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Friday April 25th 2014



Survey Taps the Angst of Health Brokers

• Survey Taps the Angst of Health Brokers
• ACA Expected to Deliver Lower Than Expected Premiums
• Consumers Warned About Health Reform Scams
• Covered California Gears up for Agent Certification Training
• Blue Shield Teams up on ACO
• Insurance Law Podcast
• WellPoint Sees Jump in Profits & Rate Increases
• ACA Spurs Insurers to Form Alliances Around Supplemental Products
• Employees Value Their Voluntary Benefits
• Guide to LTC Options
• Telemedicine
• Guide to Health Insurance Tax Subsidies
• June Sees a Slow Down in Life Sales
• Life Settlement Conference


Survey Taps the Angst of Health Brokers

4.1.1America’s insurance brokers have been shaken by wide-ranging changes to the nation’s health care system and economic unrest, with 45% considering exiting the health insurance business altogether. Fifty-one percent are only somewhat or not at all confident about the future of their firm and industry, according to a survey conducted by Research Now on behalf of Aflac. But are brokers being too pessimistic? Employers and employees say they need more help than ever from brokers to unravel the confusing web of changes that come with health care reform.

The survey reveals the following
• 29% of brokers are concerned about staying relevant to their clients.
• 62% of brokers say the most important issue for their firm is how rising health care costs are affecting their clients’ benefit decisions.
• Only 15% of brokers are completely confident in the future of their firm and the industry.

But employers and workers who participated in the Aflac study say they depend on the expertise of their brokers and benefit consultants. For example, 78% of employees agree, at least somewhat, that they would be more informed about their health insurance choices if they worked with an insurance consultant during benefit enrollment while 35% of strongly or  completely agree.

Employee education and communication about benefits are two key areas of opportunity for brokers. Michael Zuna of Aflac said that a broker’s “expertise is increasing in demand among companies and employees. The smartest agents and brokers will seize upon health care reform as an opportunity to further demonstrate their value and encourage employers to satisfy workers’ expectations and needs when it comes to benefits education. Our research shows that education and engagement will be crucial to helping employers attract and retain employees and keep them productive and satisfied on the job.”

The assistance of  brokers and benefit advisors is particularly crucial given this statistic: Fifty-five percent of employers haven’t done anything to prepare for upcoming changes to the health care system. But 75% of employees are expecting their employers to educate them about changes to their coverage.

Tailored benefits and employee wellness programs also provide opportunity for brokers. The survey revealed the following:

• 82% of brokers recommend tailored benefits. Ninety-two percent of employees say they’d take advantage of tailored options, but just 38% of employers provide such plans.
• 56% of brokers recommend that their clients sponsor employee wellness programs, but 60% of the companies in the Aflac study don’t have these programs.

For more information, visit

ACA Expected to Deliver Lower Than Expected Premiums

Premiums in the health insurance marketplace will be nearly 20% lower in 2014 than previously expected, according a report released by  HHS Secretary Kathleen Sebelius. Proposed individual premium rates for 2014 are 18% lower than HHS’ previous estimates for the 10 states and the District of Columbia that HHS looked at.

In the six states that provided information in the small group market, proposed premiums are estimated to be 18% lower than for similar coverage without the Affordable Care Act.

Estimates are based on premium proposals for the lowest cost silver plan in the individual and small group markets. Actual 2014 premiums may be even lower when health plans are offered in the Marketplace this fall. Thanks tthe rate review process and competition, a number of  states are reporting significantly lower rates than what was proposed earlier this Spring.

 In 2014, the cheapest silver plan for a 25-year-old individual in Los Angeles County is $174 a month without a tax credit and $34 a month for an individual whose income is $17,235. Also, an individual can purchase a catastrophic plan for $117 per month.

Further, data from the Medical Expenditure Panel Survey reveals that the average premiums for employer sponsored insurance increased only 3% from 2011 to 2012, which the lowest increase since the data series started in 1996.

Since the health law’s rate review provisions were implemented, there has been a dramatic drop in the number of requests for insurance premium increases of 10% or more — from 75% to 14%. To date, the rate review program has helped save Americans an estimated $1 billion. For more information, visit

Consumers Warned About Health Reform Scams

Scammers are already taking advantage of consumers who are confused about health reform. The Federal Trade Commission is expecting an increase in fraud and identity theft. Scambook, an online complaint resolution platform, outlines the following health reform scams:

The Fake Obamacare Card: Scammers who claim to represent the government call and tell victims that they need an Obamacare card to be eligible for the Affordable Care Act, even offering it as an insurance discount card. In each scenario, the card can only be obtained by providing credit card information or Social Security numbers.

The Information Update: Posing as Medicare officials, fraudsters call consumers to verify personal information and warn them of consequences if they don’t give out the information. 

• Fake Coverage and Mandatory Payments: Scammers sell fake healthcare coverage; request fees for healthcare benefits; and even threaten jail time if consumer doesn’t pay the fake enrollment fees.

Fake Navigators: Scammers, pretending to be navigators, are calling consumers to ask for service fees upfront. When enacted, this service will be free to the public.The government is sponsoring the training and certification of navigators to help consumers transition. However, this program has not started yet. 


Covered California Gears up for Agent Certification Training

Registration for Covered California Certification will open August 19 with in-person training to take place the first week of September. Online Certification will follow, but no date was offered, reports the California Assn. of Health Underwriters. Agents can register for in-person training at or

WellPoint Sees Jump in Profits & Rate Increases

WellPoint announced a 24% profit increase in the second quarter of 2013 compared to last year. The company’s stock recently hit an all-time high of $90 per share. Mark Reback of Consumer Watchdog complains, “WellPoint and the other big health insurers are continuing to be two-faced when they preach austerity to their customers in order to raise premiums, then turn around and announce large profits and a record share price to shareholders. As federal health reform requires health insurers to disclose more information online, it will be harder for them to say one thing to customers and the opposite to Wall Street and investors. Most consumers remain vulnerable in many states where there are no regulations to reject excessive rate hikes, even when company profits exceed projections.” Anthem Blue Cross, WellPoint’s California subsidiary, recently imposed a rate hike on more than 250,000 small business customers. For more information, visit

Blue Shield Teams up on ACO

Blue Shield of California has teamed up on a three-year accountable care (ACO) initiative with Providence Health & Services, Southern California and Facey. The ACO will provide integrated, cost-efficient care to about 16,500 HMO members in Los Angeles County. About 5,500 enrollees are members of the California Public Employees’ Retirement System (CalPERS). The organizations anticipate flat or decreased healthcare cost trends for members during the three-year collaboration.

They will share clinical and case management information and coordinate comprehensive healthcare services for Blue Shield HMO members assigned to Facey Medical Group physicians. The ACO includes three medical centers: Providence Holy Cross, Providence Tarzana and Providence Saint Joseph. For more information, visit


ACA Spurs Insurers to Form Alliances Around Supplemental Products

Insurance industry dealmakers say that the Affordable Care Act (ACA) is spurring more companies to form alliances around voluntary offerings, according to a survey of Inter-Company Marketing Group (ICMG) members. Healthcare reform is expected to boost interest in supplemental medical and cancer/critical illness products — among others.

The distribution of supplemental products is expected to come from a wide variety of channels including GAs, regional and national brokers, TPAs, payor markets, payroll processing companies, enrollment firms, and carriers that simply want to “private label” the products to round out their portfolio. Seventy-six percent of member companies are considering alliances due to healthcare reform; 56% expect more business through strategic alliances for the industry as a whole; 48% expect more business through strategic alliances for their company.

The survey offers the following insights from executives:

• More alliances will be formed and/or expanded around voluntary offerings – both with traditional and non-traditional products.
• Many carriers are moving into voluntary products.
• As a greater share of healthcare costs are shifted to the employee, supplemental products will play a bigger role.
• Larger insurance carriers are taking over the marketplace, which will lead to premium increases.
• Some larger firms will move to becoming the government’s TPAs instead of really providing insurance.
• Offering underwritten individual and group health will be a thing of the past once healthcare reform becomes effective in 2014.
• Policies will be serviced by sponsored partners, and new business will be issued under the new guaranteed issue guidelines in 2014.

For more information, visit

Employees Value Voluntary Benefits

Employees favor companies that offer voluntary benefits. In fact, 90% of Americans agree that voluntary benefits help companies balance the needs of employees while dealing with tight budgets, according to a WellPoint survey

While two thirds of employees are satisfied with their employers’ benefit offerings, it’s a small drop in satisfaction compared to 73% in 2010.  The survey also reveals that companies can do more to help employees understand their benefit options. Only half of workers surveyed in 2010 and 2012 say they are knowledgeable about voluntary benefits. Employees in small companies are less knowledgeable about voluntary benefits than employees at medium and large size companies (small, 47%; medium, 60%; large, 58%).

Bill Smith, president of WellPoint’s Disability, Life and Voluntary business says that employers can help employees learn more about their voluntary benefit offerings by organizing benefit fairs with insurance representatives and sponsoring group enrollment meetings. Efforts like these are important since Americans spend little time on their own researching benefit options. The 2012 survey found that 48% of employees spend less than one hour researching their options before deciding on enrollment benefitss. For more information, visit


June Sees A Slow Down in Life Apps

U.S. application activity for individually underwritten life insurance was down 3.7% in June, according to the MIB Life Index. Life insurance application activity has declined in five of the past six months, with 2013 activity down 2.2% overall. June’s 2013 MIB Life Index value has set an all time low for the month across the board. Ages birth to 44 experienced the sharpest declines — down 5.7%; ages 45 to 59 were down 2.8%; and ages 60 increased by 1.1%. For more information, visit




Securian Financial Group introduced Premier VUL. While its primary function is to protect beneficiaries from the untimely death of a breadwinner, Premier VUL also adjusts to clients’ needs as their financial priorities change. The variable subaccounts offer growth potential to clients who want to invest in the stock market. For clients with a different focus, the fixed index accounts offer potentially higher interest crediting than traditional fixed products, while still providing insurance company guarantees.

Policy owners can add the Income Protection Agreement (IPA), which pays all or a portion of the policy death benefits in installments for up to 30 years rather than a lump sum. Another option is a new rider, the guaranteed income agreement (GIA), which provides a guaranteed lifetime benefit. For more information, visit

Guide to LTC Options

LTC Financial Partners, LLC introduced a guidebook for long-term care (LTC) planning. The guide, “3in4 Need More: Long Term Care Planning” describes more than half a dozen government and private financial options. It also details care options ranging from at-home care to assisted living in plush senior residences. LTC Financial Partners is offering the 36-page publication free. It also covers critical illness insurance, reverse mortgages, combination products, such as life insurance policies with LTC riders, and VA benefits. For more information, visit


The site, is a telemedicine concierge, which offers board certified medical doctors on call 24/7 who call back within 24 minutes, can recommend treatment facilities and even call ahead for the patient. The cost for a family is $29.95 per month. The doctor will consult with you over the phone; help you register your vitals when you enroll; and can even call in a prescription for you at your local pharmacy without you ever having to go to the office or the ER.

Guide to Health Insurance Tax Subsidies

Zane Benefits updated its website to provide information on tax subsidies for purchasing individual health insurance coverage through the new state-based public marketplaces. For more information, visit


Life Settlement Conference

The Life Insurance Settlement Association’s fall conference will be held October 9 to 10 in Orlando. For more information, visit

Insurance Law Podcast

A.M. Best Co. released the latest installment of the Insurance Law Podcast, which examines timely insurance issues from an attorney’s point of view. The next episode features recent tax law changes in California, their impact on claimants, attorneys and the insurance industry in the state, and possible broader implications. To listen or subscribe to the Insurance Law Podcast at