s average cost is $3,840-per-year for best coverage for a 60-year-old couple each purchasing $164,000 of immediate coverage, growing to a combined benefit pool of $730,000 ($365,000 each) at age 85. “That’s a three percent increase from the 2012 average ($3,725) and 4.8% higher than 2012 ($3,663),” Slome said.
Single women face the greatest cost increase compared to last year. Slome explains, “Last year, leading insurers began charging women higher premiums. Women accounted for two-thirds of the $6.6 billion in long-term care insurance claim benefits paid out.” A 55-year-old single woman would pay an average of $1,225-per-year for the same level of benefits available to a single man for $925 according to AALTCI. The typical single woman will pay an average of 12% more than in 2013. The Association study continues to reveal a significant spread between rates charged by insurers. “No one insurance company is always the least or the most expensive. One insurer will literally charge more than double for virtually the same level of benefits,” Slome notes. The AALTCI study reported differences that ranged from 31% to as much as 114%. For more information, visit AALTCI.org.
Long-Term Care Conference
The Intercompany Long-term care Insurance Conference Assn. (ILTCI) is holding its 14th annual conference March 16 to 19 at the Rosen Centre in Orlando. For more information, visit http://www.iltciconf.org.
Whole & Term Life
Aflac is offering two newly enhanced insurance plans: Aflac whole life and Aflac term life. Plan highlights include face amounts up to $500,000 and a guaranteed-issue option. The whole life insurance plan provides coverage and builds cash value for the life of the policy. The term life insurance plan offers coverage at a fixed rate for a length of time of the policy, typically for a 10, 20, or 30-year plan. Aflac’s whole life and term life insurance face amount options are offered for up to $500,000 for people under age 50 and up to $200,000 for people from 51-70 or 51-68 years of age for the whole and term plans, respectively. Guaranteed-issue is also available for the primary insured for a $20,000 or $25,000 of term life coverage. For more information, visit www.aflac.com/business.
AXA has launched BrightLife Protect, a cost-effective universal life insurance policy designed to meet the protection needs of people, families and businesses. Premiums can be allocated to a fixed account (guaranteed interest account) that offers a guaranteed rate of return and/or to a select account that offers upside cash value accumulation potential and a guaranteed 0% floor, which protects from losses due to market performance. There is also a long-term care service rider. For more information visit http://www.axa-equitable.com.
Securian’s Minnesota Life has introduced a term life insurance product with simplified application and underwriting and customer-friendly digital enrollment. MyLife Select term life insurance offers up to $250,000 of coverage and a level premium for policy terms of up to 20 years. An accelerated death benefit rider, included at no extra cost, provides early payment to insureds who have been diagnosed with terminal illness. After the coverage has been in force one year, insureds have five years (until age 65) to convert the policy to whole life. Insureds also have the opportunity to renew the policy annually after the original term expires without additional underwriting until age 85 (premiums will rise annually). For more information, contact Ryan Frantzen, national sales director, Securian Financial Institution Group, at Ryan.Frantzen@securian.com or 651-665-1497.
ACA Education Tool
NavGate Technologies introduced is CareOptions Family Healthcare Advisory Program. It offers employees and their family members up-to-date, ACA information and estimates their potential federal subsidy with CareOptions. Employees and their families can research the quality and cost of many healthcare providers and facilities. They can also get early detection and care needs assessments; create a healthcare advance directive and power of attorney for healthcare; develop a care plan; and learn about medical conditions. CareOptions also allows employers or the worksite benefit provider to communicate benefit offerings and information directly to each employee, keeping them engaged and informed. For more information, visit www.NavGate.com/info.
National Health Council introduced an out-of-pocket cost calculator at PuttingPatientsFirst.net. Patients can estimate their costs based on their expected health care needs, including prescription medications, and choose from six patient scenarios to see how changes in health needs affect the selection of insurance plans.
The Abacus Group and Health Options Worldwide are offering a wellness engagement tool, myHINT, to agents who work with Abacus. Through their virtual health coaches, employees get monthly reminders about the risks to their health, and the recommendations that can mitigate those risks. For more information, visit www.myhint.com.
• Emergency Care Gets Poor Grades
• Hospitals Charge Wildly Varying Rates for Childbirth
• California Workers Face Higher Out-of-Pocket Costs
• Genworth Settles in Death Master Case
• One Simple Mistake May Be Killing Your LTC Sales
• LTC Insurers Hit With Sex Discrimination Complaints
• Haste Makes Waste When it Comes to Health Insurance Shopping
• Fear and Uncertainty Around Obamacare Persist
• Individual Plans and the So-Called “Death Spiral”
• HMOs Are On Stronger Financial Footing
• Chronic Care Whole Life Rider
• Universal Life
• MassMutual Call Center Hours
• A Snapshot of Hispanic Financial Planning Consumers
• Faith in the American Dream is Eroding, but Financial Satisfaction is on the Rise
Emergency Care Is Failing Many Patients
California moved into the top half of the nation for emergency room care with a rank of 23rd and a grade of C-. The 2014 American College of Emergency Physicians’ report card still ranked the state near the bottom of the country at 42nd with an F in the category of access to emergency care, the same grade it received in 2009. In 2009, California received a D+ and ranked 37th in the nation.
The state has the lowest number of emergency departments per person and an inadequate number of hospital beds, as well as shortages of orthopedists, hand surgeons, and registered nurses. Nearly one-quarter of adults in California lack health insurance. To improve its grade, California must increase the health care workforce and expand the supply of emergency departments and staffed inpatient and psychiatric beds, according to the Report Card.
The state received C-’s in patient safety and disaster preparedness. California lacks a statewide trauma registry and a uniform system for providing pre-arrival instructions. The state needs to implement statewide systems and procedures to ensure that all citizens are protected in the event of a disaster.
California’s C+ in medical liability could be improved with pretrial screening panels to discourage frivolous lawsuits. The state’s best grade, a B+ for public health and injury prevention, was due to low rates of smoking and obesity, strong seat belt and safety belt legislation, and outstanding trauma care located within 60 minutes of nearly everyone in the state. For more information visit http://www.acep.org.
Hospitals Charge Wildly Varying Rates for Childbirth
Depending on the hospital, a California woman could be charged $3,296 to $37,227 for a vaginal delivery, and $8,312 to $70,908 for a caesarean section, according to a study by BMJ Group. Hospitals in markets with middling competition had significantly lower adjusted charges for vaginal deliveries. Hospitals with higher adjusted charges are for-profit hospitals as well as those with higher wage indices and case mixes. Hospitals in markets with higher uninsurance rates charged significantly less for caesarean sections while for-profit hospitals and hospitals with higher wage indices charged more. However, the institutional and market-level factors included explained only 35% to 36% of the between-hospital variation in charges. For more information, visit www.group.bmj.com
California Workers Face Higher Out-of-Pocket Costs
California workers are less likely to be offered employer-based coverage compared to recent years. Also, those who are covered pay more in premiums and cost sharing, according to a survey by the California HealthCare Foundation. The survey provides an overview of the landscape leading up to implementation of the Affordable Care Act (ACA) in 2014. Workers may continue to see costs rise next year. More than 40% of firms are likely to increase what workers pay for their premiums in the coming year, and 34% plan to increase employees’ deductibles. However, the 2013 numbers may not signal important trends since the survey was conducted right before the ACA went into effect.
The following are some key findings:
• Sixty-nine percent of California employers offered coverage in 2000 compared to 61% in 2013.
• Premiums in California have risen 185% since 2002, which is more than five times the state’s inflation rate.
• The average monthly premium for single coverage was $572 in 2013, compared to $490 nationally. The average for family coverage was $1,442 compared to $1,363 nationally.
• California workers paid an average of 22% of the total premium for single coverage and 33% for family coverage in 2013, significantly higher shares than the previous year.
• One in four California firms experienced reduced benefits or increased cost sharing in the last year.
For more information, visit www.chcf.org/almanac.
Genworth Settles in Death Master Case
The California Dept. of Insurance reached a settlement with Genworth over the insurer’s use of the Social Security Administration’s Death Master File database. Genworth agreed to pay $1.9 million to state insurance departments; California will receive roughly $175,000 of the settlement amount. Genworth also agreed to use the Death Master File database to search its records for deceased life insurance policyholders so beneficiaries can be paid.
One Simple Mistake May Be Killing Your LTC Sales
The most common mistake that a long-term care advisor can make with an affluent Baby Boomer is to use the words “long-term care.” When those words are spoken, clients often hear “nursing home,” which makes them shut down. Instead, advisors should say, “Let’s talk about ways we can keep you in your home longer,” says Kevin McGarry, director of the Nationwide Financial Retirement Institute.
Seventy-eight percent of affluent Baby Boomers think of nursing home care when they hear the term, “long-term care.” However, nearly half of all LTC happens at home, with only 27% taking place in a nursing home and 24% in adult day care. The next step is to get an estimate of long-term care costs and build a plan from there, McGarry said. Four in five advisors say clients are more likely to stay with them if they discuss these issues.
Affluent Baby Boomers are in the dark about the need for long-term care insurance. More than seven in 10 mistakenly assume that the Affordable Care Act will cover their long-term care (LTC) costs in retirement, according to a survey by Nationwide Financial. Neither the Affordable Care Act nor Medicare will help America’s workers pay their long-term care costs. While Boomers desperately want to receive LTC in their home, few are adequately planning for the costs and many are not planning at all.
Harris Interactive conducted the poll of 801 Americans over 50 with at least $150,000 in household income. Only 28% are aware that the Affordable Care Act does not cover LTC costs. Nearly half are worried about becoming a burden to their families; and 54% say they would rather die than live in a nursing home.
John Carter, president and chief operating officer of Retirement Plans for Nationwide Financial said, “Virtually no one wants to end up in a nursing home, but few are planning for long-term care costs. And if they have to rely on Medicaid, they may not have a choice.” Affluent Boomers expect their LTC costs average only $36,220 annually. By 2030, the cost of a nursing home is expected to reach $265,000 per year. For more information, visit www.nationwidefinancial.com/healthcare.
LTC Insurers Hit With Sex Discrimination Complaints
The National Women’s Law Center filed sex discrimination complaints against Genworth Financial, John Hancock, Transamerica, and Mutual of Omaha. The complaints are in response to their recently announced practice to begin gender rating long-term care insurance policies. These complaints are believed to be the first to challenge gender rating in long-term care insurance under the provision of the Affordable Care Act (ACA) that prohibits sex discrimination in health care.
The complaints, filed with the Office for Civil Rights (OCR) at the Dept. of Health and Human Services, assert that the gender rating by these four companies violates the ACA’s anti-discrimination rule in health care. This is the first law to ban gender discrimination in health care nationwide and applies to virtually all aspects of the health care system, including long-term care insurance.
By gender rating their long-term care insurance policies, these companies are charging women 20% to 40% more for the same product, said NWLC co-president Marcia Greenberger. “Requiring women to pay higher prices just because they are women is wrong, unfair and, thanks to the Affordable Care Act, is now illegal sex discrimination,” she added. For more information, visit http://www.nwlc.org.
Haste Makes Waste When It Comes to Health Insurance Shopping
Consumers who use healthcare moderately could face unnecessary out-of-pocket spending if they purchase a higher tier health plan (e.g. silver over bronze) without looking at deductibles and caps on annual out-of-pocket costs. National averages show that deductibles and out-of-pocket limits get lower as the health plan tier rises, but cost-sharing can still vary significantly among plans within each tier (bronze, silver, gold, platinum).
HealthPocket examined the lowest to highest deductibles and out-of-pocket caps for Affordable Care Act health plans in 34 states. For bronze, silver, and gold plans, the differences in deductibles amounts to thousands of dollars among insurance policies in same category. The largest range was within silver plans. The lowest deductible was $0 and the highest was $6,250. The smallest range was among platinum plans with the lowest deductible at $0 and the highest at $1,000.
Also, a top-tier platinum plan could have a higher cap than an entry-level bronze plan. Both gold health plans and platinum health plans had the widest range of out-of-pocket caps ($4,850 difference from the lowest to the highest cap). HealthPocket also found the small business health insurance market had similar characteristics to the individual and family health insurance market. For more information, visit www.HealthPocket.com.
Fear and Uncertainty Around Obamacare Persist
When it comes to the Affordable Care Act (ACA) there is fear and uncertainty among small-business owners, according to a study by Merchant Cash and Capital, an alternative financing company for small businesses. Nearly 40% aren’t sure how the ACA will affect their business.
Some small business owners are already preparing for implementation and are feeling the impact on the health of their businesses in 2014. One in four say they will halt any growth initiatives in the near future as a result of the ACA. One in five say they will put new hiring on hold as they wrestle with increasing operational expenses.
The Small Business Health Options Program (SHOP) exchange is the marketplace for small businesses to choose health plans for their employees. SHOP is available now to businesses with 50 or fewer full-time equivalent employees. Nine percent of small-business owners don’t offer insurance, but plan to use the SHOP exchange to provide employees with coverage; and 5.42% do offer health insurance, but will switch to a new health insurance plan provided through the exchange. For more information, visit www.premierconsultingpartners.com.
Individual Plans and the So-Called “Death Spiral”
Allowing people to keep individual health insurance policies that don’t meet ACA requirements is not likely to send new health insurance exchanges into a death spiral, according to a RAND study. In November, President Obama announced rules that allow current non-group enrollees to keep their existing health plans, provided their state’s health insurance commissioner permits such actions. This was after criticism that some consumers in the individual market were losing their health insurance plans.
The three options to help people keep their old plans would all cause some disruption to risk pools, but not enough to threaten their viability. An option adopted by President Obama to allow state insurance commissioners to decide whether to extend old insurance policies is the least disruptive of the three policies examined by the RAND report. The study predicts the president’s action will have only minimal effect on enrollment and premiums.
The most disruptive proposal would allow people to keep their old health plans and allow others to buy the policies. It would lead to moderate price hikes and sharply lower enrollment in the new marketplaces, substantially increasing federal spending on subsidies for enrollees.
Two alternative proposals have stalled in Congress. One would require insurance companies to continue offering non-compliant individual health plans indefinitely, but not take new enrollees. A second bill would allow non-compliant plans to continue and be offered to new enrollees.
Because each of the proposals would divert many young and healthy people from the new health insurance marketplaces, there has been concern the changes could lead to a self-reinforcing cycle of increasing premiums and enrollment drops that could lead to the implosion of the marketplaces.
All three proposals are likely to increase the number of people with health insurance because many non-compliant insurance policies are likely to be less expensive than those in exchanges. However, many of the non-compliant policies are likely to offer fewer benefits than policies offered in the exchanges.
Opening the non-conforming plans would be likely to raise premiums in the marketplaces by as much as 10% and decrease enrollment by 3.2 million nationally. It would also trigger an additional $5 billion in federal spending on subsidies and tax credits in the individual marketplace in 2015. The two other strategies would result in far smaller cost increases. For more information, visit www.rand.org.
HMOs Are on Stronger Financial Footing
Twenty HMOs and indemnity insurers became financially impaired from December 2008 to December 2013, showing a declining trend, according to a study by A.M. Best Company. The impairment count includes 13 indemnity health insurers and seven HMOs. The annual impairment frequency declined from nearly one in 21 companies in 1998 to one in 526 companies in 2011 and 2012. For more information, visit http://www3.ambest.com/bestweek/purchase.asp?record_code=220647.
Chronic Care Whole Life Rider
New York Life introduced a chronic care rider for its whole life product. Policyholders can accelerate the face amount to help pay for chronic care needs. The chronic care rider is a flexible, low-cost addition to a whole life insurance policy with a premium that is guaranteed to stay level. If a policyholder doesn’t use their benefits for chronic care, the funds remain intact for their heirs or as cash value to help supplement retirement income. For more information, visit www.newyorklife.com.
Pruco Life Insurance Company’s newest universal life insurance product offers death benefit protection with tax-advantaged growth potential and the ability to access cash value. Pruco is a subsidiary of Prudential Financial. PruLife Founders Plus UL provides cost-effective death benefit protection with an extended no-lapse guarantee, and offers a choice between two interest crediting account options that can help build cash value in the policy.
MassMutual Call Expands Center Hours
As of January 1, MassMutual’s participant information call center has remained open one hour later, with highly trained customer service representatives available from 8:00 a.m. to 9:00 p.m. EST. Professionals are trained to help people manage a vast array of retirement needs by answering questions about investment options to helping callers take full advantage of matching contributions. Call center associates also offer roll-in services so customers can consolidate savings from other qualifying retirement accounts to achieve a more holistic picture of their overall retirement savings. For more information call MassMutual at 1-800-874-2502, option 4.
A Snapshot of Hispanic Financial Planning Consumers
For Hispanics, the American Dream is based on achieving financial security so their families can get ahead – with a specific focus on paying off mortgages, getting out of credit card debt, paying for their children’s college educations, and preparing for retirement. Hispanics are experiencing a cautious increase in optimism about the economy. But their financial planning intentions aren’t closely aligned with their actions, according to a recent MassMutual study. The study also reveals the following:
• 57% of Hispanics say paying off their mortgage is a top financial priority and 46% prioritize getting out of credit card debt — significantly greater than the general population. Despite these higher-than-average initial efforts to achieve financial security, additional steps seem to be lacking. Forty-three percent say that investing and financial planning should be a higher priority for them, and only 28% are confident selecting investment options to meet their goals.
• 49% of Hispanics insist on paying for their children’s college education, yet only 31% rank savings/investing in their children’s college education as a top priority.
• 47% of Hispanics are involved in educating children about finances, and 79% recognize that this education is important for their children’s their success. Thirty-six percent of adults wish their own parents had taught them more about money.
Chris Mendoza of MassMutual said, “We’re working harder to inform Hispanics about resources available that can help them put concrete financial plans in place and to adequately address their current and future needs. Not only does life insurance provide financial protection if the worst were to happen, but some policies also accumulate cash value – a living benefit that can be used for supplementing retirement income, funding a child’s education or emergencies.”
For more information, visit massmutual.com/familyfinances.
Faith in the American Dream Is Eroding, but Financial Satisfaction Is Rising
Though the economy is showing signs of recovery, Americans’ belief in the American Dream is deeply shaken. Half of older Millennials (25 to 32) and 45% of older Baby Boomers (54 to 64) say the American Dream is disappearing completely, an increase of 15% over the past two years.
Seventy-eight percent of older Boomers consider home ownership to be a key to achieving the American Dream, and 80% consider financial independence to be equally important. Younger respondents have notably less engagement with these historic benchmarks, instead focusing on developing a monthly budget, according to MassMutual’s third biennial study. The study also includes the following:
• Only 17% of Chinese Americans and 28% of African Americans say the American Dream is disappearing compared to 42% of Caucasians.
• Thirty percent of families are satisfied with their financial situation, up from 18% in 2009. Thirty-nine percent say they are very good at managing money, compared to 30% in 2009. Gen X (33-44) trails the pack in terms of financial satisfaction and investment confidence.
• Thirty-eight percent of younger Boomers (ages 45-53) are satisfied with their financial situation compared to 30% of older Boomers (54-64), a gap which has grown continually wider over each prior survey. Older Boomers also own markedly fewer financial products versus younger Boomers.
• Seventy-two percent of families say that it is important to educate children on finances while 49% of families are educating their children about money management.
For more information, visit www.massmutual.com or find MassMutual on Facebook, Twitter, LinkedIn,
• Exchanges Bring Narrow Networks and High Cost-Sharing for Cancer Patients
• Exchange Enrollment Jumps in December
• California Children Lack Vital Dental Care
• Blue Shield to acquire GEMCare
• Alliant Goes on the Hunt for Acquisitions
• Private Health Insurance Exchange
• ING U.S. to Become Voya Financial in 2014
• Life Insurers Face Major Financial, Regulatory Reporting Changes
• Life Insurers Expect Modest Growth in 2014
EMPLOYEE RELATIONS & BENEFITS
• Bosses Are Happier Than Their Workers
• An Alternative to Retirement Plan Loans
• Habits of Highly Effective Advisors
• Variable Annuity With Living Benefit Riders
• Payment Processing Services
• ACA Compliance Tools
• Online Investing Course from LOMA
LONG TERM CARE INSURANCE
• Long Term Care Insurance Prices Drop For Men, Rise Slightly For Couples
Exchanges Bring Narrow Networks and High Cost-Sharing for Cancer Patients
Many exchange health plans have limited access to National Cancer Institute (NCI) designated cancer centers or transplant centers. They also impose high out-of-pocket costs for patients with silver and bronze level plans, according to a report commissioned by The Leukemia & Lymphoma Society (LLS).
The report, prepared by Milliman, provides an early look at the 2014 individual benefit designs, coverage benefits, and premiums for policies sold on four state health insurance exchanges in California, New York, Florida, and Texas.
The report reveals the following areas of concern:
• Narrow networks: Many specialty providers and hospitals that cancer patients rely upon are largely left out of the new health insurance exchange plans. Cancer patients could rack up thousands of dollars of medical expenses without reaching their out-of-pocket maximum since it is unlikely that any out-of-network expenses will count toward a patient’s out-of-pocket maximum. This it more important than ever to have adequate networks covering specialty care.
• High cost sharing: The lower tier bronze and silver plans require significant cost-sharing from patients. Qualified health plans come with high deductibles — sometimes nearly as high as the out-of-pocket ceiling. The maximum out-of-pocket limits set for 2014 are $6,350 for an individual policy and $12,799 for a family policy. Some insurers offer plans with lower out-of-pocket limits in some states. However, the out-of-pocket limit does not apply to non-covered drugs or treatment centers.
• Challenges with transparency: Given the difficulty in navigating the health insurance system and the number of choices for consumers, providing thorough and accurate information is critical to ensuring consumers have the right kind of health insurance.
For more information, visit www.LLS.org
Exchange Enrollment Jumps in December
There was a more than three-fold increase in plan selections in state and federal health exchanges in December compared to October and November, according to a report by the Dept. of Health and Human Services. At nearly 500,000, California has the highest number of people who have selected an exchange plan. The following are some additional enrollment figures about enrollees nationwide:
• 54% are female.
• 24% are 18 to 34.
• 30% are birth to 34.
• 20% selected a Bronze plan.
• 60% selected a Silver plan.
• 13% selected a Gold plan.
• 7% selected a Platinum plan.
• 1% selected a catastrophic plan.
• 79% selected a plan with financial assistance
For more information, visit http://aspe.hhs.gov/health/reports/2014/MarketPlaceEnrollment/Jan2014/ib_2014jan_enrollment.pdf – 1
California Children Lack Vital Dental Care
The American Academy of Pediatric Dentistry says that children should have a dental visit no later than their first birthday. But 37% of two- and three-year-olds in California have never been to the dentist, according to a report by Children Now. The rates are even lower for California’s poorest young children, as only one in three, ages birth-to-three, enrolled in Denti-Cal have seen a dentist.
By kindergarten, over 50% of children in California have experienced dental decay and 28% have untreated decay. California students miss 874,000 days of school each year due to dental problems, costing schools over $29 million each year. Children who reported recent tooth pain were four times more likely to have a low grade point average. Approximately 3.6 million children are enrolled in Denti-Cal with nearly half of all California children expected to be enrolled by 2014.
Most dentists see a low volume of children on Denti-Cal. Dentists often cite low reimbursement rates as the reason for not accepting Denti-Cal patients. In addition, 22 California counties have no pediatric dentists who accept Denti-Cal.
The 2013 to 2014 state budget includes a 10% reimbursement rate reduction to most Medi-Cal providers. The only pediatric service affected by the cut is dentistry, despite the fact that California already ranks among the lowest nationally in reimbursing dental providers in Medicaid.
The Dept. of Health Care Services worked to recruit more dental providers in 2013, during the state-mandated transition of children from Healthy Families to Medi-Cal. However, the Medi-Cal payment rate cuts are likely to reduce the number of providers.
The California Dept. of Health Care Services is creating a statewide pediatric oral health action plan to increase the number of children (ages one to 20) who get preventive dental services and children (ages six to nine) who get a dental sealant. These strategies will help increase dental utilization for children enrolled in Medi-Cal.
The report offers the following recommendations for the state:
• Increase Medi-Cal dentist reimbursement rates.
• Provide incentives for pediatricians to explain the importance of routine dental care to parents.
• Expand the use of tele-dentistry (the delivery of dental-related services and information via telecommunications technologies) to reach under served child populations.
• Expand the oral health care workforce so more children can access needed services.
For more information, visit http://www.childrennow.org.
Blue Shield to acquire GEMCare
Blue Shield of California will acquire Bakersfield-based GEMCare Health Plan. GEMCare is active in the commercial and Medicare markets in Kern County and the Central Coast. With the planned acquisition, Blue Shield will broaden total membership and provider networks and add Medicare members in Kern, San Luis Obispo, and Santa Barbara counties for the first time. The acquisition agreement also facilitates new patient-centered medical homes and accountable care organizations.
GEMCare members will experience minimal changes. All GEMCare Medicare business will remain with current contracts. Commercial members will retain coverage at current premiums until their next renewal date. GEMCare Health Plan employees will continue to provide services on behalf of the GEMCare Health Plan and will be employed through Managed Care Systems, a third party administrator, during the transition period. The agreement is subject to the approval of the California Department of Managed Health Care.
Alliant Goes on the Hunt for Acquisitions
Alliant Insurance Services has launched Alliant Americas, signifying an aggressive growth strategy for its commercial business. The new organization will expand Alliant’s middle market presence through strategic acquisitions and investments.
Headquartered in Newport Beach, Calif, Alliant Insurance Services is one of the largest insurance brokerages in the United States with a history dating back to 1925. Alliant provides property and casualty, workers’ compensation, employee benefits, surety, and financial products and services to more than 26,000 clients nationwide, including public entities, tribal nations, healthcare, energy, law firms, real estate, construction, and other industry groups.
Sean McConlogue, president of Alliant Americas, said that there are opportunities for mid-sized agencies to partner with the firm to gain access to additional capital, sophistication, program relationships, and resources. For more information, visit www.alliant.com.
Private Health Insurance Exchange
Beginning in February, CaliforniaChoice is offering employers the ability to provide their employees with two metal tiers. The tiered-choice option offers employees greater access to health plans, benefits, doctors, specialists and hospitals. Available tiered-choice options include platinum and gold, gold and silver, or silver and bronze metal tiers. Each metal tier available through CaliforniaChoice also offers employees access to both full and limited provider networks. For more information, visit www.calchoice.com.
ING U.S. to Become Voya Financial in 2014
ING U.S. will begin using the name, “Voya Financial” during the second quarter of the year. The various ING U.S. businesses and legal entities plan to complete their transition to Voya throughout the year. Ann Glover, chief marketing officer of ING U.S. said Voya is an abstract name coined from the word “voyage.” It reflects momentum and optimism, and a view towards the future. For more information, visit www.voya.com.
Life Insurers Face Major Financial, Regulatory Reporting Changes
In response to new regulations, half of life insurance company chief financial officers (CFOs) expect to see major changes in product design and pricing of their universal life product with secondary guarantees. Seventeen percent say that their companies will stop selling universal life altogether or significantly curtail sales while 33% will make changes to product design and/or pricing, according to a survey by Towers Watson.
Fifteen percent will implement major changes to their annuity products. Fifty-five percent are considering design changes to their pension plans and 64% are considering changes to their retiree medical and life plans.
The survey addresses requirements for the International Financial Reporting Standards (IFRS) 4 Phase 2; National Association of Insurance Commissioners (NAIC) Own Risk and Solvency Assessment (ORSA); NAIC Valuation Manual (VM) 20; Actuarial Guideline (AG) 38, revisions for 8D and 8E; and Statement of Statutory Accounting Principles (SSAP) 102/92.
“By far, the greatest impact of these new regulations will be felt by companies that write universal life with secondary guarantees. NAIC regulators have maintained that the design for many of these products does not sufficiently reflect the reserves they warrant,” said Jack Gibson, managing director, life insurance consulting, Towers Watson.
“The complexity of these new life insurance regulatory requirements makes it imperative that insurers understand exactly how these changes will alter everything in their business – from supplementary reporting to capital financing for products such as universal life with secondary guarantees and term insurance,” said Gibson.
“Even if CFOs have people who know the intricate details of these regulations and are able to focus on near-and long-term planning for financial functions, that planning will be easier if CFOs are well-informed on the life insurance regulatory changes. But according to our results, the majority understand just the basics, or have a low level knowledge-base on most of the reporting requirements,” said Gibson. Despite this, CFOs expect to make only moderate staffing changes. Eighty percent will draw on a combination of expertise in-house with some outsourcing to comply with the IFRS 4 Phase 2 framework.
Most insurers expect to make at least moderate changes to their governance, process, and controls in response to all five regulations. All insurers will make changes precipitated by IFRS 4 Phase 2, and 92% will make changes to meet the ORSA regulation. Remarkably, many insurers don’t have significant controls and governance in place to meet these new requirements. They are best prepared for the NAIC’s ORSA (50%) and least prepared for the SSAP 102/92 (9%).
All the new regulations are likely to cause changes to insurers’ software models or modeling tools. In fact, 71% or more said changes to modeling software or tools will be needed for all new regulations except SSAP 102/92. The most significant changes will be needed for IFRS 4 Phase 2, where nearly half (44%) expect to make significant changes, with slightly over half (56%) expecting to make moderate changes to their modeling. “Insurers that can create systems flexible enough to incorporate these new changes and to adapt to future changes will be best positioned to manage software-related costs and to leverage the usefulness of what could be a major investment. Some insurers might be able to use legacy systems, but for others, that will be a challenge,” said Gibson.
Eighty percent expect it to take two years to implement new IFRS standards, and more than 60% anticipate significant or moderate challenges in implementing ORSA. “The looming challenges are evident. Preparing for them provides insurers with a great opportunity to assess reserving and capital, reporting functions and enterprise risk management. They can also use it to reevaluate whether new talent is needed, or existing talent can be further challenged with new responsibilities,” said Gibson. For more information, visit towerswatson.com.
Life Insurers Expect Modest Growth in 2014
Life insurance executives surveyed by LOMA expect only modest growth this year due to interest rates, the economy, and uncertain equity markets. “There will be a modest increase in sales and profits for our industry as the industry tailors products to fill specific market gaps and continues to focus on low-cost niche market opportunities and/or alternative distribution channels,” said Doug French of LOMA. Most executives agreed with the following:
• Technology will be more important than ever, particularly analytics, social media and mobile. The use of big data can help insurers better understand policyholders and build better relationships with them, several executives said.
• Quality service will key to retaining customers. Over the past decade, customer expectations have changed dramatically and are being set by companies in other industries, executives said.
• Major merger/acquisition activity is unlikely in 2014, but companies will enter new product lines to meet consumer demand and spur growth.
For more information, visit http://www.loma.org.
EMPLOYEE RELATIONS & BENEFITS
Bosses Are Happier Than Their Workers
Bosses not only get bigger paychecks, but they are also more satisfied with their family life, their jobs, and their financial situation compared to their workers, according to a recent Pew Research Center survey. Top managers with children are less likely than other working parents to say that parenthood has been an obstacle to job advancement (33% versus 17%) and more likely to say their current position is a career rather than a just a job. The survey also reveals the following:
• Eighty-three percent of bosses are very satisfied with their family situation compared to 74% of workers.
• Sixty nine percent of bosses are very satisfied with their job compared to 48% of workers.
• Forty percent of bosses are very satisfied with their financial situation compared to 28% of workers. Fifty-four percent of bosses have household incomes of $75,000 or more, compared to only 32% of workers.
• Seventy-three percent of bosses say that they have gotten the education and training to succeed compared to 57% or workers.
• Sixty-two percent of bosses say they are paid fairly for their work compared to 54% of workers. So it may not be surprising that bosses are only about half as likely as workers to be looking for another job (12% versus 23%).
Bosses and workers said that the following aspects of a job are extremely important:
• Doing a job that they enjoy: 39% of bosses and 44% of workers
• Having job security: 32% of bosses and 36% of workers.
• Being able to take time off for child or family care needs: 32% of bosses and 35% of workers.
• Having a job that helps society: 19% of bosses and 23% of workers.
• Having opportunities for advancement: 25% of bosses and 24% of workers.
• Having a big salary: 20% of bosses and 18% of workers.
• Having good benefits: 26% of bosses and 35% of workers.
Fifty-three percent of bosses are Republican or lean to the GOP compared to 37% of workers. Forty-three percent of bosses and 37% of workers describe themselves as conservatives while about a third of bosses and workers describe themselves as moderates. Only 17% of bosses and 21% of workers describe themselves as liberals.
Bosses and workers share strikingly similar views on key gender issues. About half of top managers (52%) and employees (48%) say it’s easier for a man than a woman to get a top job in government or business. And exactly the same proportion say that men generally earn more for doing the same work (54% for both sexes). But both labor and management offer a more positive view when asked to focus on how men and women fare at their workplaces. Seventy percent of bosses and 75% of workers say that men and women are paid the same for doing the same job where they work. Equally large majorities agree that women and men have the same opportunities to advance.
However, men are more likely than women to be the boss (16% versus 10%). Whites still dominate in the corporate suite: 16% of all whites are bosses, compared to 6% of blacks, and 4% of Hispanics. For more information, visit www.pewresearch.org.
An Alternative to Retirement Plan Loans
A white paper by Purchasing Power reveals that employee-purchase programs can help employees fund some unexpected expenses and reduce their reliance on student loans instead of taking loans against their 401(k)s. Those who borrowed or took early distribution from their 401(k)s, 403s, or Roth plans, in the past three years, used the money for the following:
• 37% general household expenses (mortgage/rent, utilities)
• 24% medical expenses
• 22% college tuition/expenses
• 22% credit card payments.
• 18/5 big ticket items (appliances, electronics, computers)
• 14% new cars
• 7% major car expenses
• 16% other
Fifty-five percent said that they would be at least somewhat likely to use an employee-purchase program for appliances, furniture, computers, electronics, and educational services, etc. To get the full white paper, visit www.PurchasingPower.com.
Habits of Highly Effective Advisors
The most prosperous advisors are largely independent and work in ensemble practices and in larger agencies, according to a study by the Million Dollar Round Table (MDRT) and LIMRA. The survey was conducted among 400 U.S. members of MDRT, representing a variety of ages, backgrounds and work settings. Forty percent of the most profitable advisors are independents. Fifty-seven percent of the most profitable and 60% of the most productive advisors work in ensemble practices. Large agency size also plays a role with 60% of the most profitable and 82% of the most productive respondents being supported by staff.
Ninety-seven percent of advisors say that keeping up with industry regulations is the most pressing challenge, followed by improving efficiency with 92%, and enhancing client base with 88%. For more information, visit mdrt.org.
Variable Annuity With Living Benefit Riders
Nationwide Financial introduced the Nationwide Living Benefit Suite of Riders for Nationwide Destination Series 2.0 variable annuities. The suite offers new options to help advisors recommend the best fit for clients based on age, risk tolerance and their potential guaranteed income needs at retirement. The suite of riders includes the following:
The Nationwide Lifetime Income Rider for investors at or near retirement who are seeking a secure, guaranteed level of income. Nationwide Lifetime Income Capture is for investors who are further from retirement. It offers the potential for guaranteed lifetime income with the possibility to increase their income potential. The Nationwide Lifetime Income Track offers fee-conscious investors increased equity exposure and the possibility of guaranteed income in retirement at a low cost. For more information, visit www.nationwidefinancial.com/livingbenefits or call 1-800-321-6064.
Payment Processing Services
Paychex introduced Paychex Payment Processing Service. The full suite of payment processing solutions includes credit and debit card processing, mobile and online payment services, and point-of-sale solutions. It makes it easier for business owners to accept credit and debit cards. It also allows business owners to deposit checks, offer gift cards, and earn electronically revenue through dynamic currency conversion.
For more information, visit http://www.paychex.com/payment-processing.
ACA Compliance Tools
ADP introduced additional tools and resources to its human resource and payroll platform. It now offers an ACA full-time equivalent calculator and tax credit assistance tools. For more information, visit www.adp.com/runpayroll.
Online Investing Course from LOMA
LOMA launched an online educational course, “Institutional Investing: Principles and Practices.” It is tailored to life insurance, financial services, and retirement professionals. For more information, visit www.loma.org.
LONG TERM CARE INSURANCE
Long Term Care Insurance Prices Drop for Men, Rise Slightly for Couples
A healthy 55-year-old man can expect to pay 15% less for long-term care insurance coverage compared to last year. A married couple, both age-60, faces a 7% increase according to a report by the American Association for Long-Term Care Insurance (AALTCI). The average cost for a 55-year-old male purchasing $164,000 of long-term care insurance protection is $925 a year. Equal coverage for a single woman costs $1,225. Leading insurers began charging women higher premiums in 2013. “Women account for two-thirds of the $6.6 billion in claims paid by insurers last year.
The study looks at a 60-year old couple each purchasing $164,000 of current protection that will grow to $730,000 combined when both reach age 80. It will pay an average of $3,840 yearly, a 3% increase over the prior year’s average. Adding an inflation growth option builds your benefits over time, but it can double the base cost of coverage.
“Insurers offer a variety of discounts and options that can enable an individual to reduce the cost of protection. Today there are more choices available for consumers to protect against the very real risk of needing care explains Tracy Russo, Partner at The National LTC Education Center. Russo notes that it’s best to plan in your mid-40s to mid-60s.
Costs for policy coverage vary significantly from one insurer to the next. The typical difference is around 80%, but, in certain cases, one insurer charged 109% more than another industry leader. For more information, visit www.aaltci.org
• Growth in Health Spending Slows For Fourth Straight Year
• The Downside of ACOs
• Employees With CDHPs Have Lower Prescription Adherence
• Wellness Programs Can Cut Costs, but Only for Certain Workers
• Enrolling In the Exchanges Takes 90 Minutes
• Health Insurers Extend Deadline for Premium Payment
• Many Americans Will Face Higher Health Insurance Costs
• Covered California Health Plans Extend Payment Deadline
• Many Californians Remain Uninsured
PENSION AND 401(k) PLANS
• 401(k) Assets Are Heavily Invested in Stocks
• Pension Plans Get A Reporting Extension
• Indexed Universal Life
• Fixed Annuity Webinar
• Watch Insurance Conferences Online
Growth in Health Spending Slows for Fourth Straight Year
Health care spending grew at a record slow pace for the fourth straight year in 2012, according to a actuaries at the Centers for Medicare and Medicaid Services, published in the journal Health Affairs. In 2012 U.S. health care spending saw the fourth consecutive year of slow growth with an increase of 3.7%. The share of the economy devoted to health spending decreased from 17.3% in 2011 to 17.2% in 2012.
The Gross Domestic Product increased nearly 1% faster than health care spending at 4.6%. Private health insurance premiums reached $917 billion in 2012, and increased 3.2%, near the 3.4% growth in 2011. The net cost ratio for private health insurance was 12% in 2012 compared to 12.4% in 2011. (The difference between premiums and benefits as a share of premiums.)
Private health insurance enrollment increased 0.4% in 2012, but still lower than in 2007. Out-of-pocket spending grew 3.8% in 2012. Private health insurance spending for physician and clinical services grew at a faster pace while Medicare spending decelerated slightly in 2012.
The following categories saw an increased spending trend:
• Hospital spending increased 4.9% in 2012 compared to 3.5% in 2011.
• Spending on physician and clinical services increased 4.6% in 2012 compared to 4.1% in 2011.
• Spending for dental services increased 3% in 2012 compared to 2.2% in 2011. Out-of-pocket spending for dental services, which accounted for 4 2% of all dental spending, increased 3.9% in 2012 compared to 3.1% in 2011.
• Spending for other health, residential, and personal care services grew 4.5% in 2012 compared to 3.3% in 2011. This category includes expenditures for medical services that are generally delivered by providers at schools, community centers, the workplace, residential mental health centers, substance abuse facilities, and by ambulance providers.
• Spending growth for freestanding home health care agencies increased 5.1% in 2012 compared to 4.1% in 2011. Medicare and Medicaid spending accounted for 81% of total home health care spending in 2012. Medicare spending grew at a faster rate in 2012 while Medicaid spending slowed.
• Medicaid spending grew 3.3% in 2012 compared to 2.4 % in 2011. Federal Medicaid expenditures decreased 4.2% in 2012 while state and local Medicaid expenditures grew 15% — a result of the expiration of enhanced federal aid to states in the middle of 2011. The relatively low annual rates of growth in Medicaid spending can be explained in part by slower enrollment grow tied to improved economic conditions and efforts by states to control health care costs.
The following categories saw a decreased spending trend or stayed the same:
• Spending for independent health practitioners of physical therapy, optometry, podiatry, and chiropractic medicine increased 4.5%, which is about the same rate as in 2011.
• Spending for freestanding nursing care facilities and continuing care retirement communities increased 1.6% in 2012 compared to 4.3% in 2011. The slower growth was primarily due to a reduction in Medicare spending due to a one-time rate adjustment for skilled nursing facilities.
• Retail prescription drug spending grew 0.4% in 2012 compared to 2.5 % in 2011. Driving the low growth were reduced retail drug prices as numerous blockbuster drugs lost patent protection and generics became available.
• Retail spending for durable medical equipment (contact lenses, eyeglasses, and hearing aids) increased 5.6% in 2012, the same as in 2011.
• Retail spending for other non-durable medical products (over-the-counter medicines, medical instruments, and surgical dressings) grew 1.8% in 2012 compared to 3% in 2011.
• Medicare spending, which represented 20% of national health spending in 2012, grew 4.8% compared to 5% in 2011. With a new payment system, there was a one-time payment reduction to skilled nursing facilities in 2012 after a large increase in 2011.
In 2012, households accounted for the largest share of spending (28%), followed by the federal government (26%), private businesses (21%), and state and local governments (18%). The federal government financed 26% of total health spending in 2012, a slight decrease from 27% in 2011. In June 2011 saw the expiration of enhanced federal funding from the American Recovery and Reinvestment Act of 2009. Since states are no longer getting additional federal government aid, they have seen their share of the health care bill increasing from 17% in 2011 to 18% in 2012. For more information, visit http://content.healthaffairs.org/content/33/1/67.abstract.
The Downside of ACOs
Writing in this week’s Journal of General Internal Medicine, Drs. David Himmelstein and Steffie Woolhandler warn that accountable-care organizations (ACOs) will bring frequent denials of care, restrictive provider networks, and increased financial risk sharing. HMO practices that are resurfacing in the context of today’s ACOs limit patient choice and pressure physicians to withhold care and avoid unprofitably ill patients, such as those with mental illnesses.
Supporters say that ACOs will have safeguards against the cherry-picking healthy patients and denying care. But the authors write that the early HMO proponents made virtually identical promises.
Just like HMOs, ACOs will be highly susceptible to gaming, such as over-diagnosing and up-coding medical conditions to make patients look sicker on paper to garner higher payments for care. Experience has shown that providers who initially refrain from such practices are forced to do so to survive.
Nor is there evidence that today’s ACOs will save money. Himmelstein and Woolhandler say that giant corporations will have a competitive edge in the reshaped, post-ACA health care landscape based on their clout and the size of their market share, and that a system dominated by profit-maximizing oligopolies is a perilous route to savings. In contrast, countries that have adopted a universal system of care with regulations that restrain costs and minimize opportunities for profit have achieved better outcomes, lower costs, and fairer compensation of physicians.
Employees with CDHPs Have Lower Prescription Adherence
Research published in the American Journal of Managed Care looks at how workers with chronic conditions were affected when their Mid-Western employer adopted a consumer-directed health plan (CDHP) with a health savings account (HSA) for all workers. During the first year after implementation, enrollees with hypertension, dyslipidemia, and diabetes had significantly less medication utilization and lower adherence rates. These reductions abated, yet remained, after two years among hypertension and dyslipidemia patients. Adherence was significantly lower in patients with depression after two years. There were no statistically significant effects on enrollees with asthma/chronic obstructive pulmonary disease. For more information, visit http://www.ajmc.com.
Wellness Programs Can Cut Costs, but Only for Certain Workers
Workplace wellness programs can lower health care costs for those with chronic diseases, but some components of the programs may not reduce health costs or lead to lower net savings, according to a RAND Corporation study. The results are published in the January edition of the Journal Health Affairs. The study looks at PepsiCo’s Healthy Living wellness program over seven years. The program includes health risk assessments, on-site wellness events, lifestyle management, disease management, complex care management, and a nurse advice phone line.
Efforts to help employees manage chronic illnesses saved $3.78 in health care costs for every $1 invested. However, people who participated in the lifestyle management program reported a small reduction in absenteeism, but there was no significant effect on health care costs.
In contrast, the disease management program reduced costs among participants by $136 per member per month, or $1,632 annually. There was a 29% drop in hospital admissions. RAND researchers say that with any prevention effort, it is often easier to achieve cost savings in people with higher baseline spending, as found among those in the disease management program. Interestingly, disease management participants who also joined the lifestyle management program experienced much higher savings at $160 per month with a 66% drop in hospital admissions. This suggests that proper targeting can improve the financial performance of lifestyle management programs. For more information, visit http://www.rand.org/newsletters.html
Enrolling In the Exchanges Takes 90 Minutes
Enrolling a family in a health exchange in New York or California takes an average of 90 minutes, according to a study by HolaDoctor.com. Researchers made calls at different times and days and the wait time on the phone to be 12 to 50 minutes.
Not all operators responded in Spanish even though the service is offered through various media. However, employees who attended the calls in English offered the Spanish translation service through a third party. Having documentation at the time of the call speeds up the process. When people call the federal market, an automated message tells the caller which documents they will need to enroll. For more information, visit www.holadoctor.net
Health Insurers Extend Deadline for Premium Payment
America’s Health Insurance Plans (AHIP) announced that health plans are extending the deadline for consumers to pay their first month’s premium. Consumers who select their plans by December 23 and pay their premiums by January 10 will be able to have coverage effective January 1.
Consumers who want to begin coverage on January 1 must select a plan by December 23 and pay the first month’s premium by December 31. The short time period to complete these steps, particularly around the holidays, combined with the ongoing technical issues with healthcare.gov have raised concerns that some consumers’ coverage may not be able to begin on January 1. Consumers must still pay their first month’s premium before coverage takes effect, but those who pay their premium by January 10 will now be able to have coverage retroactive to January 1.
Many Americans Will Face Higher Health Insurance Costs
Nearly half of Americans with employer-based health coverage are seeing more money being taken out of their paychecks for health insurance compared to a year ago, according to a Bankrate.com report. Forty-four percent have higher out-of-pocket expenses compared to one year ago, including deductibles and copayments. Forty-eight of Americans would choose to repeal the Affordable Care Act (ACA), and only 38% would choose to keep it. In late September 46% of Americans wanted to repeal the ACA and 46% wanted to keep it.
Upper-middle-income Americans with employer-based health insurance (annual household incomes from $50,000 to $74,999) are most likely to say that more money is being taken from their paychecks and that they are experiencing higher out-of-pocket expenses. Out of all income levels, upper-middle-income Americans are the most likely to say that the law has had a negative effect on their health insurance (47%).
While many feared losing family coverage as a result of the Affordable Care Act, very few employers have taken this step (fewer than one in 10 Americans with employer-based health insurance lost coverage for a spouse or child this year). And only two in 10 Americans with employer-based health insurance now have fewer doctors included in their plans.
“Since so much of the Obamacare conversation has focused on uninsured Americans and the government-run exchanges, it’s easy to forget most Americans – about 150 million – get their health insurance from an employer. People covered under these plans should watch for changes and discuss with their employers how Obamacare may affect their coverage and costs. In some cases, getting insurance through the health exchanges could be more cost effective, so it is important to research all possibilities,” said Bankrate.com insurance analyst Doug Whiteman. The study also reveals the following:
• 52% of women with employer-based coverage report higher out-of-pocket expenses, compared to only 35% of men.
• Americans who are feeling more negative about the law outnumber those feeling more positive by a two-to-one margin (31% to 15%). For more information, visit
Covered California Health Plans Extend Payment Deadline
Covered California’s 11 health insurance companies agreed unanimously to extend the deadline for consumers to submit payment for their first month’s premium. Consumers now have until Jan. 15 to get payment to the companies. Payment for coverage taking effect Jan. 1 must be in the hands of the health insurance companies by Jan. 15 and not simply postmarked or in-transit. Meanwhile, about 200,000 households with coverage due to take effect Jan. 1, and who supplied their email addresses to Covered California, will get direct notification about the payment deadline extension. Consumers can also visit CoveredCA.com for instructions on how to pay their premium. Health insurance companies stress that this is a one-time payment deadline extension, and that payment for coverage is due at the beginning of each month. For more information on Covered California, please visit www.CoveredCA.com.
Many Californians Remain Uninsured
At seven million, California has the most uninsured residents of any state. California also has the seventh largest percentage of uninsured under 65, according to a report by the California HealthCare Foundation. Many of the state’s uninsured are employed. The percentage of residents who get coverage through their jobs has dropped from 63% in 1988 to 54% in 2012. While public insurance has mostly offset this gap, one in five remains uninsured.
The Affordable Care Act (ACA) will reduce the number of uninsured residents in California, but a significant number will be left behind. The following are key findings:
• One in five Californians is uninsured. The rate among those who work is even higher at one in four.
• Sixty-two percent of uninsured children in California are in families in which the head of the household worked full-time during 2012.
• Employees in businesses of all sizes are more likely to be uninsured in California than in the rest of the United States. In businesses with fewer than 10 employees, 40% of workers are likely to have no insurance.
• Nearly one-third of the uninsured in California have annual family incomes of $50,000 or more.
• Nearly 60% of the state’s uninsured population is Latino.
For more information, visit www.chcf.org.
PENSION AND 401(k) PLANS
401(k) Assets Are Heavily Invested in Stocks
The bulk of 401(k) assets are invested in stocks. In 2012, 61% of 401(k) participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock, according to a report by the Employee Benefit Research Institute. Thirty-three percent were in fixed-income securities, such as stable-value investments and bond and money funds.
Seventy-two percent of 401(k) plans included target-date funds in their investment lineup. Fifteen percent of the assets in the EBRI/ICI 401(k) database were invested in target-date funds, and 41% of 401(k) participants in the database held target-date funds. Also known as “lifecycle funds,” these funds are designed to offer a diversified portfolio that rebalances automatically to be more focused on income over time.
More new or recent hires invested their 401(k) assets in balanced funds, including target-date funds. For example, at 2012, nearly 54% of the account balances of recently hired participants in their 20s were in balanced funds compared to 51% in 2011, and about 7% in 1998. A significant subset of that balanced fund category is in target-date funds. At 2012, 43% of the account balances of recently hired participants in their 20s were invested in target-date funds, compared to 40% at 2011.
The 401(k) participants continued to seek diversification of their investments. The share of 401(k) accounts invested in company stock edged down to 7%. This share has fallen by more than half since 1999. Recently hired 401(k) participants were less likely to hold employer stock.
Participants’ 401(k) loan activity remained steady, although loan balances increased slightly in 2012. Twenty-one percent of 401(k) participants who were eligible for loans had loans outstanding against their 401(k) accounts, unchanged from 2011, 2010, and 2009, but up from 2008 at 18%. Loans outstanding amounted to an average of 13% of the remaining account balance in 2012, down 1% from 2011. Nevertheless, outstanding loan amounts increased slightly from the previous year.
The 2012 average 401(k) account balance in the database was 8.4% higher than the year before, but may not reflect the experience of typical 401(k) participants in 2012. For more information, visit www.ebri.org.
Pension Plans Get A Reporting Extension
On January 3, 2014, Pension Benefit Guaranty Corporation (PBGC) published a final rule extending the flat-rate premium due date for large single employer and multi-employer pension plans (500 or more participants) starting with the 2014 plan year. Flat-rate premiums for large calendar year 2014 plans will be due October 15 instead of February 28. It gives small plans more time to value benefits, provide for relief from penalties, and make other changes. PBGC expects to publish a final rule and make MyPAA available for 2014 filings well before the first filing deadline of October 15. Until then, PBGC is not accepting 2014 filings.
Indexed Universal Life
Genworth introduced its second index universal life (UL) insurance product, “Foundation Builder Index UL.” It provides affordable death benefit protection backed by a no-lapse guarantee of up to 30 years, plus the opportunity to build cash value for future financial flexibility. It also offers five index interest crediting strategies linked to the percentage change in the S&P 500 and an optional accelerated benefit rider for long term care services. For more information, visit http://www.genworth.com.
Fixed Annuity Webinar
The National Assn. of Fixed Annuities is sponsoring a webinar, “Top 10 Reasons Why 2014 is the Year of the Fixed Annuity. How Generational Attitude Changes Should Positively Impact Your Business.” It will be held Thursday, January 23, 2014 at 8:30 a.m. PT. For more information, visit www.nafa.com.
Watch Insurance Conferences Online
Virtual Insurance Conferences & Expos will enable insurance and financial professionals to access, view and interact with live conferences via their computers, smartphones, and tablets. The first Virtual Insurance Conferences & Expo is set for May. It will feature the American Association for Long Term Care Insurance’s LTC Sales Summit. For more information, visit www.insuranceExpos.com or call 818-597-3205.
• Covered California Expands Service Center Hours
• Medi-Cal’s Solid Performance
• Blues to Dominate State Exchanges
• Short-Term Health Insurance Finds Its Place
• Many Americans Want More Regulation of Health Insurance
• Employers Reveal Private Exchange Preferences
• Not Just the ACA Is Shaping the Healthcare Industry
• Shopping Experience Improves for Public Exchanges
• Average Out-of-Pocket Costs for Obamacare Plans
• Life Insurers To Penetrate New Markets
• Voluntary Benefits To Take on a Bigger Role
• Holiday Wish Lists For Benefits
• Fiduciary Management
• Section 125 Premium Only Plan Documents
Covered California Expands Service Center Hours
With health care coverage set to begin on January 1, Covered California has expanded its service center hours and outlined some key dates for consumers. Covered California’s Service Center, at 800-300-1506, will now be open from 8:00 a.m. to 8:00 p.m. on Sunday, Dec. 22, to help consumers enroll. The agency also extended the deadline for enrolling in plans and paying for coverage beginning January 1. Coverage will be retroactive on January 1, 2014 if a consumer chooses a plan by Dec. 23, 2013, and the insurance company gets payment by January 6, 2014. The Affordable Care Act requires most people to enroll by March 31, 2014 or face a tax penalty. If consumers enroll from March 16 to March 31, their coverage will begin on May 1, 2014. People applying for health insurance through Covered California will find out if they qualify for financial help with premium payments or if they are eligible for low-cost or no-cost insurance through Medi-Cal. For more information, visit www.coveredca.com/FAQs/Enrollment-and-Payment-FAQs-FINAL.pdf
Medi-Cal’s Solid Performance
Medi-Cal managed care performs at or above the national Medicaid median on 17 of 19 quality indicators, according to a report by the California HealthCare Foundation. Medi-Cal lags behind the national median in postpartum care and timeliness of prenatal care — a gap that has persisted over the past four years. For more information, visit http://www.chcf.org/publications/2013/12/monitoring-performance-medical-managed-care.
Blues to Dominate State Exchanges
Blue plans are likely to be among the leaders in the state exchanges where they can leverage their dominance into creating narrow-network plans that offer a price advantage over competitors, according to a report by Decision Resources. Humana is expected to be among the five largest carriers in enrollment for each exchange it competes in. Centene is poised to capitalize on its position as a leading managed Medicaid carrier and could become a major exchange player nationally through its Ambetter plans. Through its acquisition of Coventry, Aetna is in a prime position to be a top exchange player in several states and is particularly strong in the Southeast.
However, the health plans’ participation in the exchanges is expected to decline along with rising merger and acquisition activity and the continued introduction of narrow network products, said Carolyn McMeekin, vice president of Insight Products for Decision Resources Group. For more information, visit www.DecisionResourcesGroup.com.
Short-Term Health Insurance Finds Its Place
More consumers will be turning to the short-term insurance to address temporary lapses in coverage as the exchanges experience technical glitches, according to a report by HealthPocket. Jeff Smedsrud, president of Healthcare.com said, “Short-term medical plan may make sense for some people facing a health insurance coverage lapse for a limited period of time, but these consumers should understand the restrictions and the rules of these plans before enrolling.” For more information, visit HealthPocket.com.
Many Americans Want More Regulation Of Health Insurance
Health insurance ranks among the industries for which more Americans want to see increased regulation. They are oil (41%), pharmaceuticals (39%), tobacco (35%), health insurance (34%), banks (31%), electric and gas utilities (24%), packaged food companies (24%) and managed care companies such as HMOs (24%).
In contrast, less than 10% want more regulation of computer hardware and software companies (6% each), online search engines (7%), online retailers (7%) or supermarkets (9%). The biggest changes from last year are drops of 7 points in those who want more regulation of electric and gas utilities and drops of 6 points each for those who want more regulation of managed care companies, life insurance companies and health insurance companies. For more information, visit www.harrisinteractive.com.
Employers Reveal Private Exchange Preferences
Nearly 70% of employers say it is very important for an advisor to be independent of the private exchange they are considering, according to a report by the Private Exchange Evaluation Collaborative (PEEC). If employers could contribute towards employees’ coverage on the public exchange/marketplace in 2017 and 2018, 58% of employers say they would consider encouraging employees to get coverage through the exchange.
“The survey results indicate a strong interest in private exchanges, but also uncertainty about the benefits,” said Laurel Pickering, President & CEO, Northeast Business Group on Health. Many firms that have served as trusted employee benefit advisors are now vendors themselves; providing private exchange solutions to employers, said Christopher Goff, CEO & General Counsel, Employers Health Coalition.
Private exchanges could gain traction as an alternative to traditional employer sponsored benefit options over the next five years. The greatest barriers to private exchanges are their immaturity, the uncertainty about their long-term stability and the employer’s loss of flexibility, especially in tailoring benefit plan designs. Only 25% say that moving to a private exchange will save them money
Interest in private exchanges extends across all industry segments and employer size while the importance of exchange features varies among employers. For more information, visit www.thepeec.com.
Not Just the ACA Is Shaping the Healthcare Industry
The Affordable Care Act (ACA) is only one factor that will rapidly reshape the healthcare industry in 2014, according to a report by PwC’s Health Research Institute (HRI). Kelly Barnes of PwC said, “While health insurance exchange implementation is driving headlines, the next 12 months will be marked by…a range of core business challenges. Businesses must address rapid innovation and competition from non-traditional players but, above all, they must respond to empowered consumers as customer-centric transformation sweeps healthcare.” The survey finds the following:
• The public is wary of new entrants in health insurance. Only one in 10 consumers say they are very likely to buy insurance from a new start-up, and only 15% are very likely to purchase a health plan run by a hospital or health system. Twenty-seven percent of employees have a strong preference to have a choice of three to five health plans while 14% have a strong preference to be offered a single plan.
• More large employers are using private exchanges. This trend is likely to grow in 2014 as employers explore strategies to hold down costs, shed administrative burdens, and expand plan choices.
• Cost-conscious employers are making transparency a top factor in their negotiations with health plans and providers. Earlier this year, CMS released a trove of hospital pricing data for the first time, showing significant cost variability. Price-sensitive consumers are distinguishing high-quality care from high-cost care. Sixty-five percent of consumers say that expensive medical treatment doesn’t necessarily mean better quality care.
• Providers and consumers are increasingly adopting mobile health technologies; more than one-quarter of consumers use mobile apps to schedule healthcare appointments, up from 16% a year ago.
• States are struggling to contain rising Medicaid costs while an aging Baby Boom population has not saved enough for health costs in retirement. Demographic and economic trends point toward many years of rising long-term care costs. States are looking to managed care to help hold the line on long-term care spending. Ten years ago, only eight states had a Medicaid managed long-term care program; in 2014, that number is expected to climb to 26.
• Instead of just prescribing drugs, providers are prescribing exercise regimens and using data to help keep patients on track to meet health goals. In 2014, the trend could fundamentally alter how health organizations deliver care while keeping costs down. For the full report, visit www.pwc.com/us/tophealthissues.
Shopping Experience Improves for Public Exchanges
The shopping experience at HealthCare.gov is now on par with leading private insurer web sites, such as Aetna, eHealth, and Kaiser Permanente, according to a report by Change Sciences Group. The new HealthCare.gov site has become dramatically more engaging, usable, and likely to convert than it was in early November.
Pamela Pavliscak, who directed the research project, said, “There has been a perception that private insurers were far ahead of the public exchanges. This new data shows that the public exchanges can be competitive, at least in support of shopping for plans. However, online direct-to-consumer health insurance has a long way to go before it is as easy to shop for as a TV or a plane ticket. As a group, health insurance sites perform far worse than the two top e-commerce sites for usability.
Insurance shoppers found Covered California, significantly less engaging than AccessHealthCT. Some private exchanges fared poorly according to other measures as well. eHealth is significantly more usable than any private or public site. For more information, visit https://www.changesciences.com/trending/healthcare-web-site-user-experience-2013.
Average Out-of-Pocket Costs for Obamacare Plans
There are significant differences in out-of-pocket costs among the new ACA metal plans, according to a HealthPocket report. Deductibles drop more dramatically among metal plans than their differing actuarial values would suggest. When comparing the new Affordable Care Act health plans, consumers should factor in their expected healthcare use along with premiums. However, for those who need a specific doctor or hospital, it is important to note that annual out-of-pocket expense protections only apply to covered medical services delivered by in-network healthcare providers, said Kev Coleman, Head of Research & Data at HealthPocket.
Health plans under the ACA are differentiated by the percentage of medical costs that the health plan pays. The entry-level bronze plan covers 60% of enrollee costs; the silver plan covers 70%; the gold plan covers 80%; and the platinum plan covers 90%. However, when looking at the average deductible amounts for each of the metal plans, the differences were significantly larger than the 10% plan payment increments differentiating the plans.
HealthPocket found the average deductible amount for each of the four metal plans as follows:
* Bronze Plan: $5,081 for an individual/$10,386 for a family.
* Silver Plan: $2,907 for an individual/$6,078 for a family.
* Gold Plan: $1,277 for an individual/$2,846 for a family.
* Platinum Plan: $347 for an individual/$698 for a family.
Life Insurers to Penetrate New Markets
With the rise in consumer confidence and ongoing economic recovery, life insurers are poised to rebuild product portfolios; expand into under-penetrated markets; and deploy the capital they have accumulated into profitable business opportunities, according to Ernst & Young’s 2014 outlook.
Doug French of Ernst & Young said that insurers need cost-effective ways to distribute products through alternative channels. Insurers can streamline their operations and support growth by using sophisticated technology and data analysis and investing in the right people and processes. Ernst & Young says that life and annuity insurance companies must pursue five key areas in 2014:
1. Companies that integrate social media with other distribution and communication channels will have a competitive advantage.
2. Outsourcing, co-sourcing, and shared services can streamline processes and increase profitability, enabling companies to compete more effectively in the expanding market.
3. To outperform competitors in 2014, life insurers should focus on common standards and policies, enhanced and predictive analytics, and a data framework that defines ownership and controls. Companies must also adopt data security to protect against the exponential rise in cyber attacks.
4. In a volatile economic environment, life insurers can enhance shareholder returns by improving the yield on investments in products and operations and balancing risks and rewards in their asset portfolios.
5. The trend toward greater regulatory intervention and related pressures will continue in 2014. This will increase the need for life insurers to assess enterprise risks, heighten operational transparency, enhance government efficiency, and establish clear risk ownership and accountability. For more information, visit www.ey.com/insurance.
Voluntary Benefits to Take on a Bigger Role
After health care reform, the big story in 2014 for employee benefits will be the substantial role that voluntary benefits will play for employers and their employees. Both traditional and non-traditional voluntary benefits are making their way to the forefront of the benefits package that employers will offer next year.
Voluntary benefits will become an essential element of the benefit program that many employers use to attract and retain employees,” said Elizabeth Halkos, Purchasing Power’s Chief Revenue Officer.
A wider array of traditional voluntary benefits will be included in the employee benefits package starting in 2014. Employers will be adding gap coverage, short-term disability, cancer, critical illness, prescription, dental, life insurance and hospital supplemental policies.
More than three-quarters of employees responding to the Employee Benefit Research Institute’s 2013 Health and Voluntary Workplace Benefits Survey say that the benefits package an employer offers prospective employees is extremely or very important in their decision to take the job.
A TNS Omnibus survey reveals that 86% of employees say it is important to be able to customize their benefits to fit their lifestyle. With voluntary benefits employees can customize their benefits by adding on traditional voluntary insurance products as well as non-traditional voluntary benefits, such as employee purchase programs, financial education, pet insurance, legal plans and identity theft policies.
This past year has seen non-traditional voluntary benefits offered more frequently in the benefits package. A recent Eastbridge Consulting survey reveals that employee purchase programs are among the most popular, with 13% of employees owning the product through work. Next is legal plans with 8%, identity protection at 3%, and pet insurance at 1%. Eastbridge notes that ownership of these products is low because many have only recently begun to be accepted as employee benefits. Look for this trend to escalate in 2014. Non-traditional voluntary benefits offer workers a way to get items and services through convenient payroll-deduction. Most of the non-traditional offerings allow workers to get something they need right away as opposed to many core benefits that employees only appreciate when they are sick or injured. Non-traditional voluntary benefits, such as group legal plans, financial planning, and employee purchase programs, have become more popular.
The latest non-traditional voluntary benefits include financial planning and online educational services, including college courses, certifications and career development courses for health care professionals. Also coming will be affordable solutions to work-life balance, such as vacations available through employee purchase programs. Employers will also add more financial wellness benefits to their voluntary benefit offerings. For more information, visit www.purchasingpowertoday.co.
Court Allows New York Catholic Groups to Refuse Contraceptive Coverage
A federal judge ruled that a group of Catholic institutions in New York don’t have to comply with the Affordable Care Act (ACA) contraceptive coverage requirement. The ACA guarantees that all new health insurance plans cover FDA-approved contraceptives, including the pill and IUDs, without co-pays or deductibles.
US District Judge Brian Cogan in Brooklyn ruled that the six plaintiffs – Archdiocese of New York, Catholic Health Care System, Catholic Health Services of Long Island, Diocese of Rockville Centre, Cardinal Spellman High School, and Monsignor Farrell High School – are exempt from the mandate because of their religious beliefs. This case is Roman Catholic Archdiocese of New York v. Sebelius.
Although the ACA provision has helped thousands of women obtain contraception – the proportion of women paying zero dollars for oral contraceptive pills increased from 15 to 40% since it went into effect – this ruling will make it harder for the more than 25,000 employees of the plaintiffs to obtain affordable contraception, according to the Feminist Majority Foundation.
Several for-profit companies have also challenged the ACA contraceptive coverage requirement in federal courts. In November, the US Supreme Court agreed to hear a challenge by Hobby Lobby, a for-profit national craft store chain, and Conestoga Wood, a wood cabinet manufacturer. Both are arguing that the requirement violates the religious beliefs of these corporations and that they should not be required to provide health insurance plans that cover certain types of birth control. The feminist majority launched a petition to send the Supreme Court a clear message that companies should not be able to use religion as cover to discriminate against women.
The Archdiocese of New York applauds Judge Brian Cogan’s ruling saying “The court has correctly cut through the artificial construct, which essentially made faith-based organizations other than churches and other houses of worship second-class citizens with second-class First Amendment protections. Religious freedom is our “First Freedom,” guaranteed in the Constitution of the United States. This decision wisely and properly affirms that this freedom must extend beyond merely being free to choose how we worship, and must include how we act in accord with our religious beliefs.”
Holiday Wish Lists for Benefits
What tops the benefits wish lists of America’s employers and workers this holiday season?
Colonial reveals what employers want most from their benefits:
• Ways to save money – With the cost of providing benefits to workers continuing to rise, employers are looking for all means possible to trim their costs.
• Help understanding the Affordable Care Act — Employers are finding it difficult to keep up with changes in the new health care legislation and how it will impact their business — and their bottom line.
* Greater participation in the company’s wellness program — When more workers participate in employer-sponsored wellness programs and improve their health, employers save on health care costs.
• What employees want most from their benefits plans
• Help understanding their benefits — Employers aren’t the only ones confused by the Affordable Care Act and how it affects their employee benefits. Forty-seven percent of workers say they are not very knowledgeable or not at all knowledgeable about the impact the Affordable Care Act will have on them.
• Benefits that meet their individual needs — Employees have different needs for benefits based on their marital status, income, age, lifestyle, and family situation. Having a choice of affordable benefits allows workers to choose the coverage that best meets their needs.
• Financial security for their families — Thirty-six percent of American workers say they always or usually live paycheck to paycheck. Employees need benefits that protect them from financial disaster. For more information, visit www.coloniallife.com
Aon Hewitt launched SimPlus Savings, which enables plan sponsors and plan fiduciaries to delegate certain fiduciary obligations and outsource administrative functions related to their defined contribution (DC) plans. At the same time, they can maintain a line of sight into the strategic direction of their plans. For more information, visit www.hewittennisknupp.com.
Section 125 Premium Only Plan Documents
Core Documents has produced a new YouTube video titled, “$99 Section 125 Premium Only Plan PDF Documents.” See it at http://www.youtube.com/watch?v=4TPMg-xjm5o.
Coverage Calculator Inc. launched its new website, www.coveragecalculator.com, which helps consumers compare the out-of-pocket medical costs associated with different types of health insurance plans, including the metal plans sold on the Healthcare.gov website.