EMPLOYEE BENEFITS
• Boosting Morale through Education about Benefits
• Voluntary Benefits Expected to Take Off
• In Service 401K Withdrawals
HEALTHCARE
• Use of Retail Medical Clinics Continues To Grow
• An Explanation of Contraception Coverage under Health Reform
• New Rules to Cut Red Tape for Health Plans and Providers
• Medicare Prescription Drug Premiums Remain Steady
• Downward Trend in Growth of Health Care Costs Pre-dates Recession
• Public-Private Partnership to Prevent Health Care Fraud
IN CALIFORNIA
• The Principal to Acquire First Dental Health
NEW PRODUCTS
• LTC Insurance
• Critical Illness E&O Offering
• Book of Business Tool for Retirement Plan Advisors
• White Paper Highlights Explains How to Integrate Integrating Short- and Long-Term Disability
• Estate Planning Software
Boosting Morale through Education about Benefits
Eighty-two percent of those who give high ratings to their benefit education also rated their workplace as excellent or very good in 2011, according to a recent Unum survey. Conversely, only 27% of employees who say their benefit education was fair or poor also say that they have an excellent or very good workplace. Seventy-nine percent of those who rate their benefit education highly say they would stay with their employer even if they got the same pay and benefit elsewhere. The survey, which was conducted by Harris Interactive, reveals that 52% of workers surveyed, overall, rated their employer as a very good or excellent place to work.
Twenty-eight percent of employees say their employer provides only fair or poor benefit education. Only half of those employees got printed information or brochures in 2011, down from 70% in 2008. Just over a third of those employees got a chance to attend an information and question-and-answer session about benefit, down from 52% in 2008. Twenty-nine percent had access to a toll-free number to speak with a benefit advisor compared to 47% in 2008. For more information, visit www.unum.com.
Voluntary Benefits Expected to Take Off
Employee benefit brokers could look to voluntary benefits to stabilize their businesses, according to a report by Minnesota Life. The report cites a revealing statistic from a broker survey conducted this spring by Eastbridge Consulting Group. More than 70% said voluntary sales account for less than 10% of their total revenues. “The time may be right for brokers to grow that percentage,î said Paula Bilitz, director of group life insurance marketing at Minnesota Life. A shift in focus to voluntary benefit addresses the uncertainty over the future of health care reform as well as the economy’s slow recovery. “Employers are finding it more difficult to provide competitive, yet affordable, employee benefits, making them especially receptive to the expert advice brokers can provide. It’s a good time to talk about employee-paid benefits, such as critical illness or supplemental life insurance, which costs the employer nothing to offer and appeals to employees who find it more convenient to buy at work than on the open market,” he said. To get information about trends in human resources, employee benefits, and employment policies, visit https://web1.lifebenefits.com/lb/Aware/aware_front.html.
In Service 401(k) Withdrawals
Three quarters of employers allow employees to make in-service withdrawals from 401(k) plans, usually starting at age 59 1/2. The figure rises to 86% of those with 5,000 or more plan participants, according to a 2012 study by the Plan Sponsor Council of America. These withdrawal rights may enable Americans who are nearing retirement to rollover a portion of the funds in their current 401(k) or other qualified plan, into an IRA. Many plan participants face significant risk three to five years before retirement when a substantial drop in the market could derail their plans. A fixed index annuity, established as an IRA, can offer principal protection, upside potential with flexibility and control, and guaranteed retirement income in uncertain times, according to researchers. The in-service withdrawal option may not be right for everyone. However, when used properly it can help many plan participants protect what may be their single largest asset. For more information, visit www.psca.org.
Use of Retail Medical Clinics Continues to Grow
Fast-growing retail medical clinics are attracting older patients and are delivering more preventive care, particularly flu shots and other vaccinations, according to a study by the RAND Corporation. Visits to retail medical clinics increased from 8% to 19% of all visits from 2007 to 2009.
More than 44% of visits to the clinics occurred on the weekend or other times when doctor’s offices are usually closed, according to the study published online by the journal Health Affairs. Retail clinics are promoting new services, such as caring for diabetes and other chronic illnesses. Dr. Ateev Mehrotra of RAND said, “If demand for primary medical care drives longer wait times to see a doctor, as it has following health care reform in Massachusetts, then this could drive greater demand for convenient alternatives such as retail clinics.”
The clinics, which are usually staffed by nurse practitioners, offer basic health care at clearly posted prices. Doctor groups have said that retail clinics could disrupt patients’ relationships with their primary care doctors and interrupt continuity of care. The criticism has increased since some clinic operators began offering care for chronic illnesses, such as asthma and high blood pressure.
But retail clinics account for only a small slice of outpatient medical care compared to the estimated 117 million emergency room visits and 577 million visits to doctors’ offices each year. Visits to retail medical clinics for vaccinations increased sharply from 2007 to 2009. Another recent study published by RAND researchers found that vaccination visits to the three major retail clinic chains quadrupled to more than 1.9 million in 2009. Most of the inoculations given were for influenza.
“The number of vaccinations provided at retail clinics could grow even larger if providers started counseling patients about the need for inoculations when they visit the clinics for other care,” said Lori Uscher-Pines, an associate policy researcher at RAND.
In the latest study, researchers found that the proportion of retail clinics visits that patients made for acute medical problems dropped from 78% to 51%. There was a corresponding increase in visits for preventive care, making up more than 47% of visits by 2009. Researchers say that patients who have no primary care doctor or have a weak relationship with their doctor are more likely to seek care at a retail clinic. For more information, visit www.rand.org.
An Explanation of Contraception Coverage under Health Reform
The following is a summary of the Academy of Managed Care Pharmacy’s explanation of contraception coverage under the health reform law:
• The contraceptive-coverage provision will take effect for individual policy holders as their health benefits renew over the next 12 months.
• HHS issued interim guidelines, on March 21, stating that coverage is required without patient cost sharing for all FDA approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity prescribed by a provider. This excludes items and services, such as vasectomies and condoms.
• HHS rules allow for some restrictions on access to expensive brand-name contraceptives. Nothing prevents a plan or issuer from using reasonable medical management techniques to determine the frequency, method, treatment, or setting for an item or service.
• Health plans may use formularies to determine the most appropriate array of oral contraceptive products to be included for coverage. This would allow health plans to select generic contraceptives over more expensive brand name products.
For more information, visit www.amcp.org/2012.
New Rules to Cut Red Tape for Health Plans and Providers
Health and Human Services (HHS) Secretary Kathleen Sebelius released a new rule that requires insurers to offer a standardized, online enrollment for electronic funds transfer and electronic remittance advice. The goal is make it easier for physicians and hospitals enroll to with multiple health plans to receive transactions electronically. To view the regulations, visit www.ofr.gov/inspection.aspx.
Medicare Prescription Drug Premiums Remain Steady
Average basic premiums for Medicare prescription drug plans are expected to remain constant in 2013, announced HHS secretary, Kathleen Sebelius. The average monthly premium for basic prescription drug coverage is expected to be $30 in 2013. Average premiums were $29.67. Since the law was enacted, seniors and people with disabilities have saved $3.9 billion on prescription drugs as the Affordable Care Act began closing the donut hole coverage gap.
The projection is based on bids submitted by drug and health plans for basic coverage during the 2013 benefit year and calculated by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary.
Coverage for brand name and generic drugs in the coverage gap will increase over time until 2020, when it will be fully closed. This year, people with Medicare got a 50% discount on covered brand name drugs and 14% coverage of generic drugs in the donut hole. In 2013, Medicare Part D coverage will begin to increase for brand name drugs, meaning that people with Medicare will receive a total of 52.5% off the cost of brand name drugs
For more information, visit: http://www.healthcare.gov/law/features/65-older/drug-discounts/index.html.
Downward Trend in Growth of Health Care Costs Pre-dates Recession
The recession, alone, isn’t the cause of a downward bend in the health care cost curve. The trend can also be explained by better cost containment strategies, according to an article published in the New England Journal of Medicine and conducted by the Altarum Institute. Excess growth in health spending, compared to the GDP, moderated in 2005 — more than two years before the start of the Great Recession. Excess growth in personal health care spending averaged only 0.5% during the two and a half years leading up to the recession, compared to 1.9% in the prior period. For more information, visit www.altarum.org.
Public-Private Partnership to Prevent Health Care Fraud
HHS launched a program to stamp out health care fraud with the cooperation of the federal government, state officials, private health insurance organizations, and other health care anti-fraud groups. One objective is to share information on schemes, utilized billing codes, and geographical fraud hotspots. Another goal is to stop payments from being billed to different insurers for care delivered to the same patient on the same day in two different cities. A long-range goal is to use industry-wide healthcare data to predict and detect health care fraud.
The Executive Board, the Data Analysis and Review Committee, and the Information Sharing Committee will hold their first meeting in September. Until then, several public-private working groups are developing an initial work plan.
The partnership builds on tools provided by the Affordable Care Act, resulting in: tougher sentences for people convicted of health care fraud. Criminals will receive 20% to 50% longer sentences for crimes that involve more than $1 million in losses. There will also be enhanced screenings of Medicare and Medicaid providers and suppliers. The administration’s efforts, so far, have resulted in a record-breaking $10.7 billion in recoveries of health care fraud over the past three years. For more information, visit: www.stopmedicarefraud.gov
The Principal to Acquire First Dental Health
The Principal Financial Group will acquire First Dental Health. Upon closing, expected in October 2012, First Dental Health will become a member of the Principal Financial Group. First Dental Health, a California-based independent dental PPO, includes more than 11,000 credentialed dentists with locations in California, Arizona, and Nevada. For more information, visit http://www.principal.com/grouplh/dental.htm.
LTC Insurance
John Hancock Long-Term Care Insurance is offering “Benefit Builder.” As an alternative to a traditional inflation option, it provides automatic benefit increases that occur gradually over time as well as voluntary buy-up options. Without a corresponding increase in premiums, a policyholder’s benefit can grow through an automatic crediting formula thatís tied to the investment earnings of a segment of John Hancock’s general account. In addition, every three years through age 75, policyholders can increase benefit by 10% without having to answer questions about health or undergo a medical exam, subject to restrictions. For more information, visit www.manulife.com.
Critical Illness E&O Offering
The American Association for Critical Illness Insurance is offering low-cost E&O insurance to life and health insurance agents nationwide. Coverage is also available for new agents with options for agencies and their staff. The plan provides a $1 million limit of liability for each claim with a $1,000 per-claim deductible. The association also offers free membership to insurance agents. For more information, visit http://www.criticalillnessinsuranceinfo.org/eo
Book of Business Tool for Retirement Plan Advisors
Securian is offering a tool that allows retirement plan advisors discover marketing opportunities by looking at their accounts in the aggregate. The tool is designed to allow advisors to enhance relationships and increase cash flow. The program offers quick access to valuable client servicing information, reports, and data on one web page. For more information, visit www.securian.com
White Paper Highlights Explain How to Integrate Integrating Short- and Long-Term Disability
The Disability Management Employer Coalition and Liberty Mutual are offering a white paper that describes the seven best practices for integrating short- and long-term disability programs to lower costs for employers and improve service for employees. It can be downloaded at www.libertymutualgroup.com/leadershipseries.
Estate Planning Software
WealthCounsel released its 2012 semiannual updates to the WealthDocx estate planning software system. For more information, visit www.wealthcounsel.com.
