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LIFE INSURANCE
• Single Parents Face Life Insurance Gap
EMPLOYEE BENEFITS
•How Legal Problems Affect Productivity
NEW PRODUCTS
•Portfolio Tool
HEALTHCARE
•Individual Plan Denials Vary by Plan
•Elderly Residents Not Getting Necessary Preventive Services
•Affordable Care Act Increases Access to Wellness Visits With Medicare
•Integrated Delivery Health Plans Score Higher with Members
•Healthcare Costs Grow at a Higher Pace
•Commentary on Healthcare Exchanges
IN CALIFORNIA
•LAAHU Qualifies For Silver Seal of Certification
COBRA NEWS
•Boxer Reintroduces Domestic Partner COBRA Benefits Bill
•Relatively Few Continue Job-Based Coverage on COBRA
•Judge Dismisses COBRA Lawsuit
FINANCIAL PLANNING
•Workers’ Retirement Confidence Sinks to All-Time Low
LIFE INSURANCE
Single Parents Face Life Insurance Gap
The highest percentage of Americans without life insurance is made up of single parents with children living in their home, according to a study by Genworth and the University of Virginia Darden School of Business. Sixty-nine percent of single parents with children living in their home don’t have life insurance compared to 45% of married parents with children in living their home.
Gregory Bucko, director of Customer Innovation at Genworth Financial companies said, “We were surprised to find that single parents – the group arguably the most in need of life insurance – are among the highest uninsured people in the U.S. It’s a common misconception that life insurance is always expensive or something you need to purchase all at one time. Life insurance should be thought of as a journey, as something that can be obtained in increments as life needs evolve. Even small increases in a person’s life insurance coverage over time can mean the difference between financial independence and financial hardship for their loved ones in the event of a death.”
Fewer single fathers than single mothers have life insurance coverage. Statistics of those without life insurance soar to 79% for single fathers who are not homeowners and have children in their home. That uninsured statistic applies to those earning up to $250,000 a year.
Sixty-six percent of single mothers who earn less than $50,000 a year and have children living in their home don’t have life insurance. The uninsured figure drops 56% percent for those who earn more than $250,000.
The number of single parents without life insurance tends to increase with the number of children, particularly at the lower income levels. The percentage those without life insurance increases drastically in single-parent homes with five or more children.
Fairchild said, “We find that many single parents are simply too busy or even too scared to properly evaluate their life insurance needs. This is an understandable fear because the first level of financial safety – from the other parent – isn’t there…The insurance industry has an opportunity to better educate consumers and give them the tools and resources to help protect themselves and their families.” To help consumers understand how much coverage they need and demystify the purchase process, Genworth has introduced a program called The LifeJacket Project. To view the tools, please visit www.genworth.com/life.
How Legal Problems Affect Productivity
A study by MetLife reveals how personal legal matters can take a toll on workplace productivity. People who are dealing with legal issues, such as will preparation, traffic tickets, real estate matters, debt problems, or family situations like adoption and divorce – spend close to three hours a week at work dealing with these issues. That’s nearly three hours a week for five to six weeks. Furthermore, 37% of men and 47% of women said dealing with their issue has hurt their physical or emotional health. The survey was conducted online by Harris Interactive on behalf of Hyatt Legal Plans.
Only 30% of employees who used an attorney through a group legal plan took vacation or other paid time off to address their legal situation compared to nearly 50% of employees who hired an attorney on their own. Nine out of 10 people who used a group legal plan said they would use it again. Interestingly, even 42% of people who were satisfied serving as their own attorney said they would be interested in enrolling in a group legal plan if given the option. For more information, visit www.legalplans.com.
Portfolio Tool
Jackson National Life launched its Portfolio Construction Tool, an interactive online solution that helps advisers build customized investment portfolios. Advisers can screen investment options by asset class, portfolio manager, investment style, expenses, and performance. Advisers can also save and edit individual proposals and create templates for future use. For more information, visit www.jackson.com.
Individual Plan Denials Vary by Plan
The rate of denials for individual plan applications was 19% for the first quarter of 2010, but denial rates varied significantly across insurers, according to a Government Accountability Office (GAO) report. For example, just over a quarter of insurers had application denial rates from 0% to 15% while another quarter of insurers had rates of 40% or higher.
GAO noted that these denial rates may not provide a clear estimate of the number of people who were able to get coverage since people can apply to multiple insurers. Also, the statistics do not reflect applicants who have been offered coverage with a premium that is higher than the standard rate.
The rates of coverage denials varied significantly including rates of denials of pre-authorizations and claims. Coverage denial rates varied significantly across states, with claim denials ranging from 11% to 24% across the three states that collected the data.
In addition, rates varied significantly across insurers, with data from one state indicating a range in claim denials from 6% to 40% across six large insurers operating in the state. Several factors may have contributed to the variation in rates, such as states varying in the types of denials they require insurers to report. Coverage denials occurred for a variety of reasons — frequently for billing errors, such as duplicate claims or missing information on the claim and eligibility issues, such as services being provided before coverage was initiated. Coverage denials, if appealed, were frequently reversed in the consumer’s favor. For example, 39% to 59% of appeals resulted in the insurer reversing its original coverage denial. For more information, visit www.gao.gov.
Elderly Residents Not Getting Necessary Preventive Services
Elderly U.S. residents are not getting the preventive services they need, according to a CDC report, HealthLeaders Media reports. The report examined whether elderly U.S. residents were receiving the following preventive services:
1. Vaccinations against influenza and pneumococcal disease.
2. Screenings for breast and colorectal cancer, diabetes, lipid disorders and osteoporosis.
3. Counseling services to help patients quit smoking.
The report found significant racial disparities in the use of preventive services. For example, 49% of Asian/Pacific Islanders and 47% of Hispanics have not had screenings for colorectal cancer, compared to 34% of whites. In addition, more than half of Hispanics, 47% of blacks and Asian/Pacific Islanders did not get pneumonia vaccinations compared to 36% of whites.
The report states that the elderly need to be more aware of the preventive services that are available to them under the federal health reform law, and the services that are covered by Medicare.
Affordable Care Act Increases Access to Wellness Visits Medicare
In less than two months, more than 150,000 seniors and others with Medicare had an annual wellness visit, according to an HHS report. The preventive benefit is now covered by Medicare free of charge when obtained by a participating healthcare professional, thanks to the Affordable Care Act. Congress eliminated the part B coinsurance and deductibles for the annual wellness visit and many other preventive services. Cancer screenings, such as mammograms and colonoscopies as well as tobacco cessation counseling may now be obtained free of charge. To learn more about the new Medicare benefits in 2011, visit www.HealthCare.gov/news/factsheets/new_medicare_benefits.html.
Integrated Delivery Health Plans Score Higher with Members
Health plans members are more satisfied with health plans that share characteristics of integrated delivery systems (IDS), according a J.D. Power study. Another major finding is that, in 2011, member satisfaction with health plans, in general, is at the lowest point since the study’s inception in 2007, averaging 696, compared to 701 in 2010. Member satisfaction with coverage and benefits has decreased slightly. Members expressed considerable declines in satisfaction with communication, claims processing, and statements.
Now in its fifth year, the study measures member satisfaction among 137 health plans in 17 regions throughout the United States by examining seven key factors: coverage and benefits, provider choice, information and communication, claims processing, statements, customer service, and approval processes.
Satisfaction with integrated health plans, such as Health Alliance Plan and Kaiser, averages 741 on a 1,000-point scale compared to 691 among members of plans where care is not integrated. In addition, members of integrated plans have a better understanding of their coverage and the processes necessary to get services. Sixty-three percent of integrated plan members say they completely understand the benefits covered, compared to 52% of non-IDS plan members. Forty-four percent of IDS plan members say they completely understand how to get preventive services while just 24% of non-IDS plan members say the same.
Richard Millard, senior director of the healthcare practice at J.D. Power said, “An advantage of these plans is that interactions center on the member as a patient because the provider and plan are integrated. The higher level of satisfaction with integrated plans is particularly important with the passage of the Affordable Care Act, which will result in the creation of accountable care organizations modeled after the IDS approach.
Members of integrated plans tend to be more satisfied with information and communication as well as coverage and benefits. “Information and communication remains the factor with lowest satisfaction among all plans, possibly reflecting the increasing complexity of health benefits. Because members are increasingly concerned about the uncertainties surrounding cost and coverage, plans that focus on delivering useful information to manage these changes tend to earn higher satisfaction scores,” said Millard.
Fifty-seven percent of health plan members chose to make changes involving cost or coverage during the past year or were required to do so – continuing a trend in which more members say they are powerless to control their healthcare costs.
With individual plans, satisfaction averages 667 points compared to 700 points with group health plans.
Exchange-based purchasing may result in further growth of the individual market, but it is not yet well understood. However, only one-half of all members think that by 2014 they will continue to purchase health insurance as they do now.
For more information, visit http://www.jdpower.com/healthcare/ratings/member-health-plan-ratings.
Healthcare Costs Grow at a Higher Pace
The average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased 6.29% over the 12-months ending January 2011. This is an increase over the 6.05% annual growth rate in the December 2010 and the first time this rate has accelerated since May 2010, according to a report by Standard & Poor’s.
David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s said, “In January, we saw the annual growth rates in healthcare costs picking up slightly after six consecutive months of decelerating rates in the latter half of 2010.” The Composite Index rose by 6.29%, the Commercial Index was up 8.03%, and the Medicare Index was up 3.40%. Only the Hospital Medicare Index reached a new low, 1.72% in January 2011 versus the same month in 2010.
Blitzer said, “In the past year, we began to see a trend of deceleration in annual growth rates for the nine indices in this family, especially in the second half of 2010. The first month of the New Year shows a departure from this trend, but it is too soon to predict if this is an anomaly or a sign of what 2011 has in store for us. The S&P growth rates for Healthcare Economic Hospital were 5.64% in January 2011 compared to 5.56% in December 2010. The January 2011 growth rate was 6.76% for Professional Services compared to 6.34% in December 2010.
The rate of change in expenditures with commercial health insurance plans continues to outpace expenditures for Medicare. “The only time we ever saw this relationship reversed was for a brief period in late 2005. In the past year alone, the gap has widened by more than 3.0% age points,” he noted. For more information, visit www.standardandpoors.com/indices.
Commentary on Healthcare Exchanges
by Dr. Tamzin Rosenwasser
The ObamaCare bill requires states to satisfy the Federal government that they are setting up health insurance exchanges by 2013 or the Federal government will force the state to use a national exchange, created and run by the Federal government. Insurance companies will be companies in name only — their directors pawns of the government. A name for that type of arrangement is “Fascism.” Eligibility for ObamaCare’s health insurance subsidies depends on income, so there will be an intrusive verification of income, family size, smoking status, and so on.
Since the bill mandates requirements that many companies and customers will likely find distasteful, the exchanges embody a fundamental instability, which nothing but force can resolve.
Nowhere in the Constitution is government authorized or allowed to claim power over individual citizens’ medical care. There has been no sign that the Executive Branch will so adhere to the law declared by the judge’s ruling. The Executive Branch shows contempt for the Court. Because of these two rulings, plus the dislocation and expense that would be caused by instituting exchanges, states should refrain from taking any actions to further ObamaCare. Citizens should now be attentive, and compel the Executive Branch to obey the law.
Dr Tamzin Rosenwasser is board-certified in Internal Medicine and Dermatology and has practiced Emergency Medicine and Dermatology. Dr. Rosenwasser served as President of the Association of American Physicians and Surgeons (AAPS) in
2007-2008 and is on the Board of Directors. For more information, e-mail Yorktown19Oct@aol.com or call 765-538-2058
LAAHU Qualifies For Silver Seal Of Certification
The Los Angeles Association of Health Underwriters (LAAHU) qualified to receive the Silver Seal of Certification. NAHU’s Chapter Certification Program recognizes excelling chapters. Recognition is based on criteria satisfaction in various areas of chapter management. “The Silver Seal of Certification is bestowed upon chapters that have demonstrated developmental excellence in their area, nationally and in the healthcare industry. The volunteers in the Los Angeles chapter met our expectations and far exceeded them,” said NAHU CEO Janet Trautwein. “We are proud to be one of three local chapters nationally who can claim this distinction. Being a Top Three chapter is as a direct result of the focused efforts of the LAAHU Board over time to operate in ways that lead to a well-managed, flourishing chapter that is focused on the needs of its members,” said Dede Kennedy-Simington, Awards Chair for LAAHU.
Boxer Reintroduces Domestic Partner COBRA Benefits Bill
Senator Barbara Boxer (D-CA) reintroduced the Equal Access to COBRA Act, which would give many domestic partners the same access married spouses have to COBRA health coverage if their partner loses a job. The law would apply to companies that already offer health coverage to domestic partners and their children.
It would change federal law to allow equal access to COBRA coverage for all people who are covered by an employer’s health plan. It would apply to domestic partners as they are defined by an employer’s health insurance plan.
Under federal law, employers must offer continuing healthcare coverage to departing employees and their beneficiaries for up to 36 months. Current federal COBRA laws do not apply to domestic partners or same-sex spouses – even at companies that offer health coverage to domestic partners of employees. More than half of Fortune 500 companies cover domestic partners under their health plans. Senator Boxer originally introduced the legislation last year, and Rep. Anthony Weiner (D-NY) has introduced a companion bill in the House.
Relatively Few Continue Job-Based Coverage on COBRA
An estimated nine-million working-age adults became uninsured in the past two years, according to the Commonwealth Fund 2010 Biennial Health Insurance Survey. That’s 57% of people who had health insurance through a job that was lost. Only 25% of people who lost employer health insurance were able to find another source of health insurance coverage and only 14% continued their job-based coverage through COBRA. The survey paints a bleak picture for the 43 million adults under age 65 who reported that they or their spouse lost a job in the past two years, finding that job losses are often compounded by the loss of health insurance, leaving families vulnerable to catastrophic financial losses and bankruptcy in the event of a serious illness or accident.
In addition, purchasing individual coverage was not a viable option for most people. Seventy-one percent of adults who tried to buy individual coverage in the past three years, or 19 million people, found it difficult or impossible to find a plan that fit their needs or find a plan they could afford, or they were turned down or charged a higher price for coverage because of a pre-existing condition. For more information, visit www.commonwealthfund.org.
Judge Dismisses COBRA Lawsuit
United States District Judge for The District Of Puerto Rico dismissed COBRA-related claims against an employer. Norma Franco-Franco-Santos sued Goldstar Transport and Puerto Rico Warehousing Management Corp. after she was laid off. She claimed that her former employer was guilty of age discrimination and that the employer failed to comply with the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA).
Franco-Santos alleged that after she was laid off, her employer did not give her the statutorily mandated notices of her rights under COBRA. The COBRA law mandates that an employer has to give former employees the opportunity to continue coverage under the employer’s group health plan if a qualifying event occurs. Termination of employment, other than by reason of the employee’s gross misconduct, is a qualifying event. It requires the employer to notify the administrator of the group health plan within 30 days of the termination.
However, employers that meet the small-employer exception are not statutorily required to offer this service. The small-employer exception states that this mandate does not apply to any group health plan for any calendar year if all employers maintaining such plan normally employed fewer than 20 employees on a typical business day during the preceding calendar year.
The employer contended that, even if considered a single employer, the combined work forces of Goldstar and PRWM are small enough to exempt the corporations from having to comply with the requirements of Section 1161. The employer contends that during the relevant period, it employed 14 qualifying employees at most.
Franco-Santos argued that, during the relevant period, both companies had a combined 19.4 employees who worked at least 50% of the time. The court found that her calculation of 19.4 employees is still lower than the maximum number of employees that can meet the exemption. Therefore, under either parties’ interpretation, the employer’ are not legally mandated to comply with Section 1161 of COBRA.
Workers’ Retirement Confidence Sinks to All-Time Low
More and more Americans have lost confidence in their ability to afford retirement, according to the Employee Benefit Research Institute (EBRI) and the Principal Financial Group. Twenty-seven percent say they are not at all confident about having enough money to live comfortably in retirement.
Americans are redefining retirement in response to high unemployment rates, government fiscal crises, rising healthcare costs, lower investment returns, a surging older population that is putting pressure on Social Security and Medicare, and longer life expectancies.
Roughly a third of workers and retirees had to dip into their savings last year to pay for basic expenses. Those with retirement savings, such as a 401(k) or an individual retirement account (IRA), were far less likely to tap into their savings.
Many people do not plan or save for retirement. Forty-two percent say they simply guessed about how much savings they would need in retirement. Seventy percent say they are behind schedule in planning and saving for retirement. More than half of workers say they have less than $25,000 in total savings and investments, excluding their homes.
Twenty percent of future retirees say they intend to retire later than they had planned. But 45% of current retirees say they retired earlier than they planned, mainly because of a health problem or disability. For more information, visit www.ebri.org.
