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Monday April 21st 2014



The Employer Mandate Gets a One-Year Delay

• The Employer Mandate Gets a One-Year Delay
• Employees of Religious Organizations Will Get Contraception Coverage
• Medicare Advantage Enrollment Continues to Grow
• Health Plans Must Improve Satisfaction Among Employers
• Docs Silent on Health Reform
• Second Major Carrier Exits the Individual Health Market
• State Budget Expands Access to Health Care
• Financial Advisors Struggle with Life Insurance Sales
• Middle-Income Americans Perceive High Risks for Critical Illness
• Dental-Related ER Visits Hit Record Numbers
• Retirement Readiness Consulting Tool
• BenefitMall Unveils New Brand
• Group Short-Term Disability Plan
• Virtual Learning Community for Index Insurance Products
• Affordable Care Act Toolkit for Employers
• Business Owner’s Guide to the ACA


The Employer Mandate Gets a One-Year Delay

ObamacareThe Obama administration announced that it will delay enforcing the employer mandate provision by one year, until 2015. Under the mandate, businesses with more than 50 employees must provide health insurance to workers or pay a penalty until 2015.

Valerie Jarrett, a senior adviser to President Barack Obama said, “In our ongoing discussions with businesses we have heard that you need the time to get this right. We have heard the concern that the reporting called for under the law about each worker’s access to and enrollment in health insurance requires new data collection systems and coordination. So we plan to re-vamp and simplify the reporting process. Some of this detailed reporting may be unnecessary for businesses that more than meet the minimum standards in the law. We will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014.”

Neil Trautwein of The National Retail Federation said,” This one year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment.”

The National Assn. of Health Underwriters (NAHU) says that it has had longstanding concerns that employers would have had a very short timeframe to comply with very new complex requirements and that they could be penalized for inadvertent violations. According to the NAHU statement, “As employer groups deal with questions on how this delay will affect their businesses, we encourage them to seek counsel from an experienced, licensed health insurance agent. These professionals can help employers prepare for the new 2015 deadline as well as assist in finding affordable plans that fit the needs of employees and their families.”

Employees of Religious Organizations Will Get Contraception Coverage

Under Final rules issued by the Administration, non-profit religious organizations will not have to contract, arrange, pay for or refer contraceptive coverage directly. However, no-cost coverage will be provided separately to women who have enrolled in their health plans.

With an insured health plan, the non-profit religious organization can notify its insurer that it objects to offering contraception coverage employees.  The insurer would then notify plan enrollees that it is providing them separate no-cost payments for contraceptive services.

With a self-insured health plans, the non-profit religious organization can notify its third party administrator (TPA) that it objects to contraception coverage. The TPA would then notify health plan enrollees that it is providing or arranging separate no-cost payments for contraceptive services. The final rules are available here:

Medicare Advantage Enrollment Continues to Grow

The Affordable Care Act (ACA) reduced federal payments to Medicare Advantage plans to bring them more in line with payments under traditional Medicare. Despite predictions that enrollment would drop, enrollment in Medicare Advantage plans has actually climbed from 11.1 million in 2010 to 14.4 million in 2013 – a 30% increase, according to a report by the Kaiser Family Foundation.

Enrollment continues to grow across counties and high and low payment quartiles,  which suggests that the market offers enough choice to attract enrollees even if some plans become less competitive under the ACA. However, the analysis did not examine cost sharing or benefits, and it is unclear how much the plans have changed cost sharing or extra benefits since 2012.

The Congressional Budget Office expects enrollment to continue to increase in 2015 and future years. But, the CMS Office of the Actuary expects enrollment to decrease after 2014.

Since payment reductions have not yet been fully phased in, it remains to be seen how companies will respond. Also, quality-based bonus payments have partly offset the payment reductions. There could be some shakeout in the market, over the next few years, as payment reductions are implemented and benchmarks move closer to  for traditional Medicare spending. To remain viable, some plans will have to become more efficient or modify the extra benefits they provide. HMOs seem to have an advantage over other model types. For more information, visit

Health Plans Must Improve Satisfaction Among Employers

Health plans need improve satisfaction in order to limit the erosion of their business to alternative channels in which employees have more choices, according to a study by J.D. Power.

Satisfaction among fully insured employers averages 709 (on a 1,000-point scale). Satisfaction among self-funded employers averages 696. Satisfaction across all factors among employers that do not intend to offer coverage five years from now is at least 76-points lower than employers who intend to offer coverage.

Cost satisfaction among employers that intend to continue sponsoring coverage is 106 points higher than among those that intend to drop coverage. Satisfaction with cost is improving as more consumer driven high-deductible plans are offered to employees, which 82% of employers indicate are controlling costs.

Richard Millard, senior director of the healthcare practice at J.D. Power said, “One way that health plans can improve employer satisfaction is by demonstrating they are making an affect on the health behavior of employees. How well health plans are able to do this may make a difference in determining whether an employer chooses to continue offering coverage,”

HCSC ranks highest among fully insured employers with a score of 741 while Cigna ranks highest among self-funded employers with a score of 707. Health plans perform particularly well in benefit design, problem resolution, and account servicing. For more information, visit

Docs Silent On Health Reform

Half of all consumers who have a regular physician say their doctor hasn’t commented on how the Affordable Care Act will affect healthcare, according to a survey by HealthPocket. Thirty-eight percent of doctors who discussed health reform with their patients had mostly negative comments while 33% had mostly positive comments, and 29% had neutral comments.

When the health exchanges are up and running on October, consumers will begin weighing their options for coverage starting in 2014. Experts say those decisions will be influenced, in part, by whether their physicians will be participating in specific plans. Patients will need to understand what their options really offer since early insurance plan filings show that premium pricing pressure is causing insurance carriers to cut costs and limit some plans to narrower networks of providers. For more information, visit


Second Major Carrier Exits the Individual Health Market

UnitedHealth Group will stop selling individual health insurance plans in California at the end of the year. Previously, Aetna announced that it would stop selling individual plans at the end of 2013.  Insurance Commissioner Dave Jones said, “While both United Healthcare and Aetna have a very small share of California’s individual health insurance market, their departure means less choice, less competition, and more market consolidation by the remaining big three health insurers — Anthem Blue Cross, Blue Shield of California, and Kaiser — which means an increased likelihood of even higher prices from those health insurers downstream.”

Jones said, “One of the factors I believe contributed to this decision…is the special tax break that California law gives to Anthem Blue Cross and Blue Shield, which has allowed and continues to allow those two companies to avoid paying $100 million in state taxes a year. Aetna and United Healthcare don’t get the special tax break provided to Anthem Blue Cross and Blue Shield, and so they faced a major competitive disadvantage in California.”

Aetna had approximately 60,000 people covered by individual policies as of March 31, 2013, and it projects it will have approximately 50,000 people covered by individual policies at the end of 2013, when the company exits the individual market. United Healthcare, through its subsidiary PacifiCare, had approximately 10,000 individual policyholders late in 2012. Policyholders from both companies have been informed they can keep their existing health insurance until December 31, 2013. Aetna and United Healthcare policyholders will be able to purchase health insurance from other health insurers inside and outside the new California health benefits exchange.

State Budget Expands Access to Health Care

Gov. Jerry Brown signed a state-spending plan for the coming fiscal year, which expands Medi-Cal to an additional 1.4 million low-income Californians. In doing so, the state is adopting an optional provision of the federal Affordable Care Act.

The budget leverages private funds from The California Endowment and federal matching grants providing $53 million for Obamacare outreach and enrollment assistance at no additional cost to California taxpayers. This funding will provide $28 million in private and federal money to support enrollment for up to 450,000 Medi-Cal applicants. It will provide $25 million for Medi-Cal outreach and enrollment grants targeting mixed-status families, the homeless, school-age children, and other vulnerable populations.

In the short term, fiscal savings would far outweigh the non-federal costs of providing health care to the expansion population, according to a statement by the California Legislative Analyst’s office (LAO). LAO said, “After a decade, when the enhanced federal matching rate is reduced from 100% to 90%, we estimate that overall savings to the state as a whole (state and local governments) would likely continue to outweigh costs…We believe the policy merits of the expansion and the fiscal benefits that are likely to accrue to the state as a whole outweigh the costs and potential fiscal risks. We recommend the state adopt the optional expansion.  We also find that the state is in a better position than the counties to effectively organize and coordinate the delivery of health services to the newly eligible population — potentially resulting in improved health outcomes and administrative efficiencies. As a practical matter, we also believe the state is better positioned than the counties to successfully implement an expansion by January 1, 2014. We recommend the Legislature adopt a state-based expansion, shifting the fiscal and programmatic responsibility of providing health care to the expansion population from counties to the state.”


Financial Advisors Struggle with Life Insurance Sales

Fifty-two percent of financial advisors do not describe their efforts to provide life insurance to their clients as successful, according to a survey by Saybrus Partners Forty-four percent say that, over the past three years, no more than 10% of their portfolio of clients have asked them about which life insurance may be appropriate . Only 14% say that more than half  of their clients have asked about life insurance.

When asked to name the most complicated part of selling life insurance, 37% cited the variety policies and riders. A quarter of advisors cited the abundance of paperwork that’s required to sell and issue a policy while 13% cited frequent product changes. They also cited the difficulty in understanding regulatory changes (9%); understanding how combination products can address multiple needs, such as LTC (8%); and understanding how to leverage policies for other uses, such as succession planning for business owners (8%).

Kevin Kimbrough, national sales manager for Saybrus Partners said that some advisors have formed partnerships with life insurance professionals who can provide information, recommendations and sales assistance. Among the 30% of advisors who do not regularly provide life insurance to their clients, 49% say that selling life insurance detracts attention from their practice, and 17% say they don’t sell life insurance because it is too complicated. For more information, visit,


Middle-Income Americans Perceive High Risks for Critical Illness

Middle-income Americans give themselves a one in five chance of being diagnosed with a critical illness in the next three years and a one in two chance of being diagnosed with a critical illness within the next 20 years, according to a study commissioned by Washington National Institute for Wellness Solutions (IWS). IWS surveyed 1,001 Americans ages 30 to 66 with an annual household income of between $35,000 and $99,999.

Those who feel more vulnerable in the short term — with a perceived diagnosis risk greater than 50% over the next three years — tend to have lower income, fewer resources, and poor health.

While middle-income Americans are aware and concerned by the risk of critical illnesses, not enough are involved in the following health-promoting activities:

• 49% engage in physical activity.
• 47% eat healthy foods.
• 43% get eight hours of sleep.
• 37% see a dentist.

While more than three-fourths of middle-income Americans have a personal healthcare provider whom they see at least annually, fewer seek regular preventative care. Only one-third have gotten a flu shot in the past six months (during the flu season), less than two-thirds of women 40 and older have gotten a mammogram in the past two years, and only about half of all middle-income Americans older than 50 have had a colonoscopy. When asked why they are not engaged in healthier behaviors, most cite external factors, such as the lack of time and money or physical limitations, rather than personal reasons, such as a lack of motivation. For more information, visit


Dental-Related ER Visits Hit Record Numbers

Record numbers of Americans visiting emergency rooms for dental treatment, which is straining the nation’s health care system and increasing health care costs, according to an analysis by the American Dental Association (ADA). Young adults with inadequate dental coverage are driving the surge in dental ER visits. During the past decade, young adults have been hit particularly hard by decreases in private dental insurance coverage and significant reductions in adult dental Medicaid programs. The share of young adults (21 to 34 year olds) with a dental visit who sought treatment through an ER doubled from 1.5% to 3%, which is far higher than any other age group.

The number of dental ER visits in the United States jumped from 1.1 million in 2000 to 2.1 million in 2010. While ERs can provide pain relief and treat infection, few hospitals have dentists on staff to provide comprehensive dental care.

“Without further interventions from policy makers, dental ER visits are likely to increase…Dental ER visits already cost the healthcare system up to $2 billion annually — money that is better spent on improving the dental safety net,” said Thomas Wall, a lead author of the briefs.

Unfortunately, the Affordable Care Act (ACA) does little to address the issue because it does not mandate dental benefits for adults, nor are dental benefits likely to be included in the essential benefit packages in insurance plans sold through most state exchanges.

Policymakers are urged to review innovative programs that divert dental patients from ERs to community health centers or private dental practices. ADA President Robert A. Faiella said, “These local programs have seen significant success in getting patients into the dental chair where they can get comprehensive treatment that, by and large isn’t available in hospitals.”

The evidence is compelling that providing adult dental benefits within Medicaid programs goes a long way in reducing ER visits for dental conditions. Unfortunately, state policy makers have, in general, eroded such benefits the past decade. For more information, visit


Retirement Readiness Consulting Tool

The RetireReady Tracker is now available with The Standard’s retirement plans. It allows advisors to determine how well a retirement plan is helping a client’s workforce prepare for retirement. The “RetireReady” ccore estimates the average level of pre-retirement income that eligible employees are on track to replace in retirement. For more information, visit

BenefitMall Unveils New Brand

BenefitMall and CompuPay have united under one corporate brand. The new BenefitMall combines payroll, benefit, and HR services. For more information, visit

Group Short-Term Disability Plan

Aflac’s new Group Disability Advantage product offers guaranteed-issue coverage. It features increased disability benefits, optional benefits for pre-existing conditions, and optional limited benefits for mental illness and alcoholism/drug addiction. Other product highlights include the following:

• Increased income replacement coverage – The maximum benefit replaces up to 60% of salary (or 40% in states with a state disability program).
• Increased maximum benefit – The total monthly benefit limit is raised to $6,000.
• Lowered minimum-hours requirement – The minimum hours worked has been reduced to19 hours per week for employees to qualify for coverage.
• Lowered minimum-income requirement – The minimum income has been reduced to $9,000 per year for employees to qualify for coverage.
• Waiver of premium benefit – After a covered individual has been totally disabled for 90 days, premiums are waived until the benefit period expires.

For more information, visit,

Virtual Learning Community for Index Insurance Products

Genworth launched The Index Institute, a virtual community for producers. It contains index life insurance and index annuity training, market insights, presentations, product information and cutting-edge sales ideas. For more information, visit

Affordable Care Act Toolkit for Employers

Paycom launched an Affordable Care Act (ACA) Toolkit for employers. The ACA offers tools to help employers to make decisions as they face the complexities of health care reform. A whitepaper titled “ACA HR Technology Guide” offers tips on creating and maintaing a health reform compliance strategy and points out how the right HR technology is critical to ACA compliance. For more information, visit

Business Owner’s Guide to the ACA

Mario K. Castillo, a labor and employment attorney at Monty & Ramirez LLP, has written a book, “The Business Owner’s Guide to The Employer Mandate.” It helps employers answer the following questions:

• Is my company required to comply with ACA?
• How much will it cost if our company doesn’t offer health insurance?
• I’ve heard about “safe harbors.” What are they?
• I have also heard about managing risk exposure. How do I manage risk?
• How does the ACA define “qualified” healthcare?
• Do I have to pay for coverage for an employee’s spouse and dependents as well?

The book is on Amazon and at Barnes & Noble. For more information, visit