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Thursday April 24th 2014



Health Net Terminates Agreements with Six Tenet Healthcare Hospitals

• Health Net Terminates Agreements with Six Tenet Healthcare Hospitals
• New Insurance Laws Aim to Protect Consumers
• San Diego DA Convicts Financial Planners
• Word & Brown Named a Top Workplace
• Blue Shield Seeks Individual Rate Hikes as High as 20%
• Online Doctor Visits
• Health Apps
• Voluntary Disability Protection
• Retirement Summit
• Access to LTC Summit Recordings
• NAIC Cautions Against Added Medigap Cost Sharing
• Premiums Have Soared Since 2003
• 401(k) Investors Continued to Diversify
• Aviva Sells U.S. Annuity and Life Business
• Advisors Are Key to Financial Planning Security
• Women Are Likely to Follow Financial Advice


Health Net Terminates Agreements with Six Tenet Healthcare Hospitals

HealthnetHCalifornia Health Net terminated agreements with all six of Tenet Healthcare’s Southern California hospitals: Desert Regional Medical Center, Fountain Valley Hospital and Medical Center, John F. Kennedy Memorial Hospital, Lakewood Regional Medical Center, Los Alamitos Medical Center, and Placentia Linda Hospital. Health Net and Tenet Healthcare were nearing the end of a three-year contract. “The decision to proceed with the termination process was difficult. We had no choice, however, as Tenet Healthcare has refused our requests to negotiate a new contract that more accurately reflects statewide market conditions,” said Steve Sell, president of Health Net’s Western Region Health Plan.

Health Net says that Tenet’s reimbursement should be in line with the medical consumer price index, which averages more than 3%, and that reimbursement for state- and federally funded programs like Medi-Cal should be consistent with the funding for those programs. In recent discussions for a new contract, Health Net and Tenet have been unsuccessful in reaching agreement on reimbursement amounts.  “Our goal is to help preserve affordable benefits for our customers, not pass along inflated health care costs,” said Sell.

New Insurance Laws Aim to Protect Consumers

The California Legislature has passed several bills that have been sponsored or publicly supported by the California Department of Insurance (CDI):

• AB 1846 (Gordon) establishes a regulatory licensing framework for consumer owned and operated plans (CO-OPs), which are designed to foster the creation of consumer-driven, nonprofit health insurance organizations.
• AB 1761 (Perez) prohibits people or entities from representing, constituting, or otherwise providing services on behalf of the California Health Benefit Exchange without having a valid agreement with the Exchange.
• AB 999 (Yamada) modifies the process for LTC rate development to protect consumers from excessive premium rate volatility. It is considered one of the strongest LTC consumer protection measures in the nation.
• AB 2138 (Blumenfield) provides increased funding for district attorneys to investigate and prosecute health and disability insurance fraud in collaboration with CDI enforcement personnel.
• SB 1216 (Lowenthal) and SB 1448 (Calderon) ensure that CDI has the regulatory authority to protect consumers in response to changes brought by the globalization of the insurance business and insurer use of reinsurance.
• SB 1216 provides a framework for when a California-based insurer cedes business to a non-U.S. based reinsurer. Commissioner Dave Jones notes that the recession brought to light the need for regulators to have more authority to evaluate the risks that a non-insurance entity poses on an insurer in a holding company system.
• SB 1448 updates California’s Insurance Holding Company System Regulatory Act so the financial status of an insurer in a holding company system can be assessed.
• AB 2303 (Assembly Committee on Insurance) gives the insurance commissioner the authority to take over an insurer that the U.S. Treasury Secretary determines is insolvent or in danger of becoming insolvent.
• SB 1170 (Leno) expands restrictions on misleading advertising tactics directed at seniors and senior veterans. It would enhance the notification requirements for an agent or broker to meet with a senior in their home to sell an insurance product.
• SB 1184 (Corbett) is designed to stop unscrupulous insurance agents and brokers who charge a fee to help senior veterans qualify for veterans’ aid programs when these services are readily available for free for those who qualify. Insurance agents and brokers cannot be involved in obtaining senior veterans’ benefits with the sole purpose of financial gain.
• AB 1747 (Feuer) requires a life insurer to send a pending lapse notice to the policyholder within 30 days of nonpayment. The policyholder must be able to name one or more people to receive a copy of the pending lapse notice or termination of a policy for nonpayment of premium. People can easily lose the critical protection of life insurance if just one premium is accidentally missed, even if they have been paying premiums on time for many years, notes Commisioner Dave Jones.

San Diego DA Convicts Financial Planners

Financial planner, Victor James Loh will serve six years and four months in state prison for defrauding 17 victims and the California State Franchise Tax Board of more than $4.25 million dollars. His wife, Jannett Bidwell will be sentenced June 26.

From 2008 through 2009, the couple convinced 17 victims to transfer their retirement funds to companies that Loh and Bidwell created. The couple described these companies as secure investments, but they were actually vehicles for the funds to be transferred out to other Loh and Bidwell controlled accounts. The couple spent the proceeds of their clients’ retirement funds on expensive cars, horses, trips, and other personal expenses.

Victor Loh and his wife were financial planners and held insurance sales licenses. Before 2008, the couple worked as financial planners advising investors to self-direct retirement funds into annuities. The couple also purchased a company that later went into bankruptcy. While that company was in bankruptcy proceedings, they continued to solicit victims to invest their retirement funds in the couple’s “secure investments.” Victor Loh pleaded guilty to four counts stipulating him to $4.25 million in restitution and a six-year, four-month state prison sentence.

Word & Brown Named a Top Workplace

The Orange County Register named The Word & Brown Companies as one of Orange County’s Top Work Places for 2012. Word & Brown was selected as one of 20 mid-sized firms recognized by the newspaper. It is based on a survey of employees measuring employer qualities, such as company leadership, compensation, training, workplace flexibility and diversity. The newspaper and its research partner, Workplace Dynamics, surveyed employees from nearly 150 companies across Orange County. Operating nationally, The Word & Brown Companies include the Word & Brown General Agency, CONEXIS, CHOICE Administrators Quotit, and HealthCompare. For more information, visit

Blue Shield Seeks Individual Rate Hikes as High as 20%

Blue Shield of California is seeking premium increases of as much as 20% for some individual policyholders, the Los Angeles Times reports. Blue Shield is proposing an average rate increase of 12% for more than 300,000 individual policyholders, effective in March 2013. California officials are examining the rate hike proposal, but have no authority to reject the rate increase. The insurer said it expects to lose money in the individual market next year even with the proposed rate hikes. Medical costs for the individual market have increased by 10.6% while the amount that the insurer actually pays for people is increasing by 12.5%.


Online Doctor Visits

Anthem Blue Cross members will soon be able to choose a doctor and address their health issues live via two-way video at LiveHealth Online will launch in the first quarter of 2013 initially to small and large-group fully insured customers and self-funded national employers. Doctors will offer live consultations from 7:00 a.m. to 11:00 p.m. daily. Members will be able to initiate online meetings via live audio/video and secure chat. Patients use online care typically to communicate with a doctor about colds, aches, sore throats, allergies, infections as well as wellness and nutrition advice. A complete record of each encounter is created, which can be forwarded to their primary care doctor with the patient’s permission. E-visits using e-mail and electronic patient health records had similar outcomes to in-person visits for treating sinus and urinary tract infections, according to a November 2012 study from the University of Pittsburgh published in the Journal of the American Medical Association.

Health Apps

Cigna is offering four healthy living mobile apps free to the first 20,000 people who download them
is a nutrition tracking and planning tool, which was named as the best iPhone Health & Fitness app by Apple. It uses a barcode reader or browser feature to find nutritional information. It can also be used to create shopping lists and find healthier and more affordable alternative products.
iPhone download
• Android download

Endomondo is a GPS-enabled workout tracker that turns your phone into a personal trainer.
iPhone download
Android download

Meditation Oasis’s Relax and Rest Guide Meditation offers music and nature sounds for meditation and focuses on breathing and full-body relaxation.
iPhone download 
• Android download

The White Noise and Nature Sounds audio player helps promote better sleep. The app also allows for the addition of white noise as well as a favorite image.
iPhone download
• Android download

Voluntary Disability Protection

Guardian Life is offering an enhanced supplemental income protection program with benefits for business owners and their employees. It’s supported by a fully customizable online educational and enrollment system, “Income ProVider.” Because it’s offered as a voluntary benefit, employees can take advantage of discounted group rates with very few, if any, medical underwriting restrictions. Unlike typical group long-term disability plans, employees who depend on performance incentives or bonuses for much of their income can have variable compensation protected. A portability feature gives employees a one-time opportunity to increase their coverage up to the plan’s maximum GSI offer, even if they are switching employers. There are three  distinct plan options. For more information, visit


Retirement Summit

The Retirement Income Summit will be held May 13 to14 in Chicago  The keynote speaker will be Ken Dychtwald, PhD, founder of AgeWave. For more information, visit

Access to LTC Summit Recordings

The American Assn. for Long Term Care Insurance is offering recordings of 32 workshops and keynote presentations from the 2012 National Long Term Care Insurance Sales Summit. Downloads of complete sessions are available for a $20 charge from Fleetwood Recording. You can get a free five-minute preview of the presentations. To get a 33% discount, enter code SAVE33 during the online checkout process. The discount is valid through January 2013. For more information, visit


NAIC Cautions Against Added Medigap Cost Sharing

In a letter to HHS Secretary Kathleen Sebelius, the National Association of Insurance Commissioners (NAIC) says that it opposes further cost sharing in Medigap Plans. One in five people with Medicare has a Medigap plan to help cover cost sharing and other health care costs that are not covered by Medicare. Some policymakers have suggested limiting Medigap coverage by increasing out-of-pocket costs for beneficiaries.

But the NAIC says that increasing costs would not only harm beneficiaries, but may also lead to increased costs in the system. After extensive research, the NAIC concluded, “We were unable to find evidence in peer-reviewed studies or managed care practices that would be the basis of nominal cost-sharing designed to encourage the use of appropriate physicians’ services. Therefore, our recommendation is that no nominal cost-sharing be introduced to Plans C and F.”

Under the Affordable Care Act, the NAIC was directed to review and revise the standards for Medigap Plan C and Plan F benefits. A task force of state insurance regulators, insurers and trade associations, consumer advocates, and other Medicare experts spent almost two years reviewing literature on cost-sharing and patient behaviors.

Judith Stein, Executive Director of the Center for Medicare Advocacy said, “When required to pay beyond their means, people skip needed medical care and treatment, leading to poor health outcomes, increased emergency room visits, and hospitalizations.” The NAIC says that its findings will be a significant consideration as policymakers grapple with how to bring down the nation’s deficit.

Premiums Have Soared Since 2003

From 2003 to 2011, premiums have risen 62% for employer-based family health insurance coverage, according to a study by the Commonwealth Fund. At the same time, deductibles more than doubled in large and small firms, which means that workers are paying more while getting less-protective benefits. If these trends continue, the average premium for family coverage will reach nearly $25,000 by 2020. The Affordable Care Act’s reforms should begin to moderate costs while improving coverage. But further efforts are needed with private insurance costs projected to increase faster than incomes over the next decade, according to the Commonwealth Fund. If annual premium growth slowed by 1%, by 2020 employers and families would save $2,029 annually for family coverage. For more information, visit


401(k) Investors Continued to Diversify

In 2011, 401(k) savers sought diversified portfolios. Sixty-one percent of the assets of 401(k) participants were invested in equity securities while 34% were invested in fixed-income securities, according to a report by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI).

Seventy-two percent of 401(k) plans offered target-date funds at the end of 2011 compared to 70% at the end of 2010 and 57% at the end of 2006. Target-date funds offer a mixed investment portfolio of equity and fixed-income securities. They allow a portfolio to become more focused on income over time to get diversification, noted Sarah Holden, senior director of retirement and investor research at ICI and coauthor of the study.

At the end of 2011, 13% of the assets in the EBRI/ICI 401(k) database were invested in target-date funds compared to 11% in 2010 and 5% in 2006. Thirty-nine percent of 401(k) participants held target-date funds at the end of 2011 compared to 36% in 2010 and 19% in 2006.

Fifty-one percent of the account balances of recently hired participants in their 20s were invested in balanced funds at the end of 2011, up from 44% in 2010 and 24% in 2006. At the end of 2011, 40% of the account balances of recently hired participants in their 20s was invested in target-date funds, compared to 35% in 2010 and 16% in 2006.

A growing number of employers are taking advantage of automatic enrollment, contribution acceleration, and qualified default investment alternatives, including target-date funds.

Twenty-one percent of 401(k) participants who were eligible for loans had loans outstanding against their 401(k) accounts, which is unchanged from the previous two years. Outstanding loans amounted to 14% of the remaining 401(k) account balance at the end of 2011.

The average account balance of the longest-tenured participants in their 50s or 60s was more than eight times larger than that of new hires. At the end of 2011, the average 401(k) participant account balance was $58,991 and the mid-point account balance was $16,649, with wide variation reflecting the many variables in retirement saving, including participant age, tenure, salary, contribution behavior, rollovers from other plans, asset allocation, withdrawals, loan activity, and employer contribution rates. For more information, visit


Aviva Sells U.S. Annuity and Life Business

Athene Holding Ltd., a Bermuda-based insurance holding company, will acquire Aviva plc’s U.S. annuity and life insurance operations. This includes Aviva Life and Annuity Company, based in Iowa and Aviva Life and Annuity Company of New York. Athene will acquire Aviva USA. The transaction is expected to close in 2013, subject to customary conditions and regulatory approvals.

Athene will become the second largest issuer of fixed indexed annuities in the United States with the combination of Aviva USA and Athene Annuity & Life Assurance Company (a Delaware-domiciled insurer focused on retail fixed and indexed annuity sales and reinsurance). U.S. operations will be headquartered in West Des Moines, Iowa. Athene says that it is committed to retaining a substantial employee base in Des Moines. Athene recently received a $621 million capital infusion in anticipation of the transaction and expects to have over $3.5 billion of combined statutory capital within its insurance company subsidiaries following the transaction.” Athene, which is focused on becoming the leading U.S. fixed annuity company, is evaluating strategic options with respect to Aviva USA’s life insurance operations.


Advisors Are Key to Financial Planning Security

Retirement preparedness is strongly linked to completing key activities like determining your income and expenses, calculating how long your assets will last, and identifying the things you want to do in retirement and how much they will cost, according to a LIMRA study. Those who work with advisors are twice as likely to accomplish at least some planning activities, particularly the more complex tasks, such as calculating future assets available in retirement and estimating how long those assets will last. Only 15% of all pre-retirees have a formal written retirement plan. Only half of pre-retiree households with higher incomes have such plans in place. Meanwhile, 62% of pre-retirees working with an advisor have written retirement plans. The majority of recent deferred annuity buyers say the two most important reasons they bought an annuity were to facilitate retirement planning and ensure that their assets last throughout their and their spouses’ retirement. For more information, visit

Women Are Likely to Follow Financial Advice

Nearly 90% of women take action after receiving financial advice, from saving more to rebalancing retirement portfolios, according to a survey from TIAA-CREF. “It’s encouraging that women are willing to take action…but the fact that so many women say they don’t know where to look for advice and don’t know whom they can trust shows there’s more work to be done,” said Cathy McCabe, managing director for TIAA-CREF. Nearly half of women respondents assume that they can’t afford personalized and objective advice. According to one in three, they don’t have time to look for advice. As a result, many women turn to family members and friends for advice rather than visiting a financial advisor. TIAA-CREF created the Woman to Woman Financial Empowerment Series, which includes workshops developed by women, for women. Each workshop is interactive, allowing attendees to learn from the financial advisor and other women in the room. For more information, visit