A survey by Benefitfocus reveals distinct differences in benefit offerings among manufacturing, education, and health care industries. Manufacturing leads the adoption of high-deductible health plans (HDHPs), education favors traditional plans (PPOs, HMOs, etc.) and the health care industry offers the most voluntary benefits. Manufacturing is the only industry of the three, in which more companies offer a combination of HDHPs with traditional plans than traditional plans only (48% to 46%). Manufacturing employees selected an HDHP over a traditional plan 46% of the time. The findings suggest that manufacturing employers have an opportunity to encourage employees to participate in health savings accounts (HSAs) or flexible spending accounts (FSAs) to cover higher out-of-pocket costs associated with HDHPs. Only 23% of education employers offer at least one HDHP. Traditional health plans dominate the mix of benefits. HMOs made up 44% of employee enrollments, which suggests an opportunity to offer a wider range of lower cost benefit options for a multi-generational workforce.
Employees in the health care industry face high deductibles regardless of plan selection, but are better equipped to cover unexpected medical costs with voluntary benefits (including critical illness, accident, and hospital-indemnity insurance). Health care employers offered gap products at the highest rate of the three industries at 12 percentage points above the average. Nearly half of health care workers selected a voluntary plan when given the choice. For more information, visit benefitfocus.com.
Health Insurers Increase Debt in Wake of the ACA
Since 2011, U.S. health insurers have nearly doubled their borrowing levels due to the Affordable Care Act (ACA), according to a report by A.M. Best. With traditional health insurance products, insurers receive full premium payment every month before paying any claims. But that’s not the case with exchange products. In the first few years of the exchanges, insurers relied heavily on risk-adjustment, reinsurance, and risk corridors. The timing of paying direct premium subsidies fluctuated significantly. So health insurers had to pay the claims because their liquidity was under pressure. They turned to borrowing to alleviate this pressure. A.M. Best has not seen any significant rating pressures due to borrowing. However, heavy reliance on borrowed funds could put pressure on ratings if it reduces financial flexibility or slows the growth of capital and surplus. However, financial institutions see the use of borrowed funds as favorable since many top borrowing insurers are very big, highly capitalized, and highly rated, according to the report.
Millenials Underestimate the Cost of Care
Millennials (ages 18 to 36) are more likely than are non-millennials to underestimate the cost of an injury or illness, including medical, household, and out-of-pocket costs (66% versus 45%), according to a survey by Aflac. Sixty-five percent say they could afford less than $1,000 for an unexpected out-of-pocket expense. Millenials are more inclined to try unconventional ways to pay for out-of-pocket health care expenses, such as borrowing from friends or family and crowd sourcing. The online study surveyed 1,500 benefit decision-makers and 5,000 employees at small, medium, and large companies. For more information, visit AflacWorkForcesReport.com.
Anthem Revises Medical and Pharmacy Guidelines Due to Wildfire
Anthem Blue Cross revised the following medical and pharmacy guidelines to help members in Kern County who are affected directly by the Erskine Wildfire:
- Allowing members to see any physician necessary to provide access to care.
- Waiving the notification penalty on utilization management review of in-hospital cases.
- Suspending early refill prescription limits.
- Allowing replacement of medical equipment or supplies.
- Extending filing deadlines for claims.
These medical and pharmacy guidelines are effective until July 17 unless further extended. These relaxed guidelines do not apply to Medicare Advantage members.
Home Care Costs Rise Again in California
The cost of long-term care from a home health aide has increased in California and nationally, according to a Genworth study. Long term care costs are up in all care settings in California from 2015. Home is where most Americans get long-term care. “Although home care costs are much less expensive than those in facility-based settings, the costs can add up to as much as $54,912 per year in California, which is why it’s imperative for consumers to begin planning now for how they will pay for that care should they need it,” said Tom McInerney, president and CEO of Genworth. He noted that at least 70% of Americans 65 and over will need some form of long-term care and support. The following are key trends in California’s major metropolitan areas:
- The cost of care in a semi-private nursing home in Los Angeles is 8.8% less than the state average, at $6,935 per month.
- Home health aides cost 18.52% more in the San Diego metro area than the national average, at $4,576 per month.
- The cost of private nursing home care in San Francisco is $15,193 per month, which 97.36% more than the national average.
For more information, visit genworth.com/long-term-care-insurance/source/make-a-plan/payment-options/self-funded.html.
Sam Smith is NAHU’s Person of the Year
The National Association of Health Underwriters (NAHU) awarded Sam Smith its Person of the Year award. Smith has held many leadership positions for the Los Angeles and California Association of Health Underwriters. Smith was one of a few to spearhead CAHU’s Agents in Action campaign, which was integral to defeating Proposition 45. Janet Trautwein, CEO of NAHU said, “When Smith takes on a job, he does not settle for doing just enough. Instead, he improves, innovates, strengthens, and contributes to the success of LAAHU, CAHU, and NAHU.” Smith began his insurance career in 1975 with Connecticut Mutual, specializing in executive and employee benefits. For the next 22 years, Smith built the sales force and corporate accounts units for several large insurance companies, general agencies, and property & casualty firms. In 1996, Smith founded Genesis Financial & Insurance Services, where he remains as the president and co-partner with past NAHU president Bruce Benton. NAHU says that Smith has been an unceasing advocate for agents—and not just through NAHU. He speaks on behalf of agents at Chambers of Commerce, in public symposiums as well as with policymakers and reporters. He is a lay leader in his Episcopal church and seeks to become an ordained priest. Smith lives in Valley Glen, Calif., where he dedicates much of his time to various charitable organizations, and is a lay chaplain at a local hospital.
Jim Stenger Named President of NAHU
Jim Stenger was named president of the National Association of Health Underwriters (NAHU) Board of Trustees. After accepting the gavel from outgoing president Don Goldmann, Stenger vowed to reinforce NAHU’s mission to educate consumers and lawmakers about the value of health insurance agents and brokers. Through education and association involvement, we vows to increase the ability of NAHU members to serve consumers. Janet Trautwein, NAHU CEO said, “Jim has been a consistent leader and impeccable asset not only in the health insurance industry, but also to his local and state NAHU chapters. As president, Jim will continue his commitment of helping NAHU achieve its legislative and educational initiatives for its members.” Stenger entered the health insurance business in 1973 and worked for two large insurance companies and two international employee benefit brokerage firms in New York. In 1986, he joined NAS Financial Services as an owner; it became one of the largest general agencies in New Jersey. BenefitMall purchased NAS Financial Services in 2010 where he served as director of business development. Stenger and his wife, Marilyn, continue to dedicate their efforts to helping health insurance brokers develop their leadership, management, strategic planning and marketing techniques. During his membership in NAHU, he has served on several boards and committees as a regional, state and local leader and has gotten numerous awards for his efforts.
Linda Rose Koehler Named As a NAHU Vice President
Linda Rose Koehler was named to the National Association of Health Underwriters (NAHU) Board of Trustees as Region VIII vice president. “With 28 years of experience in insurance and benefit planning, Linda Rose’s foundation of knowledge and experience allows her to have a clear overview of pertinent issues in the marketplace, making her an excellent asset to the NAHU Board of Trustees,” said Janet Trautwein, NAHU CEO. Koehler has worked in the healthcare industry for over 25 years. In 1989, she became one of the founding chapter members of NAHU’s Inland Empire AHU. In 2008, she served as the awards chair and recieved the NAHU and Golden Gate AHU’s Distinguished Service Award. She also served as president and on the boards of the Eastern Carolina AHU, Silicon Valley AHU, Golden Gate AHU, and California AHU chapters. She is the foundation chair of Golden Gate AHU. A graduate of Citrus College in Glendora, Calif., Koehler manages the employee benefits division of Herzog Insurance Agency. She has also worked in high positions for CIMS and Claremont Insurance Services and was an account executive for Blue Cross Blue Shield of North Carolina, Foundation Health Plan, and Health Net. Koehler became extremely active in fund raising for the Polycystic Kidney Disease (PKD) Foundation when her son, Lee, passed away from complications of PKD and when she discovered her granddaughter, Hannah, had inherited this genetic disease. She lives in Livermore, Calif., with her Siberian husky dog, Akela, and has three grandchildren in Charleston, S.C., named Michael, Hannah, and Jacob Carter.
Joining Forces For Pediatric Oral Health
The Center for Oral Health is partnering with Liberty Dental Plan, Health Net, and Access Dental plans on a school-based oral health program. Early Smiles will provide checkups and preventive treatments for children who might not otherwise get services. The initiative aims to serve 12,000 children in Sacramento-area elementary schools in its first year. Dental providers from Liberty Dental Plan, Health Net, and Access Dental, will serve as the dental home for children who need restorative dental care. They will offer case management and ensure that their members get the dental care they need. For more information, visit centerfororalhealth.org.
Employees Appreciate Voluntary Insurance Benefits
Seventy-nine percent of employees see a growing need for voluntary insurance compared to last year. And of those, 60% say the need is driven by the rising cost of medical services, according to an Aflac survey. Employees who are offered voluntary benefits report higher satisfaction with their jobs and their benefits. Employees whose work site offers voluntary benefits are more likely to say the following:
- They are prepared to pay for out-of-pocket expenses not covered by major medical/health insurance related to an unexpected serious illness or accident (73% versus 56%).
- They are extremely or very satisfied with their jobs (73% versus 57%).
For more information, visit AflacWorkForcesReport.com.
Pet Health Insurance Is One of the Fastest-Growing Employee Benefits
One in three Fortune 500 companies offers pet insurance as a voluntary benefit, according to Nationwide. As one of the fastest-growing voluntary benefits in the U.S., more than 5,000 companies and organizations have added Nationwide pet insurance to the voluntary benefits portfolio, including Chipotle Mexican Grill, Hewlett-Packard, Levi Strauss & Co., Microsoft, T-Mobile, Xerox, Adidas, and Yahoo!. “Since 65% of Americans own at least one pet, two-thirds of employees may be shouldering sizable pet-care costs. Offering pet insurance as a voluntary benefit will appeal to prospective pet lovers and help retain pet-owning employees,” said Scott Liles, president and chief pet insurance officer for Nationwide. As the popularity of pet health insurance expands, some companies are subsidizing a percentage of their employee’s cost. Several employers now pay as much as 100% of their employees’ pet insurance premiums. “With the cost of core benefits on the rise, companies are looking for offerings that can be added to a benefit portfolio at no expense to the employer. Pet insurance fills that need,” said Liles. For more information, visit nationwide.com.
Employees Value Student Loan Payment Benefits
Ninety percent of 400 middle managers say that that student loan debt is creating stress for their employees, according to a survey by IonTuition. Nearly 85% say that employees would appreciate being able to make student loan payments via automatic payroll deductions. Almost 85% say that employees would take advantage of a student loan repayment assistance benefit; nearly 80% say it would help them recruit talent; and 70% say it would improve employee retention and morale. Nearly 75% say that employees contribute less to their 401(k) because of their student loans. More than half of managers say that prospective employees view benefits as the most important aspect of a company, taking priority over company culture, commute, and reputation. For more information, visit iontuition.com/Partnership/Employers or call 888-853-8323.
Offering A Great Customer Experience Pays Off For Insurers
Insurers that offer a great customer experience far outperform the stock market as well as their peers. That’s the conclusion from Watermark Consulting. The analysis focused on model portfolios of the top five and the bottom five performers in customer experience. The top five far outperformed the industry index while bottom five trailed the index. And the performance gap wasn’t small – over the seven year period examined, the top five delivered average annual returns that were at least double that of the bottom five. Jon Picoult, founder and principal of Watermark Consulting said, “Insurance providers may…tout the importance of customer centricity, but behind the scenes, many are skeptical that such a strategy pays off. They…cling to archaic business practices that create complexity and confusion, further stoking customer frustration.”
Insurers that impress policyholders reap the rewards in the form of increased loyalty, greater wallet share, stronger word-of-mouth, and a more competitive cost structure. “Insurance companies are struggling to set themselves apart in a marketplace that increasingly views their products as commodities…The best way to break out of that sea of sameness is to deliver an end-to-end customer experience that turns everyday policyholders into…raving fans.” For more information, visit watermarkconsult.net.
Help With ACA Reporting
Aflac has partnered with three reporting companies to make it simple and cost-effective for employers to get compliance services. Aflac’s ACA reporting partnerships help business owners reduce the administrative tasks related to employee health care and enable them to take advantage of services at Aflac-preferred rates. Aflac employer clients will have access to ACA compliance solutions, including the following:
- ACA phone and email hotlines for ACA-related questions.
- Communication support, including 1095 communications to help employees stay informed of ACA notifications or changes to their coverage.
- Electronic IRS filing services of 1094 and 1095 forms.
- Standard and customized reports, analytics, and testing to reduce risk of fines and fees.
- Tracking and monitoring employee eligibility, including leave of absences and seasonal or union employees.
For more information, visit aflac.com/aflac-business-solutions
Reverse Mortgage Webinar Series
American Advisors Group launched a free webinar series for financial professionals, “Reverse Mortgage 101 and The Boomer Effect on Financial Planning.” For more information visit aag.com/financial-advisors/webinars.
Course on the DOL Fiduciary Rule
The LIMRA LOMA Secure Retirement Institute launched a short online course, “DOL Fiduciary Basics for Employees.” Kathy Milligan, FLMI, ACS of LOMA said, “This rule touches almost every part of the business, so it’s vitally important for financial services organizations to prepare employees as they transition to this new regulatory environment. Our new course helps employees understand the operational changes their company is making to comply with the new rule.” It is presented in 13 short multi-media vignettes, each being several minutes long. For more information, visit limra.com/DOL.
Electronic Management for Individual Disability Policies
Guardian released an end-to-end electronic policy service. Guardian says that it’s the first DI program of its kind in the industry. It offers consumers a faster and more convenient way to enroll, sign, purchase, retrieve, and manage supplemental income protection program policies purchased through their employer. For more information, visit GuardianLife.com.