May 30 – by Leila Morris
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EMPLOYEE BENEFITS
• Voluntary Sales Bounce Back
• Employees to Pay More for Their Benefits
IN CALIFORNIA
• Health Reform Expected to Create Jobs in CA
DISABILITY
• Return to Work Programs Reduce Costs and Boost Productivity
HEALTHCARE
• Voters Blame the Legal System for Health Care Costs
INDUSTRY UPDATE
• Aflac Launches Subsidiary
• Insurance Lobbying Drops Off
NEW PRODUCTS
• Short-Term Disability
• HSA
EVENTS & EDUCATION
• Retirement Seminar
• Webinar on the Supreme Court & Health Reform Tomorrow
• Online Retirement Workshop
• Explanation of Employee Benefits
• Guide to Dependent Audits
• ERISA Guide
Voluntary Sales Bounce Back
The voluntary benefits industry has weathered the recession and regained its traditional upwards track, according to a recent report by Eastbridge. Voluntary sales for 2011 were up 4.5% over 2010.
About 80% of voluntary sales came from the top 15 companies. Five had double-digit increases and only three had decreases. Sales increased an average of 5% among the top 15 compared to a decrease of 2.6% in 2010. In-force premium was also up nearly 6%. Bonnie Brazzell, vice president of Eastbridge said, “The good news is that the voluntary industry rebounded very quickly in just one year.” For more information, visit www.eastbridge.com.
Employees to Pay More for Their Benefits
An increasing number of employers plan to move to an employee choice benefit model over the next two years, which means that employees will have greater responsibility for choosing the types and levels of benefits they receive. They will also be responsible for paying for a greater share of their benefit costs, according to a survey of senior finance executives by CFO Research services and Prudential Financial. “Facing a difficult economic environment and rising healthcare costs, companies are looking at ways to manage costs and reduce risk across the benefit spectrum while ensuring that they remain competitive,” said Sam Knox, senior vice president and director of research at CFO.
The survey also reveals that many companies are closer to making decisions on the future of their traditional pension plans. Financial executives are increasingly looking at pension risk transfer and liability driven investment strategies to reduce or eliminate the risks in defined benefit plans.
Christine Marcks, president of Prudential Retirement said, “For their defined benefit plans, finance executives are increasingly likely to adopt liability-driven investment and pension risk transfer strategies. For their defined contribution plans, they ‘are looking’ at retirement income and risk-mitigation products that will enable more employees to retire as planned.”
Concerned that employees are delaying retirement decisions due to inadequate savings, senior finance executives are exploring stable value products, guaranteed income products, and enhancements to target-date funds. They continue to recognize that their companies’ benefit programs attract and retain talent. For more information, visit http://www.news.prudential.com.
Health Reform Expected to Create Jobs in CA
If the Supreme Court strikes down the Affordable Care Act, it may have a negative effect on the California economy, according study by the Bay Area Council Economic Institute. The study concludes that the federal health care law would create almost 100,000 new jobs and boost economic output by $4.4 billion. The biggest job gains are expected in Southern California, with almost 58,000 jobs, followed by the Sacramento Valley with almost 13,500, the Bay Area with 7,600, San Diego County with almost 6,500, and the remaining 10,000 jobs spread throughout other counties.
Health reform is expected to increase spending on healthcare and medical services. There are also the secondary benefits of money flowing to other parts of the economy. That increased spending would boost economic activity in the state by $4.4 billion according to the report. The biggest gains would be in Southern California with a $3 billion increase in net economic activity. Sacramento County would be the next largest beneficiary of increased spending, with net economic output rising by almost $608 million.
Those figures take into account the dampening effect that provisions, such as the employer mandate, would have on hiring and economic activity. The mandate, which is among the more hotly contested elements of the Affordable Care Act, requires large employers to provide health insurance or pay a fine. And yet, the study observes that the employer mandate is a crucial to expanding healthcare coverage while being a job creator in the state.
The Affordable Care Act would also expand the labor force by preventing workers from being sidelined because of health problems. Broader coverage would also reduce ‘job lock,’ in which uncertainty about changing health insurance discourages workers from seeking better jobs. For more information, visit www.bayareaeconomy.org.
Return to Work Programs Reduce Costs and Boost Productivity
Extended disability absences can be shortened when employees get the right kind of support, according to a report by Prudential Financial. While many employers have components of return-to-work programs, they aren’t achieving the full cost and productivity savings that they would get from a fully integrated program.
Forty-five percent of plan sponsors are involved in return-to-work initiatives compared to 39% in 2007. Many employers still worry about things like the cost and necessary resource allocation, negative employee reactions, and the perceived permanence of light-duty accommodations. What they don’t realize is that employees benefit from return-to-work programs that focus on what they can do rather than what can’t do, with the structure to support that transition, according to the report. These programs allow the disabled to retain job skills and bring their income closer to pre-disability levels. For the full report, visit www.prudential.com.
Voters Blame the Legal System for Health Care Costs
Heavy majorities of voters, across party, lines say the legal system is increasing health care costs, according to a survey for Common Good conducted by Clarus Research Group. Sixty-six percent of voters favor taking medical claims out of the current legal system and putting them into new health courts with expert judges. The survey also reveals the following:
* 75% say that lawsuits and legal fees are a major cause of high medical insurance rates. Eighty-nine percent of Republicans, 76% of independents, and 62% of Democrats agree.
* 68% say that many good doctors are leaving the practice of medicine because of the number of lawsuits and the cost of liability insurance.
* 67% of voters say that doctors order unnecessary medical tests and procedures just to protect themselves from lawsuits.
For more information, visit www.commongood.org.
Aflac Launches Subsidiary
Aflac has launched Aflac Benefits Solutions (ABS), a subsidiary focused on providing specialized services to the nation’s largest brokerage firms. ABS is designed to foster new and expanded partnerships supported by a national team of business developers, consultants, marketers, and account service executives. ABS augments the company’s solutions and services targeted at regional and mid-tier brokers. ABS will offer ongoing research and insights into industry trends to national brokerage firms and consultants, along with tools for understanding voluntary benefit products and services, marketing and enrollment assistance, and leading technology to help firms better educate and serve clients. For more information, visit http://aflacbenefitssolutions.com.
Insurance Lobbying Drops Off
Spending on insurance lobbying has dropped significantly in 2012 despite another tight presidential race and a slew of seats opening in the U.S. House and Senate. To date, the industry has spent roughly $39.4 million on federal lobbying, according to data from the Center for Responsive Politics and federal lobbying disclosure records. That marks a 9.3% decline from the first quarter of 2010 and a 3.9% decline from the first quarter of 2011.
The major driver of the trend is the fact that fewer insurance-related bills are before Congress this year, according to an article in BestWeek U.S./Canada. Prior Congresses saw major insurance-related legislation including the Dodd-Frank Act and the Affordable Care Act. For more information, visit www.ambest.com/sales/BestWeek.
Short-Term Disability
Principal Financial Group introduced “Basic Short-Term Disability,” a lower-cost option to its standard disability products. Available as an employer-paid or voluntary benefit, it’s designed to be easy to understand and affordable while giving employers the opportunity to offer meaningful protection for their employees. The weekly benefit can be up to $500.
For more information, visit www.principal.com.
HSA
HealthPartners introduced its “Empower HSA Rx Plus” plan. It provides the benefits of a high-deductible and HSA plan including employee engagement and cost savings for employers. It also provides significant pharmacy savings on certain prescriptions. Members have a prescription copay of $12 (generic) or $45 (name brand) for more than 200 preventive drugs. The plan also provides 100% preventive care coverage for medical services, non-formulary coverage, and a tax-free savings account. For more information, visit www.healthpartners.com.
Retirement Seminar
MassMutual’s Retirement Services Division continues its web-based RetireSmart series with “Social Security and Your Retirement” for participants of all ages. The live online seminar is scheduled for Wednesday, June 27 at 12:00 p.m. EDT./9:00 PST. For more information, visit www.retiresmartseminars.com.
Webinar on the Supreme Court & Health Reform Tomorrow
Health and benefits law firm, McDermott Will & Emery, will host a webinar on the potential effects of the Supreme Court’s decision on the federal health care reform law on Thursday, May 31st at 10:00 a.m. EDT/ 7:00 a.m. PST. To register, visit http://www.yourconferencecenter.com/r.aspx?p=1&a=UGqouzmgLKaUVr
Online Retirement Workshop
Mercer has launched My Retirement Workshop. The website provides interactive tools and hands-on instruction for employees. For more information, visit www.myretirementworkshop.com.
Explanation of Employee Benefits
Unum has created GetBenefitSmart.com, a site that offers engaging, real-world explanations of employee benefits. Customized for different stages of life, the site answers benefit questions from a range of perspectives – from single workers and young parents to empty-nesters.
The site is also available in Spanish at BeneficiosParaMi.com.
Guide to Dependent Audits
Research and Markets is offering the publication, “How to Reap Big Health Care Savings Through a Dependent Audit.” For more information, visit http://www.researchandmarkets.com.
ERISA Guide
Research and Markets is offering the publication, “Employee Benefits Law: ERISA and Beyond.” It is designed to help readers ensure that their plans are properly structured, qualified, and implemented. For more information, visit http://www.researchandmarkets.com.
