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Thursday April 24th 2014



The Uninsured Are Undecided About Health Insurance

• The Uninsured Are Undecided About Health Insurance
• Republicans Call for Review of HHS Fundraising
• The State of Prescription Benefit Plans
• Sole Proprietors Lack Health Coverage
• LIDMA Fall Meeting & Showcase
• State Launches Rate Review Website
• Fakhimi to Lead MassMutual in NorCal
• Advisors Detail Wealth Management Threats and Solutions
• NAILBA Membership Changes
• Health Care Consumerism Webinar
• Health Reform Tool
• Critical Illness Guide
• Disease Management Program Receives Accreditation
• Index Universal Life


The Uninsured Are Undecided About Health Insurance

healthinsuranceSixty-four percent of the uninsured haven’t decided whether to purchase health insurance by the ACA’s January 1 deadline, according to a survey by Beginning on January 1, uninsured Americans will pay a penalty of $95 or 1% of income (whichever is greater).

The Affordable Care Act (ACA) will offer tax credits to reduce the cost of health insurance, but found that 58% of Americans are not sure if they will be eligible. Low-income households may benefit the most from health subsidies, but those with annual income under $30,000 are the least likely to be aware of their eligibility (68%). More than three in five uninsured Americans say the main reason they don’t have health insurance is that they can’t afford it.

Sixty-one percent are concerned that the ACA will cause health care costs to go up while only 26% predict a decrease in costs. Fewer than half say more people will enjoy better health thanks to the ACA.

Laura Adams, senior insurance analyst, warned, “Uninformed consumers risk missing key deadlines; the health exchanges will begin accepting applications in fewer than four months.” The survey, which was conducted by Princeton Survey Research Associates International, can be seen in its entirety at

Republicans Call for Review of HHS Fundraising

Senate Republicans are calling on the HHS Inspector General to investigate fundraising activities by HHS Secretary Kathleen Sebelius. The following is a summary of a letter to the HHS Inspector General from Senate Ranking Members Lamar Alexander (R-Tenn.) of the Senate Health, Education, Labor and Pensions Committee, Orrin Hatch (R-Utah) of the Senate Finance Committee, and Tom Coburn (R-Okla.) of the Senate Homeland Security and Governmental Affairs:

Major news outlets have reported that Sebelius is raising money from the private sector, including from health care executives, for use by a private entity, Enroll America, which is helping implement the Patient Protection and Affordable Care Act (PPACA). These activities call into question whether appropriations and ethics laws are being followed.

Administration officials told The New York Times that private fundraising was necessary because Congress refused to provide enough money to carry out the health care law. An HHS spokesman said the Secretary’s efforts included meetings, calls, and events with 18 categories of people and organizations since January, including retail pharmacies, insurers, pharmaceutical companies, and hospitals

Administration officials told The New York Times that the Secretary secured $10 million from the Robert Wood Johnson Foundation and a pledge of about $500,000 from H&R Block, which plans to help people apply for tax credits under the new law.

The Hill reported that a nonprofit promoting President Obama’s healthcare law has created an air of expectation that insurers will contribute to the group, according to an insurance industry official. Enroll America has come to feel like just an arm of the administration, said one official who works closely with insurers.

The Hill also reported that current and former administration officials have taken on leadership and fundraising roles for Enroll America. President Obama himself made a vague, but personal appeal for a close partnership with insurers, which some in the industry saw as a precursor to direct fundraising pitches. If true, these statements from the administration and the news reports would suggest the following:

· The Secretary has asked for financial support from at least two private entities.
· The Secretary has asked entities she regulates to support private efforts.
· The solicitation has been broad and has been taking place for months.
· These solicitations were in response to Congress’s refusal to appropriate more funds for PPACA implementation.
· The Secretary and other government officials may be attempting to raise funds for Enroll America from health insurers.
· There are close ties and substantial coordination between the Administration and Enroll America.

The State of Prescription Benefit Plans

Ninety-nine percent of employers provide prescription drug coverage to active employees compared to 96% in 2011. The survey by Buck Consultants reveals that more employers are contracting with pharmacy benefit managers (PBMs). Sixty-one percent use PBMs compared to 57% in 2011 and 47% in 2009. Sixty-eight percent say pricing competitiveness is an extremely important service from PBMs. Paul Burns of Buck Consultants advised that, “Any PBM contract that is 18 to 24 months old should be reviewed for pricing competitiveness and up-to-date contractual language.”

Seventy-one percent of employers say that pharmacy benefits account for at least 16% of their spending on healthcare benefits. Eighty-seven percent say that providing affordable pharmacy benefits helps contain healthcare costs over the long run.

Pharmacy benefit costs continue to increase, accounting for more than 15% of employers’ total health care costs. If not managed effectively, prescription drugs can be a constant financial drain on company resources and undermine the entire healthcare benefit program, said Burns.

Only 26% of survey respondents have grandfathered health plans. And 42%  of these employers plan to keep their grandfathered plans beyond 2014. Employers are using the following options to comply with the ACA mandate to offer contraceptive products at no cost to plan participants:

  • 27% cover contraceptive generics and brands with no generic equivalent at $0 copay.
  • 25% cover generic contraceptives at $0 copay, and cover others at the brand drug copay level unless deemed medically necessary.
  • 25% cover all prescription contraceptives at $0 copay (The majority of survey respondents provide coverage of immunizations under the medical benefit only, with about 20% offering coverage under the medical and pharmacy benefit.)

One percent or less of covered employees use specialty medications for chronic catastrophic illnesses, such as multiple sclerosis and cancer. But these medications represent 20% or more of pharmacy plan costs. These specialty medications can cost $75,000 or more a year. More than 30% of employers don’t know the portion of drug spending that’s attributed to specialty medications.

Sixty-seven percent of employers have utilization management programs compared to 45% in a prior survey. Fifty-five percent have step therapy protocols to manage specialty drug costs – up from 34%.

Forty-eight percent of respondents offer prescription drug plans to Medicare-eligible participants. But only 55% plan to continue this benefit, down from 75% in the previous survey. Burns said that some employers are considering moving to an employer-group waiver plan to take advantage of additional subsidies under the Affordable Care Act (ACA).  For more information, visit

Sole Proprietors Lack Health Coverage

Cigna Individual and Family Plans surveyed 250 self-employed Americans and found that nearly 25% do not have health insurance. Sixty percent of uninsured respondents place business priorities ahead of personal health and overall wellness. Yet, more than one-third say taking one month away from work due to personal illness would result in losing customers or even going out of business. Eighty-two percent say they don’t have health insurance because it’s too expensive, yet 80% overestimate the cost of insurance and about a third underestimate the cost of medical care. For more information, visit


LIDMA Fall Meeting & Showcase

The Life Insurance Direct Marketing Association (LIDMA) Fall Meeting & Showcase will be held September 22 to September 25 at the Balboa Bay Club in Newport Beach, CA. For more information on LIDMA membership visit

State Launches Rate Review Website

The California Department of Managed Health Care launched a Website that provides information about the DMHC’s rate review process; useful terms; questions and answers; and resources related to rate review and health care costs.  For more information visit

Fakhimi to Lead MassMutual in NorCal

MassMutual San Francisco’s General Agent Robert Fakhimi, CLU, ChFC, CFP, will lead MassMutual Northern California in Sacramento. He will also remain head of the MassMutual San Francisco office. Fakhimi and the team will focus on small business owners and professionals. There will also be a strong focus on providing financial education to the community through workshops and volunteer efforts. Fakhimi plans to recruit 24 financial professionals to MassMutual Northern California. For more information, visit


Advisors Detail Wealth Management Threats and Solutions

Nearly 95% of advisors surveyed by Curian are concerned that rising interest may affect their clients’ fixed-income investments.  Advisors say that tax efficiency has also become a major concern with national tax policy changes in effect this year. More than 87% say that tax efficiency and after-tax performance are important aspects of the solutions they propose to clients.

Advisors cite unemployment and government spending as the biggest threats to wealth management while their clients cite market volatility. The lowest perceived threat for both advisors and their clients is declining Social Security benefits. Nearly 95% of advisors are concerned about how rising interest rates may affect fixed-income investments.

More than 87% say that tax efficiency and after-tax performance are important aspects of the solutions they propose to clients. Sixty-three percent use strategies to reduce the effect of taxes on an investment portfolio. However, more than 28% say they have access to tools and strategies to help reduce the impact of taxes on clients, but do not actively use them.

Nearly 27% of advisors expect to use more separately managed accounts this year; 24% expect to use more alternative investment products; and only 2.5% expect to use more fixed annuities.

More than 30% of advisors say that 10% or more of their assets under management are allocated to alternative investments. More than 31% plan increase their use of alternative investments by 5% to 10% this year; and one-fifth plan plan to increase their use of alternative investments by 10% to 15%.

Fifty-seven percent use multi-strategy open-end mutual funds to gain access to alternative asset classes; and 38% use single-strategy open-end mutual funds.

More than three-fourths say that the most valuable service from their advisory solutions provider is ease-of-use of the platform and technology, closely followed by a strong performance history of investment options (nearly 68%).

Most advisors say their clients bring them the most leads, followed by referrals from industry professionals such as CPAs, attorneys, insurance professionals and mortgage/real estate professionals (nearly 50%). Only 6% of cite social media, and 5% cite traditional advertising as a top source of leads. Continuing the trend from last year, 72% say that gaining more affluent clients is the major goal for 2013. Forty-nine percent say their biggest challenge is attracting clients and generating referrals.

Fifty-six percent don’t use social media in their practices, but those who do say they most frequently use LinkedIn (35%). Forty-nine percent prefer apps that mimic an asset firm’s primary website and 46% prefer business calculators or tools. For more information, visit

NAILBA Membership Changes

The National Association of Independent Life Brokerage Agencies (NAILBA) changed its qualifications for an agency to be accepted as a regular member:

1. Is an appropriately licensed independent brokerage agency.
2. Derives its primary income from brokerage distribution.
3. Is free to place business with any carrier.
4. Maintains a brokerage general agent’s contract, in good standing, with at least three brokerage carriers.
5. Is committed to promoting and advocating the independent brokerage system.
6. Agrees to comply with the NAILBA bylaws and promote the trade and business of independent insurance brokerage agencies and the interests of consumers served by such agencies.

For more information, visit

Brad Davis of Aflac will host a Webinar on healthcare consumerism Tuesday, June 25 from 11:00 a.m. to 12:00 p.m. PST. For more information, visit


Health Reform Tool

BenefitMall is offering tools to help small- to mid-sized employers navigate healthcare reform and determine how they will be affected. A 10-minute survey creates a personalized report to determine the next steps based on their responses. There is also a full-time equivalent calculator and a small business credit estimator. For more information, visit

Critical Illness Guide

LTC Financial Partners, LLC is offering a free guide, “Surviving CriticalIllness Financially.” For more information, visit

Disease Management Program Receives Accreditation

Healthyroads’ Population Health Program received a Full Disease Management Accreditation from URAC. The Healthyroads Population Health Program was launched in 2011. It combines its existing URAC-accredited comprehensive wellness program with its newly accredited disease management program for health plans, employer groups, and members. The program offers smoking cessation; exercise and nutrition; and chronic condition management programs. It offers a custom Web portal, trackers, educational information, e-coaching classes, and telephone coaching to reduce health risks. For more information.

Dental & Vision Plan For Small Employers

Standard Insurance Company is offering its affordable “PolicyLink Dental+Vision Plan.” Employers can choose from The Standard’s eligible dental products and determine a plan maximum. Within that plan maximum, employers can designate an amount for their vision maximum benefit from four options: $150, $200, $300, and $350. For more information, visit

Index Universal Life

Genworth launched its first Index Universal Life (IUL) insurance product, “Asset Builder IUL.” It combines a death benefit with tax-deferred cash accumulation and an optional accelerated benefit rider for long-term care services. For more information, visit