LIFE INSURANCE
• Pre-existing Conditions Are Not Always A Barrier to Life Insurance
IN CALIFORNIA
• The AIG Settlement
• 2013 Editorial Calendar
NEW PRODUCTS & SERVICES
• Tax Credit Eligibility Check
• Term Life
• Critical Illness and Accident Employee Benefits
• Indexed Universal Life
• Enrollment Assistance
HEALTHCARE
• The Candidate’s Views on Health Care
• Fewer Workers Expect Retiree Health Benefits
• Medicare Coverage of Home Health Care
• Cigna Expands Collaborative Accountable Care Program
401(k) PLANS
• Securian Advises Plan Sponsors to Watch for the Proposal Games Retirement
EVENTS
• Webinar on Defined Benefits
Pre-existing Conditions Are Not Always A Barrier to Life Insurance
Too many Americans have taken themselves out of the market for life insurance because of outdated assumptions about pre-existing conditions and insurability, according to a Genworth study. Dr. Marjorie Keymer, vice president, medical director at Genworth said that Americans need to know that, by having well-controlled medical conditions, they may very well be eligible for preferred rates on life insurance.
Thirty-nine percent to 54% of Americans from 18 to 64 with common, self-reported pre-existing conditions have no life insurance. Doubts over insurability prevent many potential candidates from applying for coverage, according to the study. However, medical advances and wellness programs have made it possible for many Americans to manage chronic conditions while the insurance industry has developed increasingly sophisticated underwriting practices to provide preferred rates to those that have well-managed conditions such as asthma, anxiety, and high blood pressure.
Many people with seven self-reported conditions, such as anxiety, asthma, depression, high cholesterol, hypertension, weight problems and sleep apnea, have no life insurance. Uninsured sufferers of anxiety, asthma and depression account for more than half of all those who reported the condition while 40% of people with hypertension, 44% of those with weight problems and 42% of those with sleep apnea have no life insurance. Thirty-nine percent of Americans with high cholesterol remain uninsured. “We need to redefine the word ‘healthy’ in the context of life insurance eligibility For adults with conditions such as anxiety, asthma, depression, high cholesterol and sleep apnea, life insurance can still be an affordable part of their overall financial plan, especially if they are actively taking steps to manage their condition,” said Janet Deskins, Genworth senior vice president for product development.
The AIG Settlement
State Controller John Chiang and Insurance Commissioner Dave Jones announced two multi-state settlements with AIG Insurance Company . AIG will pay $25 million to $30 million on an estimated 10 million policies that are past due in California. Under the second multi-state agreement with insurance regulators, AIG has agreed to business reforms that will ensure that it rapidly pays out life insurance, annuity, and retained asset account benefits. It has also agreed to pay $11 million to the states participating in the settlement. California’s share is expected to be over $1 million.
Chiang’s audits revealed an industry-wide practice of companies failing to pay death benefits to life insurance beneficiaries, despite having access to federal records indicating that policyholders had died or direct confirmation from relatives of the deceased. Instead, some companies continued to collect premium payments from the deceased by drawing down the policies’ cash reserves. Once the cash reserves were depleted, the company would cancel the policy.
The settlement agreement requires AIG to check the Social Security Administration’s Death Master File on a regular basis to find out if any of its life insurance policyholders, annuity owners, and retained-asset account holders have died. If a policyholder has died, the company must conduct a thorough search for beneficiaries, using all contact information in its records and online search and locator tools. If beneficiaries cannot be located, AIG must turn the proceeds over to the states. The Controller maintains an unclaimed property database accessible by any California resident to identify all unclaimed property the State has collected on their behalf. For more information, visit www.claimit.ca.gov.
UCLA Extension Offers Certificate Courses on Health Care Financing
UCLA Extension is offering new certificates in patient advocacy, non-profit leadership, credit analysis, health care leadership, and internal auditing. The Patient Advocacy certificate is designed to quickly provide the full range of skills and knowledge required for this emerging field. Patient advocates help people navigate the complex health-care system, medical bills, and insurance requirements. They also advise family members on how to advocate for a sick relative and more. The U.S. Department of Labor projects this field will grow by more than 25% over the next five years. Patient advocacy is important to assist patients young and old, with a range of health issues including mental health.
Also, health care institutions are increasingly looking for leaders to manage current and impending changes in the U.S. health care system. A focused certificate in Transformational Leadership in Health Care, which can be achieved fully online, is designed to provide leaders with specific skills in helping organizations realize their goals for improving patient care, create new service delivery models and to find other solutions in a growingly complex industry.
Change also is affecting non-profits, as they must now develop new fund-raising techniques and programs, understand the power of organizational branding and recognize emerging roles for organizations when it comes to advocacy and activism. The new one-year fully online certificate is designed to give non-profit professionals the additional tools and skills needed to improve their organization’s overall performance.
On the financial side, credit analysis is becoming increasingly important as consumers begin to spend again and businesses look to expand. The new Credit Analysis and Management Certificate provides the fundamentals of modern credit analysis for today’s business owners and managers as well as implications for better consumer credit management. A limited number of free online information sessions for this certificate will be held, with the first one on Nov. 26. Online enrollment for the winter quarter opens Nov. 5. For more information, visit www.uclaextension.edu or call 310-825-9971.
2013 Editorial Calendar
California Broker Magazine’s 2013 Editorial Calendar is now online at http://www.calbrokermag.com/write-for-us. If you are interested in writing a bylined article, email us at editor@calbrokermag.com.
Joe Dunn is Vice President of Workers Comp Claims at EPIC
EPIC (Edgewood Partners Insurance Center), a retail property, casualty and employee benefits insurance brokerage, has added Joe Dunn as vice president, Workers Compensation Claims in its Fresno office. Dunn brings eleven years of experience in workers compensation, settlement negotiation, and Medicare sectors to EPIC. As vice president, Workers’ Compensation Claims, Dunn will be responsible for Workers’ Compensation claims advocacy. He will work with EPIC’s Central Valley clients to manage and reduce claims expense. This will include education and training, investigating and overseeing claims and establishing best practices for claims cost control. Dunn will also coordinate and oversee insurance carrier services; ensuring case reserves are not excessive. Additionally, he will make sure that all claims are effectively managed to an early, successful conclusion, and that experience modifications are kept low. Before joining EPIC, Dunn worked as a senior workers compensation claims adjuster for the State Compensation Insurance Fund. For more information, visit www.edgewoodins.com.
Tax Credit Eligibility Check
K&A Accountancy launched a service to help small business determine whether they are eligible for the Small Employer Health Insurance Tax Credit. K&A launched a website dedicated to this new service. The firm provides a paper trail proving the calculations in case of audit. K&A says that its service is more accurate and comprehensive than free online calculators since most don’t allow users to optimize the credit and don’t account for tax-exempt organizations. Based in Woodland Hills, Calif., K&A offers full-service accounting and financial consulting.
Term Life
Genworth Financial is launching a traditional term life insurance product “Colony Term 10, 15 and 20” to replace the ColonyTerm UL, a universal life insurance product. In addition, effective Nov. 12, 2012, the company is expanding and repricing GenGuard UL, which will combine the features of Colony LifeLong UL and GenGuard UL into one product. For more information, visit Genworth.com.
Critical Illness and Accident Employee Benefits
ING U.S. launched the Compass Accident and Critical Illness Insurance product suite. The defined benefit policies provide fixed payments for covered diagnoses even if the expenses of the accident or illness are covered by the employer’s medical plan. For more information, call ING U.S. Employee Benefits at 866-566-2316.
Indexed Universal Life
ING U.S. launched an all-in-one indexed universal life product that includes potential for long-term accumulation and death benefit coverage for people and businesses. The ING Indexed Universal Life Global Choice product emphasizes flexibility. Policyholders have four crediting strategies with the ability to allocate their premiums across the strategies. Also available are new options that hold particular appeal to executive benefit and premium financing programs. For more information on ING IUL-Global Choice, contact ING U.S. at 866-464-7355 and select option 6.
Enrollment Assistance
Guardian Life introduced “Benefits Kickstart,” a universal pre-enrollment e-program designed to help provide employees with information on non-medical benefits available through their employer. The user-friendly email platform aims to help busy employers easily increase employee participation during the open enrollment season. It can be customized to an employer’s requirements. For more information, visit www.aboutemployeebenefits.com.
The Candidate’s Views on Health Care
Regardless of who wins the 2012 Presidential race, many Americans don’t see our healthcare system getting better anytime soon, no matter who is voted into office, according to The TeleVox Healthy World Report. Though Romney has declared to repeal and replace Obamacare, the two candidates don’t always differ on healthcare platforms when it comes to outcome and performance incentives for hospitals and doctors, according to political analyst Doug McPherson. Under Obamacare, hospitals get rewards or penalties based on their ability to meet standards of high-quality care. Romney would not repeal this aspect because he also believes in rewarding hospitals based on outcomes. President Obama is an advocate for electronic medical record systems and Romney also believes information technology will improve healthcare delivery. To download the study, visit http://na03.mypinpointe.com/link.php?M=22218462&N=14574&L=8859&F=T
Fewer Workers Expect Retiree Health Benefits
A growing number of workers realize that they will not get retiree health care from their employer, according to a report by the Employee Benefit Research Institute (EBRI). Workers are still more likely to expect retiree health benefits than they are to get these benefits, but the expectations gap is closing.
By 2010, 32% of workers expected retiree health benefits while only 25% of early retirees and 16% of Medicare-eligible retirees had them. Most employers that have continued to offer retiree health benefits have raised premiums that retirees are required to pay, tightened eligibility, limited or reduce benefits, or enacted some combination of these changes. Increasing retiree contributions tops the list of likely changes among employers that still offer the benefit: 43% of employers say they are very likely to increase the retirees’ portion of premiums next year while 35% are somewhat likely to do so. To get the full report, visit http://www.ebri.org/pdf/PR992.23Oct12.RetHlth.pdf.
Medicare Coverage of Home Health Care
The Obama administration has proposed a settlement in a nationwide Medicare class-action lawsuit. It would allow thousands of U.S. residents with chronic conditions or disabilities to qualify for Medicare coverage of home health care services, reports The New York Times. The administration agreed to change Medicare rules to cover skilled nursing and therapy services when they are needed to maintain the patient’s current condition or prevent or slow further deterioration. The changes would apply to the traditional Medicare program as well as private Medicare Advantage plans. More than 10,000 beneficiaries whose claims were denied before Jan. 18, 2011 when the lawsuit was filed are expected to benefit as their claims would be re-examined under the new standards, the Times reports. The changes are expected to generate savings because fewer patients would need to depend on hospitals and nursing homes for physical therapy and similar services.
Cigna Expands Collaborative Accountable Care Program
Cigna continues to expand its collaborative accountable care program through nine new initiatives with physician groups in Ariz., Calif., Colo., Conn., Nevada, Oregon and Tenn. In California, Brown & Toland Physicians is an independent practice association based in San Francisco. http://www.brownandtoland.com. Cigna now has 42 collaborative accountable care programs in 18 states covering more than 390,000 customers, and is on track to reach its goal of 100 initiatives for one million customers by the end of 2014. Cigna launched its first collaborative accountable care program in 2008.
These programs focus on expanding patient access to health care, improving care coordination, and achieving improved health outcomes, affordability, and patient satisfaction. In places where it’s been introduced, collaborative accountable care is helping improve the health of Cigna customers while holding the line on medical costs. For example, in 2011, Medical Clinic of North Texas (MCNT) improved total medical cost trend by 4.4% while maintaining quality at 4% better than the North Texas market. During the same period, Eastern Maine Healthcare Systems maintained quality at 5% better than its market. Also in 2011, Holston Medical Group had an overall emergency room visit rate that was 12% lower than its Eastern Tennessee market while avoidable emergency room visits for Cigna Medical Group were 24% lower than the Phoenix market.
Securian Advises Plan Sponsors to Watch for the Proposal Games Retirement
Dept. of Labor regulations require retirement plan providers to provide details about all the costs associated with recordkeeping and administering their 401(k) plans. But when plan providers submit proposals for a company’s retirement plan business, they may not be clear about the revenue from the companies that providing the investments and the actual cost of services, said Brandon Bellin, FSA, CFA, senior associate actuary, Securian Retirement. Bellin wrote a paper about the Proposal Securian Outlines the following scenarios:
* Game #1 revenue sharing: Retirement plan providers get payments, called “revenue sharing,” from investment companies for including their funds in the provider’s investment array. Providers may show plan sponsors initial proposals that include investment options with low revenue sharing and therefore lower total cost, implying they are less expensive and a good value. Later, the provider may suggest a better lineup that pays higher revenue sharing and drives up plan costs.
* Game #2 proprietary target date funds: Plan providers can generate additional revenue by offering target date funds from an affiliated asset manager. In these cases, investment management expenses can be unreasonably high for the underlying funds. For example, many target date funds that invest in passive index funds have expense ratios more typical of funds with active managers. This additional revenue allows the provider to make its base recordkeeping pricing appear lower.
* Game #3 managed accounts: For an additional fee, employees can purchase professional management services for managing the assets in their retirement accounts. These fees can be substantial and may exceed the actual cost of providing managed accounts, again allowing the provider to reduce base recordkeeping fees. Providers may even require employers to offer managed accounts to get the lower pricing offered in the initial proposal. Plan sponsors who are not aware of the hidden revenues and fees associated with a particular retirement plan provider’s proposal put themselves at risk if they move their plans to that provider, said Bellin.
It’s important that they demand full fee disclosure from any retirement plan provider and that they ask the provider to confirm that its revenue does not vary based on the investments chosen. Since 1880, Securian Financial Group and its affiliates have provided financial security for people and businesses in the form of insurance, investments and retirement plans. Now one of the nation’s largest financial services providers, it is the holding company parent of a group of companies that include Minnesota Life Insurance Company and Securian Life Insurance Company, a New York admitted insurer. Securian Retirement is a unit of Minnesota Life.
Webinar on Defined Benefits
MassMutual is sponsoring a webcast on trends and best practices surrounding defined benefit plans. Hosted by Asset International and moderated by Charlie Ruffel, founder and director of PLANSPONSOR magazine, the one-hour webcast is scheduled for Tuesday, October 30 from noon to 1:00 p.m. For more information about MassMutual Retirement Services, contact your retirement plan advisor or call MassMutual at 866-444-2601. For more information, visit massmutual.com.
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