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.

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

Brokers add value to the products they sell. There. I said it. Someone had to.

Alan Katz

Granted, telling readers of California Broker that professional health insurance agents matter fails to achieve the heroic stature of, say, telling a group of tri-corner hat-wearing Tea Party members that Fox News is neither fair nor balanced. Or informing the MSNBC-watching leadership of the Howard Dean fan club that Michael Moore is more propagandist than documentarian. But still, someone has to say it, “Brokers add value to the products they sell.”

As we start a new year this message is more critical than ever. We’re talking 2012 here and 2012 is far more than the stuff of apocalyptic specials aired on the Discovery channel at three in the morning. This is the year in which many of the changes to America’s healthcare system conjured up by the Patient Protection and Affordable Care Act move from the file marked “Theoretical” to the one named “Holy Cr*p, They’re Doing What?”

2012 will be a year when decision makers make decisions that matter. Not that last year or next year are unimportant in this regard. But 2014 is when the most far reaching aspects of the PPACA take effect (think guarantee issue, individual mandates, exchanges, more standardized products). While still two years away, the life cycle of public policy is akin to dog years, which makes two years a matter of moments.

Many of the decisions being made in the next 12 months will greatly impact the future of brokers. Yet they are being made by people or being reported on by people whose understanding of what brokers actually do is somewhat limited or non-existent. After all, how many of these policy shapers have even worked with a broker in the past? Cal-PERS, the state government’s healthcare program, doesn’t use agents. And in large companies, employees (e.g., reporters) may never meet their company’s benefit consultants.

When they do hear about insurance brokers it’s often in the context of: 1) someone doing something they should not have been doing; or 2) as a punch line in need of a reference to a pushy salesman. As a result (and as someone who has written a book on selling it pains me to admit this), most folks hold insurance agents, brokers, and consultants in low regard. You know you’re in trouble when lawyers, politicians, mortgage bankers, and tobacco executives are needed to make yourself look good.

Yes, there are exceptions. Some decision makers and the reporters who write about them know in great detail what insurance brokers do and why it matters. But they’re less common than those whose understanding is based on Woody Allen films or the loud guy at the Chamber meeting talking about the premium-paid trip to Hawaii with Acme Insurance he took.

The point here is that professional health insurance brokers play an important role in today’s healthcare system. Those who will greatly influence the role brokers play in the future healthcare system don’t know what that value is. They don’t know about the time spent helping clients identify their real needs, finding the best solutions, administering enrollment, explaining their benefits, resolving problems, and on and on. Decision makers too often perceive brokers as merely sucking money of the system — money that could go to lowering costs or expanding coverage instead of understanding that brokers help clients gain the most value for the money they put into the system.

And before you start condemning decision makers for their ignorance, keep in mind that it’s not really their fault. They don’t know what they don’t know. They’re busy people with lots of decisions to make. They’ve got hearings to attend, press releases to release, fund raisers to raise, and time to hang with the lobbyists, and all the other time sinks that make America’s government work. They also want to have time with their families, keep up with the latest developments on American Idol, and a host of other homework-interfering activities, which means if they are to understand what brokers really do then it’s up to brokers to teach them. The days of being content with simply delivering value are gone. Now brokers need to demonstrate value.

For brokers who dwell solely in the world of paperwork (exchange one piece of paper called a “check” for another called “policy”) this is bad news. Computers can do this kind of transaction far more quickly, painlessly, and cheaply than commissioned sales people and they increasingly will.

On the other hand, sales professionals who understand that they’re providing health and financial security to their clients and act accordingly, these folks have stories to tell – stories that need to be told. These are the brokers who do more than simply ask clients what they want and then find it, but who understand market trends, who are up-to-speed on the latest products, and who lead their clients as well as attend to them. For these brokers the only challenge will be making explicit all that they do rather than counting on the actions to speak for themselves.

Those actions need to speak not just to their clients, but also to policy shapers as well. This is where it gets interesting because, by making the value brokers are providing to clients explicit to those clients, brokers will be recruiting their best advocates: those very same clients. When CAHU brings hundreds of brokers to Sacramento to meet with lawmakers the impact is great; were those brokers to each bring one client along to meet with lawmakers, the impact would be powerful.

Regardless of the political activity, getting clients engaged increases the effectiveness dramatically. Brokers talk about their value and it may be viewed as self-serving. Clients speak about brokers’ value and elected officials will take notice. These clients are voters. Whether the audience is legislators, reporters or Exchange Board members, in 10 minutes clients explaining why they need and want their brokers can convey delivers a more powerful message than brokers can in a day.

Of course, this means that brokers have to be needed and wanted by clients. Fortunately, the brokers who have moved beyond paperwork and are looking out for the financial and personal health of their clients should have several of those kinds of clients. Brokers who haven’t progressed, won’t have these clients.

So I’m happy to state the obvious: brokers add value to the products they sell. Now we need to enlist clients to do the same.

–––––––––

Alan Katz is EVP of Sales & Marketing for SeeChange Health Insurance, and author of the book “Trailblazed: Proven Paths to Sales Success” and of the Alan Katz Health Care Reform Blog. He is past president of both the National and California Associations of Health Underwriters.

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.

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.

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.

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.

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

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.

EyeMed Vision Care enhanced its website 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.