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Saturday April 19th 2014



ACA Expected to Put a Damper on Hiring


• ACA Expected to Put a Damper on Hiring
• Several Factors Are Driving Employers’ Health Care Costs
• Health and Fitness Apps Pose Privacy Risks
• Out-of-Pocket Costs Create Opportunities For Voluntary Benefits
• Employees Want To Choose Their Health Insurance Company
• Doctors Are in the Dark About Health Exchanges
• Mental Health Care for the Uninsured
• GWG Life Settlements Gets Provider License
• More Expensive Facilities Didn’t Offer Better Hip & Knee Replacements
• Anthem Blue Cross Bows Out of the Small Business Exchange
• Term Life Is In Demand in the Workplace
• The 50 Top Performing Life-Health Insurance Companies
• Webcast on 457(b) Retirement Plans
• Health Care Consumerism Conference
• Dental PPO
• Discounted Hearing Aids For Vision Plan Members


ACA Expected to Put a Damper on Hiring

Hiring copyEmployers are less likely to hire as a result of the Affordable Care Act (ACA), according to a survey by Sageworks. Sageworks surveyed 300 accounting professionals about the hiring plans of their business clients. Sixty-six percent said that businesses are less likely to add new employees in the next year due to the ACA. Sixteen percent say the ACA will have no effect on hiring, and 14% are not sure about the effect. Only 2% say the ACA makes businesses more likely to hire new employees.

Sageworks Chairman Brian Hamilton said, “Private companies are performing well, but they’re simply not hiring with the same volume and consistency that we’d expect from them at this point in the economic recovery. The recent delay in the implementation of the Affordable Care Act, and the uncertainty that accompanies such a delay, won’t help the employment situation. Private businesses are trying to map out their hiring and investment plans for the next 12 months, and a last minute delay like this will increase the likelihood that companies remain on the fence about hiring.” For more information, visit

Several Factors Are Driving Employers’ Health Care Costs

The majority of growth in employer healthcare spending was driven by an increase in the cost per case of medical and surgical procedures. Other cost drivers are rising specialty drug prices and the ongoing obesity epidemic, which is an underlying driver of many of the diseases noted in the report by Truven Health Analytics.

Twenty specific medical episodes account for 41% of the  growth in employer healthcare spending. From 2006 to 2011, employer healthcare costs increased 4.3% a year, driven largely by spending in the following areas:
• Preventive health services.
• Osteoarthritis (except spine).
• Multiple sclerosis.
• Childbirth (Cesarean section).
• Complications of surgical and medical care.

Bill Marder, PhD of Truven Health Analytics said, “On the positive side, a great deal of employer healthcare spending growth is being driven by preventive services. However the growth is big enough to raise questions even there. Other cost-drivers that show up in these data, such as the obesity epidemic, are creating real challenges for employers as they try to balance the cost/quality equation.”

The study also found the following:
• Outpatient medical services are driving spending growth. Inpatient services are expensive, but they affect fewer people.
• Musculoskeletal conditions make up the costliest and fasted growing group of diseases.
• Complications of surgical and medical care are occurring more frequently, partly due to the growing use of surgery to treat orthopedic conditions
• More plan members are using preventive services, such as general medical exams, vaccinations, and cancer screening.

For more information, visit

Health and Fitness Apps Pose Privacy Risks

Many popular health and fitness apps pose considerable privacy risks, according to an analysis by the Privacy Rights Clearinghouse. Users must weigh the benefits of the service with the possibility that they are revealing information about their health not only to the app developer or publisher, but also to third parties.

Forty-three percent of the free apps that the Clearinghouse reviewed provided a link to a website privacy policy. But, only about half of the sites that posted a privacy policy were accurate in describing the app’s technical processes. The study found the following:
• Many apps send unencrypted data without the user’s knowledge.
• Many apps connect to several third-party sites without the user’s knowledge.
• Unencrypted connections could expose sensitive and embarrassing data to everyone on a network.

Seventy-two percent of the apps pose medium to high personal privacy risks. Paid apps pose the lowest privacy risk. Because paid apps don’t rely solely on advertising to make money, the data is less likely to be available to other parties.

The Clearinghouse offers consumers the following tips:
• Research the app before downloading it.
• Consider using paid apps over free apps if they offer better privacy protections.
• Assess the app’s intrusiveness based on how much personal information you have to provide in order to use it.
• Assume that any information you provide to an app may be distributed to the developer, third-party sites the developer uses for functionality, and unidentified third-party marketers and advertisers.
• Limit the amount of personal information you provide. If the app allows it, try the features first without entering personal information.
• Ask a tech savvy friend to help you navigate settings and help you restrict the information that the app gathers.
• Delete any app that you no longer use. If possible, delete your personal profile and any data archive you’ve created while using the app. For more information, visit

Out-of-Pocket Costs Create Opportunities for Voluntary Benefits

Sixty-one percent of employees are worried about not having enough money to meet out-of-pocket medical costs. At the same time, 50% of employers say that cost sharing with employees is an important benefit strategy, according to a MetLife survey. While 58% of employees are very concerned that their employer will no longer offer medical insurance, they agree strongly that voluntary supplemental benefits are important for managing their health care costs.

In 2012, 58% of companies said that having a voluntary benefit strategy is important compared to 32% in 2010. But employers may be concerned about how benefit cost-sharing will affect employee loyalty. Thirty-four percent of employees  agree stronglywith this statement, “Having to pay a larger share of my premium costs would make me feel less loyal to my employer.”

Michael Fradkin, senior vice president, Voluntary & Worksite Benefits at MetLife said, “A strategic use of voluntary benefit offerings can actually be a…smart solution when walking this loyalty and budget tightrope. Smart employers count on the importance of benefits for their employees and build on the fact that employees place even greater value on having benefits that meet their individual needs.” According to the study, 77% of workers value being able to choose froma variety of benefits and options. Sixty-one percent of employees say that being able to customize their benefits would increase their loyalty. For more information, visit

Employees Want To Choose Their Health Insurance Company

Sixty-five percent of employees who have employer-sponsored insurance want to choose their own health insurance company. Only 22% want their employer to make that decision for them. Bruce Telkamp, CEO of HealthPocket said, “The stage is set, under Obamacare, for a decline in employer-sponsored health insurance and a rise in individually purchased coverage. Our poll reveals that, with respect to the selection of a health insurance company, personal choice is what workers want. For those workers who will migrate from employer-sponsored to individually purchased health insurance, they’ll get the control they desire.” For more information, visit

Doctors Are in the Dark About Health Exchanges

Less than 11% of physicians expect the health exchanges to be ready by the October 1 deadline, and most have no idea what to expect when newly insured patients start arriving for treatment in January 2014, according to a survey. Shane Jackson of said that physicians’ practices will play a major role in helping people who’ve never had insurance to understand how it works. So the major lack of awareness among physicians and patients is troubling.

More than 56% of physicians don’t know how the new policies will affect their businesses; 70% don’t know how the claims process will work; and 67% are not familiar with patient coverage terms that might affect payment for services, such as grace periods. Fifty five percent of physicians expect their bad debt to increase under the Affordable Care Act.

Physicians expect their patient volume to increase by 13.4% due to the new insurance access. Eighty-nine percent say that consumers have not been adequately educated about how these new insurance policies will function. For more information, visit


Mental Health Care for the Uninsured

Public programs are playing an increasingly important role in providing mental health care due to holes in private coverage of mental health. Many Medi-Cal beneficiaries and uninsured adults with less-severe mental health conditions face significant coverage gaps, and they lack access to services, according to an analysis by the California HealthCare Foundation.

Public mental health services in California are delivered primarily through county mental health programs. The counties shoulder nearly all financial and administrative responsibility for these services. This decentralization has resulted in wide variation in program operations, quality, and service availability. Funding for California’s public mental health system is carved out from the rest of public health care system funding. As a result, people with mental health needs must often navigate two systems for care. For more information, visit

GWG Life Settlements Gets Provider License

GWG Life Settlements, LLC received a life settlement provider license from the California Dept. of Insurance. The license allows GWG Life to purchase life insurance policies in the secondary market directly from owners living in California. Beau Mayfield of GWG Life said, “The CDI process was a true challenge, though entirely expected given California’s thoroughness and sizable secondary market of life insurance.” For more information, visit

More Expensive Facilities Didn’t Offer Better Hip & Knee Replacements

A pilot program for the California Public Employees’ Retirement System (CalPERS) was able to lower the price of hip and knee replacement surgeries by 19% in one year. CalPERS health plan costs dropped significantly from $35,408 to $28,695, per surgical-related admission. Ann Boynton of CalPERS said, “The outcomes of this program further support what we know to be true, that higher cost does not mean better quality. Current spending levels are not sustainable and we must continue to find ways to provide quality services at lower costs now and into the future.”

Members could choose facilities that required little to no out-of-pocket costs beyond deductible or co-insurance. Members could also pay the difference for using another facility that charged more than $30,000.

Hospitals must be contracted with the Anthem PPO network, which manages credentialing. All participating hospitals must maintain accreditation by at least one of several nationally renowned accreditation organizations. In addition, hospitals have to perform enough procedures to demonstrate the hospital’s skill in the surgeries.

The program released the following positive results:
• Out-of-pocket costs remained relatively flat from 2011 to 2012.
• Outcomes were equivalent or better in the group using the designated facilities.
• CalPERS’ members had significantly lower 30-day general infection rates compared to non-CalPERS members.
• Calper’s members had significantly lower general complication rates in 30 days compared to non-CalPERS members.

California hospital charges for total knee replacement and total hip replacement surgeries ranged from $15,000 to $110,000 without evidence of difference in outcome or quality, according to an Anthem analysis conducted in 2009.

Dr. Michael Belman, medical director for Anthem said, “We were also glad to see that overall member out-of-pocket expenses did not increase from year to year even though not all facilities originally charged the threshold payment and not all members decided to go to designated facilities. Not only were we able to save 19% while maintaining or improving quality, but the data also confirm that this program helped reduce costs for these procedures at hospitals that didn’t participate in the program.”

Anthem Blue Cross Bows Out of the Small Business Exchange

Anthem Blue Cross is withdrawing its bid to participate in the small business exchange. California insurance commissioner, Dave Jones had recommended that the company be excluded due to rate increases on California small business plans. Anthem remains in small group market outside the Exchange — giving businesses options and insurance market competition

Jones said, “Last month I recommended that Anthem Blue Cross of California be excluded from California’s small business health insurance exchange because of its pattern of excessive and unjustified rate increases on California small businesses. This recommendation was made pursuant to The Affordable Care Act, which directs insurance commissioners to determine if a pattern of excessive or unjustified rate increases exists such that a health insurer should be denied access to the state health insurance exchange.”

Unlike United Healthcare and Aetna, which pulled out of California’s individual health insurance market entirely, Anthem will continue selling in the small group health insurance market in California outside the exchange, so there is no effect on choice or competition in the small group market overall. It does mean that Anthem will not have access to federal tax credit and taxpayer subsidized business in the small group market exchange.


Term Life Is in Demand in the Workplace

Term life products continue to be in demand among employers and employees. And carriers are responding to that demand by providing more choices and options, according to a recent Eastbridge study. The report reveals the following:

• The types and number of riders available with voluntary term life products have increased dramatically in the past several years.
• Simplified issue underwriting for term life plans has become more common.
• Several factors are driving differentiation in voluntary term life offerings: special programs and services available with the plans, a variety of face amounts offered, and flexible underwriting offerings. For more information, visit


The 50 Top Performing Life-Health Insurance Companies

Ward Group analyzed the financial performance of nearly 800 U.S.-based life-health insurance companies and identified the top performers from 2008 to 2012). The following companies achieved outstanding financial results and outperformed the industry in financial stability, revenue growth, strong capital/surplus positions, underwriting results, and financial returns:

1. Aetna Life Insurance Company
3. Amalgamated Life Insurance Company
4. American Equity Investment Life Insurance Company
5. American Family Life Insurance Company
6. American Fidelity Assurance Company
7. American Health and Life Insurance Company
8. American Republic Insurance Company
9. Americo Financial Life and Annuity Insurance Company
10. Amica Life Insurance Company
11. Auto-Owners Life Insurance Company
12. Bankers Life & Casualty Company
13. BlueBonnet Life Insurance Company
14. Boston Mutual Life Insurance Company
15. CICA Life Insurance Company of America
16. CIGNA Group
17. Combined Insurance Company of America
18. Companion Life Insurance Company
19. Farm Bureau Life Insurance Company
20. Farmers New World Life Insurance Company
21. Federated Life Insurance Company
22. Fidelity Security Life Insurance Company
23. First Investors Life Insurance Company
24. Forethought Life Insurance Company
25. Funeral Directors Life Insurance Company
26. General Re Life Insurance Corporation
27. Great American Life Insurance Company
28. HCC Life Insurance Company
29. HM Life Insurance Company
30. Homesteaders Life Company
31. Humana Insurance Company
32. Liberty National Life Insurance Company
33. Life Insurance Company of the Southwest
34. LifeCare Assurance Company
35. LifeWise Assurance Company
36. Midland National Life Insurance Company
37. National Teachers Associates Life Insurance Company
38. National Western Life Insurance Company
39. Ozark National Life Insurance Company
40. Protective Life Insurance Company
41. RiverSource Life Insurance Company
42. Standard Insurance Company
43. Symetra Life Insurance Company
44. Tennessee Farmers Life Insurance Company
45. Thrivent Financial for Lutherans
46. Trustmark Insurance Company
47. United Insurance Company of America
48. UnitedHealthcare Insurance Company
49. Unum Life Insurance Company of America
50. USAA Life Insurance Company

For more information, visit


Webcast on 457(b) Retirement Plans

MassMutual is sponsoring a live webcast for retirement plan professionals and plan sponsors titled, “Five Pieces You May Be Missing in the 457(b) Plan Puzzle.” For more information, call 866-444-2601.

Health Care Consumerism Conference

The Institute for HealthCare Consumerism (IHC) is sponsoring the third annual IHC FORUM West, which is dedicated exclusively to the growing health care consumerism trend. The conference will be held December 5 to 6 at the Red Rock Casino Resort in Las Vegas. Registration rates start at $99. For more information, visit


Dental PPO

Aetna expanded its Dental Preferred Provider Organization network, PPO II, to over 205,000 dental practice locations nationwide. “The recent expansion…makes it one of the largest discount Dental PPO networks in the country,” said Dan Fishbein, president of Aetna’s Specialty Businesses. Dentists within Aetna’s PPO II network offer reduced rates to members for covered care, which controls overall costs and lowers out-of-pocket amounts.

Discounted Hearing Aids For Vision Plan Members

High-tech, custom-programmed hearing aids are now available at discount prices – starting at just $649 each – to people enrolled in UnitedHealthcare vision benefit plans, including employer-sponsored and individual policies. For more information, visit