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VISION CONFERENCE RECAP
• Top Brokers Share Their Sales Secrets
• Transitions Polarized Lenses Introduced
• How to Get Through to Clients 
IN CALIFORNIA
• Assembly Passes Bills To Expand Healthcare Services
• Get an Inside Look at DMHC’s Medical Review Process Tomorrow
• What Would Happen Without the Individual Mandate?
NEW PRODUCTS
• Fixed Annuities
• Medical Records App
• Tool to Evaluate Consumer-Directed Health Plans
LIFE SETTLEMENTS
• More Boomers Are Considering Life Settlements 
HEALTHCARE
• Americans Are Paying More and Getting Less
• Healthcare Spending Likely To Be Down for Years
LIFE INSURANCE
• Life Insurance Distribution Meeting
• How the Industry Overlooks Customers
• Customer Satisfaction Ratings for Insurers

VISION CONFERENCE RECAP

This week, the fifth annual Managed Vision Care track has been featured at the Transitions Academy in Orlando. The three news items below are highlights from the show.

Top Brokers Share Their Sales Secrets

Winning the 2010 broker of the year award has been the biggest door opener in 30 years said, Patsy Akridge, president, Akridge Financial Services of Martinsville, Va. “This award adds another level of extraordinary performance to my client portfolio.” Brokers are nominated by their vision plans or they can nominate themselves. For more information on getting nominated, visit http://www.healthysightworkingforyou.org/?category=3. The site also features selling tools, which members of the panel say they find useful in client presentations. Akridge says that she now focuses more on presenting vision plans to her clients as well as tying vision care with medical care. In fact, one recurring theme of the conference is that brokers need to explain how the preventive care that is offered in vision benefits reduces overall healthcare costs and absenteeism and well as increasing productivity. When Akridge talks to clients about vision benefits, she makes her presentation more engaging by discussing about the aesthetics of  vision products. The three finalists for the 2011 award also gave their tips:

• Anya Simpson, president, Benefit Plans Inc. in Norfolk, Va: You need to emphasize that employees’ vision needs to be protected to reduce medical costs and absenteeism because employers overlook that issue.  Simpson admitted that she used to be an obstacle to selling because she did not understand the value of the benefit.
• Patrick Tibbs, Everence Financial Advisors, Goshen, Ind.: With healthcare reform, now is the perfect time to talk with clients about how to help employees with the cost and control chronic diseases. Employees get excited when they buy their eye ware under the health plan. They tell their friends. That is how I have gotten some referrals.
• Steve Farmer, executive senior vice president, Wallace, Welch and Willingham in Clearwater, Fla.: So far, with health reform, I have seen health insurance premiums rise faster. Also, we are dealing with a bad economy in Florida, so clients are very price sensitive. I had great success talking about using the website to show how it reduces healthcare costs. The biggest hurdle is convincing the HR director about offering a vision plan. But once they put the plan in place, they are surprised at how many employees sign up.

Transitions Polarized Lenses Introduced

Lenses that darken and lighten automatically have been around for a long time, but Transitions is now introducing lenses that are also polarized. The Vantage lenses, which will be available in May, offer sharper vision in sunlight. When you wear them, glass and water look more transparent outdoors and glare is reduced in even the brightest sunlight. Pat Huot, director of Managed Vision Care for Transitions Optical said that the Vantage lenses would cost consumers more than the typical transitions lenses. Vision plans will be offering discounts to members who want to purchase the lenses. To coincide with open enrollment, Transition is launching ads on T.V., magazines, and the Internet to promote the new technology to people in the 30-something to 50-something age group.

How to Get Through to Clients

Brokers got together to discuss value based selling at the Transitions Academy 2012 in Orlando. Here are some highlights:

• Use personal stories to explain how vision benefits have helped you or someone you know.
• Bring relevance to the sale based on the unique aspects of your client’s employee group. People in different occupations have different vision challenges.
• Read the client’s annual report and visit their website to understand their challenges and goals before you make a presentation.
• The benefit should deliver better than expected results. It should not create headaches for H.R.
• Ask clients what they like or don’t like about their existing benefits.
• Employees might love a particular benefit, but if the H.R. director is not behind it, you won’t be selling it.
• Some employers are actually boosting their benefit offerings to keep up with what unions are offering. This lessens the temptation for employees to join unions.

IN CALIFORNIA

Assembly Passes Bills to Expand Healthcare Services

California Healthline reports that the Assembly passed several bills designed to expand medical care and mental health services. Lawmakers approved a measure – AB 154, by Assembly member Jim Beall (D-San Jose) — that would require insurers to cover conditions, such as anxiety and depression. Opponents argue that the state’s health insurance exchange guidelines are still being finalized and that the bill could end up costing the state more over the long term.

The Assembly also passed the following bills:

• AB 137 would require insurers to cover mammograms for medical needs regardless of a patient’s age.
• AB 171 would require health plans to cover developmental disorders, such as autism.
• AB 369 would prevent health plans from requiring a patient to try lower-priced prescription medication before allowing access to a physician-prescribed drug.
• AB 1000 would require insurance companies to cover oral chemotherapy treatments at the same level as intravenous chemotherapy.

For more information, visit http://www.californiahealthline.org/articles/2012/1/27/legislature-takes-action-on-several-health-related-bills.aspx#ixzz1kttovJ6u

 Get an Inside Look at DMHC’s Medical Review Process Tomorrow             

The Department of Managed Healthcare (DHMC) will be holding a meeting in Sacramento (or by conference call) on “California’s Independent Medical Review Process: History, Impact, and Prospects for Change.” It will be held 11:00 AM to 12:35 PM at the California State Capitol, Room 42021315, 1400 Tenth Street in Downtown Sacramento. If you can’t make it in person, you can call 866-244-8528 and use passcode 639160#. To attend in person, RSVP to the Center for Health Improvement.

What Would Happen Without the Individual Mandate?

If the individual mandate were eliminated from the Affordable Care Act in 2019, there would be 54% fewer newly insured Californians in 2019. The number of newly insured would fall by more than 1 million, according to a report by the UCLA Center for Health Policy. The individual mandate, which is being reviewed by the Supreme Court, will require virtually all individuals to purchase or enroll in insurance coverage through Medicaid, Medicare, the Children’s Health Insurance Program, their employers, or the individual insurance market. If the requirement were eliminated, adverse selection in California and the rest of the nation could be greater than in Massachusetts. The reason is that Massachusetts provides more generous subsidies than those available under the ACA. For more information, visit http://www.healthpolicy.ucla.edu/NewsReleaseDetails.aspx?id=101

NEW PRODUCTS

Fixed Annuities

SecureOption Focus is Securian’s first annuity product designed for nationwide distribution. It positions the company for sales when interest rates rise. “It’s a fixed deferred annuity with features and a compensation structure we anticipate advisors will appreciate. For clients, it offers a choice of initial guarantee periods, a return of premium guarantee, and a bonus interest rate in the one year guarantee period,” said Kerry Geurkink, director of Individual Annuity Marketing. For more information, visit https://advisors.securianretirementcenter.com.

Medical Records App

Kaiser Permanente is now giving patients access to their records through a mobile-optimized website. The new app is available for Android devices and other mobile devices, including the iPhone. From their mobile devices, Kaiser Permanente patients will have 24/7 access to lab results, diagnostic information, and e-mail access to their doctors. They will also be able to order prescription refills.

Tool to Evaluate Consumer-Directed Health Plans

Ceridian Corp. is offering its free CDHC Continuum Quiz. The free quiz helps companies identify CDHC best practices and understand how these important plans can help companies curb rising healthcare costs. For more information, visit www.ceridian.com or call 800-729-7655.

LIFE SETTLEMENTS

More Boomers Are Considering Life Settlements

About 29% of Baby Boomers would consider a life settlement to fund their retirement, according to a survey commissioned by The Lifeline Program. Fifty-five percent are concerned that they will have to continue working past the age of 65 and 76% remain adamant that people older than 65 should have life insurance.

Seventy-nine percent say financial planners and life insurance professionals should be informing policyholders about life settlements as a financial option rather than having a policy lapse due to not paying premiums. “Many people didn’t know selling their life insurance policy was even an option, but Boomers are demanding more education from their financial advisors, even if a life settlement isn’t for them,” said Wm. Scott Page, president and CEO of The Lifeline Program. For more information, visit http://www.thelifeline.com/WhitePaper/

HEALTHCARE

Americans Are Paying More and Getting Less

U.S. healthcare spending nearly doubled from 1999 to 2009, climbing from $1.3 trillion to $2.5 trillion. The figures are striking, but what have they meant for individual Americans? RAND research published in the journal Health Affairs depicts how rising healthcare spending affects an average American family—in this case, a median-income married couple with two children, all covered by employer-sponsored health insurance.

In just 10 years, families nearly doubled their spending on healthcare. However, the complex ways in which Americans paid for healthcare obscured this increase. Families easily notice increases in employee health insurance premiums and higher copays and deductibles. But other increases are largely hidden from view, such as what employers pay toward insurance coverage (which would otherwise be paid out as wages) and the share of income and payroll taxes that pays for Medicare, Medicaid, and other government health programs.

At the same time, compared to other developed countries, Americans saw a smaller increase in life expectancy; more frequent use of costly healthcare technology including imaging tests of questionable medical value; and less effective treatment of curable ailments. The U.S. dropped from 14th to last among 16 developed countries in preventing death from treatable conditions

Total annual income, including employer-paid contributions to family health insurance premiums, grew from $76,200 in 1999 to $99,120 in 2009 – an increase of nearly $23,000. However, price and tax increases, together with the jump in healthcare spending, left families with just $1,140 in additional available income. During the 1990s, U.S. healthcare spending grew at the rate of GDP + 1%. If spending had continued growing at that rate instead of accelerating, families would have had an extra $2,880 in 2009. The RAND research brief is available at www.rand.org/t/RB9605.

Healthcare Spending Likely to Be Down for Years

The rate of increase in healthcare spending has slowed – a trend that is likely to continue even when the economy recovers, according to a report by Fitch Ratings. In 2011, U.S. healthcare spending rose only a fraction from the record low recorded in 2010. One factor is the relatively slow growth in healthcare premiums and another is the drop in reimbursement rates. Also, if no progress is made in reducing the deficit, cuts to Medicare reimbursement will take effect in 2013. In addition, most states have proposed or implemented plans to reduce Medicaid expenditures by reducing benefits and reimbursement rates, narrowing eligibility, and implementing cost sharing. Arizona has eliminated transplants for recipients temporarily, prohibits childless adults from entering the plans, and fines smokers and the obese on Medicaid. New Jersey is considering lowering the income threshold for participants. For more information, visit www.fitchratings.com

LIFE INSURANCE

Life Insurance Distribution Meeting

LIMRA is hosting its annual Distribution Conference on Feb. 22-24, 2012, in Ponte Vedra Beach, Fla. Presentations will focus on the value of pursuing a multi-channel strategy; how technology is driving change in the traditional channels; and how the regulatory environment affects distribution.  For more information, visit http://www.limra.com/Events/eventdetail.aspx?id=1118.

How the Industry Overlooks Customers

The members of only 39% of U.S. households say they have had an opportunity to buy life insurance in the past two years, according to a LIMRA survey. Companies could grow their life business by more aggressively pursuing this untapped market,” said Cheryl Retzloff, senior research director, LIMRA Markets research.

Only 26% of single people say they have had an opportunity to buy life insurance compared to 74% of married people. Singles who did say they have had an opportunity to buy life insurance are almost as likely to buy life insurance as married households (51% versus 58%). One third of single mothers who are the primary wage earners have no life insurance coverage. And even single mothers with life insurance coverage are underinsured: Two thirds felt that their families could not cover everyday living expenses for much more than a few months should they die.

The study found that twice as many households shopped for life insurance in 2011 as in 2003 (22% versus 11%). But fewer households that shopped bought in 2011 compared to 2003 (54% versus 70%). Having online opportunities to buy life insurance may be the main reason why more households report shopping for life insurance in 2011. Shoppers who shopped only online were considerably less likely to buy (36% bought) compared to those who met face to face with sales reps (74%) or even those who dealt directly with insurance companies or sales reps without meeting face to face (67%).

The key differentiator between those who buy life insurance and those who don’t is whether they have children under age 18 in the household. Almost half of buyers have children in the household, compared with 38% of non-buyers. Not only does having or adopting a child trigger households to shop for life insurance, but it also motivates them to buy: Seventy-three percent of households that shopped for life insurance because of births or adoptions actually bought policies.

Non-buyers comprise two segments — the 70% who are still deciding whether they will purchase and the 30% who have already decided not to buy. Only 14% of non-buyers actually decided they did not need life insurance and would definitely not buy.

LIMRA’s research indicates that it is extremely important to follow up with prospects who had investigated or inquired about life insurance, whether that inquiry was face to face, on the telephone, through the mail, or online. The most important reason that many people cited for not buying life insurance was that they were still shopping.

Retzloff said that insurers and producers need to remember that some life insurance shoppers may be slow to make a decision and may need someone to help them make the final decision to move, especially those under age 46 who have dependent children in the household.

Customer Satisfaction Ratings for Insurers

A new national study of satisfaction ratings conducted by Insure.com provides a comprehensive view of how consumers feel about the largest auto, home, health and life insurance companies in the U.S:

Life insurance companies
1. Ameriprise Financial 90.90
2. TIAA-CREF Life Insurance 88.58
3. Transamerica 81.28
4. Northwestern Mutual 81.23
5. New York Life 80.36
6. Pacific Life 79.99
7. Massachusetts Mutual 79.62
8. MetLife 79.39
9. Allstate 78.94
10. Prudential Financial 78.64
11. Principal 77.59
12. John Hancock 77.02
13. Hartford Life 73.75
14. AXA Equitble 73.58
15. Great-West Life 73.05
16. Jackson National 71.80
17. American General 70.86
18. ING Life Insurance 69.32
19. Lincoln National 68.12
20. Aviva Life Insurance 59.94

Health insurance companies
1. BCBS of Illinois 84.74
2. Horizon BCBS of NJ 84.52
3. Kaiser Permanente 84.45
4. Highmark BCBS 82.27
5. Regence BCBS 82.17
6. Humana 81.87
7. BCBS of Massachusetts 81.46
8. Independence BCBS 81.33
9. Care First BCBS 80.24
10. United Healthcare 79.23
11. BCBS of Florida 78.70
12. Anthem BCBS 78.29
13. Aetna 77.78
14. CIGNA 76.17
15. Coventry Health Care 73.19
16. Aetna Life (Dental, Etc.) 72.48
17. Health Net 71.91
18. Assurant 60.85
19. Blue Shield of California 59.20

Auto insurance companies
1. USAA 98.00
2. Auto-Owners Insurance 85.82
3. Hartford Financial Services 83.31
4. State Farm 80.50
5. 21st Century 79.28
6. Farmers 79.01
7. AAA 78.95
8. GMAC Insurance 78.56
9. Allstate 78.10
10. Travelers 77.57
11. GEICO 77.46
12. Erie Insurance 76.90
13. Liberty Mutual 76.14
14. Country Insurance 75.89
15. Nationwide 74.68
16. American Family 74.05
17. Progressive 73.69
18. Mercury General 72.05
19. MetLife 72.01
20. Esurance 71.19

Home insurance companies
1. USAA 98.11
2. Amica Mutual 97.67
3. Chubb 92.19
4. Erie Insurance 88.72
5. Country Insurance 85.75
6. AAA 84.66
7. Nationwide 83.53
8. State Farm 82.34
9. MetLife 81.68
10. 21st Century 80.79
11. The Hartford 80.44
12. Travelers 79.79
13. Liberty Mutual 79.03
14. Farmers 78.71
15. Allstate 78.55
16. Auto-Owners Insurance 78.48
17. American Family 77.10
18. Universal Property & Casualty 75.05
19. Fireman’s Fund 73.66
20. Citizens Property Insurance 64.15

IN CALIFORNIA
• Single-Payer Healthcare Bill Clears Senate Appropriations
NEW PRODUCTS
• Absence Management
• Web-Based Life App
• Long Term Care
• FSA and HRAs
MERGERS & ACQUISITIONS
• AIG’s Chartis and American General Merge Group Benefits
MEETINGS
• Retirement Income Summit
EMPLOYEE BENEFITS
• Financial Stress Takes its Toll
• U.S. Workers’ Confidence in Retirement Security Improves
• Wellness Programs Get Results
SALES UPDATE
• How Successful Sales Managers Spend Their Time
HEALTHCARE
• What Will Healthcare Look Like in 2025?
• Many Needs, Many Models
• Lost Decade, Lost Health
• Primary Care that Works for All
• I Am My Own Medical Home

IN CALIFORNIA

Single-Payer Healthcare Bill Clears Senate Appropriations

The Senate Appropriations Committee approved the California Universal Healthcare Act, authored by Senator Mark Leno (D-San Francisco). SB 810 would create the California Universal Healthcare Act administered by a proposed California Healthcare Agency. This massive power grab would take choice away from California healthcare consumers. No other healthcare service plan, contract, or health insurance policy could be sold in California for services that are provided by the single payer system. The new agency would dictate a single standard of care for all California residents through the decisions of a new health insurance commissioner. All California residents would be required to buy into the system through an unspecified premium tax set by SB 810′s proposed Premium Commission. The following quote is taken directly from the bill’s language, “This would reduce the California health plan and insurance industry to either third-party administrators for the system or entities that would provide coverage for benefits not covered by the system.” (http://leginfo.ca.gov/pub/11-12/bill/sen/sb_0801-0850/sb_810_cfa_20120119_105427_sen_comm.html.)

On Thursday, January 19, the Senate Appropriations Committee voted to send SB 810 to the Senate floor for a vote.  The vote must take place by January 31 or the bill will die. If the Senate approves SB 810, the legislation will move to the State Assembly for consideration. The bill is nearly identical to SB 840 (Kuehl), which the Governor vetoed in 2008 saying that, according to the Legislative Analyst’s Office, the bill is estimated to cost $210 billion in its first full year of implementation and cause annual shortfalls of $42 billion. Since this bill is nearly identical to SB 840, it would have a similar fiscal impact on the state. SB 810 it does not address the veto message. CAHU is urging members to contact their state representatives about this issue. To find the contact information on your state Senator, visit http://www.leginfo.ca.gov/yourleg.html

NEW PRODUCTS

Absence Management

Cigna’s created the Vocational Support Services program to help prevent future workplace absences and make it easier for employees to return from medical leave sooner. It is available at no additional cost to employers who use Cigna Leave Solutions. Once an employee voluntarily joins the program, a counselor coordinates with the employee and the employee’s manager to create a personalized plan, which can include workplace accommodations, such as providing ergonomic equipment. For more information, visit www.cigna.com.

 Web-Based Life App

American General is offering a web-based life insurance application. Producers can complete and submit applications electronically via a computer or tablet to ensure fast turnaround times. Producers can access and complete the online application through single-sign on to www.agquickticket.com.

Long Term Care

Prudential’s long-term care insurance business is now giving policyholders access to a single source for guidance to support independent living. The Univita Living program helps individuals and families find, coordinate, and manage their independent living needs. Program members have access to a variety of services including assessments to evaluate individuals on key dimensions of independence, a resource library, and direct access to more than 200,000 qualified care and service providers. In addition, the program provides a private social network, which allows family members and caregivers to coordinate and share observations and real-time updates about a loved one’s care. For more information, visit http://www.news.prudential.com.

FSA and HRAs

Flexible Benefit Service Corporation upgraded its FSA and HRA platform with the following:

• A web portal for employer and participant account access

• Weekly and daily reimbursement options

• Multiple funding options

• Online claims submission with automated e-mail status alerts

• Paperless communication options • Enhanced reporting capabilities

• Free debit cards with all Healthcare FSAs

For more information, visit www.flexiblebenefit.com or call 888-353-9178.

MERGERS & ACQUISITIONS

AIG’s Chartis and American General Merge Group Benefits

Chartis U.S. Accident and Health and American General plan to merge their group benefit organizations into the new AIG Benefit Solutions. The new organization will offer nearly two dozen insurance products and programs — many available on employer-funded and voluntary, employee-paid platforms, as well as resources for underwriting, enrollment and plan administration. The portfolio includes plans and programs for life (term and universal), AD&D, accident, hospital indemnity, dental, vision, limited healthcare, group and personal disability (including FMLA administration), critical illness and cancer insurance, and an employee assistance program. The move is intended to give brokers, employers, and group managers access to a wide range of products and resources with efficiencies that can help reduce costs. “The benefits market is changing rapidly, and we’ll be able to draw on vast resources, including underwriting and product experts, to meet the needs of the market,” said Curtis W. Olson, who is the new president and CEO of AIG Benefit Solutions. Olson added, “The AIG brand has made a positive re-emergence in the market and our distribution partners and customers will know they are dealing with an established company. Integration of the units into one organization will take place in three phases through 2012.”

MEETINGS

Retirement Income Summit

Investmentnews.com is sponsoring a retirement income summit in Chicago April 30 to May 1, 2012.  Topics include the Seven Most Important Equations of Retirement Income Planning – and How to Use Them. To register, visit http //e.ccialerts.com/a/tBPHwyWAVIbIpB8fm0mAp2Ce6N7/in2.

EMPLOYEE BENEFITS

Financial Stress Takes Its Toll

Money worries are affecting workers’ performance and retirement savings plans, according to a survey of HR professionals from Society for Human Resource Management (SHRM). Fifty-five percent say that, in the past 12 months, employees have been more likely to dip into their employer-sponsored retirement savings plans compared to previous years. Twenty-two percent said that employees’ financial challenges have a large affect on performance; 61% noted some affect; and 16% noted a slight affect.  The survey also reveals the following:

• 46% have noticed issues with employee stress.

• 24% said money woes are leading to employee absenteeism and tardiness.

• 12% have noticed a negative affect on employee health. Forty-nine percent 49% of HR professionals say employees are stressed about not having enough money to cover personal expenses; 35% say employees are stressed about medical expenses, and 26% say employers are stressed about saving for retirement.

Twenty-two percent of HR professionals attribute worker money woes to credit card debt and the same number attribute it to home mortgage payments. Roughly 12% of HR professionals say that educational expenses are causing noticeable stress in the workplace. Education expenses include the employee’s own tuition costs as well as that for dependent children or other family members. Fifty-two percent of employers represented in the survey provide financial education to their employees. A closer look shows that 79% offer access to an employee assistance program that includes financial counseling and resources; 68% provide financial education to employer-provided benefits such are retirement, medical insurance, and flexible spending accounts; and 47%, offer financial education limited to retirement-related planning. Among the 52% of organizations that teach employees about financial planning, 39% cover budgeting, paying for education, debt reduction, credit card use, homeownership, and taxes. For more information, visit http //www.shrm.org/surveys.

U.S. Workers’ Confidence in Retirement Security Improves

Workers’ confidence in their ability to retire comfortably continued to rebound from post-recession lows last year. Workers report growing satisfaction with their financial situation. Also, fewer employees report significant declines in retirement savings. Many employees are taking steps to get their financial houses in order, according to a survey by Towers Watson. The percentage of workers who are very or somewhat confident about having enough resources to live comfortably 15 years into retirement increased from 62% in 2010 to 68% last year. Workers are not as confident about living comfortably throughout retirement. Forty-seven percent say they are very or somewhat confident they will have enough resources to last 25 years into retirement. This compares to 40% who said there were very or somewhat confident in 2010. Fewer employees are seeing significant declines in their pension and retirement savings – 47% in 2011 versus 55% in 2010 and 60% in 2009. Additionally, employee satisfaction with their household finances has continued to improve, jumping from 33% in 2010 to 41% in 2011.

Despite this upturn, 59% of workers are generally unsatisfied with their financial situation. Kevin Wagner, a senior retirement consultant at Towers Watson said, “Many employees are more financially conservative today and have a renewed interest in improving their financial decisions and planning and saving for retirement.” The survey noted that, after two years of cutting back on daily spending, paying off debt and saving more for retirement, some respondents plan to take additional measures, such as doing further cost cutting and focusing more on retirement security. The percentage of workers with defined benefit pension plans who are satisfied with their household finances jumped sharply in the past two years, from 29% to 49%. Defined benefit participants are more than twice as likely to be very confident about the first 15 years of retirement and 2.5 times as likely to be confident about a 25-year retirement compared to workers who only have a 401(k) plan. A larger percentage of workers under 40 were satisfied with their household finances last year (47%) compared to 2009 (28%). However, 66% of young workers say they will need to save much more in the future to achieve a comfortable level of retirement income. The percentage of young workers who review their retirement plans carefully increased by more than 40% from 2010 to 2011. For more information, visit http://www.towerswatson.com/united-states/newsletters/insider/6214.

Wellness Programs Get Results 

Forty-one percent of workers agree that having a wellness program encourages them to work harder and perform better at work, according to the latest Principal Financial Well-Being Index. The index surveys American workers at growing businesses with 10 to 1,000 workers and is conducted by Harris Interactive. Fifty-two percent of workers (up from 37% last year) say they have more energy to be more productive at work because they participated in a wellness program. Another 35% (up from 28% a year ago) and say they missed fewer days of work. Forty-five percent of workers chose better overall physical health as the top benefit to participating in a wellness program. Other top mentions included receiving a meaningful incentive from their employer for participation (30%) and reduced personal healthcare costs, greater chance of living a longer, healthier life and reduced stress (29% each). Fifty-five percent of workers rated wellness activities offered by an employer as very successful or somewhat successful in improving health and reducing health risks. The top four wellness benefits workers would most like to see their employer offer are fitness center discounts (25%), on-site preventive screenings (22%), access to wellness experts such as nutritionists (21%), and onsite fitness facilities (19%). However, the top four wellness benefits offered by employers are online wellness information (19%), educational tools or resources (18%), fitness center discounts (17%), and printed wellness information (17%). Interestingly, access to wellness experts was only available to 11% of those surveyed. For more information, visit www.principal.com.

SALES UPDATE

How Successful Sales Managers Spend Their Time

High-performing sales managers spend 100 extra hours per year on selling activities compared to low-performing sales managers. They spend 39 fewer hours on management activities and 61 fewer hours on non-selling related activities. High-performing sales managers also spend more of their selling time on closing sales and servicing accounts compared to other sales managers, according to a survey by Towers Watson.

Successful sales managers spend an extra 104 hours a year with current customers, either selling new applications or solutions or personally managing renewals or with new, non-qualified business leads. High-performing sales managers are almost three times as likely to spread their attention evenly across members of their sales team rather than devoting most of their time to a select few team members. This does not mean that sales managers spend their time with each team member similarly. Instead, these managers spend time with lower-performing sales reps to provide extra coaching and guidance while spending more time with better-performing members on co-selling or performance reinforcement, said Craig Ulrich of Towers Watson. Fifty-one percent of sales professionals who interact with their manager several times a day say that their manager is effective compared to only 24% who interact with their manager once a day. More than three in four sales professionals who believe their immediate manager acts with honesty and fairness and provides clear work goals for the team also say that their manager is effective. For more information, visit http://www.towerswatson.com/research/5832

HEALTHCARE

What Will Healthcare Look Like in 2025?

By 2025, patient-doctor relationships and healthcare delivery will look radically different, according to a forecast by the Institute for Alternative Futures. Working with more than 50 national healthcare leaders, the Institute created four scenarios to show what primary care might look like in 2025. The scenarios take into consideration the nation’s economic challenges, political polarization, and opportunities afforded by technological advances and new delivery systems. Clem Bezold, Institute for Alternative Futures chair and senior futurist said, “In all four scenarios, we forecast that electronic records will become ubiquitous. Community health centers will give high-quality care to low-income people, and a small persistent group of affluent will receive great fee-for-service concierge healthcare. You will see more virtual care, personal health avatars and doctors operating remotely.”

Many Needs, Many Models

This scenario is a natural extension of healthcare as many Americans know it. The scenario forecasts a shortage of primary care physicians, increased emphasis on disease prevention, growth in electronic medical recordkeeping, a shift from employee-based insurance to health insurance exchanges, and growing disparities in access to and quality of primary care based on income and where people live.

Lost Decade, Lost Health

This scenario forecasts a shortage of primary care physicians, declining income for practicing physicians, and more uninsured patients, some of whom resort to black market care and unreliable online advice. Patients with good insurance have access to great care enhanced by advanced technology.

Primary Care that Works for All

This scenario assumes nearly universal healthcare coverage, with 85% of patients using integrated systems staffed by collaborative teams of healthcare providers, including physician assistants, nurse practitioners and health coaches who work closely with patients. Seeking to provide better care at lower cost while improving the health of the population they serve, primary care teams join with community partners to address factors that affect a community’s health, including employment, educational attainment, housing, transportation, and access to fruits and vegetables.

I Am My Own Medical Home

Under this scenario, four of 10 patients choose consumer directed health plans, which include catastrophic insurance with high deductibles. For the most part, savvy consumers use advanced technologies to stay healthy including non-invasive biomonitors and wellness and disease management apps. Large vendors offer free avatar-based health coaching to consumers who purchase other integrated health products and services. Consumers shop for the best doctor and buy on the basis of high quality and low price. In addition to the full report, the project’s website includes instructions for using the scenarios in workshops: www.altfutures.org/primarycare2025.

Healthcare Costs Moderate in November 

The average per capita cost for healthcare services covered by commercial insurance and Medicare programs  increased by 5.13% from November 2010 to 2011. This is a decline from the 5.29% annual growth rate from October 2o to October 2011, according to the S&P Healthcare Economic Composite Index. Healthcare costs covered by commercial insurance plans increased by 6.96% over the year ending in November 2011, down from the 7.10% for October. Growth rates in Medicare claim costs rose by 2.37%, down from the 2.55% for October. The Hospital and Professional Services Indices annual growth rates also declined from their October 2011 rates. However, November’s moderation in healthcare costs was more attributable to professional service practices than to hospitals. Most of the change was driven by further declines in growth rates in costs covered by Medicare plans. For more information, visit standardandpoors.com.

HHS Issues Interim Final Rule on Contraception Coverage

HHS’ Interim final rule on preventive health services ensures that women with health insurance coverage will have access to all FDA-approved forms of contraception. Women will not have to forego these services because of expensive co-pays or deductibles or because an insurance plan doesn’t include contraceptive services. This rule is consistent with the laws in a majority of states, which already require contraception coverage in health plans.

Beginning August 1, 2012, most new and renewed health plans will be required to cover these services without cost sharing for women across the country. After evaluating comments, HHS has decided to add an additional element to the final rule. Nonprofit employers who, based on religious beliefs, do not provide contraceptive coverage in their insurance plan, will have until August 1, 2013 to comply with the new law. Employers must certify that they qualify for the delayed implementation. HHS secretary Kathleen Sebelius said, “We intend to require employers that do not offer coverage of contraceptive services to provide notice to employees, which will also state that contraceptive services are available at sites such as community health centers, public clinics, and hospitals with income-based support. We will continue to work closely with religious groups during this transitional period to discuss their concerns.” She noted that the final rule will not affect protections that healthcare providers have under existing conscience laws and regulations.

MEDICARE
• Medicare Advantage Plans Improve Diabetic Care
• Raising the Ages of Eligibility for Medicare and Social Security
NEW PRODUCTS
• Dental Plans for Individuals
MEETINGS & EVENTS
• NAHU Conference in D.C.
• Webinar on Life Insurance and Generational Dynamics
IN CALIFORNIA
• Aetna, Sutter Health Reach Agreement On Two-year Contract Renewal
• DMHC Orders Anthem Blue Cross to Pay Providers
PRESCRIPTION DRUGS
• CVS Settles FTC Deceptive Pricing Charges
HEALTHCARE
• Health Spending Escalates
• Website Offers Dental and Medical Fee Data
• Another ObamaCare Provision Falls
FINANCIAL PLANNING
• The Majority of Male Small Business Owners Prefer Male Financial Advisors
• Escalating Healthcare Costs Threaten Retirement
VOLUNTARY BENEFITS
• State Regulatory System Complicates Voluntary Sales
CAREER UPDATE
• Guardian to Hire 800 Financial Reps

MEDICARE

Medicare Advantage Plans Improve Diabetic Care

Medicare Advantage Chronic Special Needs Plans are effective in managing care for some of Medicare’s most vulnerable beneficiaries with diabetes, according to a study published in the January issue of Health Affairs.

The study compared 36,000 Care Improvement Plus members with diabetes to a similar population enrolled in traditional Medicare. Members of special needs plans members had more primary care. They had reduced rates of hospitalization and hospital readmissions. The study indicates that offering additional services to people with chronic diseases could result in lower Medicare spending and may improve the quality of life for beneficiaries with diabetes.

The plans were able to reduce hospital readmission rates, by as much as 40%, by offering services such as in-home preventive health visits. these include services such as foot exams, social needs assessments, and medication reviews. The plans were able to reduce hospitalizations and readmissions for non-Caucasian members at rates greater than their Caucasian counterparts, suggesting that the plan’s model is effective in addressing ethnic and racial disparities in healthcare. For more information, visit http://www.careimprovementplus.com/cipnews.aspx.

Raising the Ages of Eligibility for Medicare and Social Security

The Congressional Budget Office (CBO) reports that raising the ages at which people can collect Medicare and Social Security would reduce federal spending and increase federal revenues by inducing some people to work longer. However, it would also reduce people’s lifetime Social Security benefits and cause many of those who would otherwise have enrolled in Medicare to face higher premiums for health insurance, and higher out-of-pockets. If Medicare eligibility were raised from 65 to 67, Medicare spending would decline by about 5%. For more information, visit http://www.cbo.gov/doc.cfm?index=12531

NEW PRODUCTS

Dental Plans for Individuals

United Concordia Dental now offers five new dental PPO plan designs to individuals through its iDental product line. The iDental plans were created to provide dental coverage — not just discounts — to individuals and families. There are no waiting periods for preventive or diagnostic services and the plans use United Concordia’s extensive Advantage Plus dental network. Most of the iDental plans cover 100% of the cost of routine care such as cleanings, exams, and X-rays. They also pay toward the cost of other covered procedures including fillings and crowns and they take full advantage of United Concordia’s negotiated fees with network dentists, helping lower the consumer’s  dental bill. Quotes are available through www.UnitedConcordia.com.

MEETINGS & EVENTS

NAHU Conference in D.C.

NAHU is sponsoring a conference on health reform January 24 to 25. For more information, visit http://www.nahu.org/meetings/capitol/2012/index.cfm.

Webinar on Life Insurance and Generational Dynamics

A.M. Best is sponsoring a Webinar on how producers can help clients identify ways to make the best use of their resources while building enduring family connections. The live webinar is scheduled for Tuesday, February14, at 2 p.m. ET. Register at www.bestreview.com/webinars/life12. Attendees can submit questions in advance during registration or email questions to news@ambest.com during the live event. Coverage of the webinar will be featured in an upcoming issue of Best’s Review. For more information about the webinar, please call (908) 439-2200, ext. 5561, or email lee.mcdonald@ambest.com.

IN CALIFORNIA

Aetna, Sutter Health Reach Agreement On Two-year Contract Renewal

Aetna and Sutter Health have reached an agreement on a two-year contract renewal maintaining network access for Aetna members in Northern California. With this agreement, members of Aetna commercial plans can get covered benefits, at in-network rates, from Sutter Health hospitals and ancillary facilities. The contract also keeps the physicians and healthcare providers at the Sutter facilities as participating network providers, the company said.

DMHC Orders Anthem Blue Cross to Pay Providers

The California Department of Managed Healthcare (DMHC) ordered Anthem Blue Cross to pay healthcare providers money owed to them, with interest, for services provided dating back to 2007. The action is a result of Anthem’s refusal to remediate providers following a financial claims audit that identified errors in payment of medical claims. In 2008, the DMHC launched provider claims audits of the seven largest health plans in California due to  complaints from providers about late and inaccurate payments and inappropriate claim denials. These audits found claims payment violations above the threshold allowed under California law at all seven health plans.

PRESCRIPTION DRUGS

CVS Settles FTC Deceptive Pricing Charges

CVS Caremark Corporation will pay $5 million to settle Federal Trade Commission charges that it misrepresented the prices of certain Medicare Part D prescription drugs including drugs used to treat breast cancer symptoms and epilepsy — at CVS and Walgreens pharmacies. Due to the allegedly deceptive claims, many seniors and disabled consumers paid significantly more than expected for their drugs. This pushed them into the donut hole sooner than they anticipated (the coverage gap where none of their drug costs are reimbursed).

The settlement will bar deceptive claims related to Medicare Part D drug prices and require CVS Caremark to pay $5 million to reimburse affected Medicare Part D consumers for the price discrepancy. According to the FTC complaint, CVS Caremark offers Medicare Part D prescription drug plans through subsidiaries like RxAmerica, which CVS Caremark acquired in October 2008. Many consumers choose their Medicare Part D drug plans by looking up plan benefits and drug prices on RxAmerica’s website, by using the Plan Finder on the Centers for Medicare & Medicaid Services website, or by visiting other third-party websites where such information is posted.

The FTC charged that, from 2007 through at least November 2008, RxAmerica posted on its website and supplied for posting to Plan Finder and third-party websites incorrect prices for Medicare Part D prescription drugs at two pharmacy chains, CVS and Walgreens. In some instances, the actual prices for these drugs were 10 times more than the posted prices. Because of the deceptive price claims, many elderly and disabled consumers chose RxAmerica plans and paid significantly more than expected for their drugs at CVS and Walgreens, the FTC alleged.

The proposed settlement order bars CVS Caremark from misrepresenting the price or cost of Medicare Part D prescription drugs or other prices or costs associated with Medicare Part D prescription drug plans. It requires that CVS Caremark pay $5 million in consumer refunds. The FTC will be mailing checks to eligible consumers who were harmed by these misrepresentations after the order becomes final. The settlement also contains standard record-keeping provisions to allow the FTC to monitor compliance with its order.

HEALTHCARE 

Health Spending Escalates

U.S. healthcare spending accelerated 3.9% in 2010 compared to growth of 3.8% in 2009, according to HHS. Total health expenditures reached $2.6 trillion, which translates to $8,402 per person or 17.9% of the nation’s Gross Domestic Product, the same share as in 2009. The National Health Expenditure Accounts (NHEA) are official estimates of total healthcare spending in the United States. Dating back to 1960, the NHEA measures annual U.S. expenditures for healthcare goods and services, public health activities, government administration, the net cost of health insurance, and investment related to healthcare. The data are presented by type of service, sources of funding, and by type of sponsor. For more information, visit www.cms.gov/NationalHealthExpendData.

Website Offers Dental and Medical Fee Data

FAIR Health is offering consumers access to data on the expected cost of medical and dental treatments based on level of insurance and geographic area. FAIR Health is an independent, non-profit organization dedicated to bringing transparency to healthcare costs and out-of-network reimbursement information.  FAIR Health offers free, web-based tools to help people find out the typical fees in their areas for the entire spectrum of medical and dental services.  Consumers are using the site before visiting a doctor’s office or undergoing medical or dental treatment; while at a doctor’s office as part of a negotiation over the price of a procedure; and during the appeals process with their insurance companies. For more information, visit www.fairhealthconsumer.org

Another ObamaCare Provision Falls

by Greg Scandlen 

Reprinted with permission from the National Center for Health Policy Analysis Blog

Part of the [health reform] law called for the creation of Consumer Operated and Oriented Plans (CO-OP) and  appropriated $6 billion to set up these plans in all 50 states. It created an entirely new section of the Internal Revenue Code (Sect 501-C-29) to allow this new type of member-operated organization to be tax-exempt. They were intended to be sort of like the public option the Democrats wanted to compete with private insurance plans.

It was a pretty dumb idea in the first place, made even worse by the way the legislation was written. The Urban Institute published an interim assessment of the program back in August that ticked off all the problems it is having. One example is this: The law also prohibits using the loan funding for marketing or propaganda. So the law’s authors equate marketing with propaganda. And they expect these plans to succeed without doing any marketing.

The law also prohibits any insurance industry involvement and interference and it also prohibits HHS from being involved in provider negotiations or pricing of services. And the plans are prohibited from being sponsored by any state or local government or from having any representative of government on their boards. So where is any expertise going to come from? The law’s authors seem to think starting an insurance company from scratch is as easy as organizing an Occupy Wall Street demonstration.

The law requires that substantially all of a plan’s activities be in the individual and small group markets, so that precludes farm bureaus, labor organizations, or other existing organization who might be sympathetic to the goals of the plan. HHS has issued a funding opportunity announcement (FOA) that specifies that applications for funding must include, according to the Urban Institute paper: A feasibility study, a detailed business plan, a detailed budget with narrative and a timeline for meeting various milestones, including the necessary state regulatory approvals.

It goes on to explain that a feasibility study must be supported by an actuarial analysis and is concerned with the likelihood of success. It must describe the target market, products to be offered, regulatory schemes, market impact, financial solvency, economic viability, State solvency requirements and other regulations and other key factors. It should also include pro forma financial statements with sensitivity testing for alternative enrollment scenarios. The business plan should describe the management team, target market, competing plans, targeted potential subscribers, the process used for pricing products, contracting strategy, proposed methods for provider payment, and plans for use of integrated care models. Budgetary matters, strategies for getting enrollment and plans for becoming operational (financial management system, information technology, staffing plans) must also be included. All of this, just to apply for funding. Wow!

Congress reduced the program’s funding from $6 billion to $3.8 billion in the April, 2011 budget agreement. So we will be saving $2.2 billion, and only wasting $3.8 billion on a program that can never work. But that $3.8 billion will end up in somebody’s pocket, so I suppose it qualifies as stimulus. http://healthblog.ncpa.org/

FINANCIAL PLANNING

The Majority of Male Small Business Owners Prefer Male Financial Advisors

Seventy-five percent of male small business owners prefer male financial advisors. Also, about 61% of female small business owners prefer female financial advisors, according to a study by the American College. The survey also reveals the following:

• Women are more concerned about retirement planning than men (84% of women vs. 76% of men) and have taken more action to address this issue.

• More women have consulted with a financial advisor about maximizing business owner benefits (44% of women vs. 33% of men).

• More women have consulted with an advisor about starting a retirement plan (41% of women vs. 29% of men).

• More women list not having enough money in retirement as one of their top three concerns.

• Fewer women than men state that they take an active role in understanding needs in retirement planning (75% of women vs. 85% of men). However, many have not estimated how much capital they will need to be able to retire (34% women vs. 26% men).

• Only a few women have a formal, written financial plan for managing income and expenses in retirement (24% of women vs. 34% of men) or have a formal, written plan for transitioning their business at retirement (11% of women vs. 28% of men).

• Most small business owners have not consulted with an advisor about retirement planning (44% of women vs. 33% of men), but those who have report being satisfied with their advisor relationship (76% of women vs. 85% of men).

For more information, visit www.TheAmericanCollege.edu.

Escalating Healthcare Costs Threaten Retirement

A healthy 65-year-old male can expect a total cost of healthcare expenses, including premiums, for the rest of his lifetime to top $350,000 and a 65-year-old woman can expect at least $417,000 in healthcare expenses – a 13% increase compared to her male counterpart. The report by the Insured Retirement Institute (IRI) also reveals that the average person on Medicare will have out-of-pocket medical expenses totaling more than $4,300 per year.  However, a 55-year-old man can reduce the total investment needed to fund future health expenses by more than 70% by adding an annuity.

Sixty-three percent of Baby Boomers are not confident that they will have enough money for medical expenses during retirement. This concern is especially strong among younger Boomers ages 50 to 54 with 72% lacking confidence. The report also found the following:

• The 2012 Social Security cost-of-living adjustment (COLA) of 3.6% represents an average increase of $42 per month or about $500 for the year.

• Per capita healthcare expenses increased 5.75% in the 12-month period ending September 2011.

• For 2012, Medicare Part B premiums will account for 8.2% of the average Social Security benefit, up from 5.1% in 2000.

• While the average Social Security check is 31% higher than it was in 2001, premiums for Medicare Part B have doubled.

• Although there is no decline in the COLA net of Part B premiums (net COLA) for 2012, Part B premiums have negatively affected the COLA for 12 of the past 20 years.

To get the full report, visit https://www.myirionline.org/eweb/uploads/research/HealthExpenses-FINAL.pdf.

VOLUNTARY BENEFITS

State Regulatory System Complicates Voluntary Sales

Carriers often ask how others in the voluntary market handle multi-state accounts. This was the subject of the most recent Eastbridge Frontline Report, “Situs State Regulation Practices of Voluntary Carriers.” The survey found that a third of carriers feel that their company’s current multi-states practices hurt sales.

Most companies try to use “the employer in situs” state to govern the issuance of coverage. (The in situs state is the primary state in which the employer is headquartered or has the primary concentration of employees.) Managing multi-state accounts is a big challenge because of differences in products, platforms, and how extra-territorial regulations in various states affect the management of multi-state accounts or accounts that border more than one state.  Fifty-two percent said that situs state practices are a common topic of conversation in their organization. For more information, visit www.eastbridge.com.

CAREER UPDATE

Guardian to Hire 800 Financial Reps

Throughout 2012, the Guardian Life plans to hire 800 financial representatives by targeting and recruiting career-changers. Meg Skinner, chief distribution officer at Guardian Life said, “Unlike employers with a more traditional view of the job market, we welcome career changers and experienced professionals who may have recently experienced a downsizing or who are working in unfulfilling jobs where their skills are undervalued. Their skills are highly valued here at Guardian, and we’ve empowered them to make better career choices.” She says that more sales reps are needed to meet the rising demand for secure financial products, such as whole life insurance. For more information, visit www.GuardianLife.com or http://www.linkedin.com/company/164085.

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IN CALIFORNIA
• California Employees Are Paying More and Getting Less
• Health Net to Sell Medicare Drug Plan to CVS
• High Desert Families to Get Help Navigating the System
• Ballot Would Limit Rate Hikes
AGENT NEWS
• Agent Loses Case Against Mutual Of Omaha 
NEW PRODUCTS
• Universal Life 
LIFE INSURANCE & ANNUITIES
• Life Insurance Executives Foresee Opportunities in 2012
• NAFA Fixed Annuity Webcasts
• Life Insurance May Be An Untapped Financial Resource 
HEALTHCARE
• Direct Pay Platform Bypasses Traditional Insurance
• Supreme Urged to Declare Obamacare Unconstitutional
• Employer Plans Offer Comprehensive Benefits
• Self-Employed Health Insurance Tax Deduction Was Eliminated
LONG TERM CARE
• Knowledge About LTC Planning Is Not Driving Sales

IN CALIFORNIA

California Employees Are Paying More and Getting Less

California workers are bearing more of their health premium costs while seeing their benefits squeezed, according to a survey from the California HealthCare Foundation (CHCF). In 2011, workers at a quarter of California businesses saw their health insurance benefits diminish while their share of copayments, deductibles, and premiums increased.

And more than a third of employers are considering shifting more premium costs to workers next year. Since 2002, family premiums rose 153% – more than five times the 29% increase in California’s inflation rate.

The proportion of California employers offering coverage declined from 73% to 63% in the past two years. Annual premiums were higher for individual coverage in California than nationally ($5,970 versus $5,429) and family coverage ($15,724 versus $15,073).

At the same time, the employer contribution in California is significantly higher than the national average. California employers contributed $5,213 annually for single coverage and $11,921 for family coverage.

Workers at small firms were much more likely to cover at least half of the premium for family coverage compared to workers at large firms. The number of workers at small firms who have a deductible of $1,000 or more increased to 27% from just 7% in 2006. To get the full report with breakdowns by plan type, visit http://www.chcf.org/publications/2011/12/employer-health-benefits.

Health Net to Sell Medicare Drug Plan to CVS

Health Net announced that its subsidiary, Health Net Life Insurance Company, has entered into an agreement to sell its Medicare stand-alone Prescription Drug Plan (Medicare PDP) business to a subsidiary of CVS Caremark for about $160 million in cash.

Health Net expects to get about $140 million in net cash proceeds from the sale. The transaction is expected to close in the second quarter of 2012, subject to closing conditions and regulatory approvals. Health Net has about 400,000 Medicare PDP members in 49 states and the District of Columbia. Health Net’s annualized revenue for the Medicare PDP business is about $490 million.

The company will continue to provide prescription drug plans as part of its Medicare Advantage plan offerings. Jay Gellert, president and chief executive officer of Health Net said, “Our Medicare PDP members, who have received certain services from CVS Caremark for five years, will now be affiliated with one of the nation’s largest Medicare PDP sponsors.” For more information on Health Net, visit www.healthnet.com.

United Healthcare and LISI Team UP

LISI will make available UnitedHealthcare benefit plans including HMOs, PPOs and consumer-directed plans to businesses with fewer than 100 employees. LISI is a general agency based in San Mateo. The company also has offices in Sacramento, Fresno, Los Angeles, Orange, and San Diego. For more information www.LISIbroker.com or call 866-570-LISI (5474).

High Desert Families to Get Help Navigating the System

This month, the Inland Empire Health Plan (IEHP) is expanding its Health Navigator program to the Inland Empire High Desert. It is the first health plan in the nation to have a full-time in-house team that’s dedicated to helping members navigate the healthcare system. The High Desert expansion follows the program’s successful first year launch. Health Navigators connects with 1,765 health plan members in San Bernardino, Riverside, and surrounding areas. To date, the program has decreased avoidable emergency department visits by about 40%. “The program serves as a link among members, providers and the health plan, which leads to better coordination and care,” said IEHP CEO Dr. Bradley Gilbert.

The program, funded by grants from IEHP and First 5 San Bernardino, helps IEHP members get preventive care while reducing avoidable emergency room visits and hospitalizations. The Health Navigator makes a home visit and helps the member and family understand how to get the medical care they need. Services include the following:

• Explaining the differences between urgent care and emergency-room care.
• Helping them understand how to use the 24-hour nurse advice line.
• Scheduling primary care visits, preventive visits, and immunizations.
• Connecting members with dental providers.
• Helping them write down questions the member can take to their next doctor visit.
• Providing referrals to other community agencies.

The expansion will roll out in regional phases, starting with Victorville and continuing with Hesperia and then other High Desert communities. IEHP, Inland Empire Health Plan is a Knox-Keene licensed health plan located in San Bernardino, California. The IEHP service area includes San Bernardino and Riverside counties and serves more than 530,000 members in the following programs: Medi-Cal, Healthy Families, Healthy Kids, and a Medicare Advantage Special Needs Plan. www.iehp.org.

Ballot Would Limit Rate Hikes

In November, Consumer Watchdog filed a ballot initiative that would require health insurance companies tojustify rates. It would also give the state insurance commissioner the power to reject “excessive or unreasonable” rates.
The proposed Insurance Rate Public Justification and Accountability Act would also orohibit health insurance, auto insurance and home insurance companies from charging premiums based on prior insurance history or credit score.The initiative also requires insurance companies to justify rates in relation to proposed changes to patient out-of-pocket expenses, including deductibles and co-pays. For more information, visit http://www.ConsumerWatchdog.org

AGENT NEWS

Agent Loses Case Against Mutual Of Omaha

The California Court of Appeals has ruled that insurance agents (and other sales people) are independent contractors if they are able determine when, how, and whether to sell a company’s products. As such, they are not protected under the certain labor laws that apply to employees. The case, Arnold v. Mutual of Omaha Insurance Company, is the first California decision to detail the circumstances under which salespeople or insurance agents may be classified as independent contractors.

Plaintiff Kimbly Arnold, a former insurance agent for Mutual of Omaha, brought a putative class action seeking the reimbursement of necessary business expenses and penalties for the untimely payment of final wages upon termination of her relationship with Mutual of Omaha. Arnold also asserted a cause of action for unfair competition. Mutual argued that Arnold cannot recover for the alleged Labor Code violations because those provisions only applied to employees.

As the court explained, Arnold used her own judgment in determining whom she would solicit for applications for Mutual’s products, the time, place, and manner in which she would solicit, and the amount of time she spent soliciting for Mutual’s products. While Mutual offered several resources to its agents, (training, office space, and prospecting of accounts) agents were not required to take advantage of them. The court also was persuaded by the fact that Arnold contracted with multiple insurance companies to offer competing products to her clients.

The court found that several factors weighed in favor of finding that Arnold was an independent contractor and not an employee:
• She was engaged in a distinct profession and was responsible for maintaining her own license with the California Department of Insurance.
• She was responsible for providing most of her own tools needed to sell insurance.
• She was paid a commission based on her results and not the amount of time she spent working on Mutual’s behalf.

The court also noted that an at-will provision in an independent contractor agreement is not, by itself, a basis for changing that relationship to one of an employee, particularly when parties believed that they were creating an independent contractor relationship. Attorneys Francis J. Tripper Ortman III, Eden Anderson and Robb D. McFadden of the San Francisco office of Seyfarth Shaw LLP represented Mutual of Omaha.

NEW PRODUCTS

Universal Life

Symetra Life Insurance Company rolled out enhancements to its cash value universal life (UL) insurance product — Symetra Classic UL — including expanded death benefit options and a charitable giving benefit. Symetra Classic UL’s  newest death-benefit option pays a benefit plus a return of the premiums paid. It is designed for those who individuals who want to  maximize the amount of money passed on to their beneficiaries or for businesses that want to cover key employees. Symetra is also offering a new charitable giving benefit. Symetra also has expanded the age range for the product’s accelerated death benefit rider for limited activities of daily living and cognitive impairment. The rider now is available to insured people from 20 to 85 years old. For more information, call 800-706-0700 or visit
http://www.symetra.com/IndividualsFamilies/Products/LifeInsurance/Permanent/Pages/Classic-Universal-Life-Insurance.aspx

LIFE INSURANCE & ANNUITIES

Life Insurance Executives Foresee Opportunities in 2012

Despite several challenges facing the life insurance industry, executives anticipate opportunities in 2012. LOMA interviewed a panel of top executives about their predictions on sales, distribution, use of technology and social media, and regulation over the next 12 months.  Executives agreed that profitable growth is a top priority. However, some executives say that insurers will need to revisit their brand and growth strategies, challenge prevailing industry norms, and use consumer-marketing expertise from outside of the industry.

the industry will continue to face shrinking distribution as fewer financial advisors offer insurance while traditional life insurance producers are getting older and retiring. Insurers will need to find innovative ways to attract college grads and young workers into the industry.

However, executives say that companies have opportunities to grow their life insurance and annuity product lines because of  consumer demand for safety and guarantees and as well as a growing need for reliable retirement income solutions , especially in markets where these products are not sold today.

The panel said technologies like mobile applications, cloud computing, and advanced/predictive analytics have the greatest potential to help the life/annuity industry grow. Mobile computing is quickly becoming a priority because advisors and customers expect to be able to connect with companies and have immediate access to information. Social media and the Internet will continue to be vital to companies to reach prospective clients and advisor candidates as well as for service. The Forecast for 2012 is featured in the January issue of LOMA’s Resource magazine. The entire forecast may be read on the Resource section of the LOMA website, www.loma.org.

NAFA Fixed Annuity Webcasts

The National Assn. for Fixed Annuities (NAFA) is holding a Webcast titled, Annuity Advertising & Marketing.” It will be held, Thursday, January 19 at 10:30 a.m. Central time. Click here to Register.https://www1.gotomeeting.com/register/69960121

Life Insurance May Be An Untapped Financial Resource

In tough economic times, people look everywhere for emergency cash in an IRA or 401(k), credit cards, even under their mattress. But many consumers overlook life insurance as a source of immediate funds and few are aware of the investment features some policies offer, according to a recent survey by the National Association of Insurance Commissioners (NAIC).NAIC Vice President and North Dakota Insurance Commissioner Adam Hamm said, “More than two-thirds of consumers don’t know that some types of life insurance include a cash value and nearly half don’t think of life insurance as an investment option.”

The NAIC survey found that 63% of consumers have life insurance. Those who own permanent life insurance may be able to take out a loan against the value of the policy if they have been paying premiums for a pre-determined length of time. There are no requirements for using these funds. Also, the interest rate on this loan may be cheaper than borrowing against a 401K or maxing out a credit card. There also may be tax benefits, since the cash from this type of loan typically is not considered income by the IRS.

Another option for quick funds is be to cash in a permanent life policy to retrieve to the entire accumulated value. But doing so should only follow careful consideration because life insurance premiums increase with age. This option is most viable for individuals who already have sufficient term life insurance or who no longer have financial dependents.

(What the NAIC does not mention in the press announcement is that some consumers may be able to get a life settlement for their policy, which could net them far more that what they could get by cashing in their policy.)

For Americans who are worried about the recent stock market volatility, permanent life insurance may present a lower-stress way to put aside money for the future. The dollars that go into the investment channels of these policies (beyond the costs of the insurance) accumulate interest each year. And insurers typically guarantee a minimum return of at least 3% to 4% a year.

Almost half of respondents to the NAIC survey said low risk and tax-advantaged growth were priorities when investing in today’s volatile market and are features of some permanent life insurance policies. Additionally, 65% of survey respondents did not know that some types of life insurance include a dollar amount that is guaranteed to increase in value and may provide tax benefits. With the value of retirement accounts down, permanent life insurance policies that build cash value may add stability to a financial portfolio and allow consumers to accumulate funds over the long-term. These policies also can offer tax advantages to small business owners or individuals who have maxed out their qualified retirement plan contributions. For more information, visit www.naic.org.

HEALTHCARE

Direct Pay Platform Bypasses Traditional Insurance

Physician Care Direct (PCD) introduced the Physician Care Direct Access Card plan. For about the same cost as a monthly cell phone bill, plans include annual physicals, screenings, and other services defined by the physician; office visits are priced at a low per-visit scheduling fee or may be included in the membership.

Services not included in the Access Card plan are provided at affordable, transparent prices. The Access Card fee is paid for much like a gym membership, with a monthly or yearly fee paid by employers or individual patients directly to the primary care physician. Physician Care Direct Access Cards are not health insurance or medical discount cards. They are private contracts for healthcare services directly connecting physicians with local businesses and individual patients. Physicians using the PCD solution eliminate coding, billing, and collection costs for their Access Card patients.

PCD says that businesses can offer their employees an affordable healthcare benefit by purchasing primary care directly from local physicians. Since September 2011, Physician Care Direct has signed on practices in New Jersey, Massachusetts, Virginia, North Carolina, Georgia, Louisiana, Texas, California and Washington. For more information, visit
www.PhysicianCareDirect.com.

Supreme Court Urged to Declare Obamacare Unconstitutional

The American Center for Law and Justice (ACLJ) is urging the Supreme Court to declare the entire health reform law unconstitutional because the the individual mandate cannot be severed from it. Jay Sekulow, Chief Counsel of the ACLJ said, “Nearly 30% of the U.S. House has joined with us and more than 100,000 Americans in urging the Supreme Court to declare this deeply flawed healthcare law unconstitutional. The fact is the unconstitutional individual mandate is the essential element of the healthcare law and the balance of ObamaCare cannot function independently without it.”

In an amicus brief filed with the high court, the ACLJ argues the Court of Appeals for the Eleventh Circuit declared the individual mandate unconstitutional, but failed to declare the entire Affordable Care Act (ACA) invalid, since the two cannot be separated.

The ACLJ is preparing to file more amicus briefs next month with the high court focusing on several other issues tied to ObamaCare. The ACLJ will argue that the Anti-Injunction Act, which prohibits a lawsuit from stopping a tax before it has been imposed, does not apply to ObamaCare. In a separate brief, the ACLJ will address why the individual mandate is unconstitutional. The high court will hear oral arguments on the challenges to ObamaCare in March. For more information, visit www.aclj.org.

Employer Plans Offer Comprehensive Benefits

People with employer-sponsored health plans already get emergency care and hospital care under every healthcare plan. Follow-up care such as in-patient rehab, nursing facilities and hospice care are also covered by 90% to 97% of small-group plans. Prenatal, delivery and infant care along with organ transplants and prescriptions are also covered in nearly every plan, according to a survey by the National Association of Health Underwriters (NAHU).

NAHU surveyed more than 1,100 of its members who specialize in providing health insurance coverage to employers of all sizes. Janet Trautwein, NAHU CEO said, “Employer-based health insurance coverage is the single largest pillar of the American health insurance system. We need to protect and preserve this system that already provides health coverage to more than 160 million Americans.”

Last month the Department of Health and Human Services (HHS) released guidance on the essential benefits package mandated by the Affordable Care Act (ACA). Federal officials are in the process of defining the terms of an essential benefits package, which is the list of treatments that every policy must cover. The nonpartisan Institute of Medicine (IOM) has encouraged regulators to make sure that coverage is comprehensive but also affordable. The more expansive the essential benefits package is, the more expensive insurance premiums will be. And pricier insurance will lead to reduced rates of coverage, as fewer people and businesses will have the means to pay for it.

Trautwein said, “The emphasis on affordability is good news for employers who have been struggling with rising healthcare costs. Over the last decade, the average employer-sponsored insurance premium has risen 113%. Federal policymakers should keep this in mind as they lay out the new essential benefits package. An overly expansive package could exacerbate these cost trends and make insurance less affordable. Or it could cause employers to stop offering health benefits to their workers altogether. Employers are already saddled with costs that have risen faster than wages or inflation. As the IOM report makes clear, for many individuals, coverage that’s exceedingly generous but unaffordable is equivalent to no coverage at all. We recommend that HHS look to employer coverage as the benchmark for their essential benefits package.” For more information, visit www.nahu.org.

Self-Employed Health Insurance Tax Deduction Was Eliminated

In 2011, the self-employed health insurance deduction was eliminated and the payroll tax cut was extended only for two months. Will the tax cut be extended yet again or will it be allowed to expire? The debate continues and unfortunately the small-business owner is often the last to know, according to a paper by National Association for the Self-Employed (NASE).Before preparing 2011 tax forms, the self-employed and micro-businesses (fewer than 10 employees) should be aware of a number of tax law changes, but also must stay focused and connected for new changes that are inevitable during 2012.

The payments that small-business owners make for health insurance premiums for themselves and their families won’t be as tax beneficial for 2011 tax returns as they were for 2010. The premiums paid for health insurance by the small-business owner will be still be deductible on page one of form 1040, but unlike 2010, those same premiums will not be included on Schedule SE.

The Affordable Care Act, which was passed in 2010, required that employers begin reporting the cost of coverage under an employer-sponsored group health plan. That reporting was originally required beginning on January 1, 2011, so that business owners would have to report those amounts for the year just ended. The good news is that more time has been granted. The reporting for 2011 is now voluntary for all employers and optional for 2012 for those employers with fewer than 250 employees.

Net earnings from self-employment will be higher and the related Self Employment Tax will be higher. This is in effect a 13.3% tax hike on the small-business owner.

Beginning January 1, 2011, the employee’s part of the OASDI portion of Social Security tax was decreased from 6.2% to 4.2%, on the first $106,800 paid to each employee. For the small-business owner, the OASDI portion of Self Employment Tax was decreased from 12.4% to 10.4%, which was a significant benefit. The impact for the small-business owner will be included on Schedule SE and means up $2,000 in lower taxes for all working Americans.

The payroll tax cut for 2011 was expected to last only for one year, however, the cut has been extended for the first two months of 2012. The debate in Washington continues to be heavy on this subject and there is a good chance the tax cut could be extended even further.

The Small Business Jobs Act of 2010 increased the maximum allowable deduction under Code Section 179 from $250,000 to $500,000 for tax years beginning in 2010 and in 2011. This provision provides additional incentive for small businesses that invest in new equipment for both years. At the same time, the limit for the phase out of the deduction was increased to $2,000,000 from $800,000.

Business owners using their vehicle for company business can deduct 51 cents per mile driven on their 2011 tax return. The rate has also been set for 2012 at 55.5 cents per mile. The rate for medical miles driven was 19 cents per mile for 2011 and 23 cents per mile for 2012, while charitable miles use the rate of 14 cents per mile for both years.

When an IRA contributor who is not covered by a workplace retirement plan is married to someone who is covered, the deduction is phased out if the couple’s income is between $169,000 and $179,000.

For tax year 2011, the Alternative Minimum Tax exemption for a married couple filing a joint return is $74,450, and $48,450 for single filers, representing a $2,000 and $1,000 increase, respectively. The AMT exemptions are scheduled to decrease to year 2000 levels to $45,000 for a married couple and only $33,750 for a single taxpayer.

Keith Hall, National Tax Advisor for the NASE said, “Perhaps more than at any time I can remember, this is a time of uncertainty for the small-business owner. With a presidential election looming, the tax code will become an increasingly powerful chip in the debate for the White House. Job credits, payroll tax cuts, investment incentives, all will be debated and re-debated. The only certainty is that things will change and it is critical that the small-business owner keep track of all the things the IRS will be asking them to do.” For more information, visit www.NASE.org.

LONG TERM CARE

Knowledge About LTC Planning Is Not Driving Sales

More people know the basics of long-term care (LTC) and insurance coverage compared to five years ago and 60% believe they will  need some LTC someday, according to a John Hancock survey. However, fewer have planned for the possibility in their own lives.

A majority of respondents answered seven out of 10 basic LTC questions correctly compared to four out of 10 in 2006. But, fewer have made financial calculations for what they’ll need in retirement (66% vs. 72% in 2006). Only 41% of those who have calculated for retirement have included LTC needs in the equation, compared to 51% in 2006. Only 22% made plans to finance potential LTC needs, compared to 31% in 2006.

Eighty-two percent say it’s irresponsible not to plan for the cost of LTC needs. Sixty-one percent chose LTC isurance, among a number of options, as the best way to plan by the greatest number of respondents. Additionally, the vast majority of respondents saw a number of the benefits of LTC insurance as important:
• LTC insurance helps people get care where they choose (93% in 2011 from 79% in 2006).
• LTC insurance ensures that you get high quality nursing home care (93% in 2011 from 74% in 2006).
• LTC insurance ensures that you are in control of your overall care (92% in 2011 from 80% in 2006).

Although 61% say that having LTC insurance is the best way to cover long-term care needs, only 11% have purchased it. Fifty-three percent of those who haven’t bought LTC insurance say they plan to cover their LTC costs with Medicaid. By their own admission, few Americans understand how Medicaid works. In addition, 75% of respondents think that Medicaid will be cut back in the next decade.

Thirty-two percent say they are less likely to purchase long-term care insurance because of the economy. Consumers are more likely this year agree that a long-term care policy is an extra cost they do not want to spend right now (92% vs. 80% in 2006) and that they simply cannot afford to pay for it (80% vs. 66% in 2006).

When given the approximate cost per year for a semi-private room in a nursing home, the majority of respondents don’t think they could even afford to pay this amount for a full year (62%). For more information, visit http://www.johnhancock.com.

Middle Americans Are Satisfied With Medicare

Eighty-two percent of middle-income Americans on Medicare say that they are extremely or very satisfied with Medicare’s access and quality of healthcare, according to a study conducted by the Bankers Life and Casualty Company Center for a Secure Retirement (CSR).

The study focused on 400 pre-Medicare Boomers (age 47 to 64) and 400 older adults (age 65 to 75) with an annual household income of $25,000 to $75,000. Only two percent of Americans on Medicare are not satisfied with the access and quality of healthcare Medicare provides. For pre-Medicare Boomers, the numbers are not as favorable. Forty-six percent are extremely or very satisfied with their access and quality of healthcare and 24% are dissatisfied.

For those who are 67 and already on Medicare or 47 and looking forward to retirement, the study found that 87% are concerned about the future of Medicare and 71% believe the federal government will cut back Medicare benefits. Twenty-two percent of middle-income Boomers age 47 to 64 are uninsured in our country and are counting on Medicare to be their healthcare safety net. Thirty-six percent say that health reform will not benefit someone their age while only 13% believe that reform will be beneficial. For more information, visit www.CenterForASecureRetirement.com.

EMPLOYEE BENEFITS
• Employees Don’t Understand Their Benefits
• Every Small Business Needs to Know About These Potential Regulatory Changes 
NEW PRODUCTS
• Vision Benefits Website
• Financial Planning Resource
• Mammogram Gift Cards
• Telemedicine 
HEALTHCARE
• Children Health Insurance Programs (CHIP) Vary in Generosity
• Book Challenges Popular Thinking on U.S. Healthcare
• Americans Expected to Support Healthcare Reform
• Consumers Are Using HSAs to Control Healthcare Costs
• Health Reform Made Simple and Adorable
IN CALIFORNIA
• Foundation Wants Essential Benefits to Cover Substance Abuse
• Federal Health Reform Comes to Rural Counties
• Uninsurance Rate Climbed for California Women
• City Attorney Reaches Settlement With Blue Shield

EMPLOYEE BENEFITS

Employees Don’t Understand Their Benefits  

HR decision makers say that only about 60% of their employees understand their benefits, according to a study by ADP Inc. Surprisingly, 36% of large employers and 66% of midsized employers have no budget set aside for employee benefit communications.  About half of HR decision-makers say their budget for benefit communications has remained the same in the past year and only a minority expect it to increase in one or two years.

Fifty-one percent of large employers and 72% of midsized companies don’t provide decision support tools to help employees understand their benefits, even though a majority of HR decision makers say that these tools are important. Decision support tools are typically software applications, available through a company website, that allow employees to compare healthcare plans.

The following are the most commonly used decision support tools: a flexible spending account calculator, a plan-comparison chart, a medical-cost calculator, and wellness-incentive modeling. One out of five large companies that do not provide decision support tools plan to do so in the next couple of years. Only 13% of midsized companies that do not provide decision support tools plan to do so in the next year or two.  Sixty percent of HR decision makers say that mobile access to benefit information is important, yet only 46% of large companies and 39% of midsized companies provide it.

The following are the mobile application features that HR decision-makers are most interested in: healthcare provider information, benefit alerts, and single sign-on.

Eighty-six percent of large companies and 71% of midsized companies offer employee benefit information online. Eighty-six percent of large and midsized employers with a web-based portal think it is important for employees to have 24/7 access to benefit information, yet only 72% of large employers and 66% of midsized employers provide it.

HR decision-makers say that allowing employees to modify their own data allows them to maintain more accurate information, field fewer calls from employees, and lower their administrative burden. For more information, visit www.ADP.com.

Every Small Business Needs to Know About These Potential Regulatory Changes 

Paychex Inc. released its list of the top 12 potential regulatory changes that small businesses need to know about in 2012. Paychex works closely with the IRS and other government agencies and is constantly monitoring regulatory and compliance-related matters.

• Health Coverage W2 – The IRS further delayed a requirement for smaller employers to report the cost of employer-sponsored health coverage on employee Forms W-2, indefinitely postponing it until further guidance is issued. However, employers that file 250 or more Forms W-2 in 2011 must include this cost on the W-2 starting in tax year 2012. The healthcare amounts reported on the W-2 will be strictly informational and not taxable to the employee.

• Healthcare Reform – The Supreme Court is expected to rule in 2012 on the constitutionality of the individual mandate provision in the Affordable Care Act.

• 401(k) – In 2012, 401(k) service providers will have to make additional fee disclosures to plan sponsors and plan sponsors will have to make additional fee disclosures to participants. Contribution limits will increase in 2012. Regulations will be enacted in 2012 or are under consideration to broaden the definition of a plan fiduciary, make investment advice more accessible to plan participants, and restrict the number of loans an employee can take from their 401(k).

• Job Creation – Congress passed legislation in 2011 to provide a tax credit for hiring veterans. The temporary reduction of employee payroll taxes was due to expire on December 31, 2011, but Congress extended the provision for two more months. A new recapture provision applies to employees who earn more than $18,350 during the two-month period.  The tax cut could extend through 2012, pending further negotiations. Congress is considering additional measures, such as earmarking funding for infrastructure projects and passing measures to help small businesses access capital.

• Worker Classification – IRS is allowing eligible employers to reclassify workers as employees in exchange for partial tax relief from past federal employment taxes. In late 2011, the Dept. of Labor agreed to work with the IRS and several states to coordinate enforcement. Legislation in several states to increase fines for worker misclassification may affect employers in 2012.

• Deficit Reduction – Proposed legislation focuses on reducing the deficit through spending reductions and tax increases. Many of the ideas involve reforming personal and business tax and closing of tax loopholes.

• Immigration – The federal government is conducting rigorous worksite enforcement and paperwork inspections of companies of all sizes to crack down on the employment of illegal immigrants. In 2012, state laws will require more private sector employers to use the federal E-verify system for employee verification. Also possible in 2012 are Congressional immigration reform proposals that may include additional federal employment verification obligations.

• Employment Law – Many states restrict employers from using an employee’s credit information in employment-related decisions or are considering these resrictions. The Dept. of Labor and many states have enacted or are considering regulations to provide greater transparency of pay checks. These regulations focus on how workers’ pay is calculated, especially as it relates to minimum wage and overtime requirements.

• Security and Privacy – Cybercrime and corporate bank account takeovers against small businesses are becoming more widespread. Employers should take security precautions, such as using stand-alone computers for online banking; not clicking on attachments or hyperlinks from unknown sources; and working with their bank to implement fraud detection tools on their accounts. Many states have enacted onerous privacy and security breach regulations.

• Dodd-Frank – The sweeping Dodd-Frank financial law is focused primarily on Wall Street reforms and consumer protection. However small businesses may face limited access to credit and higher costs of credit or other financial services because of the increased burden it places on some industries.

• Unemployment Insurance – Virtually all businesses will face higher unemployment insurance taxes if Congress reinstates the federal unemployment surtax. In many states, employers will see higher taxes because of the repayment of outstanding federal loans that were taken to continue paying benefits and replenish depleted state unemployment trust funds. Many states are cosidering additional employer reporting requirements to combat unemployment insurance fraud.

• Taxes – 2012 will bring a number of important tax changes including a higher Social Security wage base and changes to  assistance benefit limits. The accelerated depreciation benefits, which were in place in 2011, may expire or be scaled back in 2012. All employers will need to keep an eye on what are likely to be additional tax changes as the year progresses.

For more information, visit www.paychex.com.

NEW PRODUCTS

Vision Benefits Website

EyeMed Vision Care enhanced its website (http://www.eyemedvisioncare.com) with engaging content and new capabilities. It features an interactive game that informs potential members about the importance of vision benefits and eye exams. The updated site also enables members to print identification cards and get an explanation-of-benefits.

Financial Planning Resource  

The Principal Financial Group has created the ERISA 404(a) Participant Disclosure Regulation Resource Center. The one-stop-hub offers resources to help financial professionals and their clients meet new regulatory requirements. For more information, visit http://www.nxtbook.com/nxtbooks/principal/erisa404_resourcecenter/index.php.

Mammogram Gift Cards

Life Gift Cards launched gift cards for mammograms. Recipients can redeem services at several thousand locations nationwide. Additional gift cards will be available for further medical services in the near future. For more information, visit www.LifeGiftCards.com.

Telemedicine 

Marriott Rewards members can now use their points to get 24/7 access to Consult A Doctor’s telemedicine services through its CSA Travel Protection offering. The services allow consumers to access a physician 24/7/365 and receive remote consultations via telephone, secure email, video, and mobile applications. CSA offers the Consult A Doctor service with many of its other travel insurance packages. For more information, visit: www.consultadoctor.com or email telecare@consultadr.com.

HEALTHCARE

Children Health Insurance Programs (CHIP) Vary in Generosity  

Eligibility requirements for children’s healthcare vary greatly from state to state, according to a report by the Foundation for Health Coverage Education (FHCE). The non-profit (www.CoverageForAll.org), ranked states by the maximum income eligibility limits for children’s health insurance programs. Founder and executive director, Phil Lebherz said, “The good news is that, by law, there is a CHIP program in every state…Most families are surprised at the income level they can make and still qualify their children — as much as $78,000 annually in New Jersey.”

California came in eighth with the highest income eligibility limit of up to $55,884. New York topped the list with an eligibility limit of $89,400. “More than half the states have CHIP programs with maximum income limits over the recently reported average family income of $49,500 a year…Families with uninsured children in these states may be eligible for free or low-cost comprehensive health coverage and not know it,” said Lebherz. FHCE created a five-question health coverage eligibility quiz on its CoverageForAll.org website.

Book Challenges Popular Thinking on U.S. Healthcare  

Hoover Institution Press released a book that challenges popular criticisms about medical care in the United States, “In Excellent Health: Setting the Record Straight on America’s Healthcare,” by Scott W. Atlas, MD. Atlas is a senior fellow at the Hoover Institution, professor of radiology and chief of neuroradiology at the Stanford University Medical Center.

Drawing on extensive research from scientific and medical journals, Atlas defends the quality of care and access to care in the United States. He notes that the 2000 World Health Organization report, which ranks the United States low among international healthcare systems, has been exposed in peer-reviewed journals as an agenda-driven biased compilation of misleading statistics. Yet, the report still serves as the fundamental basis for the allegedly poor quality of U.S. healthcare. Atlas says that, not only does the sweeping health reform legislation give the government more power to restrict care, but also fails to address the most important issue regarding reform – rising healthcare costs.

Calling the Patient Protection and Affordable Care Act “grossly flawed,” he proposes his own reform plan, which includes reforming the tax structure; offering government-provided assistance for those most in need; overhauling private insurance; and minimizing the role of government as a direct insurer. He argues that reforming these areas will reduce health costs and help maintain essential support for America’s seniors and low-income families without jeopardizing the exceptional healthcare quality and access to this healthcare.  For more information, visit HooverPress.org.

Americans Expected to Support Healthcare Reform  

Among 10 million online comments, the mass opinion about health reform trended more positively throughout the year. In fact, the number of positive comments divided by the number of negative comments favored Obamacare each quarter from 1.5 in the first quarter to 2.2 in the fourth quarter, according to an analysis by WiseWindow.

Online comments reveal that jobs and deficit spending issues will make or break the GOP election while the most polarizing issue concerns Medicaid policies.

And just for fun, here are some additional predictions:

• The consumer electronic gifts that are most likely to be returned in January are the Motorola Atrix and the BlackBerry Bold 990.

• The consumer electronic product that is most likely to be discontinued in 2012 is the BlackBerry PlayBook.

• The airline to avoid in 2012 is American Airlines, which drew more than 15% of the extreme negative opinions about airlines collected in 2011.

• TV shows that will have the greatest DVD sales in 2012 are Big Bang Theory, Glee, Vampire Diaries, Dexter, and The Walking Dead

For more information, visit www.wisewindow.com.

Consumers Are Using HSAs to Control Healthcare Costs

Employers and consumers are adopting health savings accounts (HSAs) to manage their healthcare costs without compromising care, according to two national surveys.  Seventy-seven percent of small employers believe that high deductible health plans (HDHP) with an HSA are key in controlling healthcare costs. Additionally, 56% of account holders have found that their HSA-qualified plan provides an affordable healthcare option, according to the “2011 Employer and Account Holder Surveys,” commissioned by ACS, A Xerox Company and conducted by Buck Consultants. “HSAs are doing more than just saving consumers and employers money. They are prompting a shift in behavior that is helping employees make better decisions about their own healthcare,” said Tom Hricik of ACS.

Three-quarters of respondents say that the ability to control their own health costs is an extremely or very important benefit of HSAs. Account holders are setting aside more money to cover potential medical costs than before they had an HSA (54%); engaging in healthier lifestyle choices (18%); researching preventive care programs (18%); shopping for lower priced prescription drugs (28%); and planning healthcare better throughout the year (31%). People perceive that they consume medical services at approximately the same rate but are shopping around for care more than before.

Employers report that the cost of providing HSA-qualified plans is less than the cost of providing a standard PPO. The average direct cost to provide an HDHP/HSA is $5,469 for individual coverage and $9,909 for family coverage. In comparison, the average PPO cost is $7,158 for individuals and $10,691 for family.

Surveyed employers are extremely committed to offering employer-sponsored health insurance and retaining their HSA-qualified plans. Only 6% said they are very likely to discontinue the HSA-qualified plan. And only 7% said they are very likely to move employees to future healthcare exchanges.

Other significant findings include the following:

• The average employer that implemented an HDHP and HSA program has 49% of eligible employees enrolled.

• 69% of employers contributed to their employees’ HSA accounts.

• Employer HSA contributions average $1,000 for individual coverage and $1,500 for family coverage.

• 72% of account holders chose the HSA-qualified plan over other plan options.

• 82% of account holders said that the ability to save tax-free money was extremely or very important in selecting an HSA-qualified plan.

• 79% of account holders say that having an HSA is valuable to them.

• Sixty-four percent of account holders say that their HDHP/HSA combination meets their family’s needs.

For more information, visit http://www.buckconsultants.com.

Health Reform Made Simple and Adorable

Lots of websites claim to provide a simple explanation of health reform, but the Kaiser Family Foundation has introduced a tool  (http://healthreform.kff.org/profiles.aspx) that has to be the most entertaining and easiest to use.  You simply click on cute “YouToon” characters and Main Street businesses to learn how the Affordable Care Act will affect their health coverage. For example when you click on a 20-something hipster with a goatee and knit cap, you find out that’s he’s 23-year old Phil Butler who is trying to start his career as a graphic designer. He works part-time waiting tables to help pay the bills. The site explains that, if Phil’s parents have health insurance, he can be covered on their plan until he turns 26 even though he doesn’t live with them and they don’t claim him as a dependent on their taxes. Unfortunately, adding Phil to his parents’ policy will increase their premium, which they may not be able to afford. Phil will also be eligible to purchase coverage in the state health insurance exchange. Based on his income, he will be eligible for a premium subsidy to lower the cost of the insurance. He’ll have to pay $120 per month or a little more than 6% of his income for coverage. However, given Phil’s priority to establish his career, he may choose not to purchase health insurance. In this case, he will be assessed a tax penalty of $95 in 2014, increasing to $695 in 2016.  Allowing adult children to remain on their parents’ health plans until they turn 26 was part of a package of health insurance reforms that went into effect on September 23, 2010.

IN CALIFORNIA

Foundation Wants Essential Benefits to Cover Substance Abuse 

The California Treatment Advocacy Foundation (CalTAF) is calling on state regulators to include treatment of substance abuse in the essential health benefits (EHB) package being developed under healthcare reform. CalTAF also wants California to adopt a measure that requires most group health insurance plans to include coverage for addiction treatment (similar to Pennsylvania’s Drug and Alcohol Insurance Law (Pennsylvania Act 106 of 1989).

The Patient Protection and Affordable Care Act requires health insurance plans offered in the individual and small group markets to offer a comprehensive package of items and services, known as “essential health benefits.” This requirement applies to plans inside and outside of state-run exchanges.

Phillip Greer, executive director of CalTAF said, “For far too long, health insurance companies have imposed barriers that reduce access to much-needed chemical dependency treatment by selling policies with deductibles and co-payments that were much higher than for any other illness. Most recently these insurance companies have imposed care guidelines that keep patients from receiving treatment at the level of intensity or for an amount of time that is universally accepted as necessary. It’s time these games stop.” For more information, visit www.caltaf.org.

Federal Health Reform Comes to Rural Counties  

An additional 30,000 low income adults living in 34 mostly rural California counties will get coverage under a new low income health program this month. Lee Kemper, Executive Director of the California Medical Services Program (CMSP) Governing Board said, “The federal waiver makes it possible to bring the benefits of federal health reform early to many of California’s rural communities. This coverage expansion will increase the number of low income adults served by Governing Board programs to nearly 90,000 by the end of 2013. The coverage expansion is made possible by the State of California’s Federal Medicaid “Bridge to Reform” waiver. The Governing Board was just notified that Path2Health was approved by the federal government.

Path2Health will provide no-cost health coverage to adult Californians who live in the 34 counties and are at or below 100% of the federal poverty level or about $10,890 annually for a single person. It will provide coverage for medically necessary healthcare services, including primary care, emergency and hospital care, pharmacy services, and limited dental and vision care. It will also cover a set number of mental health and substance abuse counseling visits.

Coverage will generally follow coverage provided under CMSP, a long-standing health coverage program serving indigent adults in the 34 counties. CMSP serves more than 60,000 low-income adults each month. Others will benefit in 2014 when the federal Medicaid program is expanded by federal reform. Implementation in the 34 mostly rural counties follows implementation that occurred in 10 mostly urban California counties this past summer.  Path2Health’s 34 counties represent regions with some of the highest levels of poverty and uninsurance in the state.”  Californians who qualify for Path2Health if they are: residents of one of the 34 counties Path2Health serves, have an income of up to 100% of the federal poverty level, are between 19 and 64, do not qualify for Medi-Cal, and meet federal citizenship and documentation requirements. More information about Path2Health is available at http://mypath2health.org.

Uninsurance Rate Climbs for California Women 

The proportion of nonelderly adult California women with no health insurance coverage grew to nearly one in four from 2007 to 2009, a period that coincided with the national economic recession, according to a policy brief from the Public Health Institute (PHI) reports. The rate of women uninsured all or part of the year increased from 21 percent in 2007 to 24 percent in 2009 as women lost access to employment-based coverage, according to the authors, Roberta Wyn, Ph.D., and Elaine Zahnd, Ph.D.

Altogether, approximately 2.8 million California women from 18 to 64 had no insurance for all or part of 2009.  “Clearly, the implementation of the Affordable Care Act is coming at a crucial time for California women,” said Wyn, the brief’s lead author who is a PHI consultant and an affiliate of the University of California at Los Angeles Center for Health Policy Research.  The policy brief, “Almost One-Quarter of California Nonelderly Women Uninsured in 2009,” draws on data from the 2009 California Health Interview Survey (CHIS 2009), the largest state population-based health survey in the U.S.

The state’s safety net of health providers was a regular source of care for 23% of all nonelderly women and played an important role for many women. Forty-one percent of women on Medi-Cal and 36 percent who had no coverage at all sought care through safety net providers. Employment-based coverage dropped among nonelderly adult women from 56% in 2007 to 54% in 2009.  For more information, visit http://www.phi.org/pdf-library/2011_12_16WomensInsurance.pdf.

City Attorney Reaches Settlement With Blue Shield

Blue Shield has agreed to pay a $2 million settlement to be split between the City Attorney’s Office and Los Angeles County and continue its best practices in underwriting and rescission determinations. City Attorney Carmen Trutanich said that the civil settlement will resolve the City Attorney’s civil enforcement action filed against that company for past insurance policy rescission practices.

As part of the settlement, the City Attorney recognizes Blue Shield has voluntarily cooperated in the investigation and established Best Practices that exceed current regulatory standards including additional protective language relating to the definition of fraud in rescission determinations.

In 2008, the City Attorney’s Office filed actions against Blue Shield and several other insurance companies, including WellPoint, alleging violations of the Unfair Competition Law (California Business and Professions Code Section 17200 et seq.) and the False Advertising Law (California Business and Professions Code 17500 et seq.)

The more than 850 policy rescissions in California attributed to Blue Shield, which formed the basis of the City Attorney’s civil enforcement action, were considerably fewer than those of WellPoint and its California subsidiaries, Anthem Blue Cross and Blue  Cross Life and Health Insurance Company.

The City Attorney’s civil enforcement action for unfair business practices and false advertising against WellPoint, Blue Cross Life and Health Insurance Company Anthem Blue Cross are pending.  No trial date has been set for the remaining defendants.

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ANNUITY UPDATE
• Annuity Service Award Winners
• Advisors Expect Annuity Sales to Grow
• Income And Indexed Annuity Sales Increase
IN CALIFORNIA
• LAAHU Fashion Show
• Uninsurance Rate Climbs for California Women
NEW PRODUCTS
• Multi-Asset Investment Option
• Healthcare Reform Learning Center
• Critical Illness Plan
MEETINGS
• LA Retirement & Benefits Conference
• Voluntary Benefit Executive Roundtable
• Medicare Supplement Summit
HEALTHCARE
• HHS Outlines “Essential Benefits” Under Health Exchanges
• Reforming Healthcare Payment Policies
• With 73 Million Americans Now in Managed Care, Telemedicine Is Set To Boom
EMPLOYEE BENEFITS
• Finance, HR Executives See Their Roles Changing in the Wake of Health Reform
ANNUITY UPDATE

Dalbar’s 2011 Annuity Service Award Winners 

Annuity customer service leaders in 2011 were AXA Equitable-Equivest, New York Life, Pacific Life, Prudential Financial and SunAmerica Annuity and Life Assurance Company, according to Dalbar’s annual Annuity Service Award.

The following differentiates these companies:
• Their call center representatives greet clients warmly and politely and establish an immediate appreciation for their business more than 95% of the time compared to an industry average of 69% of the time.
• They excel at making sure that clients understand all information provided.
• They set expectations as to what the next steps are for each client more than 85% of the time compared to the industry average of 53% of the time.
• They show consistency in delivering services at a superior level.

For more information, visit www.Dalbar.com

Advisors Expect Annuity Sales to Grow

Advisors say that the conversations they are having with their clients have become more emotional and more geared toward securing retirement income instead of accumulating assets, according to a study by Cogent Research and the Insured Retirement Institute (IRI). Sixty five percent of advisors who sell annuities expect guaranteed income options to become more important over the next five years.

Eighty percent of advisors who sell annuities say they are having more client discussions about retirement income planning than they did five years ago. Marie Rice of Cogent Research said that market volatility, shrinking retirement savings, and the disappearance of pensions have made investors take a long hard look at the value of annuities. Thirty-four percent of investors say that having guaranteed income is the main reason to purchase an annuity.  Sixty-eight percent of advisors say at least one client has requested an annuity in the past 12 months. The annuity industry has seen significant growth over the past couple of years with assets in variable and fixed annuities reaching a record high of nearly $2.2 trillion in 2010, which is a 10% increase from the previous year.

Net variable annuity sales were $8.8 billion for the third quarter, which is the highest level in 14 quarters. Third quarter industry-wide sales were up 6% from third quarter 2010 sales. The industry is poised to round out the year on a very high note as year-to-date fixed sales remain strong and on par with 2010 levels.Frank O’Connor, Morningstar Director of Insurance Solutions said, “The surge in net sales is a very positive development, indicating rapidly growing interest in the use of variable annuity guaranteed income benefits.” For more information, visit www.IRIonline.org.

Income And Indexed Annuity Sales Increase 

Third quarter 2011 income and indexed annuity sales topped the same quarter a year-ago according to Beacon Research. Income annuities increased 5% and indexed annuities increased 0.4%. Indexed annuity sales were also up 7% from the second quarter while year-to-date income annuity results increased 3%.

Jeremy Alexander, CEO of Beacon Research said, “As we anticipated, these products continued to do well, despite the quarter’s low interest rate environment, because of strong demand for guaranteed lifetime retirement income, be it the personal pension provided by income annuities or the lifetime withdrawal benefits offered by most indexed annuities. We expect fourth quarter sales to decline due to seasonality and the difficult interest rate environment. Beyond that, results aren’t likely to improve much until rates rise. But, as always, a lot will depend on the decisions of the companies that issue and distribute fixed annuities.”

Year-to-date 2011 sales fell 1%. Aside from the income annuity increase, there were small declines in indexed annuities (down 1%) and fixed rate non-MVAs (down 1%). Fixed rate MVA sales declined 15%. Fixed annuity sales were 7% below a year-ago and prior quarters. Lower interest rates dampened sales of fixed rate annuities. Non-MVA sales of $6.5 billion fell 14% from a year ago and 21% from the second quarter. MVAs were down 33% from the third quarter 2010 and 15% from the prior quarter. Income annuity results declined 2%. Allianz had the most sales among independent producers. For more information, visit www.beaconresearch.net.

IN CALIFORNIA

LAAHU Fashion Show

Insurance brokers and industry reps brought sexy back on the runway at The Los Angeles Association of Health Underwriters third Annual Charity Luncheon and fashion show. The event, Salute to Women in Business, was held this month at the Four Seasons Hotel in Westlake Village. This year, the program benefited Operation Gratitude. Every year, the organization sends 100,000 care packages filled with snacks, entertainment items, and personal letters of appreciation addressed to individually named U.S. Service Members deployed in hostile regions, to their children left behind, and to wounded warriors who are recuperating in transition units. A rep from another California chapter said she was checking out the show for ideas. So if you are not in Los Angeles, fashion may be on its way.

Uninsurance Rate Climbs for California Women

The proportion of non-elderly California women with no health insurance coverage grew to nearly one in four from 2007 to 2009, which coincides with the recession, according to a policy brief from the Public Health Institute (PHI). The rate of women who were uninsured all or part of the year increased from 21% in 2007 to 24% in 2009 as women lost access to employment-based coverage About 2.8 million California women from 18 to 64 had no insurance for all or part of 2009. Other key findings include the following:

• Employment-based coverage dropped among non-elderly adult women from 56% in 2007 to 54% in 2009.
• The lack of insurance was highest among young women: Thirty-four percent of women 18 to 29 had no coverage for all or part of 2009. Only 37% had employment-based insurance, the lowest level across all age groups.
• Forty-eight percent of women with the lowest family income were uninsured for all or part of 2009. In contrast, only 8% of women with high family incomes were uninsured during the same period.
• Sixty-six percent of white women had employment-based insurance for all of 2009 compared to 38% of Latinas and 49% of African American women.
• Thirty-two percent of single mothers and 31% of single women without children lacked insurance in 2009. Married women with and without children had significantly lower rates of uninsurance (14% to 20%).
• The uninsured rate was high for women  seeking work (46%) compared to women who were working full time (14%).
• Thirty-one percent of uninsured women had no doctor visit in a one-year period.
• Twenty-eight percent of uninsured women delayed needed care or went without it in the past year.
• The state’s safety net of health providers was a regular source of care for 23% of all non-elderly women. Forty-one percent of women on Medi-Cal and 36% who had no coverage at all sought care through safety net providers.

To get the full report, visit http://www.phi.org/pdf-library/2011_12_16WomensInsurance.pdf.

NEW PRODUCTS

Multi-Asset Investment Option

MassMutual introduced the Barings Dynamic Allocation Fund, which features portfolio management by Baring International Investment Limited. Barings’ dynamic multi-asset strategy combines investment types from across the risk/return spectrum. The portfolio includes a variety of asset types, including stock and bond investments from developed and emerging economies and real estate as well as commodities and other investment vehicles. For more information, call 866-444-2601 or visit www.massmutual.com.

Healthcare Reform Learning Center

Unum launched a Website to help benefit professionals and businesses stay up to date on healthcare reform. The site offers straightforward information and analysis through updates to healthcare reform law, reports, and podcasts. For more information, visit Unum.com/HealthCareReform.

Critical Illness Plan

Trustmark Voluntary Benefit Solutions enhanced its worksite critical illness insurance plan to offer more payouts under a single policy. New riders, which provide increased financial protection, are being offered to new groups in 33 states, with effective dates in January 2012. Policyholders get a single lump-sum payment if diagnosed with any of 11 critical illnesses or a maximum of two payouts under a double-benefit rider. With the new riders added to their policy, insureds can get one payout for each condition and a payout if the condition reoccurs. For more information, visit http://tvbsnews.wordpress.com.

MEETINGS

LA Retirement & Benefits Conference

The American Society for Pension Professionals and Actuaries is hosting its Los Angeles Benefits Conference January 11 to 13. Retirement professionals and government officials will discuss regulatory, legislative, and administrative issues. Participants include accountants, attorneys, actuaries, benefits & HR directors, investment professionals, and third party administrators. It will be held at the JW Marriott on West Olympic Blvd. For more information, visit http://www.asppa.org.

Voluntary Benefit Executive Roundtable 

The Voluntary Benefits Executive Roundtable will be held February 6 and 7 at the Philadelphia Airport Marriott. The event is designed to help give carrier executives and brokers ideas for  success for the next five to 10 years. To register, visit www.ContentSeminars.com,

Medicare Supplement Summit

The American Association For Medicare Supplement Insurance is holding the 2012 National Medicare Supplement Insurance Industry Summit May 16 to 18 in Miami. This will be the fifth Medicare Supplement industry conference, an event that continues to grow as more insurers again start selling this health coverage. The conference features more than 25 sessions on the marketing and sale, pricing and regulation of Medigap policies. For more information, visit http://www.medicaresupp.org/2012 or call 818-597-3205.

HEALTHCARE

HHS Outlines “Essential Benefits” Under Health Exchanges

A proposal by the Department of Health and Human Services would allow states to use an existing health plan as the benchmark for the essential health benefits package under state’s health exchange. Health insurance plans must offer the essential health benefit package in order to participate in their state’s health insurance exchange. The PPACA requires every state to launch a health insurance exchange by January 1, 2014 or default to a federal fallback program

These benefits will cover at least 10 general categories of preventive, diagnostic and therapeutic services, which HHS defines as essential and equal to benefits under a typical employer plan. States would be able to select a plan with the same services that are covered by a typical employer plan in their state. States and insurers could evolve the benefit package as innovative plan designs are developed and advancements in care become available. States could choose one of the following health insurance plans as a benchmark:

• One of the three largest small group plans in the state.
• One of the three largest state employee health plans.
• One of the three largest federal employee health plan options.
• The largest HMO plan offered in the state’s commercial market.

Plans could modify coverage for a benefit category as long as they don’t reduce the value of coverage. The essential health benefit package has to cover items and services in at least 10 categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. If a state selects a plan that does not cover all 10 categories of care, the state can examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan.

The role of the federal government in defining minimum standards for health insurance coverage raises many issues for states to consider, according to Kevin Counihan, president of CHOICE Administrators Exchange Solutions. In a recent podcast, he said that these include the dilution of state authority, how essential health benefits will affect large group plans, the absence of guidance on benefit exclusions, and the impact on medical trends, along with a host of policy decisions that state regulators and policymakers will now need to consider.

The federal government’s new level of involvement fundamentally changes the health insurance market in most states. It dilutes the authority states have traditionally had in regulating individual and group insurance coverage and in determining covered and mandated benefits, said Counihan. He said that the medical inflation trend could have a significant effect on premium costs.

Unless the limits for low- and moderate-income individuals rise along with medical inflation, the federal government and the states would have to bear medical-trend increases in the form of tax credits and subsidies. The PPACA limits how much low- to moderate-income individuals pay for coverage.It is critically important that states be aware and prepare for this scenario, explains Counihan.

Counihan said that essential health benefits could affect all health insurance policies in a state. While states can still enact benefit mandates for health insurance policies sold outside of the exchange. But states are likely to surrender this responsibility to HHS via the definition of essential health benefits. Otherwise, individuals and small businesses with higher utilization of services will seek richer policies outside the exchange. This would cause an unbalanced risk pool between members of the exchange and those purchasing outside the exchange. If that happens, insurers are likely to raise rates for non-exchange policies causing a potential death spiral of disproportionate utilization and premium increases between policies written inside and outside of the exchange, he said.

Neil Trautwein of the Essential Health Benefits Coalition said, “The devil will be in the details. The bulletin leaves unanswered the question of affordability in the states…HHS should continue to work to develop a rule that balances state-selected and reasonably comprehensive benefits with affordability for employers and individuals.”

During the podcast, Counihan outlined the key issues that state policymakers need to consider in evaluating the impact of essential health benefits. The podast grew out of a white paper, “Essential Health Benefits: Key Issues for States,” issued last month by CHOICE Administrators Exchange Solutions. The podcast can still be heard at www.blogtalkradio.com/xeroxradio/2011/12/13/essential-health-benefits-opportunities-for-state-influence-1. The he white paper is available at www.choiceadminexchanges.com.

Further information is available at http://www.choiceadminexchanges.com. For a fact sheet on the essential health benefits bulletin, visit: http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html

Reforming Healthcare Payment Policies

Catalyst for Payment Reform (CPR), a leading coalition of healthcare purchasers, released two action briefs on reference healthcare pricing, “Maternity Care Payment Reform” and “From Reference to Value Pricing.” By establishing a standard price for a drug or other product, procedure, or service, reference pricing can pressure high-cost providers to lower their prices. It generally requires health plan members to pay for any contractually allowed charges beyond the reference price. When quality is also taken into consideration, reference pricing is called “value pricing”

In 2009, the RAND Corporation estimated that, private payers in Massachusetts could lower their costs by as much as $8.8 billion if the state implemented reference pricing for academic medical center care at the same rates that community hospitals charge.

One area that can be improved through reference pricing is maternity care. The rate of cesarean deliveries in the U.S. has skyrocketed over the past decade due, in part, to existing payment policies.  Cesarean deliveries cost healthcare payers more than $3.5 billion per year even though research has shown that many of these are not medically indicated. CPR’s maternity care initiative focuses on redirecting financial incentives away from over-utilized, unnecessary interventions in labor and delivery.

The tools, along with CPR’s new health plan request for information (RFI ) are designed to enable purchasers to compare health plans. The company plans to take the RFI one step further by translating it into model contract language for purchasers to use with health plans. CPR invites healthcare purchasers and plans to use its entire health plan RFI on payment reform and will host instructional  Webinars. To download the RFI questions free of charge visit http://www.catalyzepaymentreform.org/RFI. All tools are available at www.catalyzepaymentreform.org.

With 73 Million Americans Now in Managed Care, Telemedicine Is Set to Boom

The American Telemedicine Association projects an exponential growth in the adoption of telemedicine and mHealth technologies as a record number of consumers  enter fee-capped managed care plans. Jonathan Linkous of the American Telemedicine Association said that  the move to managed care is a dramatic shift away from traditional fee-for-service payments, which allowed providers to bill for as many services as possible, regardless of need or effectiveness. This traditional reimbursement model is heavily regulated by the Centers for Medicare and Medicaid, which have strongly discouraged the deployment of telemedicine due chiefly to concerns about increased cost.

Managed care, on the other hand, places a cap on spending and allows the provider to decide what and how services should be delivered. Such a system is ideal for accelerating the use of telemedicine in the delivery of care. For more information, visit www.americantelemed.org.

EMPLOYEE BENEFITS

Finance, HR Executives See Roles Changing in the Wake of Health Reform

A tighter partnership between corporate finance and human resource executives may be on the horizon as employers address healthcare reform, according to a survey by Towers and Forbes Insights. Both groups of executives expect their per-employee investment in rewards to rise. But, neither group expects healthcare costs to consume a significantly larger share of the total rewards pie.

The majority of HR executives (81%) and finance executives (55%) agree that HR is largely responsible for setting the reward program strategy. However, 53% of finance respondents say they are more involved budgeting for rewards, compared to 47% of HR executives who see themselves in the lead.

Thirty-eight percent of finance executives say that developing an HR benefit strategy will become much more of a shared role. Just 24% of HR respondents believe they will continue to drive the process with minimal involvement from finance executives. Fifty-three percent of finance executives expect to have primary responsibility for setting budgets while 40% of HR executives say it will remain a shared role.

The survey found numerous areas that could involve closer collaboration between HR and finance executives. Cost was, by far, the most important factor for groups in making decisions about healthcare reform. In fact, more HR executives (82%) emphasized cost than did finance leaders (69%). Moreover, 67% of  HR and finance leaders expect to maintain healthcare benefits for their active employees despite their common belief that costs will continue to rise.

Randall Abbott, senior Health and Group Benefits consultant at Towers Watson said, “Healthcare reform…has the potential to test the relationship between HR and finance executives. And, with so much change quickly approaching, it highlights the need for groups to start working more closely now to leverage their respective expertise and knowledge.”

The survey also includes the following findings:

• 56% of finance executives expect their reward programs to provide more flexibility in the future, compared to 37% of HR executives.
• Both groups of of executives say that their organization is lagging competitors in investing in some elements of their reward programs.
• About one-third of HR and one-fifth of finance executives say their costs for training, career management, and flexible work arrangements fall below competitive norms.
• Finance respondents are more than three times as likely as their HR peers to believe their organization outspends competitors in the areas of career management (29% versus 9%) and flexible work arrangements (31% versus 9%).

The full report is available at http://towerswatson.com/research/6033

LIFE INSURANCE

• Sun Life to Drop Variable Annuities and Individual Life Products
IN CALIFORNIA
• Blue Shield Calls on UCLA Medical to Curtail Rate Increases
• California Beneficiaries Hit Hard by Medicare Advantage Plan Pull-outs
• California Has the Highest Uninsured Rate
PENSIONS
• A Lost Year For Pension Funding
HEALTHCARE
• New Regulation Threatens Agents, HSA Plans
• Drug Maker Cuts Distribution to Free Clinics
• Physicians Are Pessimistic About Health Reform
EMPLOYEE BENEFITS
• American Specialty Health Group Files Suit Against Healthways
NEW PRODUCTS
• Fixed Index Annuities
• Pension Funding Scorecard
• Fixed Index Annuity Product Suite
• Dental Network Optimization Program
MEETINGS
• Insurance Marketing Conference in Florida

LIFE INSURANCE

Sun Life to Drop Variable Annuities and Individual Life Products 

Sun Life CEO Dean Connor

Sun Life’s president and CEO, Dean Connor announced that Sun Life will stop selling domestic U.S. variable annuity and individual life products effective December 30. Instead, the company aims to become a leader in group insurance and voluntary benefits in the United States. Connor said, “The decision to discontinue sales in these two lines of business is based on unfavorable product economics which, due to ongoing shifts in capital markets and regulatory requirements, no longer enhance shareholder value.”  He stressed that this decision will not affect existing customers and their policies.

Connor said, “To achieve growth in the U.S., we will focus on increasing sales in our employee benefits business, which is already a top 10 player and will expand our presence in the growing voluntary benefits segment. We are confident that, with the focused investment announced earlier this year, we can build leading positions in these two sustainable, less capital-intensive businesses. We will also continue to support growth in MFS, our highly successful investment manager that has a large U.S. presence and over $250 billion of assets under management globally.”

IN CALIFORNIA

Blue Shield Calls on UCLA Medical to Curtail Rate Increases 

Thousands of patients will have to seek treatment elsewhere unless a dispute over reimbursement rates between Blue Shield of California and the University of California’s health system is not resolved by Dec. 31. Paul Markovich, COO of Blue Shield of California issued the following letter about an impasse in contract negotiations with UCLA Medical Center:

To all Blue Shield of California Customers and Members in Southern California:  We regret that we have reached an impasse with UCLA Medical Center over terms for a new contract beginning in 2012. We would very much like to keep UCLA’s outstanding hospitals and physicians in our network, and have negotiated in good faith for months to reach a reasonable agreement that preserves affordability for our members.  Blue Shield of California’s mission is to provide all Californians with access to quality health care at an affordable price. That’s why we have supported universal coverage since 2002 and advocated for federal health reform. But health reform won’t succeed unless care is affordable. Government, business, labor, and individuals can no longer tolerate the current level of rate increases driven by ever-higher provider costs, particularly hospital charges. 

Hospital costs comprise about half of what Blue Shield pays in health care for our members. Between 2000 and 2010, these costs have roughly tripled. As a result, today you can feed a family of four for five months for the same amount it costs to spend just one night in a typical California hospital.  Blue Shield is attempting to do its part to make care affordable for our members through our commitment to voluntarily cap our annual net income at 2% of revenues and pledging to return the difference to our customers and the community. This has resulted in Blue Shield giving back nearly half a billion dollars to our customers in 2011 alone. In addition, we partner with hospitals, physician groups, and employers on accountable care organizations that provide high quality, less expensive care to 100,000 Californians. 

UCLA Medical Center has made the decision to band together with four other University of California hospitals to negotiate as a group. This is a carefully orchestrated negotiating strategy that the university’s own executives have described as an effort to increase bargaining leverage to obtain higher reimbursements. If successful, this tactic will give UCLA an overwhelming negotiating advantage, allowing it and the other four UC hospitals to drastically increase their charges and make care less affordable for our members. They are pursuing this strategy despite the fact that they are each clinically and financially independent.  UCLA Medical Center’s rates for Blue Shield members have increased 98% since mid 2006 and its inpatient hospital charges are already 41% higher than our Southern California average. UCLA’s 15% profit margin is nearly four times the statewide average for hospitals and almost eight times Blue Shield’s 2% cap. Moreover, UCLA Medical Center serves a lower percentage of Medicare, Medi-Cal, and uninsured patients than other California hospitals and, therefore, faces less cost pressures than other hospitals.  Because we’ve capped our profits at 2%, every penny more that we have to pay UCLA and other providers ultimately must come from our customers who are already suffering.

We believe UCLA Medical Center should curtail its relentless rate increases so struggling local businesses, labor groups, government agencies, and individuals don’t have to pay more than they can afford. We are willing and eager to negotiate agreements with UCLA and other UC hospitals that provide a fair margin while also preserving affordability for our members.  Regardless of UCLA Medical Center’s decision, we will ensure all of our members get the quality care they need and deserve. Blue Shield customers will continue to have access to more than 40 hospitals and over 17,000 physicians in the Los Angeles area. 

California Beneficiaries Hit Hard by Medicare Advantage Plan Pull-outs 

Almost 151,000 beneficiaries in California are in Medicare Advantage plans that will not be available in 2012, according to a report by California Health Advocates. This large number is due to two regional PPOs leaving the Medicare Advantage market — Freedom Blue Plan I and Freedom Blue Classic offered by Anthem Blue Cross. These plans have been available in California for several years and their pullout affects 113,709 enrollees.  Other Medicare Advantage plans that are not renewing account for the remaining 25% of affected beneficiaries. Some of these plans may be terminating because of low enrollment.

Generally, beneficiaries in southern California have many Medicare Advantage plan options, especially HMOs, whereas beneficiaries in northern California have fewer options. In urban areas in northern California, some counties have a few HMO plans and in rural areas, some counties only have private fee-for-service (PFFS).

Although there are no counties without any Medicare Advantage plan options, a few counties have only unaffordable or unsuitable options. For example, Marin, Nevada, Sutter and Yuba counties each have only one Medicare Advantage plan in 2012 with premiums ranging from $79.60 to $99, which is much higher than the Freedom Blue PPO, which has a $0 premium. Another example is Santa Cruz county, which will have two Medicare Advantage plans next year, but the premiums are high: one HMO with prescription drug coverage at $192 and one HMO without prescription drug coverage at $89. Beneficiaries who want a Medicare Advantage plan and prescription drug coverage have to choose the HMO with prescription drug coverage because of a rule that a beneficiary cannot combine an HMO with a stand-alone Part D plan.

San Benito, Tehema and Tuolumne counties each only have a private fee-for-service plan. Many doctors do not accept the payment terms and conditions of these private fee-for-service plans. So some beneficiaries won’t be able to access care from their doctor.  Sponsors of plans that are not renewing are trying to get affected beneficiaries to enroll in other MA plans or stand-alone Part D plans. Anthem Blue, for instance, is offering local PPO plans in 13 counties and three Part D plans statewide. Insurance companies that sell Medigap policies, including some sponsors of Medicare Advantage plans, are also targeting affected beneficiaries since these beneficiaries have a guaranteed issue right to buy a Medigap policy. For more information, visit http://www.cahealthadvocates.org.

California Has the Highest Uninsured Rate 

At 6.9 million, California now has the largest number of people without health insurance of any state, according to a report by the California HealthCare Foundation  (CHCF). The percentage of Californians who get insurance through their jobs also continues to fall. In 2010, 53% of workers under 65 were covered by employer-based insurance compared to 65% in 1987. However, some of these workers gained coverage through Medi-Cal.

Over the past two decades, California has seen an increase in the percentage of people who are uninsured. The study reveals these key findings:
·   Nearly one in four workers in California is uninsured.
·  Employees in businesses of all sizes are more likely to be uninsured in California than in the rest of the United States.
·  Nearly one-third of the uninsured in California and the nation have family incomes of $50,000 or more.
·  Fifty-three percent of California’s uninsured children are in families in which the head of household worked full-time during the calendar year 2010, down from 61% in 2008. About 60% of the uninsured population is Latino.

The ranks of the uninsured may grow in the short run. But if more people lose their  employer-based coverage, changes proposed under the federal Affordable Care Act, as scheduled in 2014, would allow more Californians to gain coverage. For more information, visit http://www.chcf.org/publications/2011/12/californias-uninsured 

PENSIONS

A Lost Year For Pension Funding 

Milliman’s latest Pension Funding Index reveals that 100 of the nation’s largest defined benefit pension plans experienced a total $7 billion decline in market value and a $1 billion increase in pension liabilities in November. Declining assets drove the deficit growth. But the big story is the 4.53% discount rate, which is the lowest in the 11-year history of this study.  John Ehrhardt, co-author of the Milliman Pension Funding study said, “So long as we have low discount rates, we’ll have no choice but to hope for improved asset performance. As 2011 draws to a close, it seems increasingly likely that this will be a lost year for pension funding. In the coming weeks, plan sponsors will be closely monitoring the discount rate and the market value of these assets with the hope of starting off 2012 with at least some upward momentum.” Year-to-date, the cumulative asset return on these 100 pensions has been 2.27% and the Milliman 100 PFI funded status has decreased by $175 billion, dropping the funded ratio from 84.1% to 75.0%.  To view the complete study, go to http://ow.ly/4xFIt.

HEALTHCARE

New Regulation Threatens Agents, HSA Plans 

by Greg Scandlen (Reprinted with permission from http://healthblog.ncpa.org.) 

HHS recently issued its final standards on how to rebate money from insurance carriers that fail to reach the Medical Loss Ratio (MLR) standards for 2011. This has sparked a new flurry of attention to the MLR issue, which requires insurers to spend no more that 20% of premium on administration in the small group and individual markets and 15% in the large-employer market.  Importantly, HHS decided not to exempt broker and agent commissions from being included in the administrative cost side of the equation despite a new National Association of Insurance Commissioners (NAIC) resolution urging it to do otherwise.  The Kaiser Family Foundation has taken a look at how this decision will affect various states. It finds that, while commissions average about 6% of premium in the individual market and 5% for the small group market, it varies widely from state to state. KFF writes:  Interestingly, the amount insurers spend on brokers compensation varies quite a bit from state to state. In the individual market, commissions range from less than 1% of premiums on average in Hawaii and Vermont to nearly 10% of premiums in South Carolina and Delaware. In the small group market, broker compensation accounts for less than 1% of premiums in Alabama and North Dakota, compared to about 7% of premiums in Utah and California.

The difference is due to a number of factors, but the biggest one is probably competition. If a single company has a near monopoly it is not necessary to spend much on marketing and sales. This suggests a fairly obvious consequence of the MLR regulation. If monopoly leads to lower administrative expenses, and hence higher MLRs, due to low marketing costs, the opposite is likely to happen as well — a requirement for higher MLRs will lead to monopoly.  Dan Perrin, of the HSA Coalition, notes another consequence — instead of lowering the cost of coverage, the MLR will raise it. He argues that lower-cost bronze plans and HSAs will be banished from exchanges because [they] achieve their lower premiums by having higher out-of-pocket responsibilities. The out-of-pocket spending is not counted in the MLR calculation. He writes:  To repeat, just so everyone is clear: If an insurer pays for a health care service for their insured, the MLR rule counts that in their MLR rule. But if an individual pays for a health care service to meet their deductible, the MLR rule does not count that expenditure.

Let’s give an illustration:  I buy an insurance policy with no deductible that costs $5,000. I have $4,000 in medical expenses. That is 80% of my premium, so the health plans is in compliance.  However, if I buy a policy with $1,000 deductible for $4,000 in premium and still have $4,000 in medical expenses, I pay the first $1,000 directly to meet my deductible.  The health plan pays the remaining $3,000. That is only 75% of my $4,000 premium, so the plan is not in compliance. It’s the exact same total cost of coverage and the exact same medical expense, but one design complies and the other does not.  So, the consequences of the MLR regulation are more monopoly and higher costs.  And maybe that is why MLR regulations have never actually worked in the states that have adopted them over the years. But, like everything else in ObamaCare, the law was enacted heedless of any evidence or logic and solely for political reasons. http://healthblog.ncpa.org.

Drug Maker Cuts Distribution to Free Clinics 

It will become even harder for the uninsured to get insulin and blood-thinning medication since the pharmaceutical company, Sanofi, has decided to cut distribution to free and charitable clinics and charitable pharmacies. Sanofi has notified safety net providers of the company’s plan to suspend its Institutional Patient Assistance Program (IPAP) and severely limit its traditional patient-assistance program.  The insulin “Lantus” and the blood thinner “Lovenox” are just two of the medications that will be much harder for the uninsured to access because of the company’s decision. The average monthly cost of Lovenox is $4,000 and the monthly cost of Lantus is $357, making it virtually impossible for the uninsured to afford.

In a letter dated November 15th, clinics and pharmacies were informed of the dramatic change in this large pharmaceutical company’s policies. The letter stated that these programs were to be ended or scaled back by the end of the year, giving safety net providers very limited time to identify possible alternatives for continuing these medications for the tens of thousands of patients who rely on them.

Nicole Lamoureux, executive director of the National Association of Free Clinics said, “The company’s sudden shift…came as a huge surprise to us. The nation’s uninsured rely on these programs in order to remain compliant with their prescribed medication. At sites across the country, over $10 million worth of Sanofi medications were administered in the last year to our patients.”

Lamoureux said, “We have been assured that many patients will have access to medication through the traditional patient-assistance program. This requires new applications and paperwork, hence the timing does not allow us to smoothly transition our patients to other suitable alternatives. We considered Sanofi a partner in providing access to medication for the uninsured and this announcement is quite disappointing. It is our hope that we will be able to work with Sanofi to develop a program in a timely fashion that will prevent a situation such as this from occurring in the future.”

Physicians Are Pessimistic About Health Reform

Only 27 of doctors expect the Patient Protection and Affordable Care Act (PPACA) to reduce healthcare costs by increasing efficiency and only 33% expect it decrease disparities in healthcare access. In fact, half expect access to decrease because of hospital closures that result from the law, according to a study by the Deloitte Center for Health Solutions. Seventy-three percent of doctors are not excited about the future of medicine. Sixty-nine percent say that many of the best and brightest who might have considered a career in medicine will think otherwise.

Paul Keckley, Ph.D. of Deloitte said, “Physicians are resistant to reform and are frustrated with the direction of the profession. Understanding the view of the physician is fundamental to any attempt to change the health care model; this is the person prescribing the medicine, ordering the test and performing the surgery.” The negativity is driven in part by concern over the pressure primary doctors will face from millions of newly insured consumers seeking care and how it could affect the larger system. Doctors also fear that reform will mean a loss of autonomy and more costs and administrative burdens.

The study also reveals the following about doctors’ opinions:

• Nearly three-quarters say that emergency rooms could get overwhelmed if primary care physician appointments are full as a result of the Patient Protection and Affordable Care Act.
• More than 80% say that wait times for primary care appointments are likely to increase because of a lack of providers.  More than half say that other medical professionals (physician assistants, nurse practitioners) will deliver primary care both independently and in addition to physician services.
• 57% of surgical specialists support repealing the health reform law compared to 38% of primary-care providers and 34% of non-surgical specialists.
• 59% of physicians 50 to 59 years old say that PPACA is a step in the wrong direction compared to only 36% of those ages 25 to 39 share this sentiment. Younger physicians (ages 25 to 39) are also more likely than older doctors (ages 40 to 59) to think the transition to evidence-based medicine will improve care.

For more information, visit www.deloitte.com/us/physiciansurvey.

EMPLOYEE BENEFITS

American Specialty Health Group Files Suit Against Healthways

American Specialty Health Group (ASH), which provides the Silver&Fit Fitness Program for Medicare Advantage Plans, filed suit against Healthways on December 2, 2011 in the Southern District of California. ASH alleges that Healthways, which provides more than 60% of the Fitness Programs for the Medicare Advantage market, has resorted to illegal contracting strategies to freeze out competitors.

ASH alleges that Healthways compels its SilverSneakers contracted fitness facilities to sign an exclusivity contract preventing them from contracting with any  competitor that offers a Fitness Program for Medicare Advantage members. ASH says that Healthways enforces the exclusivity provision by threatening to terminate or sue contracted facilities that sign a competing contract with ASH. ASH contends that these methods prevent ASH from forming a competitive network of Silver&Fit fitness facilities. ASH further alleges that by stopping the competition, Healthways is able to maintain high prices for its SilverSneakers while providing a program that is “inferior in quality.” ASH contends that Healthways’ actions have led to damages in excess of $11 million in lost contracts.  Apart from seeking $11,000,000 in damages, ASH seeks an injunction of “Healthways’ unlawful, unfair, and fraudulent conduct.” The case can be found here http://www.ashcompanies.com/resources/pdf/ASHGroupComplaint.pdf.

NEW PRODUCTS

Fixed Index Annuities  

The Hartford introduced two fixed index annuities that allow risk-averse investors to build retirement assets in the face of historically low interest rates. The Hartford Saver Solution and The Hartford Saver Solution Choice offer principal protection with the potential to earn interest from three interest-crediting options, two of which are based in part on the performance of an equity index or indices. All three methods offer growth potential through interest crediting without the threat of investment losses, since clients do not invest in any securities. For more information, visit http://www.thehartford.com

Pension Funding Scorecard 

MassMutual introduced its Pension Funding Scorecard to help decision makers evaluate portfolio performance. It provides quarter-by-quarter performance comparisons of a liability driven investing portfolio versus a traditional 60% equity/40% fixed income portfolio. The index is based on aggregating data from defined benefit plans on MassMutual’s Retirement Services platform. In also provides historical returns to help retirement plan advisors make informed decisions about pension funding. For more information, visit www.massmutual.com.

Fixed Index Annuity Product Suite 

Genworth Financial launched two index annuities designed for security-conscious consumers – SecureLiving Index 7 and SecureLiving Index 10 Plus. The SecureLiving product suite is designed for consumers who are weary of investment volatility and eager to protect their money from unpredictable market fluctuations. As single premium, fixed deferred annuities, they offer index-based and fixed interest crediting strategies. Consumers can allocate premium across five different crediting strategies based on individual needs and risk tolerances. In addition, contract holders have access to their money through 10% free annual withdrawals beginning in year two. There are also annuitization options as well as the optional Income Protection rider, a waiver for confinement to a medical care facility. Products require a minimum single premium of $25,000 or more and the client must be 80 or younger to apply (age 85 for SecureLiving Index 7). Fore more information, visit www.genworth.com.

Dental Network Optimization Program

With its new Dental Network Optimization Program, Assurant puts its local recruiting team to work enlisting the dentists whom employees designate as their provider of choice. It is available for employer groups with a minimum of 100 lives. Each participating employer is assigned a dental network manager. For more information, visit www.assurantemployeebenefits.com.

MEETINGS

Insurance Marketing Conference in Florida 

The Professional Insurance Marketing Association will hold its 38th Annual Meeting from February 9 to 12, 2012 at the Hammock Beach Resort in Palm Coast,  Fla. Sessions will cover doing affinity marketplace, using relationships and marketing expertise to find new customers, and managing inbound digital marketing effectively. For more information, call 817-569-7462 (PIMA) or visit http://www.pima-assn.org.

HEALTHCARE
• Final MLR Rule Goes Against Brokers
• DOL to Crack Down on Fraudulent Health Plans
• Few Employers Plan to Drop Health Insurance Coverage
• Consumers Are Happy With Their Pharmacy Benefit
• The Most Popular Provisions in the ACA
• Seniors Are Postponing Doctor Visits
FINANICAL PLANNING
 • Financial Planning with Healthcare Expenses
• Employers Consider Financial Wellness
• Employers Are Key to Building A Financial Safety Net
• Despite Economic Turmoil, 72% of Americans Remain Optimistic
IN CALIFORNIA
• Individual Dental Plan
• Preventable Chronic Diseases Are on the Rise
INDUSTRY OVERVIEW
• Consumers Find Insurance Shopping to be the Most Complex
• Get the LIDMA Seal of Approval
LIFE INSURANCE
• Life Insurers Will Continue to Face Challenges in 2012

HEALTHCARE

Final MLR Rule Goes Against Brokers

The Centers for Medicare & Medicaid Services (CMS) issued a final regulation that will require health insurance companies to spend at least 80% of consumers’ health insurance premiums on medical care, not income, overhead, and marketing. The National Association of Health Underwriters (NAHU) issued a statement expressing disappointment that the final rule does not exempt broker fees. Janet Trautwein, CEO, NAHU said, “NAHU is disappointed that HHS did nothing to mitigate the adverse effects the MLR rule is having on the ability of insurance producers to serve the demands and needs of healthcare consumers…Just last week, the NAIC passed a resolution urging HHS and Congress to take action to preserve the role of professional health insurance agents and brokers as consumer advocates and advisors. This unprecedented action by the NAIC shows the commitment of our nation’s state insurance commissioners to protecting consumer and employer access to professional health insurance agents and brokers and we will continue to work with HHS to find an acceptable solution to this ongoing problem. We now call on Congress to heed NAIC’s recommendations and pass H.R. 1206, the bipartisan legislation introduced by Representatives Mike Rogers (R-MI) and John Barrow (D-GA) that would exclude agent and broker compensation from the MLR calculation and provide state insurance regulators with greater flexibility with medical loss ratio (MLR) implementation. We look forward to working with members of Congress on this critical issue.” Senator Mike Enzi (R-Wyo.) said, “The rule published today represents more of the heavy handed regulations that are keeping our nation from regaining its economic footing. Unfortunately, mandating that insurance companies spend a certain percentage of healthcare premiums on claims does nothing to actually lower skyrocketing healthcare costs.  Instead, the final rule published today will result in the loss of a substantial number of jobs, which will deliver another blow to our nation. We cannot wait to repeal this partisan healthcare law.  We must start over with something that actually will help lower costs, improve care, increase choice, and put Americans back in charge of their healthcare.” Insurance companies that fail to meet the new standard are required to provide a rebate to consumers. The Medical Loss Ratio (MLR) rule was created by the Affordable Care Act. Early reports suggest that insurers are lowering premium growth to avoid providing rebates. MLR rules took effect on January 1, 2011, but the final rule includes the following modifications: • The MLR rebate is tax free: Rather than having insurers send checks that could be taxed, workers in group health plans can receive rebates in a way that is not taxable. • The new regulation proposes that all consumers receive a notice, showing not just the amount of any rebate, but also what the insurer’s MLR means regardless of whether there is a rebate and how the insurer’s MLR has improved under the new law. In addition, data on the special types of plans, mini-meds and ex-patriate plans, will be publicly posted in the spring. • In 2011, so-called mini-med plans received a special circumstances adjustment to their MLR in the form of a multiplier of 2.0 for 2011. The final rule phases it down from 1.75 in 2012 to 1.5 in 2013 to 1.25 in 2014. Mini-med plans will be banned by the prohibition on annual limits in the Affordable Care Act starting in 2014. The final rule keeps the ex-patriate plan multiplier adjustment at 2.0 due to their unique structure. It also levels the playing field between non-profit and for-profit insurers in states with premium taxes. For more information on the final rule, visit: http://cciio.cms.gov/resources/factsheets/mlrfinalrule.html.

DOL to Crack Down on Fraudulent Health Plans

The Dept. of Labor’s Employee Benefits Security Administration released proposed rules under the Affordable Care Act to protect businesses and workers who get health benefits through a multiple employer welfare arrangement (MEWA). Through MEWAs, unrelated employers, typically small businesses, seek to provide healthcare and other benefits at a lower cost than other traditional forms of coverage. DOL says that scam artists and criminals have used MEWAs to defraud consumers. When such MEWAs become insolvent, they may leave consumers with substantial unpaid medical bills. The proposed rules call for MEWAs to adhere to enhanced reporting requirements so that employers, workers, and their families will not be cut off, unexpectedly, from needed healthcare services. The rules would allow the department to shut down MEWAs that are engaged in fraud or other activities that present an immediate danger to public safety or welfare. “Too many MEWAs are taking advantage of good employers who want to make health insurance available to their workers and too many hardworking Americans have suffered. These proposed rules, under the Affordable Care Act, will crack down on those who want to use MEWAs to defraud American families,” said Secretary of Labor Hilda L. Solis. Solis says that some MEWAs have taken advantage of gaps in the law to avoid state insurance regulations, such as a requirement to maintain sufficient funding and adequate reserves to pay healthcare claims. In the worst situations, operators of MEWAs have drained their assets through excessive administrative fees or outright embezzlement. In some cases, individuals incur significant medical bills before they learn that claims are not being paid. The new proposals detail the following changes: • MEWAs must register with the Department of Labor before operating in a state or be subject to substantial penalties. This will allow the department to track MEWAs as they move from state to state and to identify their principals. • The secretary of labor would be able to issue a cease and desist order. • The secretary of labor would be able to seize assets from a MEWA when there is probable cause that the plan is in a financially hazardous condition. Complete details on all provisions are  published in the Dec. 6 Federal Register and also are available at http://www.dol.gov/ebsa/healthreform/.

Few Employers Plan to Drop Health Insurance Coverage

Fifty-six percent of employers are likely to continue offering employer-sponsored health insurance after healthcare reform is enacted, according to a survey of benefit decision-makers in 502 private-sector companies. Only 12% are very or somewhat likely to drop coverage and another 32% are unsure what they will do, according to the survey by GfK Custom Research North America. With healthcare costs continuing to increase in recent years 20% of employers have seriously considered ending healthcare benefits. Nanneman said, “While the social contract between employers and employees remains secure, for the time being, there are signs that it is weakening among some employers. This suggests that, as health insurance exchanges become operational, some employers will be receptive to having their employees get insurance via this new option rather than with traditional employer-sponsored insurance.” Only 4% of companies with 500 employees or more are considering terminating coverage completely. Decision-makers who are familiar with healthcare reform are less likely to foresee their dropping coverage (7%, versus 15% among those not familiar). Tim Nanneman, vice president and director of Health Insurance Research said, “This survey suggests that firms aren’t considering a wholesale flight from employee healthcare coverage as healthcare reform is implemented. However, many employers are skeptical about the potential effects of healthcare reform.” Even though most are committed to continuing insurance coverage, many worry that reform provisions will fail to stem healthcare costs or will increase costs. Fifty-one percent expect costs to increase faster. Thirty-eight percent are not sure how health reform will affect future costs. Those who have experienced the highest recent price increases are the least likely to see healthcare reform as improving the situation.  Eighty-six percent say that the effect on the company’s bottom-line will be an important consideration when deciding what to do about employee benefits after healthcare reform. However, 82%, say the effect on employee morale will be important. For more information visit www.gfkamerica.com.

Consumers Are Happy with Their Pharmacy Benefits

Consumers are very satisfied with their prescription drug benefits and the variety of drugs and drugstores they provide, according to a study by the Pharmaceutical Care Management Association (PCMA). Eighty four percent of consumers are not willing to pay higher premiums in order to add more drugstores to their networks. The survey also reveals that following: • Insured adults are overwhelmingly satisfied with their prescription drug coverage, including covered drugs and access to stores. • More than four-fifths of insured adults are unwilling to pay higher premiums to gain access to more drug stores. • Among the 31% of insured adults who have tried mail service delivery, 89% are satisfied with the service and 10% are dissatisfied.

The Most Popular Provision in the ACA

The following is a summary of a recent blog entry by Drew Altman, PhD., president and CEO of the Kaiser Family Foundation. (http://www.kff.org/pullingittogether/Most-Popular-Provision-ACA.cfm.) In our most recent tracking poll, we asked Americans which elements of the health reform law they like and dislike. Surprisingly, the runaway favorite was a relatively obscure requirement that health plans provide consumers with a short, easy to understand description of their benefits and coverage. Sixty percent of the American people gave this requirement for greater transparency in health insurance benefits a very favorable rating, the only provision in the law to get such a rating from more than half of the public. The Administration is writing final regulations to implement this provision now. The summary of benefits provision was followed in popularity by several better known provisions of the law: preventing insurers from denying people coverage if they have preexisting conditions, ranked very favorably by 47%; closing the Medicare doughnut hole for drug coverage (46% very favorable rating); and providing tax credits to people and small businesses to help pay for coverage (44% and 45% very favorable ratings, respectively). The common element in all of the most popular provisions of the law is that you do not have to be a health policy expert to understand them. No surprise, the individual mandate, which will be the subject of Supreme Court review, was the least favorable element of the law. Some people don’t want insurance. Others may worry they will not be able to afford it. But mostly, Americans don’t like to be told what to do or that they will be fined for not doing it. Opposition softens somewhat if people think the mandate will help spread insurance risk. Our polling shows people don’t know much about its more consumer friendly provisions, which are popular even across partisan lines. As long as that remains the case, people will not perceive the ACA as part of the solution to their everyday problems and public opinion will remain split along the familiar partisan divide. That’s the larger meaning of this finding about a seemingly small provision in the ACA from our monthly tracking poll.

Seniors Are Postponing Doctor Visits  A survey of more than 1,200 seniors revealed that 51% have put off visiting a doctor or getting outpatient medical services due to concerns about costs. The Senior Citizens League (TSCL) survey also found the following: • 61% postponed visits to dentists, opticians, or hearing specialists. • 44% postponed filling prescriptions or took a lower dosage than prescribed. • 44% are spending at least $300 per month in out-of-pocket medical expenses and that 10% are spending at least $750 per month. “This survey makes clear just how hard seniors have been hit during this economic downturn. Too many seniors are forced to make life or death decisions about their health on a daily basis,” said Larry Hyland, chairman of The Senior Citizens League. To help increase buying power, TSCL is lobbying for a change in the Consumer Price Index that’s used to determine the cost of living allowance (COLA) seniors get in their Social Security checks each year. For more information, visit www.SeniorsLeague.org or call 800-333-8725 for more information.

FINANCIAL PLANNING

Financial Planning With Healthcare Expenses

Nationwide Financial launched the Personal Healthcare Assessment Program to help advisors estimate their clients’ healthcare expenses in retirement. The assessment starts with a questionnaire on the client’s health history, lifestyle and family history of medical conditions. After this, they will get a report that offers suggestions for decreasing health risks. The report will tell clients about their health profile, health risks, estimated life expectancy based on those risks, and hypothetical out-of-pocket healthcare costs during their retirement. For more information, visit www.nationwide.com.

Only Half of Small Business Owners Work with Advisors

Small business owners (SBOs) are highly desirable clients for financial advisors because of the many financial services they need and use. But SBOs are legendarily difficult to get in front of because they are so busy and not particularly interested in hearing about a service they’re not convinced they need.Kerry Geurkink, director, Annuity Marketing, Securian Financial Group Inc. said, “That part should come easily since financial advisors themselves are small business owners. Our research shows that small business owners have many financial concerns, but only half work with financial advisors. And even then they work with advisors more on personal finance than business-related issues.” SBOs top financial concerns include cost control, profitability, wealth building, financial security for their families, and rising health care costs. The percentages of SBOs who want outside assistance with these concerns is much larger than the percentage that actually seek and use it. There are circumstances under which SBOs consider seeking a financial advisor’s services. All fall in the typical advisor’s “sweet spot,” including business succession planning, personal finance, asset management and employee benefits. How does an advisor get on a small business owner’s radar? Recommendations from family members, business acquaintances, and other financial professionals provide the best entrée to an SBO. Clearly, networking with bankers, accountants and attorneys is important. “Once that first meeting is scheduled, the advisor must demonstrate expertise in running a small business. That part should come easily since financial advisors themselves are small business owners. Above all, advisors must prove that assistance from a financial consultant is an investment rather than an expense. Our job is to provide our producers with the tools they need to make that case,” says Geurkink. For more information, visit www.securian.com.

Employers Consider Financial Wellness

Fifty-eight percent of employers say that financial issues play a role in employee absenteeism, according to a MetLife study. Seventy-eight percent said that when employees are worried about financial problems, their productivity can suffer. The study found that financial education programs could lower financial stress, reduce absenteeism, increase productivity, and lead to a more loyal workforce. The study highlights the following best practices for employers to implement a successful financial wellness program: • Set a target and measure the results. Think about what the company wants to achieve with a financial wellness program. Is it reduced employee stress, increased company loyalty, enhanced financial wellness, or something else? • Craft a message relevant for the target audience. Consumers vary in their financial needs and literacy depending on their life-stage and national culture, and their readiness to get financial advice. • Use creativity to gain participation. Consumers fail to improve their financial literacy due to the lack of immediate gratification for doing so; a lack of time, money, or knowledge; or plain denial  Make the issue more real for employees through creative communications and delivery channels. For more information, visit www.metlife.com.

Employers Are Key to Building A Financial Safety Net

Employers can play a key role in providing access to financial protection, according to a white paper by Colonial Life. The white paper uses proprietary and industry research to show the risks American workers face and how employers can help them become better educated and obtain coverage without affecting the bottom line. “Families are struggling to make ends meet. The death of a wage earner or an accident that puts the breadwinner out of work for a month or more can push many families into poverty. Basic life and disability insurance can help prevent that from happening. And it’s usually very affordable when offered as part of a workplace benefits program,” says Jeff Koll, Colonial Life’s assistant vice president, life and disability products. Approximately 100 million Americans aren’t protected by private disability insurance, and four in 10 U.S. adults have no life insurance. Even many of those who are enrolled in a group insurance program provided are concerned that their coverage is inadequate. The majority of wage earners believe they have only a 2% or less chance of becomming disabled for three months or more during their working careers. However, the actual odds of a worker becoming disabled for at least six months is 33%. Contrary to what many people assume, lifelong ailments aren’t the main cause of disabilities. Ninety-one percent are caused by common illnesses or health conditions such as cancer, childbirth, or heart attack. That means that many disabilities aren’t covered by workers’ compensation. Most workers don’t have the financial resources to maintain their family’s standard of living in the event of a disability or death of a wage earner. More than a third of households say they’d immediately have trouble meeting living expenses if a primary wage earner died. In fact, 61% of American workers live paycheck to paycheck. Their employers aren’t unaware of this: In a recent Colonial Life survey, 65% of employers said they didn’t think their employees would be able to maintain their standard of living if they were unable to work for two or three months because of an illness or accident. “By integrating voluntary benefits such as the basics of life and disability coverage with existing medical benefits, employers can go a long way toward helping employees protect themselves against financial exposure,” says Koll. For more information, visit www.coloniallife.com.

Despite Economic Turmoil, 72% of Americans Remain Optimistic 

Despite the economic challenges that have rocked the nation, Americans remain positive about their future, with 66% of Americans saying that their lives are headed in the right direction, according to a survey by Lincoln Financial Group. Of the 803 adults polled by Whitman Insights Strategies, 72% are optimistic about their future and 66% feel at least somewhat in control of their personal lives, financial future, and health. Americans feel in greater control of their health (51%) than of their financial future (27%). Mark Konen, president of Insurance and Retirement Solutions for Lincoln Financial Group said, “We were surprised to learn that Americans feel more in control of their health than their financial future.” The poll uncovered these key factors that are strongly associated with feeling in control of your life: • Valuing and cultivating their personal relationships. • Volunteering in their communities and giving to charitable organizations. • Taking quiet time to be alone and think. • Exercising and spending time on a hobby. • Adhering to a budget and saving for retirement. Konen said, “While it’s not particularly surprising that ‘take charge’ Americans exercise and spend more time with their families and communities; we were surprised to learn that they also go to the movies more often than those not in control of their lives. [Editor’s note: Could it be that simply being able to afford a movie ticket makes you feel more in control of your life?] Konen added, “In fact, the combination of traits that apply to ‘take charge’ Americans shows that these people strike just the right balance: they value alone time, but also invest in their relationships with friends and family; they enjoy leisure time and taking long walks, but also make time to sit down with their paperwork and adhere to a budget. “ Forty-six percent of those in control of their lives say they do not have enough money to live on when they eventually retire. Thirty-four percent who reported an annual household income below $50,000, 84% are very or somewhat optimistic about their financial future. Americans who are in control have taken concrete steps to build financial security, such as establishing a retirement account and owning other financial products, including life insurance. They are also more likely to stay within their budgets and save money from every paycheck regardless of the amount. The survey also include the following results: • 51% of consumers say they are very much in control of their health, but only 27% say they are very much in control of their financial future. • 50% of consumers are in control of their lives go to the movies versus 33% of those who say they are not in control. • 63% of those in control of their lives regularly put money away for retirement versus 35% of those who say they are not in control. For more information, visit www.LincolnFinancial.com/surveys. IN CALIFORNIA

Individual Dental Plan

BEST Life launched Personal Dental, a line of dental plans designed for people and families in California. Preventive care on the Personal Dental plans is covered at 100% to 80% of the usual and customary charge or at a reimbursable amount. A $50 yearly deductible applies to basic and major services only. People may select an indemnity plan that increases coverage for every year up to the third year; or select a Scheduled Reimbursement plan, which provides an easy to follow list of reimbursements for each covered dental procedure. Personal Dental is available for California residents through the BEST Employers Association website, and starting with December 1, 2011 effective dates. People become members of the Association before they purchase a dental plan. For details, please visit www.beassoc.org/personaldental/. Insurance agents can contact the BEST Health Plans Sales Team at 800-237-8543.

Preventable Chronic Diseases Are on the Rise

United Health Foundation’s 2011 America’s Heath Rankings reveals troubling increases in obesity, diabetes, and the number of children in poverty. These issues are offsetting improvements in smoking cessation, preventable hospitalizations, and cardiovascular deaths. The report finds that the country’s overall health did not improve between 2010 and 2011. That’s a drop from the 0.5% average annual rate of improvement between 2000 and 2010 and the 1.6% rate in the 1990s. Reed Tuckson, M.D., United Health Foundation board member said, “Where people live matters. Every state can make improvements to ensure healthier quality of lives for their residents. In the history of the Rankings, we have seen many examples of stakeholders coming together to improve their standing. States such as Tennessee and Maine – which made explicit efforts to improve their rankings – have shown us that improved public health is achievable but must be tackled in a concerted and aggressive way.”
• Although 852,000 fewer adults smoke in California compared to 10 years ago, nearly 3.4 million adults still smoke.
• Over 6.9 million adults in California are obese, 2.0 million more adults than 10 years ago.
• In the past 10 years, diabetes increased from 6.8% to 8.6% of adults. Now 2.4 million California adults have diabetes.
• In the past five years, the percentage of children in poverty increased from 18.5% to 23.0% of the population.
• California ranks lower for determinants than for outcomes, indicating that overall healthiness may decline over time. California is 24th this year; it was 26th in 2010. The following are the states’ strengths:
• A low prevalence of smoking.
• High use of early prenatal care.
• Low infant mortality rate. The following are challenges:
• High levels of air pollution.
• High rate of uninsured population.
• Low immunization coverage. For more information, visit www.americashealthrankings.org.

INDUSTRY OVERVIEW

Consumers Find Insurance Shopping to be the Most Complex

Online shopping portals that are simple to use stand to capture more than $1.1 billion in revenues, according to Siegel+Gale’s second annual Global Brand Simplicity Index, which surveyed more than 6,000 consumers across seven countries. In the Internet retail industry, Amazon, Zappos, and iTunes are among the leaders in providing customers with simple interactions and experiences. On the opposite end of the spectrum, U.S. consumers consider general insurance and health insurance the most complex. Healthcare is at the very bottom of the Simplicity Index, with respondents seeing little difference between one carrier and another and citing challenges to understanding which services and treatments are covered by insurance. Across all industries, U.S. consumers are willing to pay  2.4% to 5.3% more for brands they believe offer the greatest degree of simplicity. For more information, visit http://www.siegelgale.com/white_paper/2011-global-brand-simplicity-index-united-states.

Get the LIDMA Seal of Approval
The Life Insurance Direct Marketing Association (LIDMA) is accepting applications for companies that want to get a LIDMA Seal of Approval. LIDMA awards seals of approval in several categories including enhanced Part two collection, eSignature, and ePolicy Delivery solutions. For more information visit www.lidma.org.

LIFE INSURANCE

Life Insurers Will Continue to Face Challenges in 2012

In 2012, low interest rates, volatile equities markets, and a volatile political and regulatory environment will continue to affect the life insurance industry, making it difficult for insurers to boost earnings, according to a study by Ernst & Young. Low interest rates are expected persist until at least 2013, increasing the risk of spread compression for existing products. At the same time, low interest rates will hamper insurer’s efforts to increase sales of fixed annuities and universal life insurance. While interest rates are likely to remain low through 2013, they could climb rapidly after the Federal Reserve’s Treasuries buying spree come to an end. If that happens, a disintermediation risk could be a concern as policyholders trade existing products for new ones with higher rates. To weather these stormy financial times, insurers need to understand the interaction between the asset and liability cash flows under a variety of scenarios. Regulatory ambiguity is likely to persist through 2012. Many key rules under the Dodd-Frank legislation have yet to be formalized, several of which will affect insurers.  Improved analytic and predictive modeling techniques create opportunities for increased sales, improved efficiency, and expanded capabilities for life insurance companies. Insurers may face challenges with Congressional efforts to reform the federal tax code. The health of the economy could spur tax code changes with significant repercussions for the life insurance industry. Shaun Crawford, Ernst & Young’s Global Insurance Sector Leader said, “Insurance accounting standards and regulatory uncertainty is likely to persist through 2012, given the present contentious reform efforts and attempts by competing interests to converge systems in divergent directions. Changes are being implemented at all regulatory levels, and navigating these changes will yield challenges, but, will present opportunities for insurers.” The complete Life Insurance Industry 2012 Outlook report can be found at www.ey.com/insurance.

IN CALIFORNIA
• Insurance Commissioner Protests Ruling Favoring Brokers
• New Initiatives Would Rein in Hospital Fees
• Site Helps Californians Plan For Long-Term Care
• Blue Shield of California to Provide Rebates
HEALTHCARE
• Retail Medical Clinics See Growing Popularity
• Affordable Care Act Helps Seniors Save
• Business Owners Don’t Agree With Mandates
• Many Seniors Would Support Tax Increases to Avoid Medicare Cuts
• Fewer Children Are Uninsured
•  The Potential for Medical Tourism
• Webinar on Private Exchanges
ANNUITIES
• Variable Annuities See Record Sales
• Income and Indexed Annuity Sales Increase
NEW PRODUCTS
• Asset Class Enhancements
• Medicare Part D Plan
EMPLOYEE BENEFITS
• Barriers to 401(k) Adoption

IN CALIFORNIA

Insurance Commissioner Protests Ruling that Favors Brokers

National Association of Insurance Commissioners (NAIC) passed a ruling calling for broker commissions to be exempted from Medical loss ratio (MLR) calculations that limit how much insurers can spend on administrative costs. One strong dissenter is California Insurance Commissioner Dave Jones. His statement makes it seem that he has never actually talked to a health insurance agent, “Rolling back the MLR requirement is not the answer. There is no guarantee that the health agents and brokers would benefit from this proposal, but the evidence shows that consumers would be harmed.”

Jones said, “In 2011, a significant number of companies have reduced commission levels, particularly in the individual market. However, a significant number of companies have not reduced commissions in 2011. The states with higher MLR requirements have not observed any problems with consumer access to insurance or to producers.”

He also said, “I recognize the important role that licensed health agents in my state play in assisting consumers and I will work with them to help ensure that they continue to play such a role as our nation’s healthcare system changes and expands to cover tens of millions of additional policyholders.”

He said that, if agent and broker commissions had been removed from the MLR calculation in 2010, consumer rebates would have been reduced by more than 60%. “The net result of the proposal would be to reduce consumer rebates by more than $1.1 billion.  At the same time, the experience of states that had higher MLRs is that consumers still have access to agents and brokers,” he said.

New Ballot Initiative to Rein in Hospital Fees

California healthcare workers filed two statewide ballot initiatives to increase transparency of hospital costs, end overcharging for hospital services, and ensure increased charity care. The Charity Care Act of 2012 sets the minimum level of charity care at 5% of patient revenue that non-profit hospitals must spend on healthcare for the needy in exchange for not paying state and local taxes.

Dave Regan, president of SEIU-UHW said, “Three quarters of the hospital industry pays no taxes. Companies that operate tax-free should not be permitted to overcharge consumers and they should be required to meet their charitable duty by providing a reasonable level of services for prevention, treatment and wellness to those in need.”

The Fair Healthcare Pricing Act of 2012 would prohibit hospitals from charging more than 25% above the actual cost of providing patient care. On average, California hospitals charge 450% and as much as 1,000%, more than the actual cost of providing care when they treat patients in their facilities.

Currently, there are no set requirements for how much charity care a nonprofit hospital must give in order to get tax exempt status even though the non-profit hospital industry is holding more than $42 billion in reserves. The fair pricing measure would require all hospitals to charge patients reasonable rates based on the actual cost of providing care – putting an end to price gouging.

In 2010, California hospitals charged patients $249 billion even though all of California hospitals’ expenses amounted to just $54 billion. For example, in 2010 Olympia Medical Center, a privately owned for-profit hospital in Los Angeles, charged patients $979 million, even though its total expenses were only $95 million that year – an average of 1,029% of the actual cost of providing care. For more information visit http://yesforahealthycalifornia.org.

Site Helps Californians Plan For Long-Term Care

The State of California launched the long-term care-planning site, www.RUReadyCA.org. Created by DHCS’ California Partnership for Long-Term Care (Partnership), the Website walks visitors through various scenarios and options to address long-term care needs. The site includes six individualized calculators and short videos featuring experiences of Californians who have faced long-term care decisions.

Blue Shield To Provide Rebates

Credits ranging from 18% to 54% of one month’s premium will appear on December bills as Blue Shield of California fulfills its pledge to limit its net income to 2% of revenue. Blue Shield is giving back the amount collected above 2% to customers and the community. Starting this week, letters will be mailed to subscribers and group customers who are eligible to get a credit. Their December bill will reflect the credit based on their dues/premiums from August 2011. The company will give premium credits back to individual and fully insured group customers based on a percentage of one month’s dues/premium from August 2011:

• Individual and family plan customers will get a credit of 54% of one month’s dues/premium.
  Fully insured groups will get a credit of 54% of one month’s dues/premium.
• Groups with shared risk agreements will get a credit of 18% of one month’s dues/premium.

• Customers with fully insured continuous coverage from August 1 through at least December 1, 2011 will get a credit in the bill for their December 2011 dues/premiums (other than government programs whose contracts do not permit such credits) .

The average individual customer will be credited approximately $135 and an average family of four will be credited approximately $420. The range is roughly $40 to $270 for individuals and $220 to $700 for a family of four.

For all fully insured mid/large group customers (51 employees and above), the average credit to the group will be $195 to $230 per member. Employers who pay part of the premium must decide whether and how to apportion it. For small groups (two to 50 employees), the averages are $220 for one employee and approximately $605 for a family of four.

HEALTHCARE

Retail Medical Clinics See Growing Popularity

The use of medical clinics in pharmacies and other retail settings increased 10-fold from 2007 to 2009, according to a RAND study. The study was published in the American Journal of Managed Care. The RAND team used data from a commercially insured population of 13.3 million. The strongest predictor of retail clinic use is proximity. Also, females are more likely to visit clinics. Retail clinic patients tend to be 18 to 44. (Those over 65 were excluded from the study.) Also, those from zip codes with median incomes of more than $59,000 are more likely to use retail clinics while those with a chronic health complaint are less likely to use them.

Care initiated at retail clinics is 30% to 40% less expensive than similar care in physician offices and 80% less expensive than similar care in an emergency room. J. Scott Ashwood, the study’s lead author said that the increase in the uses of retail clinics could lower healthcare costs if patients use the clinics as a substitution for other sources of care, but not if patents are visiting retail clinics when they would have otherwise stayed home. For more information, visit http://www.rand.org/newsletters.html

Affordable Care Act Helps Seniors Save on Prescriptions

So far this year, more than 2.2 million people with Medicare have saved more than $1.2 billion on their prescriptions, for an average of $550 per person, according to the Centers for Medicare & Medicaid Services.  More than 22.6 million seniors and people with disabilities have taken advantage of at least one free Medicare preventive benefit, including the new Annual Wellness Visit made possible by the Affordable Care Act.

“Thanks to the Affordable Care Act, seniors are getting cheaper prescription drugs and free preventive care,” said CMS Administrator Donald M. Berwick, MD.  Under the Affordable Care Act, people with Medicare can get many preventive services at no charge, including diabetes screening, some cancer screenings and help to quit smoking.

Thanks to the Affordable Care Act, seniors and people with disabilities get a 50% discount on covered brand name drugs in the Medicare Part D coverage gap, also known as the doughnut hole.  The coverage gap discount is set at 50% on covered brand name drugs again in 2012. Coverage in the dougnut hole will progressively increase each year until the coverage gap closes in 2020.

In addition to doughnut hole discounts, average premiums for Medicare Part D prescription drug plans will remain virtually unchanged in 2012.  Medicare also recently announced that average Medicare Advantage premiums will drop 4% next year.  Part B premiums, which cover outpatient services including doctor visits, will only rise $3.50 per month for most beneficiaries in 2012, and some will see a decrease.  These changes will be more than offset by the average Social Security cost of living increase ($43 per month for retired workers).  http://irionline.org/resources/article/id/581.

Business Owners Don’t Agree With Mandates

Eighty-eight percent of business owners don’t think that it’s right for the Federal Government to force a state resident to buy health insurance, according to The Small Business Authority. In addition, only 9% believe they will have to purchase health insurance from the government while 53% believe the cost of healthcare is going to increase in the next two years.  Barry Sloane, Chairman, president and CEO of The Small Business Authority said, “There is wide spread theory that the PPACA will clearly reduce choice for private carriers and allow remaining carriers to continue to raise premiums subject to government regulation.”  For more information, visit www.hesba.com.

Many Seniors Would Support Tax Increases to Avoid Medicare Cuts

A survey of 396 seniors on Medicare revealed that 61% would support tax increases if it meant fewer cuts to Medicare. In addition, 54% said that the Supercommittee’s failure to reach a debt-reduction agreement benefits them because it spares Medicare. But 61% said it would be better for the country and 65% said it would be better for their children if the Supercommittee had succeeded. The Supercommittee’s failure to deliver a plan could trigger $1.2 trillion in automatic across-the-board spending cuts in defense and non-defense spending. However, Social Security and Medicare are exempt from the automatic cuts. For more information, visit http://www.extendhealth.com.

Fewer Children Are Uninsured

The number of children living in poverty increased 19% percent in 2010, but the number of uninsured children declined 14% – a true bright spot in an otherwise challenging landscape for America’s children, according to a study by Georgetown University. The uninsured rate for children has declined from 9.3% to 8%. Medicaid and CHIP programs have been successful in reducing the number of uninsured children despite the weak economy. Massachusetts has the lowest rate of uninsured children while Nevada has the highest.

Thirty-four states, including California, experienced a decrease in their rate of uninsured children from 2008 while seven states saw an increase– but in only one state, Minnesota, was that increase significant. Hispanic and Native American children remain disproportionately uninsured; older children are less likely to be covered; and uninsured rates are higher for children who are living below 50% of the poverty level.

Traveling for Health: The Potential for Medical Tourism

Reportlinker.com is offering a new market research  report that looks at the factors driving the growth of the medical tourism industry and identifies the countries that stand to gain the most. It includes a Medical tourism index, which identifies the 20 countries seem to be set to take the lead in the medical tourism industry.  For more information, visit www.reportlinker.com.

Webinar on Private Exchanges 

Atlantic Information Services, Inc. is holding a Webinar on healthcare exchanges on December 13. For more information, visit http://www.AISHealth.com.

ANNUITIES

Variable Annuities See Record Sales

Net variable annuity sales were $8.8 billion for the third quarter, which is the highest level in fourteen quarters In addition, revised annuity sales for the third quarter show a greater year-to-year growth and a smaller quarter-to-quarter decline than originally estimated. Third quarter industry-wide sales were up 6% from third quarter 2010 sales. Third quarter sales were down 4% compared to second quarter sales.

IRI President and CEO Cathy Weatherford said, “The record level of new sales of variable annuities clearly demonstrates that the products are competitive in the marketplace and that they are attracting new investors at an expanded pace.” She noted that sales are expected to exceed $150 billion for the year. The industry is poised to round out the year on a very high note as year-to-date fixed sales remain strong and on par with 2010 levels.

Frank O’Connor, Morningstar Director of Insurance Solutions said, “The surge in net sales is a very positive development, indicating rapidly growing interest in the use of variable annuity guaranteed income benefits as an important component of a portfolio designed to produce sustainable income throughout one’s retirement.” For more information, visit www.IRIonline.org.

Income And Indexed Annuity Sales Increase 

Third quarter 2011 income and indexed annuity sales topped the year-ago quarter according to  Beacon Research. Income annuities increased 5% and indexed annuities increased 0.4%. Indexed annuity sales were also up 7% from the second quarter while year-to-date income annuity results increased 3%. “As we anticipated, these products continued to do well, despite the quarter’s low interest rate environment, because of strong demand for guaranteed lifetime retirement income, be it the personal pension provided by income annuities or the lifetime withdrawal benefits offered by most indexed annuities,” said Jeremy Alexander, CEO of Beacon Research.

“We expect fourth quarter sales to decline due to seasonality as well as the difficult interest rate environment. Beyond that, results aren’t likely to improve much until rates rise. But, as always, a lot will depend on the decisions of the companies that issue and distribute fixed annuities,” he said. Year-to-date 2011 sales fell 1%.  Aside from the income annuity increase, there were small declines in indexed annuities (down 1%) and fixed rate non-MVAs  (down 1%). Fixed rate MVA sales declined 15%.

Fixed annuity sales were 7% below a year-ago and prior quarters. Lower interest rates dampened sales of fixed rate annuities.  Non-MVA sales of $6.5 billion fell 14% from a year ago and 21% from the second quarter. MVAs were down 33% from the third quarter 2010 and 15% from the prior quarter. Income annuity results declined 2%.

Allianz regained sales leadership, moving Western National to second place.  American Equity and Aviva moved up a notch to come in third and fourth. New York Life took fifth place.  Pacific Life is the new MVA sales leader. The other top companies in sales by product type are unchanged from the prior quarter: indexed — Allianz, fixed rate non-MVA — Western National, and income — New York Life.

Allianz posted top independent producer sales. The top five products were indexed annuities except for New York Life’s Lifetime Income Annuity, which moved up one place to come in second.  The Allianz MasterDex X remained the leading product. American Equity’s Retirement Gold jumped two notches to come in third, followed by the company’s Bonus Gold. Aviva rejoined the top five with Balanced Allocation Annuity 12 taking fifth place.  For more information, visit www.beaconresearch.net.

NEW PRODUCTS

Asset Class Enhancements

Curian Capital, LLC enhanced its portfolio to increase the potential for returns and provide more diversification through actively managed alternative, international equity, real estate and municipal bond asset classes. The Curian Series Trust funds  give financial professionals access to the expertise of investment management firms. For more information, call 877-847-4192.

Medicare Part D Plan

Coventry Health Care teamed up with retail and pharmacy outlets, such as Walgreens, Walmart, and Target, to offer a Medicare prescription drug plan. The company says that its First Health Value Plus could provide hundreds of dollars in annual savings to Medicare beneficiaries and be a competitive alternative to the lowest premium stand-alone Part D plan that includes a deductible. For more information, visit www.coventryhealthcare.com.

EMPLOYEE BENEFITS

Barriers to 401(k) Adoption

Only 19% of small businesses offer employees a 401(k) or other employee self-funded retirement plan, according to a small business survey by Nationwide Financial. And only 11% say they are likely to add an employee sponsored 401(k) plan in the next two years. Many say that their business is too small or that offering a 401(k) is too expensive.

It’s not that owners or employees don’t want a plan. Thirty-seven percent of small business owners with more than six employees say they are under pressure from employees to offer a retirement plan. Seventy-eight percent say that offering a retirement plan is an effective way to attract qualified employees.

Forty-six percent of small business owners are not aware or are unsure whether an employer can offer workers a self-funded retirement plan without having to match employee contributions.

The Small Businesses Add Value for Employees  (SAVE) Act, which is before Congress, would remove many of the barriers, according to Anne Arvia, senior vice president of Retirement Plans for Nationwide. The SAVE Act would allow small employers to reduce costs by pooling their resources under a single plan with easier administrative requirements, called a “multiple small employer plan.” These plans would be much less expensive than single employer plans and would simplify an employer’s administrative requirements. The bill, H.B. 4742, sponsored by Ron Kind (D-WI) and David Reichert  (R-WA), encourages plan sponsors to work within the defined contribution system. The bill would enable small businesses to transition easily to a traditional 401(k) retirement plan as the business matures.

Seventy-one percent of small business owners say that it’s important for a plan to allow employers to decide whether to match or not match employee contributions. Sixty-two percent say that it’s important to allow multiple employers to pool resources and reduce administration costs. Four in five owners say that it’s important to have a plan that has minimal administration requirements and can be offered at a low price. Three in four owners say that it’s important that the plan can be converted to meet their needs as their business grows. For more information, visit www.nationwide.com.

IN CALIFORNIA
• California Bans Discretionary Clauses in Disability Insurance Policies
• Copay Kickbacks Are Unregulated in California
EMPLOYEE BENEFITS
• The Benefits of Dental Plans
HEALTHCARE
• Americans Tilt Toward Favoring Repeal of Healthcare Law
• Americans Rate Their Healthcare Coverage
• Medicare Part D Coverage Varies Widely Among Plans
• NAIC’s Resolution on Medical Loss Ratios Supports Agents
• HHS Expands Initiative to Prevent Medicare Fraud
• Plan Comparison Website
• Employees Seek Guidance on Health and Wellness Plans
NEW PRODUCTS
• Multi-Product, Multi-Channel Enrollment
• Online Retirement Video Series
• Stop Loss Coverage

IN CALIFORNIA

California Bans Discretionary Clauses in Disability Insurance Policies

This fall, California passed a law outlawing discretionary clauses in disability and life insurance policies. Discretionary clauses allow insurers to overrule doctors’ opinions and decide that an insured is not disabled and therefore not entitled to benefits. Insurance companies say the clauses help root out fraud and keep premiums low. However, consumer advocates, including the California Department of Insurance, say that insurers use the clauses to deny valid claims because they know that it is very difficult, if not impossible, for the insured to challenge the decision in court. To prevail over the insurance company in a discretionary clause dispute, an insured has to show that the insurance company acted arbitrarily in denying the claim.

Starting January 1, 2012, this practice will become a thing of the past in California. In a press release, Insurance Commissioner Dave Jones championed the move saying that the prohibition levels the playing field and gives consumers an even chance to prove that they are entitled to disability and other insurance. California is one of several states to outlaw the clauses after the United States Supreme Court cleared the way by ruling in 2010 that individual states have the right to prohibit discretionary clauses in insurance contracts. (Article provided by Donahue & Horrow, LLP www.donahuehorrow.com.)

Copay Kickbacks Are Unregulated in California

Brand drug copay coupon promotions lure insured consumers from generics to more expensive brands. This practice will increase costs by $2.5 billion in California over the next decade for employers, unions, and state employee plans, according to  research from Visante and the Pharmaceutical Care Management Association (PCMA). The use of these promotions by state and local government workers, alone, will cost California taxpayers an extra $388 million over 10 years.

Though banned as illegal kickbacks in federal health programs, copay coupons are unregulated in the commercial market (except Massachusetts). To minimize premiums and reduce costs, those who offer prescription drug coverage assign higher copays to expensive brands and lower copays to more affordable drugs that treat the same condition. In response, drug companies now offer coupons that cover the higher copays but not the cost of the actual drug. By covering a $50 copay to sell a $150 brand, drug companies extract an extra $100 from the employer, union, or government agency that offers coverage. This helps explain why copay coupons target only those with insurance, not the poor or uninsured.

PMCA says that copay coupons induce consumers to choose higher-cost brands over lower-cost competitors. When consumers redeem copay coupons, the drug companies process them through a shadow claims system that prevents employers and other plan sponsors from knowing when enrollees have used them. Drug companies often require consumers to submit confidential, personal information in order to redeem copay coupons. Manufacturers have long sought such sensitive patient data, which enables them to identify and  target individual patients with brand loyalty marketing programs.

To help cover the $4 billion spent annually on copay coupons nationally, manufacturers can simply raise prices. Manufacturers reportedly earn a 4:1 to 6:1 return on investment on copay coupon programs. For more information, visit http://www.pcmanet.org.

EMPLOYEE BENEFITS

The Benefits of Dental Plans

People who have dental benefits or access to affordable dental care are 28% more likely say that their oral health is excellent or very good. In contrast, those without dental coverage are 2.5 times less likely to visit the dentist, according to the National Assn. of Dental Plans (NADP). Forty five percent of people with periodontal disease, who do not have dental benefits, have not received treatment, according to the NADP survey.

Evelyn F. Ireland, NADP executive director said, “Our survey found that people with dental benefits were more likely to have a regular dentist; visit the dentist more frequently; and get dental treatment. This included children’s dental visits. When parents don’t have dental benefits, the number of kids seeing a dentist twice a year drops by over 20%.” Dr. Michael S. Grossman, president and CEO of First Dental Health said that 80% to 90% of their members use their dental plan discounts for teeth cleanings, x-rays, and exams.” For more information about the survey, e-mail research@nadp.org.

HEALTHCARE

Americans Tilt Toward Favoring Repeal of Healthcare Law

Forty-seven percent of Americans favor repealing the 2010 Patient Protection and Affordable Care Act, while 42% want it to stay, according to a Gallup poll. In October, 40% of Americans said that passage of the healthcare law was a good thing and 48% said it was a bad thing. Fifty-six percent of Americans say they prefer a system for providing healthcare based mostly on private health insurance rather than one that is government run. This response is similar to what Gallup found last year.

Americans Rate Their Healthcare Coverage 

Forty percent of Americans rate the quality of their healthcare they as excellent, tying the high reached last year and marking a significant increase from 33% four years ago. An additional 42% now rate the quality of healthcare they receive as good, resulting in 82% giving it a positive rating. That combined excellent/good percentage has been fairly steady at around 80% since 2001. These results are based on Gallup’s annual Health and Healthcare survey, conducted each November since 2001. The increase in excellent ratings is greater among those on the political right and those who have a government health insurance plan. The increase among government healthcare recipients and seniors could reflect the addition of a prescription drug benefit to Medicare, passed in 2003.

The poll finds that Americans also evaluate their healthcare coverage positively, though to a slightly lesser degree than the quality of healthcare they receive. Roughly seven in 10 Americans have rated their healthcare coverage as excellent or good since 2001. Here again, there has been a slight uptick in the  percentage giving excellent ratings, with 29% now rating their coverage this positively, up from 25% four years ago. For more information, visit www.gallup.com.

Medicare Part D Coverage Varies Widely Among Plans 

The number of Medicare Part D drugs covered by prescription drug plans varies widely among the leading plans, with an increased share of the cost being pushed to patients, according to an  analysis by Avalere Health. As a result, many patients with serious illness could see higher prescription costs in 2012. The percentage of drugs covered among the top 10 standalone prescription drug plans varies widely for 2012, with “Humana Enhanced” covering 79% of Part D covered drugs while WellCare Classic covering only 47%.

The percentage of covered drugs will decrease among six of the top 10 prescription drug plans, although many only slightly.  A total of 2,306 drugs will appear on at least one formulary in 2012.

Humana Enhanced is the only enhanced plan in the top 10 and it has the highest percentage of drugs covered among the top 10 prescription drug plans. But its percentage of drugs covered will decline from 84% in 2011 to 79% in 2012.

Moreover, the number of plans offering five-tier or more formularies continues to increase in 2012. Nearly 60% of plan offerings will have five or more tiers, up from 41% in 2011 and 30% in 2010. Eighty-seven percent of prescription drug plans will continue to use specialty tiers, which cover high cost biologics and drugs for diseases, such as multiple sclerosis, cancer, and rheumatoid arthritis. The typical tier structure for five-tier formularies in 2012 is: Tier One: preferred generics; Tier Two: non-preferred generics; Tier Three: preferred brands; Tier Four: non-preferred brands; and Tier Five: specialty/injectable drugs.

Additionally, the  use of prior authorization will increase from 16.7% in 2011 to 17.5% in 2012 and quantity limits will increase from 15.3% to 17%. While the use of prior authorization and quantity limits will increase slightly in 2012, the use of step therapy will remain low at 1.6%.

An earlier Avalere Health analysis shows that average premiums are declining for 2012. Coverage options will remain very robust as a result of CMS oversight and strong competition from plans. “While the Part D program looks quite stable, choice of drugs is increasingly being shifted away from physicians and towards cost-conscious patients,” said Dan Mendelson, CEO and founder of Avalere Health. Cost-sharing for brand and specialty drug tiers, on average, will increase in five-tier prescription drug plans in 2012. For more information, visit www.avalerehealth.net.

NAIC’s Resolution on Medical Loss Ratios Supports Agents

The National Association of Insurance Commissioners (NAIC) passed a resolution urging Congress and HHS to exempt broker and agent pay from the medical loss ratio rule by deleting it from insurance company administrative costs.“ This action taken by the NAIC makes great strides in the battle to ensure all Americans have access to health insurance professionals as they navigate thecomplicated laws and regulations resulting from the Patient Protection and Affordable Care Act (PPACA),” said Janet Trautwein, CEO, NAHU.

Robert Rusbuldt, Big I president and CEO said, “Since the medical-loss-ratio (MLR) rules went into effect they have created tremendous upheaval in the marketplace. The effect on agents and brokers has been damaging as many insurance carriers have significantly cut their agent compensation in an effort to meet these new regulations. This has reduced consumer access to agents and brokers, leading to a detrimental impact on essential services provided for consumers such as guidance in claims processing and tailoring health plans to fit the needs of people and small businesses.”

Judy Dugan, research director of Consumer Watchdog, which opposes the resolution, said, “Insurers and brokers are hoping the resolution will spur action by HHS or Congress. However, no reasonable interpretation of the Affordable Care Act would allow HHS to change the way broker pay is calculated, so direct amendment of the Affordable Care Act by Congress is the only way the resolution could move forward.”

HHS Expands Initiative to Prevent Medicare Fraud

The Dept. of Health and Human Services (HHS) is awarding $9 million from the Centers for Medicare & Medicaid Services (CMS) to fund Senior Medicare Patrol. The 2011 grants will provide additional funds to increase awareness among Medicare beneficiaries about how to prevent, detect, and report healthcare fraud. Increased funding levels for states identified with high-fraud areas will support additional collaboration, media outreach, and referrals. The Administration on Aging will continue to administer these grants in partnership with CMS.

Under the program, volunteers educate Medicare beneficiaries, family members, and caregivers about the importance of reviewing their Medicare notices and Medicaid claims if dually-eligible, to identify errors and fraud. Since 1997, HHS has funded Senior Medicare Patrol projects to recruit and train retired professionals and other senior volunteers about how to recognize and report instances or patterns of healthcare fraud. For more information on fraud prevention efforts, visit http://www.stopmedicarefraud.gov.

Plan Comparison Website

The Dept. of Health and Human Services expanded a website to give small business owners a detailed review of their health insurance plan choices. The website, www.healthcare.gov includes Insurance product choices for a given ZIP code, sorted by out-of-pocket limits, average cost per enrollee, or other factors. A summary of cost and coverage for small group products shows deductibles, co-pays, included and excluded benefits, and benefits that are available for purchase at additional cost. Users can filter product selection based on whether the plans are health savings account eligible; whether they have prescription drug, mental health, or maternity coverage; and whether they allow for domestic partner or same sex coverage. More than 530 insurers have provided information for more than 2,700 coverage plans across all states and the District of Columbia. In addition, the website provides extensive information about consumer rights, tips for how to navigate the market’s complexities, and details on how the Affordable Care Act provides new protections for beneficiaries.

Employees Seek Guidance on Health and Wellness Plans

Workers want employers to do more to help them get the most from their health and wellness plans, according to a study by the National Business Group on Health and Aon Hewitt. Helen Darling, president and CEO of the National Business Group on Health said, “We hear over and over that the key to ensuring real health improvement is employee engagement, so knowing what employees want and what will motivate them is essential to success. Consumers are telling us that the one-size-fits-all approach to health and wellness isn’t working for them. In order to help with their challenges and reduce costs, they want health programs that speak to their individual and families’ healthcare needs.”

A recent Aon Hewitt report shows that 51% of employers now offer a consumer driven health plan (CDHP), up from just 9% in 2005. The good news for employers is that consumers are willing to try CDHPs if the immediate cost savings are apparent. Sixty-three percent chose a CDHP because of the lower premium costs. Additionally, 39% chose it because their employer contributed to the associated health savings account (HSA) or a health reimbursement account (HRA). Ninety percent of those enrolled in a CDHP who have a choice said they would definitely or probably re-enroll.

While CDHPs are partly intended to encourage workers to take a more active role in their health,  they are having a mixed effect on behaviors. Encouragingly, 42% are getting more preventive care and 40% are looking for lower cost health services. More troubling is the fact that 35% are sacrificing or postponing care to avoid out-of-pocket costs. Cathy Tripp, managing principal Health & Benefits at Aon Hewitt said, “Employers need to make sure workers aren’t sacrificing health and the future costs of poor health for lower costs. Giving employees the tools and advice to decide what is the most appropriate plan for them is critical.”

Fifty percent want a plan that recommends actions they can take to improve their health based on their health status, up 9 % from 2010. Workers are also looking for convenient, one-stop access to information with 40% expressing a preference for a wellness website and more than 35% saying they want personalized health tips and reminders. Forty-four percent want cost savings tips and 33 %want cost estimating tools.

Joann Hall Swenson of Aon Hewitt said, “If companies truly want to move the needle in terms of overall health and cost, they have to stop looking at employees as one group and start looking at the individual.” She said that employers can customize health information and programs to address their workers’ health conditions and risks. They can suggest steps that employees can take to improve their condition. In addition, offering tools that allow people to understand the cost of their healthcare services goes a long way in helping workers make the most of their healthcare dollars, she added.

Workers say that the best way to motivate them to participate in employer-sponsored health plans is to use rewards. More than half of consumers would prefer non-cash or cash incentives to encourage them to take part in programs geared toward wellness and  condition management programs (or respond to a health risk questionnaire) .

To improve health and productivity, employers are increasingly offering programs to workers and their dependents, such as biometric screenings, health risk assessments, onsite clinics/pharmacies and employee assistance programs. However, many employees and their dependents don’t seem to be aware of many of these programs. In 2011, 36% of consumers did not participate in any health program or service offered by their employer. Among the programs that workers did participate in, blood tests or biometric screenings were the most popular followed by health risk.

Despite low participation, when workers do take part in these programs, satisfaction is extremely high. Almost all were satisfied with their blood work/biometric screening, a visit to the on-site clinic or pharmacy, and the health risk assessment. For more information, visit www.aonhewitt.com.

NEW PRODUCTS

Multi-Product, Multi-Channel Enrollment

MetLife launched M-Powered Enrollment, a multi-product, multi-channel enrollment program featuring capabilities for employers with 50 to 1,000 employees. The program offers a simplified end-to-end enrollment experience that maximizes the value of an employer’s benefits program. For more information, visit www.metlife.com.

Online Retirement Video Series

MassMutual Retirement Services launched RetireSmart TV. The short online videos cover key financial topics, such as understanding the importance of good credit, affording healthcare, saving for college, and preparing for retirement. The first 10 educational videos feature Farnoosh Torabi, independent Generation Y money coach, best-selling author, and personal finance journalist, talking with everyday Americans about being RetireSmart with their individual strategies. The RetireSmart TV videos can be accessed by visiting www.retiresmart.com, or the MassMutual YouTube channel at www.youtube.com/user/MassMutual.

Stop Loss Coverage

With OptumHealth’s stop loss contract, self-insured plan sponsors are protected from additional exposure resulting from changes in the claims appeal process under the Patient Protection and Affordable Care Act (PPACA). The amendment, called an “extended liability endorsement,” is included in all new and renewal OptumHealth stop loss contracts that take effect on or after January 1, 2012, subject to state approval. Beginning in 2012, People can appeal to an independent review organization (IRO) if their claim was denied by a health plan through its internal claims review process.  A claim that is initially denied may eventually have to be paid by the health plan if the IRO overturns the denial. Under this new appeal process, payment may be made months later, even beyond the benefit period in the stop loss contract. In such cases, OptumHealth will extend the paid date in the contract by up to 12 months. For more information, visit www.optum.com