July 2010 California Broker

Editor’s Column
by Kate Kinkade
Problem Still Not Solved

Voluntary Gains Ground in the New Benefits World
by Jim Barone
As the recent economic storm required employers to reduce or eliminate some employer-paid benefits, many moved away from pure employer-paid options, offering a wider array of voluntary products. Some employers may not reverse cost-shifting measures in the near term while other employers may be receptive to taking a fresh look at benefits strategy.

An Effective Way to Overcome Long-Term Care Objections: The Increasing Role of LTC Riders
by Josh O’Gara
Adding riders to enhance the features of a base life insurance policy has been popular since the early days of the industry.

Employee Health Clinics:
How Self-Funded Employers are Improving
Employee Health and Reducing Healthcare Costs

by David Zanze
Several large employers are jumping into self-funded insurance plans as a cost-effective response to healthcare reform.

Be Better Informed Than the Tooth Fairy…Read Our Annual Dental Survey
Welcome to Part I of California Broker’s 2010 Dental Survey.

by Leila Morris
We’ve asked the top dental providers in California to answer 28 crucial questions to better help you, the agent, understand their benefits, features, and services. Look Part II in the August issue. Read the responses and sell accordingly.

Medical Travel and Surgery Management: The Consumer-Driven Product That Sells Itself
by Victor Lazzaro, Jr.
American businesses are finding it harder to compete in the global marketplace and many blame staggering and ever increasing healthcare costs. HR executives need all the help they can get when it comes to managing health benefits.

Providing Health Coverage Beyond Borders
by Jose Loaiza
Health plans are always seeking ways to help consumers feel more comfortable accessing care, and several California health plans offer cross-border coverage options to those who live or work near the Mexican border.

Dental Tourism: Saving Employers and Individuals Thousands On Dental Bills
by Dr. Juan Pablo Eng
Consumers are more willing than ever to travel internationally for safe, effective, and affordable medical procedures, including dental. Stemming from the growing concern of costly dental care, a new concept has emerged: dental tourism.

Leave COBRA To The Pros
by Kristin Komen
Managing COBRA and its California cousin, “Cal-COBRA” has become increasingly difficult and time-consuming, which keeps human resources professionals from taking care of other responsibilities.

Disability Insurance Spotlight: Gaps in Coverage for More Highly Compensated Employees
by Michael Fradkin
The trends in disability insurance for the highly compensated worker present a way for you to open the door to a discussion with your clients about the gap in coverage among their top-earning employees.

Regulations Limit Changes to Existing Health Plans
by Leila Morris
The Obama Administration issued new regulations that could shift significant new healthcare cost burdens onto employees.

Converting Internet Shoppers into Health Insurance Customers
by Ron Goldstein
While health professionals are trying to guess how health reform with turn out, thousands of John and Jane Does, who have lost their jobs or had their group coverage dropped, are out shopping for individual and family health insurance plans.

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Editor’s Column Problem Not Solved

by Kate Kinkade, CLU, ChFC

Despite the fact that the insurance industry has been forecasting the loss of its primary means of distribution for the past two and half decades, nothing has been developed to address the issue. Considering how resourceful this industry is in every other circumstance, the lack of productive solutions to the key issue of distribution is surprising, to say the least.

Insurance distribution continues to rely on the involvement of a trained, skilled sales person to interact with the consumer. There are exceptions, of course, but even consumers who have been responsible for the increasing sale of term life insurance online have reported that an interaction with a sales person has driven them toward the purchase.

The issue, as everyone even remotely related to the insurance industry knows, is that the industry is not regenerating this sales force. The core function of attracting, training, and integrating new sales people into the industry is not taking place. Therefore, as the number of trained salespeople diminishes through normal attrition, the sales force is shrinking.

To see the issue clearly one must make two distinctions: the sale/service of health insurance and employee benefits as a separate distribution issue from life insurance and the increased involvement of financial professionals in the sale of life insurance products, who are not trained in insurance sales.

To address the first issue, I would submit that health and employee benefits products will continue to have a means of distribution. First, these products do not require the salesperson to find the prospect or convince the buyer of the need (i.e. there is competition for prospects, but virtually every individual and business is a prospect and knows they have the need.) These sales require in-depth product knowledge and the ability to compare and fit products to the buyer, but they do not require in-depth needs or financial analysis to make the case for the sale. If there are not enough independent trained professionals dedicated to selling and servicing health insurance and employee benefits, the companies offering these products will (and do) hire their own sales force to do so. The economics works for the manufacturer to do so, especially as the number of carriers offering products is narrow. A carrier can afford to field its own sales force. No doubt consumers prefer the independent producer, but as long as someone is bringing professionals into the business, there should be enough movement into the independent arena to keep this need supplied.

In terms of non-insurance professionals selling life insurance, there is no doubt this is a growing market. Banks and broker dealer firms are responsible for a growing percentage of life insurance sales. The distinction is that the non-insurance financial advisor is directly responsible for a relatively small proportion of those sales. Each financial services firm has some mechanism to include a trained life insurance professional in the process to assist the advisor with the life sale. Those insurance professionals are tasked with assisting in developing the analysis and convincing the client of the need for the product and in product selection and implementation; in other words, they make the sale. The number of people who are training to do that is shrinking, no matter what the source of the buyer.

What is surprising is not the shrinking sales force; that is a natural progression if there is no means of bringing people into the profession. The surprising thing is that the problem is not being addressed. Insurance agents talk about it a lot, but let’s face it, why should the agents who are currently making a living be concerned about their decreasing ranks? We may talk about caring about the future of the industry, but as long as we have products to sell and people to sell them to for as long as we want or need to do so, is it really our issue that manufacturers will be really struggling for distribution in ten years? I would submit that it is not. I would submit it is a manufacturer issue and one they are well aware of.

A number of carriers have “invested” in independent distribution firms – providing money to hire agents. But funding the recruitment of agents by one firm from another accomplishes very little other than getting more business with one carrier from another. A very few are still competing for business through compensation packages as well. In general, however, carriers are not investing in training new people in the profession.

Considering the pressure on margins, it isn’t surprising that insurance manufacturers, like many companies, are only focusing on the near future. Investing in agent training is at best a long-term project. It’s likely any one company that does so will be funding distribution for competitors in the long run. Further, many companies today have a robust, growing international market with a dedicated sales force. While it doesn’t come close to the U.S. market today, there is a clear trend to focus elsewhere for long-term growth. However, the U.S. market will continue to be a huge opportunity if there is enough distribution available to access it.

Solving the problem will take some creativity and the coordination of resources. More than anything, it would take focus – focus on this as a real issue that requires attention. Solutions could involve any number of changes. Perhaps manufacturers will get more involved in finding markets so trained agents can spend more time fulfilling needs than in developing them. Perhaps a generic training and financing structure is developed with the help of educational institutions so the cost doesn’t fall on individual manufacturers. Solutions may include formalized internship programs. There are any number of ways to approach the issue if carriers decide it warrants their focus. Carriers have dealt with major restructuring challenges, legislative attacks, and a myriad of market challenges over the past 20 years. If they bring the same talent and focus to this issue, no doubt, it will be addressed. One wonders why it hasn’t happened yet.

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Voluntary Benefits Voluntary Gains Ground in the New Benefits World Voluntary is Going Mainstream

by Jim Barone

A well-known maxim best describes the current benefit marketplace: “Sometimes the more things change, the more they remain the same.” Agreed, but professional brokers who dig a little deeper into the benefits marketplace will find a brave new world of revenue possibilities in voluntary products offerings.
In the new benefits world, employers are concerned about retaining high-performing talent, managing productivity, and offering benefits that may improve employee morale while still doing more with less in today’s economy. They still believe quality employee benefits attract, retain, and reward good employees – the organization’s most valuable resource. They still see the value of offering benefits that help employees remain healthy, productive, and focused on their jobs. Most importantly, they understand the inextricable link between employee financial security and productivity in the workplace.

As the recent economic storm required employers to reduce or eliminate some employer-paid benefits, many moved away from pure employer-paid options, offering a wider array of voluntary products. Some employers may not reverse cost-shifting measures in the near term while other employers may be receptive to taking a fresh look at benefits strategy. In either case, it is the right time and the right situation for brokers to help their clients achieve their business and benefit goals.

Voluntary Goes Mainstream

A significant trend in the new benefits world is the continued expansion of voluntary product offerings to control costs, provide choice, fill potential gaps in coverage, and serve the life-stage and life-style needs of a multi-generational workforce. Many of today’s high quality voluntary products are making a strong statement that voluntary is not a niche with limited appeal and purpose. Voluntary is going mainstream.

One of the most popular voluntary products is group legal, which gives employees affordable, easy access to professional legal services, tools, and resources to deal with personal matters that can lead to higher stress, disengagement, and lower productivity. According to an ARAG-Russell Research study, nine out of 10 people were concerned about family, financial, home, vehicle, or other legal-related matters, and seven out of 10 people experienced one or more legal events during the year.

Industry studies show growing employee interest in access to voluntary products, such as life, disability, critical illness or long term insurance to meet basic needs and provide a more secure future. A Colonial Life study showed that eight out of 10 employees were interested in voluntary benefits to supplement current benefits. Not surprisingly, many employers have been listening to the voice of the customer – their employees. LIMRA reports that more than 650,000 companies sponsor at least one voluntary benefit. This enables more than 80 million American workers to have convenient access to these key benefits in the workplace.

Employers recognize and research confirms that 21st Century employees are stressed-out about personal matters, such as finances, benefits, careers, and how to survive a personal financial crisis. Astute employers easily recognize these concerns as risk factors for lower employee engagement, attendance, productivity, and job performance. As professional benefit counselors, brokers are well served in educating employees on what innovative employers are doing to ensure employee engagement. The hard and soft costs for employee disengagement are significant.

What some employers may not know is the high price tag that accompanies stress. Employee stress costs employers an estimated $300 billion per year in absenteeism, lower productivity, employee turnover, and direct medical and mental health expenses and other insurance costs, according to data from the American Institute of Stress. Stress could easily be called Public Enemy #1 of a highly productive workforce.

Don’t Wait to be Drafted, Volunteer

In the new benefits world, it is increasingly important to learn all you can about the client’s business operations, challenges, and opportunities. Develop a clear understanding of the client’s business and benefit program goals. Become a subject matter expert for the voluntary and core products and the quality carriers you represent. Provide sound counsel. Be preemptive when you see benefit needs the client should address. Respond quickly to changes in client objectives, the competitive landscape, products, and services.

What Voluntary Can Do for You

With the ongoing dilemma of healthcare reform, mental health parity, and many other issues that keep brokers awake at night, voluntary could be your solution. Voluntary benefits continue to be one of the fastest growing market segments. Voluntary can give you a new or additional revenue source to offset declining commissions on major medical. Employers have a growing awareness of voluntary products, courtesy of high-flying advertising. Decidedly time-efficient and cost effective, cross selling to clients is less expensive than developing new business all the time. There is also the competitive thing. If you do not try to sell voluntary to your clients, another broker will.

Voluntary Takes on A Bigger Role

A broad portfolio of voluntary products has become a featured attraction of many benefit plans. Popular choices include voluntary dental and vision plans to supplement healthcare coverage; disability and critical illness insurance to guard against lost income; and life insurance, which has become the top-selling voluntary benefit as people get back to the basics of protection against the loss of the breadwinner. Meanwhile, legal plans are helping employees achieve legal wellness.

The breadth of today’s voluntary products provides greater access to benefits that serve the diverse needs of employees. To help manage rising healthcare costs, employers are implementing wellness programs with resources, such as health-risk assessments, screenings, and educational programs to promote physical activity and healthy living. Long-term care continues to gain traction among the 78 million Baby Boomers, many of whom have returned or remained in the workforce due to economic circumstances. Some employees find themselves sandwiched between focusing on their careers, still having children at home, and providing care for aging parents or grandparents. Generation Y workers have their own unique concerns and interests. Across the generations, voluntary has something to offer.

It’s Time to Broaden Your Voluntary Benefits Portfolio

I can’t think of a reason not to fully engage voluntary products with your current and future clients. As health reform take shape, we may find ourselves facing a world where benefit decisions are truly driven at the individual level. If that happens, being fully conversant in the various voluntary plans will take on greater importance.

Whether the voluntary program is legal, LTC, disability, dental or other voluntary product; one thing is for sure – now more than ever, brokers and are well-served by understanding and recommending less traditional products to their clients and clients are well served by getting these recommendations. It truly is a brave new benefits world, ripe with opportunity for brokers who see the inevitable trend toward more individualized purchase of products at the worksite.
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Jim Barone is the senior vice president and Chief Sales Officer for ARAG. He has more than 20 years of experience in the employee benefits industry. He has consulted with some of the nation’s largest employers seeking employer-paid and voluntary legal programs. Before joining ARAG, Jim was National vice president of Sales and Marketing for EyeMed Vision Care and Vice President of Sales and Marketing for Anthem Blue Cross and Blue Shield. In addition, he was responsible for the oversight and administration of regional government programs administered by Anthem. Jim received his Juris Doctorate from the University of Toledo and a Bachelor of Arts in Philosophy from the University of Cincinnati. He is a member of the Ohio State Bar Association. Jim is a national speaker on the topic of U.S. and Canadian health care reform. He served as United Way National Campaign Chairperson for Luxottica Retail and AnthemBlue Cross and Blue Shield and is a former Board Member of Colorado and Cincinnati Symphony Orchestras.

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Long-Term Care
The Increasing Role of LTC Riders
An Effective Way to Overcome Long-Term Care Objections

by Josh O’Gara

Adding riders to enhance the features of a base life insurance policy has been popular since the early days of the industry. Whether it’s one that doubles the death benefit in the case of an accidental death or waives the premium in the event of the insured becoming disabled, insurance companies and agents have found that adding these riders can greatly increase the marketability of insurance contracts by customizing the life insurance policies to address a client’s specific concerns.

For example, a guaranteed insurability rider can be added to a life insurance policy that will guarantee the client the ability to purchase a specific amount of insurance at certain points in time in the future. This type of rider is often favorable for a client who is starting a family and is anticipating the need for additional insurance upon the birth of children.

The accelerated benefit rider is another example of one that has been very popular in the past. It’s often triggered by a terminal illness or permanent disability. It’s particularly appealing since it creates a living benefit for the client in addition to the basic death benefit from the policy by paying the client up to 100% of the death benefit for a qualifying event.

A new twist to this type of rider allows clients access to their death benefit in the event they are in a nursing home or long-term care facility. This new twist on an old idea has substantial client appeal since it provides an effective argument to counter many of the objections to purchasing a traditional long-term care (LTC) plan.

How It Works

While there are several types of LTC hybrid products on the market on life and annuity contracts, the focus here is on those that can be added to life insurance contracts. The most common structure of these riders is in the form of an accelerated benefit that provides a specified percentage of the death benefit each month to offset the cost of long-term care.

Let’s assume that a female client needs $300,000 of permanent life insurance. Along with the life insurance protection, a needs analysis reveals that she can benefit from LTC protection of $200 a day if she is admitted to a nursing home. A 2% LTC rider will be added to the policy so she can access up to $6,000 a month of the total death benefit for LTC payments.

To qualify for benefits, the rider’s requirements are the same as a normal LTC plan in that the client needs assistance with two out of the six activities of daily living (ADLs). After the waiting period (90-days on most riders), a client can begin collecting benefits each month until the death benefit is exhausted. Some riders have an enhanced benefit feature that doubles the benefit pool for LTC purposes.

Most of these plans pay on a reimbursement basis. The client submits the LTC bills and is reimbursed accordingly for LTC facilities, home health care, or nursing home care. If the client does not use the full benefit each month, the unused portion remains in the pool for later use. If the rider is never used, the client’s beneficiaries will be paid the full death benefit.

Understanding The Need

A Dept. of Heath and Human Services study found that at least 70% of those over 65 will need some form of LTC at some point in their lives. This overwhelming statistic demonstrates the clear need that most Americans have for long-term care coverage. The numbers become staggering when you combine the high probability of needing care with the costs for nursing home care.

According to most estimates, the average nursing home costs about $200 a day and the average stay is about 2 ½ yrs. When those costs are added up, about 70% of people will incur a bill of more than $180,000 (this figure can be significantly higher in metropolitan areas). Even with all the data, many consumers choose not to purchase LTC policies. Given this often-daunting situation, a producer must look at every possible solution and that’s where the LTC rider can be an attractive alternative to a traditional LTC plan.

An Alternative Solution

Clients have come up with many objections to justify delaying or completely dismissing the purchase of LTC. However, most of these fall into three main concerns, which an advisor should be prepared to address simply and clearly.

Here they are:

1. Cost is the most common objection to purchasing an individual LTC plan. If we look at a typical individual plan with the same parameters for the same 65-year old female client ($6,000 a month for five years), the policy would cost about $3,000 a year. However, adding the LTC rider to the $300,000 insurance policy costs only $400 a year. At a time when most Americans admit to being underinsured, this rider can provide added motivation to obtain adequate insurance to cover both the life insurance need and LTC coverage gap.

2. The second reason consumers give for not purchasing LTC is the possibility that they may never use the benefits. Some life carriers attempt to mitigate these concerns through return-of-premium LTC plans. However, this adds significant costs to already expensive plans. Presenting the LTC rider to a client can overcome this objection. Because the rider is added to an underlying insurance contract, there will always be a death benefit paid to the client’s beneficiaries if the rider is never used. When the rider is added to a life insurance plan with cash value, there is the added flexibility so the client can access the cash for supplemental retirement or emergency income needs.

3. The third objection comes from the client who has sufficient assets that mitigate the need for an LTC policy. Based on our example, a client would need at least $300,000 of liquid assets set aside for LTC.
These so-called lazy assets are typically held in very low yield, low risk securities, such as money market funds or CDs. However, if the client takes less than one-third of this emergency fund (about $85,000 in this case) and purchases a single pay life insurance policy that includes an LTC rider, they can get the same $300,000 benefit pool. Along with the leverage it gives the client, there is the added benefit of an additional $300,000 of life insurance, which can be used to offset estate taxes or create a legacy.

The Sale

In a highly competitive market where products are changing constantly and information is easily available to consumers, it is vital for advisors to be prepared with the knowledge to benefit their clients. Long-term care riders can provide an intriguing solution to the complexities surrounding the sale of traditional LTC plans.
The concept can be used to open the door to a new client or provide a compelling reason to revisit the insurance needs of current clients. This new twist on an old idea should be a beneficial source of revenue as people try to get the most value out of their insurance policies in the tight monetary environment.
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Josh O’Gara is a brokerage manager at First American Insurance Underwriters, Inc., the Needham, Mass.-based brokerage firm that specializes in coaching life insurance producers that want to grow their practices. He can be contacted at jogara@faiu.com.

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Self-Funding Plans
Employee Health Clinics
How Self-Funded Employers are Improving 
Employee Health and Reducing Healthcare Costs

by David Zanze
In this rapidly changing business environment, there are many new and unanswered questions about what employer-provided health insurance will look like in the coming years. Several large employers are jumping into self-funded insurance plans as a cost-effective response to healthcare reform. Instead of paying a monthly premium to an insurance carrier, a self-funded employer pays for employee claims directly as they are incurred.
Health claims are filed by the employees and paid by the company through a third-party administrator (TPA).

These claims vary from month to month. The employer needs to monitor costs using reports and predictive modeling to determine what the company can expect in its claims expense. It is imperative to implement wellness programs, disease, and/or care management programs to help control medical risk and lower claims costs. According to the American Journal of Health Promotion, a reported study of more than 46,000 public and private sector workers revealed that about 25%, or $20 million, of their total annual health care expenditures was attributable to “modifiable health risks,” including obesity, tobacco use, poor exercise habits, high cholesterol and high stress, among others.

To get significant cost-savings, self-funded companies are reinventing the healthcare delivery system for their employees by embracing an old idea – the company doctor. Fifty years ago, a large company might have kept a doctor on staff to see ailing employees. Self-funded companies are now establishing onsite facilities by partnering with a clinic provider. A physician, accompanying nurse practitioner, and medical assistants are available to see employee patients to help treat minor health issues, check for early stages of more serious medical conditions, manage chronic conditions like asthma or diabetes, and provide pharmacy services.

By establishing on-site or local healthcare clinics, companies provide employees with convenient, accessible medical care, resulting in many benefits for the employer and employee. A study by the Dept. of Health and Human Services reveals that companies can cut health expenses 20% to 55%, reduce short-term sick leave by 32%, and boost productivity by 52% with wellness programs and on-site clinics. Additionally, it reduces the need for hospital visits, which is the single largest category of medical expenses in the nation.

A self-funded company has a vested interest in controlling the health of the employee population and subsequently the health of their bottom line. Employers can expect to see a return of $3 to $6 for each dollar spent, over two to five years, on corporate clinics, according to a 2005 study published in the American Journal of Preventive Medicine. According to the Partnership for Prevention Worksite Health, companies with prevention programs have seen an average decline of about 28% sick time taken, 26% in direct healthcare costs, and 30% in workers compensation and disability costs.

Clinic services are available to employees with a health benefit plan featuring no co-pay or deductible. Health risk screenings, preventative care, disease management programs, and wellness outreach or education programs are also available.

Along the Central Coast of California, a large farming organization was aiming to improve healthcare for its more than 2,000 employees and find better ways to reduce escalating health insurance costs. Last year, the company opened four primary care clinics in Santa Maria, Oxnard, Watsonville, and Salinas staffed with bilingual nurse practitioners and local physicians. The clinics are supplemented with pharmacies for prescription and over-the-counter medications. There are no doctor-visit co-pays for employees and the prescriptions are included with the employee’s nominal weekly contribution to the program. Eighty percent of the employees are enrolled in the program, from field workers to office administrators. After one year, a healthier workforce is reducing major medical claims, easing the amount of paperwork, delivering predictable and fixed costs for the company, and building trust and respect between the employer and employee.

By opening and operating their own healthcare clinics, these self-funded companies are achieving better health, productivity, and retention of their employee base. Clinics help with employee retention and recruitment resulting in fewer employee turnovers and lower recruitment costs. Employees don’t miss shifts due to the travel and wait times experienced at off-site medical offices or pharmacies thereby improving absenteeism. Alternatively, some employees will put off visiting the doctor because they don’t have time or they don’t want to miss work. Convenient access to healthcare means that health diagnoses are made sooner and treatment begins almost immediately.

Employer clinics also reduce the number of visits employees make to a doctor or emergency room. Productivity increases as companies encourage healthy habits for their employees through on-site wellness services. There are no forms to fill out and no claim disputes to deal with. Employee patients are less stressed and they spend less out-of-pocket. The employee gets health services at no additional cost. Morale improves when employees feel their company cares about their well being and when trust is built between the employer and employee.

Some attention does need to be taken to prevent problems with chronic conditions and employee privacy. Clinics should not replace the family physician or specialty care services. The clinics need to coordinate with family or primary care physicians, if necessary, to ensure that the treatment prescribed is appropriate. The clinic should not be used as the primary caregiver for difficult, chronic conditions or provide services, such as X-rays or MRIs. Employees must keep a conventional health plan for those services. Finally, employees must be assured that their medical information is kept secure and patient privacy is preserved. Employers should not have access to workers’ sensitive health information.

Company-sponsored health and wellness clinics are a win-win for the employer and employee. Health conditions and recovery improve, which lowers healthcare expenses. Employees have easy access to affordable, quality healthcare and the employers are rewarded with a more productive, loyal, and vigorous workforce. 
For self-funded employers that are considering this route, there are several facets to consider before contracting with an on-site clinic and wellness provider. First, the employer should focus on which clinics will provide the most beneficial and comprehensive services to the employee base. If anything, the clinic should at least cover the very basics. These may include: immunizations for influenza, pneumonia, hepatitis A and B, and tetanus. They should offer health screenings for cholesterol, blood glucose Tuberculosis, prostate-specific antigen, and Osteoporosis as well as body composition analysis and skin exams. A quality clinic vendor also provides wellness programs, such as weight management or health risk assessments. Before entering into an agreement with a provider, check to see if the services match the needs of the employee base. Can the programs be customized to the size and the needs of your client? Does the provider subcontract or provide its own clinical staff? Is marketing assistance needed to increase clinic participation? What are the reporting options for monitoring the health of the population? The provider should be able to tailor its program to the employer’s needs.

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David Zanze is president of Pinnacle Claims Management Inc. with nearly 30 years experience in the healthcare industry. Pinnacle Claims Management Inc. is an all-inclusive health benefits third party administrator (TPA) that offers competitive, cost efficient claims management with the latest technology. Pinnacle has extensive experience in managing claims, COBRA, and flexible benefits administration as well as a breadth of services to meet the diverse needs of self-insured employers. Pinnacle administers benefits for a diverse range of small to large sized employer groups from all business sectors of the marketplace. For more information, call 866-930-7264 or visit www.pinnacletpa.com.

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Be Better Informed Than the Tooth Fairy…
Our Annual Dental Survey

Welcome to Part I of California Broker’s 2010 Dental Survey. We’ve asked the top dental providers in California to answer 28 crucial questions to better help you, the agent, understand their benefits, features, and services. Look for Part II in the August issue. Read the responses and sell accordingly.

1. What types of plans do you offer?
Aetna: We offer the following dental plans:
• Aetna Dental Maintenance Organization (DMO(r)) plan

• PPO

• PPO Max

• Freedom-of-Choice Plan Design (offering members their choice of two dental plans)

• Aetna Dental Preventive CareSM

• Aetna DMO(R) Access

• Aetna Dental Care RewardSM

• Aetna DentalFund(r) (our consumer-directed dental plan)

• Indemnity

• Vital Savings by Aetna(r), a dental discount program.

All of our dental plans may be offered on a voluntary basis. 
Ameritas: Ameritas has the following types of dental plans available nationwide: PPO, indemnity, voluntary, non-voluntary, groups from two lives and up, individual, consumer driven and cost containment plans.

Aflac: Voluntary Individual Table of Allowances plans.

Anthem Blue Cross: Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company offer a comprehensive line-up of dental plans and products that include: PPOs and DHMOs for individuals, small groups, large groups and national accounts. We offer voluntary dental plans for small and large groups.

BEN-E-LECT: BEN-E-LECT offers fully-insured PPO, high deductible, pre-paid, and self-insured dental plans for the group market. Employer paid and voluntary down to two lives, with multiple network and out-of-network options down to the employee level.

BEST Health Plans: We offer the Advantage DHMO plans in Calif and Texas. A prepaid dental plan is available in Fla. as well. Advantage Plus PPO/Indemnity dental plans are available as a dual-choice option, alongside an Advantage DHMO plan.

Blue Shield: Blue Shield provides a wide range of affordable and comprehensive dental PPO and HMO plans. We offer dental PPO plans with MAC, UCR, and fee-for-service schedules. Our group dental PPO and HMO plans are offered on a contributory or voluntary basis. These plans can be sold as riders to health plans or on a stand-alone basis. Individual and family dental PPO and HMO plans are available to our IFP medical members as riders to health plans or we offer stand-alone dental PPO plans. We also offer two dental PPO plans developed specifically for Medicare Supplement plan members.

CIGNA: We offer the following dental plans:

• DPPO

• DEPO

• CIGNA Traditional – dental indemnity

• DHMO Standard plans and split co-pays for general dentists and specialists
• DHMO Value Plans – including flexible plan options with alternative treatment provisions.

• DHMO Preventive Plans

• CIGNAFlex Advantage (monthly switch feature between a DHMO and DPPO or dental indemnity plans)

• CIGNA Dental WellnessPlus

• CIGNAPlus Savings, a dental discount card program (not an insurance product).

• Dental Shared Administration – provides qualified funds and clients the administrative flexibility to pay their own dental claims and still take advantage of CIGNA Dental DPPO negotiated discounts and utilization management tools.

All plans are available on a stand-alone basis. All plans, except the discount card, are also available alongside medical and/or vision plans. CIGNA also has three WellnessPlus features, which can be paired with DPPO, DEPO, or dental indemnity products. Individuals who get any preventive care in one plan year qualify for increased benefits in the following plan year. All plans are available on a contributory or voluntary basis.

Dearborn National: Nationally, Dearborn National offers a flexible portfolio of dental plan options, as well as custom options for larger groups. With the proprietary claims adjudication system, employers have flexibility in customizing their dental plan. Funding options include fully insured, self insured, and voluntary plans. Dental plans are offered for groups as small as two employees to national accounts exceeding 40,000 employees. 

In addition, with our partnership with Calif. Dental Networks (CDN), we offer both PPO plans and DHMO plan options in the state of Calif.
Delta Dental: Managed fee-for-service, PPO and DHMO group dental plans; individual DHMO dental plans and group HMO vision plans.

Dental Health Services: Prepaid dental benefit solutions for groups and individuals. We also offer PPO, EPO, and indemnity (reimbursement) products for groups of all sizes and ASO services for self-funded groups.

Golden West: Golden West Dental & Vision offers a comprehensive line-up of dental plans and products that include: PP0 (nationally), dual option, triple option, stand-alone and DHMO for individuals, small groups, and large groups. We offer voluntary dental plans for small and large groups.

Guardian: Dental PPO (active or passive), prepaid/DHMO, and indemnity plans are available on a voluntary or employer-sponsored basis. Dual and triple choice, monthly switch (between a DHMO and PPO), and administrative-services only plans are also available. Guardian’s flexibility allows us to customize plans based on the needs and price points of the employer group, whether small or large.

Health Net Dental: Health Net Dental HMO (DHMO) plans and dental PPO plans offer robust benefits covering most dental procedures. Dental plans may be purchased in conjunction with a Health Net medical plan or on a stand-alone basis. In addition, the dental plans may be purchased as dual choice.

HumanaDental: PPO, prepaid/DHMO, traditional preferred, and preventive plus plans available on a voluntary or employer-sponsored basis. Humana also has a robust ASO dental plan available in California.

MetLife: MetLife offers dental PPO, dental PPO-co-pay, dental HMO, and Indemnity plans with flexible designs and funding arrangements available to accommodate employer plan requirements. MetLife offers single or multi options, fully insured or self-funded as well as a full range of contribution options.

Group dental insurance policies featuring the Preferred Dentist Program are underwritten by Metropolitan Life Insurance Company, New York, NY 10166. Dental HMO plans are available in Calif., Fla. and Texas only, through a domestic company in the applicable state named SafeGuard Health Plans Inc. The SafeGuard companies are part of the MetLife family of companies. “Dental HMO” is used to refer to products that may differ by state of residence of enrollee, including but not limited to: “Specialized Health Care Service Plans” in Calif.

Principal Financial Group: We offer both employer paid and voluntary plans, including PPO, EPO, and POS. We also offer a choice between our plans and dental HMO plans through marketing alliances.

Securian Dental: Group dental PPO and indemnity.

United Concordia Dental: United Concordia Dental offers flexible fully insured PPO and DHMO plans as well as an individual product, iDental. ASO funding arrangements are available based on group size. Most plans can be offered on an employer-sponsored or voluntary basis.
Western Dental: Western Dental offers a DHMO mixed-model provider panel comprised of (a)contracted independent, general dentists and specialists, along with (b) Western Dental employee dentists and specialists, who work in the company’s owned Western Dental Centers. Western Dental currently operates over 220 general dentistry and orthodontic office throughout Calif., Ariz., and Nev.

2. How do plans you offer for the individual and\or small group compare in rates and benefits to the large-group plans?

Aetna: The key difference between Aetna small group plans and larger group plans is that small group plans are pre-packaged plan designs. While larger groups can select from an array of benefits, the packaged small group plans are comprehensive yet price sensitive and make it easy for our customers to choose from plans that are competitive in the market.

Aflac: Our rates and benefits do not vary based upon the size of the account.
However, when replacing existing dental coverage in larger accounts,
waiting periods may be significantly reduced.

Ameritas: Ameritas’ small group and one life group plans are rated by industry and are pooled in full or in part. Large groups’ experience is rated and includes lower rates in most cases. Ameritas offers a wide variety of plan designs, regardless of group size, to meet the needs of our customers.

Anthem Blue Cross: Anthem Blue Cross normally uses the same provider network for individual, small group, and large group. There are different underwriting considerations for each business segment depending on the product offered. Our larger groups can customize benefits to meet their employees’ needs.

BEN-E-LECT: The majority of our plans compete very well in the large group market. The benefit design and structure of our plans remain consistent across the small and large group markets.

BEST Health Plans: BEST Health Plans’ Advantage DHMO plans offer orthodontic benefits to groups with two or more enrolling. Prepaid S200 and S500 are available to groups with a minimum of 15 employees enrolled. Rates for Calif. and Texas DHMO plans vary by employer-contribution. Fla. prepaid Dental plans offer the same rates for employer-contributory and voluntary plans.

Blue Shield: Rates for our large group dental HMO and PPO plans are typically lower than our small group and IFP plans due to customization of offerings for groups with more than 300 employees. Rates may vary depending on the actual plan design. We offer one dental HMO and one dental PPO network regardless of participation in a group or individual/family plan. Group plans offered vary in deductibles and annual benefit maximums. Our individual, family, and medicare Supplement dental plans vary in waiting periods, deductibles, and annual benefit maximums. All comprehensive dental plans offered include generous benefits, competitive premiums, and our strong Calif. and national provider networks.

CIGNA: Dental plan designs and rates for small groups are similar to those of large groups. There are a series of standard DHMO plan designs and DPPO/indemnity plan designs. CIGNA does not currently offer dental plans to individuals. Larger groups generally want more robust and flexible plans while smaller groups gravitate toward standard offerings. We can custom-fit DPPO plans to offer a variety of cost-saving options for employers that want to keep claims costs low, such as missing tooth limitations, class shifting, low maximums, varying coinsurance, deductibles, waiting periods, etc. Our DHMO plans start with basic coverage, specialty discount, split co-pays, and other cost savings mechanisms. They go up to very rich, low-co-pay plans at the higher end of the cost spectrum. Through recent acquisitions, CIGNA can also deliver solutions for the smaller employer segment through the CIGNA voluntary limited benefit dental plan as well as leveraging the small segment capabilities of the former Great West distribution channel. We provide the full spectrum of products, each with varying price points based on product, funding type, and voluntary vs. contributory.

Dearborn National: Dearborn National offers dental plans nationally for groups as small as two employees to large-group plans. There is an extensive portfolio of standard plan design options for small groups. Large-group plans can customize their plan designs to fit their needs. Pricing is determined by demographics, group size, and the region the employees are in.

Delta Dental: While benefits offered to smaller groups are comparable to those offered to larger groups, larger groups have more options in terms of plan designs. Rates can be slightly higher for smaller clients and individuals, but Delta Dental strives to be competitive while balancing our financial risk. With individual DHMO plan benefits, we offer three different plan options — two for individuals and families and one customized for seniors. The individual and family plans offer a wide range of covered services. The senior plan is designed to offer services most utilized by this particular population.

Dental Health Services: All plans and premiums are developed based on individual and group needs. Co-payments and treatment options vary by plan, from very low levels of coverage all the way up to plans that provide member care at zero out-of-pocket cost. We have products starting at only $6.25, ranging to very high benefit plans. Customized plan designs are always available.

Golden West: Our small and large group products are specific to location, size, industry and contributions. While larger groups have more flexibility in customizing benefit options than do smaller groups, Golden West still focuses on plan flexibility for all size groups. This enables employers to custom design their products for their personal needs.

Guardian: Guardian offers nearly the same plan options to small group employers as to large employers. We offer an array of cost-reducing options, such as waiting periods, deferral of services, and tie-ins to Guardian vision or Guardian medical products. Dental coverage is not available to individuals. 

Health Net Dental: DHMO plans offered to individuals provide a comprehensive schedule of benefits at a monthly fee that is slightly higher than rates quoted for groups. Small groups (2–50 employees) have two comprehensive Health Net Plus DHMO and 13 DPPO plans from which to choose. Mid-market groups (51–250 employees) may choose from five DHMO plans and 15 new DPPO plans. Mid-market rates are based on location, benefit plan chosen, employer contributions and participation. Individual and small group rates are based on book rates. Risk evaluation is taken into consideration when underwriting larger groups (over 250 eligible employees).

HumanaDental: We offer flexible plan designs with a range of deductibles, co-payments, and out-of-pocket expense limits to meet the needs of small to large groups. We also offer large groups the additional flexibility to customize plan options. Customers who see dentists participating in the HumanaDental PPO Network receive deep discounts. In Calif., our negotiated discounts average 34% off billed charges. All our dental plans provide employees with incentives for preventive dental care, which promotes their overall health. A free vision discount program is included.

MetLife: MetLife offers individual plans in Calif., Fla., and Texas though SafeGuard, a MetLife company. Dental HMO plans offered to individuals provide a mid-range level of benefits at a monthly fee that is slightly higher than rates quoted for groups. 

Small groups (2-50 eligible lives) have a broad range of options within the Dental PPO and Dental HMO benefit plans. Rates are based on location, plan chosen, and participation. Risk evaluation is taken into consideration when underwriting larger groups; individual plans are quoted using shelf rates. 

Principal Financial Group: The only significant rating difference pertains to experience rating, which is used on groups with 150+ employees. There are also, however, a few benefit limitations on very small cases, which apply to groups under 10 lives.

Securian Dental: Small group rates are developed on a pooled basis. Large group rates are developed on a custom basis.

United Concordia Dental: The primary factors that affect our group rates are location, experience, and credibility. While larger groups have more flexibility in customizing benefit options than smaller groups, United Concordia Dental offers an array of standard group products and options that provide small businesses with cost-effective, quality choices.

Western Dental: Our individual and small group rates are a little higher for standard benefit plans. Customized benefits plans are available for large groups.

3. Is your plan(s) better than previous incarnations? If so, how?

Aetna: Evidence-Based Policies: We determine which services should be covered based on the following:

• Major dental studies.

• New clinical advances.

• Recommendations from the leading health and dental organizations.

• Consultations with academic leaders on the latest technology and techniques now taught in dental schools.

We do not cover services that research shows as experimental, investigational or unproven. We do not cover ViziLite, VELscope, or brush biopsies. There is no evidence showing that using these services are an improvement over conventional oral cancer screening. The Journal of the American Dental Association (JADA) recently published results from a study that indicated that use of ViziLite or VELscope along with a conventional screening examination for lesions deemed clinically innocuous was not beneficial in identifying dysplasia or cancer. 
We offer the following:

Freedom-of-Choice Plan Design — Packages our DMO plan with one of our Indemnity or PPO plan options. Members pay one rate and can switch between the plans as often as monthly. It can be a lower cost alternative to a PPO plan.

Aetna Dental Preventive Care — A low-cost PPO or Indemnity plan covers preventive and diagnostic procedures from 70% to 100%. Members may also get reduced fees from dentists who participate in Aetna’s PPO network for non-covered services like fillings, adult orthodontia, and cosmetic tooth whitening.

Aetna DMO Access — A fixed-co-pay DMO plan offers broader network access at a lower cost. There are no out-of-pocket deductibles for the member to pay and no claim forms to file. It also includes the Aetna Dental Access discount network, which gives members access to more dentists and discounts of 15% to 50% for non-covered services like bleaching.

Aetna Dental Care Reward — By going to the dentist for preventive services in one plan year, Aetna will cover a greater percentage of coinsurance and/or annual maximum next plan year.

Ameritas: Ameritas is known for our flexibility and expertise in dental. We talk to employers all over the country for input on their needs. Our plans are updated constantly to meet those needs. We have released several industry firsts including a rollover maximum product, fully insured Lasik eye benefits, dollar reimbursement plans, combined dental/vision deductible, frequency and maximum plans, shared family maximum plans, and stand-alone hearing care benefits.

Aflac: We have not had any plan changes since the latest plan was
introduced in 2004.

Anthem Blue Cross: With the Dental Blue PPO plans from Anthem

Blue Cross Life and Health Insurance Company; there is greater access to more dentists in more locations. This increases the likelihood that members will have access to their own current dentist, increasing their satisfaction with their dental plan. The three networks offer flexibility in plan options and Dental Blue specialists participate in all three networks. Additionally, members have access to our negotiated discounts on non-covered services (such as veneers, implants, temporal mandibular joint dysfunction (TMD), and orthodontia), negotiated discounts after the annual maximum has been reached and negotiated discounts during waiting periods (if applicable). We have eliminated waiting periods for small group dental plans. The Anthem Blue Cross large group DHMO plans – the Dental Net 2000 Series Plans – are more cost-effective and consumer-friendly, with increased flexibility and choice. The plans include enhanced benefits for services not previously offered and often not offered by other plans. Our Tonik and Enhanced Tonik individual plans, designed for younger members, offer choice and affordability with a dental plan that’s embedded within a medical product.

We have also introduced a new International Emergency Dental Program for all of our dental members, and we offer extra cleanings and periodontal maintenance procedures for our Dental Blue members, which does not count toward the annual maximum.

In addition, we just launched new large group Dental Blue plans in California, which offer more flexibility and various out-of-network options, along with five additional new riders.

BEN-E-LECT: Our plans offer more options for employers and employees than do any other dental plan in the market. They can be written stand-alone or the employer may combine our plans for a complete package offering PPO, DHMO and fully self funded options.

Blue Shield: The new oral cancer screening coverage is not only a value-added benefit, but also comes at no out-of-pocket cost to the member. And the standalone IFP dental plans give brokers a much wider pool of potential prospects since these plans can be sold to those without Blue Shield 
medical coverage.

CIGNA: Our DHMO 07 Series features four cleanings per year, two at $0 co-pay and another two at a minimal co-pay, when recommended by the network dentist; expanded fluoride treatment options; and a robust variety of schedules and co-pay structures. The 07 Series is focused on affordability, preventive care, and wellness. Teeth whitening (take-home trays with bleaching gel) is also available on most of the 07 schedules. We’ve added free identity theft resolution services with this Series. 

CIGNA added the D Series for clients that can’t afford to continue offering full service plans or those that thought they couldn’t afford dental coverage. It offers preventive and diagnostic coverage only. It provides preventive dental services and access to network discounts for services that aren’t covered under the plan. 

CIGNA’s dental plans include several enhancements, such as coverage for oral cancer screening procedures including brush biopsy and VizilitePlus. We removed the age limit on sealants for DHMO plans. On most schedules, individuals don’t need a referral to a pediatric dentist for dependent children under seven. Individuals can also visit network orthodontists without a referral. Our WellnessPlus features reward individuals for getting preventive care by increasing their benefits in the following plan year. Dental customers also get discounts on xylitol products, health management programs, and other valuable health and wellness products and services.

The DPPO network now gives employers more choice. The CIGNA Dental Core Network is appropriate for employers looking for a strong balance between network access and discounts. The larger CIGNA Dental Radius Network offers the greatest nationwide access to dentists at all discount levels and is appropriate for employers where network size is the primary driver. 

Those enrolled in the CIGNA Dental PPO (DPPO) or Dental EPO (DEPO) plan get discounts on non-covered services (where allowed by law). The discounts also apply to covered services when they exceed their annual maximum or other plan limitations, such as frequency, age or missing tooth. Employees get lower out-of-pocket expenses since most of our DPPO network dentists have agreed to offer enrollees their negotiated contracted fees for most non-covered services. 

Targeting availability for Jan. 1, 2011, the Dental Network Savings Program (DNSP) will become a standard cost-containment feature for DPPO (except MAC and scheduled benefit plans) and indemnity clients. The DNSP provides access to a supplemental network of dentists who provide out-of-network care at a discounted rate. This means additional claim savings for clients and lower out-of-pocket costs for customers when they use a participating DNSP dentist. The DNSP allows us to provide an additional tier of discounted access points and incremental savings for clients and customers. Finally, we have added both identity theft and will preparation enhancements to the CIGNAPlus Savings discount card (not an insurance product).

Dearborn National: When Dearborn National first entered the PPO dental marketplace, we filled the niche on voluntary dental plan needs. We have since expanded to offer fully insured employer paid and self-funded dental benefits. In addition, due to the flexible proprietary claims system, the custom benefit plan design options are extremely robust. In addition to offering excellent discounts, and customer service, Dearborn National also offers the largest PPO network of dental access points, with now over 150,000. 

New DHMO products were created to cover additional cleanings (beyond the standard two times per year), alternative name brand crowns, and many other services typically used to up-sell patients.

Delta Dental: Most mid-large group plans can be customized within basic parameters. We incorporate changes in treatment standards and technology as they evolve. Delta Dental has added the following enhancements to our standard benefit package:
• Coverage allowed for one panoramic x-ray and one full mouth x-ray within the five-year frequency limitation for each of these procedures.
• Coverage for IV sedation to mirror general anesthesia for covered oral surgery
• Coverage allowed for IV sedation and general anesthesia for select endodontic and periodontal procedures.
Previous enhancements include the following:

• Coverage for dental implants, implant-supported prosthetics and other implant services.

• A benefit enhancement during pregnancy, which includes an additional oral evaluation and either one additional prophylaxis (D1110); up to four quadrants of periodontal scaling/root planing (D4341/D4342); or one additional periodontal maintenance procedure (D4910) (Written confirmation of the pregnancy must be provided by the enrollee or the dentist when the claim is submitted.)

• The option of waiving the annual maximum on diagnostic and preventive services (cost impact varies based on client’s existing plan design).

Dental Health Services: We offer a number of cosmetic procedures as standard benefits in our plans. In addition, monthly premium rates and co-payments for services are evaluated frequently to ensure that they are appropriate and competitive.

Golden West: Most recently, we launched our High/Low PPO and Triple Option dental plans, which allow employees to choose their own level of coverage. In addition, our low cost DHMO plans offer cosmetic and elective procedures as an option in addition to our free vision and ortho benefits for all DHMO and PPO (CA) members.

Guardian: We can vary deductibles, annual, and lifetime maximums and service frequencies; include deferrals of services; move services or groups of service to different service categories; and offer many coverage options including implants and cosmetic services. We also offer MAC plans, incentive coinsurance, incentive maximum, preventive-only, and preventive-plus plans. Plans can be tailored exactly to meet almost any client’s requirements while providing the prompt case implementation and rapid claim processing that our systems have always ensured.

Health Net Dental: Health Net is pleased to introduce new DPPO plans for small and mid-market groups. All of our new DPPO plans include extra services for pregnant women in their second and third trimesters, including extra cleanings, scaling, and debridement covered at 100% in and out of network and not subject to the plan’s deductible. Our new Classic Plus DPPO Plans include MaxAdvantage, our rewards program that allows members to carry over a portion of their calendar year maximum into the next calendar year. Our new Basic DPPO is a unique plan offering in- and out-of-network coverage for preventive, diagnostic, and restorative procedures (oral surgery, endodontics, periodontics, major services and orthodontia not covered).

For new groups purchasing a dental PPO plan with coverage for orthodontia, the orthodontic lifetime maximum starts over, even for members who have previously started treatment. We do not require the prior carrier’s PPO orthodontic paid claims and there is no reduction of the member’s lifetime orthodontia maximum for treatment already in progress.

The Health Net Dental Plus DHMO plans offer more than 340 covered benefits, including oral cancer screenings, additional teeth cleanings, teeth whitening and veneers. In addition, members have access to one of the largest DHMO networks in the state.

HumanaDental: Yes, we continually explore ways to offer more choices and flexibility for our customers. Please see next response.

MetLife: We are continually improving our program contracts, plan design flexibility, claims-processing guidelines, customer service, and quality programs based upon clinical research, consumer-value approaches, and dental industry trends.

MetLife continues to expand our product offerings and plan design flexibility in the small (under 500 employee) market – providing more choices to help them meet cost objectives without sacrificing quality. 

Principal Financial Group: Our current plan offers significant flexibility in plan design, optional coverage for cosmetic services, TMJ treatment, dental implant coverage, accident coverage, employee choice options, and multiple price points. Employers can design any combination of plan options to meet their needs.

Securian Dental: We have added greater flexibility.

United Concordia Dental: In recent years we have done the following:

• Introduced more voluntary plan options and added optional coverage for posterior composite restorations and implants to groups with 10 or more enrollees.

• With our DHMO plan in Calif., we added more than 70 procedures, now covering over 300 in total. 
• We launched Preventive Incentive, which covers diagnostic and preventive services without counting them toward the member’s annual maximum.

• Enhanced our employee oral health educational offerings.

• Introduced the Smile for Health program in 2007, which includes a maternity dental benefit that provides an additional cleaning during pregnancy. An enhanced dental benefit provides coverage for certain diagnostic, preventive and periodontal services that help dentists to identify and treat chronic oral infections.

• Launched a series of plan designs through iDental, our dental product for individuals and families without coverage elsewhere.

Western Dental: Western Dental Benefits Division recently launched the DHMO Series 7 dental plans. Our new plans offer an increase of covered procedures to include the availability of cosmetic alternatives and more orthodontic options for children and adults.

4. What have been the most recent changes in your plan(s)?

Aetna: Full mouth debridement will be covered as a major service and will be a standard on all new DMO, dental PPO and indemnity plans with effective dates of October 1, 2010 and later. This procedure is part of our Dental/Medical Integration program enhanced benefits.

Aflac:N/A

Ameritas: A shared family maximum plan is being rolled out.

BEST Health Plans: We launched our DHMO/prepaid dental product lines in January. The California DHMO plans offer no office visit fees as well as posterior composites and oral cancer screenings at fixed co-payments. There is no charge for most diagnostic and preventive services. Enrolled members can access their information through a member portal to access our dentist locator, a treatment cost calculator, to verify eligibility, request ID cards, and review plan information. A dental education section helps our members stay informed on recommended dental health practices.

Anthem Blue Cross: We recently introduced a new International

Emergency Dental Program for all of our dental members, and we offer extra cleanings and periodontal maintenance procedures for our Dental Blue members, which does not count toward the annual maximum.

In addition, we just launched new large group Dental Blue plans in California, which offer more flexibility and various out-of-network options, along with five additional new riders.

Blue Shield: We recently reduced pricing on four of our small group dental plans. We rolled out our Suite Deal Dental package that increases the number of plans small group employers can offer from two to five.

BEN-E-LECT: Our Freedom PPO Plans have added the option to waive the waiting period for groups with no prior coverage. The addition of our new Freedom pre-paid Dental Plans (made available by Western Dental exclusively for BEN-E-LECT) has been a well-received addition.

Blue Shield: In response to market demand, Blue Shield developed two stand-alone dental plans for the IFP market – one comprehensive Smile PPO dental plan and one affordable Value Smile PPO dental plan. Now brokers can sell Blue Shield dental coverage to individuals and families with or without Blue Shield medical coverage. Beginning June 1, we added a third teeth cleaning per year covered at 100% when using a network provider for Dental PPO plans designed specifically for our Medicare supplement plan members.

In addition, all Blue Shield dental PPO plans now cover oral cancer screenings as a preventive and diagnostic benefit, covered at 100% for the member. Additionally, we’ve expanded our dental PPO network of providers from 77,000 to nearly 110,000 nationwide.

CIGNA: CIGNA’s dental plans address emerging research on the connection between oral health and overall health. CIGNA pioneered the introduction of integrated benefits between medical and dental in 2006 with our Oral Health Integration Program, which offers enhanced dental coverage to address populations at risk, such as those with diabetes, heart disease, or those who are pregnant. In addition, CIGNA’s dental plans cover oral cancer screening procedures such as brush biopsy and VizilitePlus to aid in the early detection of oral cancer. We also don’t have an age limit on sealants for DHMO plans. CIGNA offers a complete package of very competitive dental plan designs with some of the largest national dental networks. CIGNA enhanced our dental treatment cost estimator and launched our periodontal risk assessment and cavity risk assessment tools. Both assessment tools are available in English and Spanish. CIGNA also developed an oral cancer awareness quiz and an online toolkit to help parents care for their children’s teeth.

Dearborn National: Dearborn National recently announced enhancements to their dental PPO plan, such as availability to cover implants, and the option for groups to have annual open enrollment without waiting periods.

Delta Dental: We’ve recently enhanced the Benefits Administrator Support Guide on our website. It features new content, including an administrative manual and our extensive dental health flyer library. As part of Delta Dental’s initiatives to reduce environmental impact, we provide many resources in the enhanced guide to help benefits administrators “go electronic” in their communications with employees.

Dental Health Services: Our plans provide coverage for composites on posterior teeth, re-treatment on root canals, fixed fees for precious metals and porcelain on molars, titanium crowns, teeth whitening, and other cosmetic procedures.

Golden West: Our DHMO network has increased to over 4,800 participating providers; our national PPO plan reaches over 79,000 participating providers. Our PPO plans offer industry discounts, which qualifies employers up to as much as 15% discount off PPO pricing. For DHMO plans, self-referrals have been routine for our plan participants. Our Individual SmileChoice plan includes cosmetic/elective benefits, vision and ortho coverage.

Guardian: Guardian Choice is a new plan design, which allows employee choice between a MAC or UCR PPO plan using one blended rate and the ability to switch at annual open enrollment. We have introduced new features that encourage preventive care, allowing members to get even more value from their annual maximums including Maximum Rollover, Maximum Rollover Lite, and Preventive Advantage. Other PPO plan design enhancements include benefits for up to four periodontal treatments per year (with the option to cover under preventive), oral cancer screenings, adult fluoride, cosmetic teeth whitening, and the ability for employers to offer their employees a triple-choice plan. Our new enhanced DHMO plans will waive office visit co-pays after three years and include orthodontia in progress benefit and coverage for services such as oral cancer screenings and adult fluoride. We also introduced the Direct Referral program that allows DHMO members to see any in-network specialist without pre-authorization, providing faster, easier access to important treatment. 

Health Net Dental: All of our Classic Plus, Classic, Essential and Basic DPPO plans include extra benefits for pregnant members in their second and third trimesters.

HumanaDental: Plans in our new generation of products are available as voluntary plans, and to groups with as few as two employees. Our new plans offer an extended maximum benefit, in which members get 30% coinsurance on services rendered after they reach their annual maximum. In addition, no waiting periods for major services for voluntary groups with 10 or more enrolled, open enrollment options, and orthodontia benefits. Updates include reimbursement options for out-of- network reimbursement: maximum allowable fee, or based on in-network fee schedules. Additional deductible choices, implant coverage, and acrylic filling coverage have also been added. Due to the connection between oral health and overall health, we have added, free of charge, oral cancer screenings to all of our products, excluding DHMO/prepaid plans.

MetLife: MetLife is offering the following:

• MetLife Dental Health Manager — This proprietary dental disease management program provides educational content and personalized report cards that illustrate participants’ risk for oral disease and general dental health. It is available to new and existing MetLife customers with 500 or more employees, at no additional cost as a standalone program. Employers also have the option to coordinate the program with a disease management vendor, which requires a one-time set-up fee.

• Back to the BASICs plan — This dual-option plan focuses on the essential dental services aligned with research, treatment protocols, and market trends to maximize the value to employers and their employees. The base plan has low monthly premiums and provides coverage for services needed to maintain oral health, such as preventive exams, cleanings, X-rays, fluoride, sealants, fillings, and more. Employees can choose the enhanced plan for more comprehensive coverage including coverage for orthodontia services. The enhanced plan also provides lower out-of-pocket costs through lower deductibles and higher coinsurance reimbursement and annual maximums.

• MetLife International Dental Travel Assistance Program — With this new program, participants who travel internationally get around-the-clock access to multilingual coordinators who can connect them with dental providers in over 200 countries.

• Provider Discounted Membership in the Institute of Medical Emergency Preparedness (IMEP). 
• Enhanced Oral Health Library — MetLife launched an enhanced web-based consumer education resource, the MetLife Oral Health Library at www.metlife.com/dental and clicking on “MetLife Oral Health Library.”
• Enhanced Full Service Dental for Retirees — Expected to be available Summer 2010, this product enhancement will provide a Trust option for our Full Service Dental for Retirees product. This turnkey product allows customers to enrich their retiree benefits programs with no benefit expense and minimal administration. The new Trust features means no contracts to sign for employers while providing voluntary dental options for their retirees.

Principal Financial Group: Our newest feature to our dental plans is the Preventive Passport option. This feature excludes preventive services/charges from counting towards the annual maximum. 

Securian Dental: More flexible participation guidelines. Escalating annual maximum and lifetime deductible options.

United Concordia Dental: United Concordia Dental introduced an individual product line, iDental, designed to meet the varying needs of a college student, an unemployed individual, a young family, 
a senior citizen, or anyone else that may need quality dental care at an affordable price.

Western Dental: Our Series 7 plans cover more procedures and now include Implants, veneers and external bleaching.

5. Can an insured use their own dentist even if they are not on your participation list?

Aetna: PPO – We offer a national network of dentists. Each covered family member can visit any licensed dentist for covered services. When members visit dentists who participate in our network, their out-of-pocket costs are generally lower. 
Indemnity – Members can visit any licensed dentist.
DMO – Members must seek care from a participating DMO provider unless a state allows a member to seek out of network care.

Aflac:Policyholders may use any dentist they choose as we do not have
network requirements.

Ameritas: Insureds can use any provider, but they may incur additional out-of-pocket expenses.

Anthem Blue Cross: Yes, they can with all of our PPO plans. Members who choose a provider, within the Dental Blue network, get the most savings in their dental costs. However, members can choose a non-Dental Blue dentist, but their out-of-pocket costs may be higher. The same is true for our traditional Prudent Buyer PPO dental plans. The DHMO plans are in-network only.

BEN-E-LECT: Yes, our plans offer both in and out of network coverage with multiple options for coverage and benefits. The member maintains complete control over the dentist they choose to utilize.

BEST Health Plans: Members on the Advantage DHMO/prepaid Dental plans must use a dentist in the network. If a member’s dentist is not part of the network, the member can nominate the dentist to join the Advantage network.

Blue Shield: Dental PPO plan members can choose to go to any dentist, although their benefits will be covered at a higher percentage when choosing a network dentist, with less out-of-pocket expense.

CIGNA: Insureds can use their own dentist in the DPPO and dental indemnity plans. However, there are no out-of-network benefits with DHMO, CIGNAPlus Savings dental discount plans (not insurance) or with DEPO. Individuals can nominate their dentist to join our plan and if the dentist wants to participate and meets our criteria, he/she will be credentialed and added to the network. 
Additionally, DPPO and DEPO plans may include savings on most non-covered services. Most of our DPPO network dentists offer their negotiated contracted fees to customers and their covered dependents for most non-covered services. And the savings also apply to covered services when an individual exceeds his or her annual maximum or other plan limitations, such as frequency, age or missing tooth.

Dearborn National: In the PPO dental plan, members can use an in-network or out-of-network dentist. However, they save more by going to network dentists. In the DHMO plan, members must select a dentist that is in the network.

Delta Dental: Delta Dental Premier enrollees can visit any licensed dentist for care, although there are advantages to visiting one of more than 33,600 Delta Dental Premier dentists in Calif. Enrollees can go to any dentist, but they are only guaranteed to get in-network benefits and avoid balance billing when visiting a Delta Dental dentist. Delta Dental PPO enrollees also have freedom of choice, but can benefit from the protections associated with selecting one of more than 20,700 Delta Dental PPO dentists in Calif. PPO enrollees have access to both Delta Dental PPO and Premier dentist networks with different levels of savings. 

DHMO enrollees must use a participating general dentist or approved specialist, except for 
emergency care.

Dental Health Services: Our PPO and reimbursement plans allow members to get treatment from any dentist. Members of Dental Health Services’ prepaid and EPO plans choose their dentist from our 
extensive network of participating dentists.

Golden West: Members who are covered under our True Advantage

PPO and indemnity plans can get services from a non-panel provider. Their greatest discounts will be through our panel providers under our True Advantage PPO plan.

Guardian: Members who are covered under our PPO plans can visit any dentist. However, benefits may be paid at a lower coinsurance rate for non-participating dentists. DHMO members must choose a participating primary care dentist.

Health Net Dental: Our dental PPO plans offer members freedom of choice; members may receive services from any licensed dentist, but we will reduce their out-of-pocket costs by receiving services from a participating PPO dentist. Under Health Net Dental DHMO plan, members must use a participating dentist to receive benefits.

HumanaDental: PPO members can visit the dentists of their choice. Out-of-pocket savings are great when members visit participating network dentists.

MetLife: For Dental PPO plans, plan participants can visit any dentist and receive benefits. Participants may realize additional expense savings by receiving services from a participating dentist. For Dental HMO, members must use a participating dentist to utilize their benefits.

Principal Financial Group: Our members can see any dentist (even if the dentist is not on the participation list) if they are enrolled in either our PPO or POS design. If a member is enrolled in our EPO design, they must see network dentists for services in order to receive coverage.

Securian Dental: Yes.

United Concordia Dental: Our FFS and PPO plans allow members to visit any dentist. However, out-of-pocket costs may be higher when visiting a non-participating dentist. DHMO members must use network dentists.

Western Dental: Through the DMO plans, the member must use a dentist who participates in our network in order to have coverage.

6. If the dentist bill exceeds UCR, can the dentist bill the patient for the difference?

Aetna: For covered services, network dentists are contractually prevented from balance billing above the negotiated rate. Non-covered services are also available for a discount in most states. Dentists who are not in our networks may balance bill members.

Aflac: We pay benefits based on a Table of Allowances and not UCR. If the
dentist’s charge exceeds the benefit amount paid, the dentist may
balance-bill the patient.

Ameritas PPO and the First Dental Health (FDH) Networks: Ameritas PPO dentists and FDH PPO dentists are bound by contract not to balance bill the difference between their normal charge and PPO maximum allowable charges. Most Ameritas PPO providers offer a discount on non-covered procedures (if allowed by the state) and members are financially 
responsible for those charges.

Anthem Blue Cross: No, not when visiting an Anthem Blue Cross dental PPO provider. Anthem Blue Cross participating provider contracts include negotiated fee agreements that prohibit balance billing. A participating dentist may not balance-bill members for amounts that exceed the negotiated and contractually agreed on fee. Members are not responsible for amounts in excess of negotiated rates. However, if a member visits an out-of-network provider, there is no contract and the provider can bill the patient for the difference. With our DHMO plans, the patient is only responsible for co-payments and non-covered services when accessing services through their participating dental provider

BEN-E-LECT: The member does have the option to choose this method upon enrollment.

BEST Health Plans: No, network dentists are contracted not to balance bill our members.

Blue Shield: In-network providers cannot bill members for fees that exceed the negotiated rate. Out-of-network providers, however, may bill for charges that exceed the plan’s allowed amount.

CIGNA: In-network dentists are not allowed to balance bill for covered services. We can’t prevent non-network dentists from balance billing.

Dearborn National: If a member sees an in-network dentist, per our contract, dentists are not allowed to balance bill. However, if a member sees an out-of-network dentist, that provider could balance bill the member.

Delta Dental: Contracted dentists agree not to balance bill patients for services covered under the program for which he or she has contracted service fees. Delta Dental holds its Delta Dental PPO and Premier dentists to their contracted fees when providing services to eligible enrollees.

DHMO enrollees do not pay more than their set co-payment for benefits under the DeltaCare USA plan. Specialists are paid the difference for charges exceeding the enrollee’s co-payment for all preauthorized services. When an enrollee chooses a more costly procedure not covered under the plan, the enrollee is responsible for the difference in cost between the network dentist’s usual fees for the covered procedure and the optional treatment, plus applicable co-payment for the covered procedure.

Dental Health Services: No, members utilizing in-network benefits on our prepaid and PPO plans are protected from paying unexpected, additional fees from their dentist.

Golden West: Network dentists are contractually prevented from balance billing above the negotiated rate. Non-panel dentists can balance bill a PPO or indemnity member the difference of the billed fee and the average fee charged for that particular geographic area.

Guardian: Guardian’s PPO dentists are prohibited from billing members for any difference between the billed fee and the contracted fee schedule amount, less applicable deductibles and coinsurance.

Health Net Dental: When receiving services from a participating PPO dentist, members cannot be billed any charge in excess of the maximum allowable charge established by the plan. If the member goes to a non-participating dentist, the dentist can bill the patient for the difference between the allowed amount for the plan benefit and the dentist’s submitted charge.

HumanaDental: PPO members can visit the dentists of their choice. Out-of-pocket savings are great when members visit participating network dentists.

MetLife: When receiving services from a participating Dental PPO dentist, eligible employees and dependents cannot be billed any charge in excess of our maximum allowable fee (minus any plan benefits). If the patient goes to a non-network dentist, the dentist can bill the patient for the difference between the plan benefit and the dentist’s submitted charge. When receiving services from a participating Dental HMO dentist, members cannot be billed any charge in excess of the specified plan co-payments, listed in the Schedule of Benefits for their plan. For some SafeGuard Dental HMO plans, there is a 25% fee reduction off of a participating dentist’s customary fee for non-listed procedures. (Members are responsible for the participating dentist’s full fee for procedures specifically excluded from coverage).

Principal Financial Group: Dentists cannot bill over the UCR amount if they are part of our PPO or EPO networks. A dentist that is not a part of one of our networks can bill the amount over UCR.

Securian Dental: If the dentist is part of our network – no. If the dentist is not part of our network – yes.

United Concordia Dental: Contractually, United Concordia Dental participating dentists agree to accept our allowances as payment in full for covered services (less any deductibles and coinsurances or co-payments). 

Western Dental: Since this is a managed care plan, members pay only the applicable co-payment listed on their benefit schedule. Members are financially responsible for non-covered procedures at a discount.

7. How does the dental plan protect against over billing or waiver of co-payments?

Aetna: Our explanation of benefits (EOBs) shows the member’s out of-pocket responsibility. A copy is sent to both member and provider. If necessary, the provider relations area helps to resolve any issues whether related to over billing, waiver of co-payments, or other issues.

Ameritas: The explanation of benefits calculates the insured’s portion of the bill automatically to prevent these kinds of problems.

Anthem Blue Cross: Anthem Blue Cross’ extensive contracts with participating Dental Blue providers address these issues to avoid over billing and co-payment waivers. The same is true for our traditional. Prudent Buyer PPO dental plans. Additionally, our quality assurance teams assess claims and providers regularly to ensure our DHMO members are getting the highest level of service and satisfaction. For the PPO product, the service and satisfaction monitoring would be through the grievance and appeal process.

BEST Health Plans: Network dentists are contracted to accept capitation and member co-payments as full payment. Members receive information on how their plan works at the time of enrollment. Our member portal also provides a treatment cost calculator, and helps members understand how they will be billed for treatment they receive. Member complaints are forwarded to our Provider Relations Department for review and resolution.

Blue Shield: Our contract with in-network providers stipulates that they cannot bill members for fees that exceed the negotiated rate. Any complaints from members about balance billing by providers are forwarded to our Provider Relations Department for review and resolution.

CIGNA: Balance billing for covered procedures is strictly prohibited. We counsel network dentists who do not comply. Continued balance billing may be referred to our Credentialing Committee for review of future participation in the network. CIGNA monitors allegations of overcharging through enrollee feedback, surveys, and the dental network management staff.

For DHMO plans, the collection of co-pays is between the patient and the dentist. We encourage dentists to collect co-pays at the time treatment is rendered. For DPPO/Indemnity plans, it is illegal in some states for dentists to routinely waive deductibles. Since our group contracts indicate that CIGNA is not responsible for any charge the patient is not required to pay, we may reduce our claim payment by the co-pay amount waived by the dentist. Our Investigations Unit may also contact the dentist and the patient for further information and has the ability to review claims on an ongoing basis.

Delta Dental: Delta Dental Premier and PPO dentists contract with us to establish acceptable fees as well as formally agree to certain protections for Delta Dental enrollees. Protections include: no balance billing — contracted dentists cannot charge enrollees for the difference between their contracted Delta Dental fee and their submitted charge for a service; they may only collect the patient portion (co-payment plus any deductible and/or amount over the annual maximum) at the time of service. Delta Dental dentists also agree not to unbundle a procedure that is on file with Delta Dental as one procedure. 

Waiver of plan co-payments and deductibles is considered fraudulent and is handled by notifying the dentist of the violation and possible network termination.

DHMO network dentists agree to be paid by Delta Dental on a guaranteed capitation basis. They also contractually agree to accept enrollee co-payments as payment in full for covered dental procedures and not to seek additional fees. If a dentist consistently demonstrates a disregard for their contractual obligations with Delta Dental their participation may be restricted or terminated.

Dental Health Services: Participating dentists’ charts are audited on-site on an ongoing basis to ensure treatment is rendered in accordance with Dental Health Services’ policies. In addition, plan members get extensive patient education and tools to help them understand their plan benefits so they can question charges that may not be in compliance with plan benefits. Members are encouraged to contact the plan for assistance if they feel they are being overcharged.

Golden West: Explanation-of-benefits statements are sent to members identifying the discounts taken and the member’s responsibility. The compliance department and dental consultant monitor utilization. Additionally, a proprietary claims system identifies over-utilization trends and patterns.

Guardian: Guardian’s PPO dentists may only charge members for any covered charges other than the deductible or coinsurance that may apply to the discounted fee schedule amount. Explanation of benefits statements sent to members identify the discounts taken and the member’s responsibility.

Health Net Dental: Under our DPPO and DHMO plans, participating dentists are contractually prohibited from balance billing a member more than the maximum allowable charge or the contracted copayment amount. Practices are in place to discipline network dentists who attempt to bill members more than these contracted amounts.

If it is determined that a participating dentist has overcharged a member, our Customer Service team will contact the provider on behalf of the member to confirm benefits and re-educate the office about proper plan collection from a member. If the provider refuses to comply with the plan design, the issue is escalated to the Professional Relations Department for follow-up with the provider. Depending on the circumstances, the issue could be escalated to our Quality Management Team, which follows state mandates for a full investigation, including the request for patient records from the office and a review by a dental professional. These investigations must be completed within 30 days and written communications are sent to both the member and provider. If the provider still refuses to comply, our Legal Department would be contacted and steps may be taken to terminate our relationship with the provider. In these rare instances, it might become necessary for the plan to reimburse the member or provider depending on the circumstances and to ensure a positive member experience.

HumanaDental: The dentist and the patient get an explanation of benefits to ensure that the dentist does not overcharge or omit fees. The claims processing systems adjudicates the claim based on the contracted fee schedule. Waiving co-payments does not apply under a PPO.

MetLife: For Dental PPO, our explanation-of-benefits is our first protection for the patient against over-billing. It clearly identifies the charges for services that the patient has a responsibility to pay. In addition, our customer service area gathers information from the patient and investigates the issue fully. A response with our findings is provided to the patient. Waiver of co-payments can also be identified from calls to our customer service center and our auditing unit, which looks for atypical billing patterns.

For the Dental HMO, the dentist’s agreement prohibits billing a member above the specified co-payment. The plan conducts a thorough orientation with each dental office. The Quality Management department reviews member complaints that relate to charges. The Office Quality Assessment reviewer notes any apparent overcharges during the patient-record audit and works with the dentist’s office to correct the issues.

Principal Financial Group: Provider utilization patterns are studied and issues are addressed as they are uncovered.

Securian Dental: We systematically check every submitted claim.

United Concordia Dental: United Concordia Dental participating dentists contractually agree to only bill members for applicable deductibles, coinsurance, or amounts exceeding the plan maximums. In addition, members get explanations of benefits that clearly describe the services received and their financial responsibility. 

Members can also access the My Dental Benefits tool on our Web site (www.UnitedConcordia.com) to view their benefits and eligibility information, claim details, procedure history, maximum and deductible accumulations, and more. Plus, United Concordia Dental’s responsive customer service representatives are available to assist members with questions regarding their benefits. Our Utilization Review area also analyzes thousands of claims each year to ensure the acceptability of treatment and quality of services. And, our Dental Advisors and consultants continuously review dentists’ fees and practice patterns for statistical variation from their peers. Dentists who fall outside of the norm are targeted for education and additional monitoring.

Western Dental: Providers are bound by contract to accept the member’s schedule of benefits.

8. How many provider locations do you have?

Aetna: As of 5/1/10

DMO – 48,270 dentist locations nationally and 7,328 in Calif.
PPO – 131,004 dentist locations nationally and 25,364 in Calif.

Aflac: We do not have network requirements. Policyholders may visit any
provider they choose.

Ameritas/FDH Network: 37,022 Calif. provider access points,

(23,852 Ameritas; 13,170 FDH); 21,972 Calif. locations, (16,399 Ameritas; 5,573 FDH)

Anthem Blue Cross: As of 04/30/2010
California Dental Blue PPO locations:
Dental Blue 100 about 18,734
Dental Blue 200 about 20,466
Dental Blue 300 about 21,373
Prudent Buyer 18,915
DHMO locations: more than 5,000 in California

BEN-E-LECT: Our dental plans utilize the Smart Health (Interplan), First Health (CCN) and Western Dental networks, which contain thousands of offices statewide.

BEST Health Plans: In Calif., we contract with 7,828 providers.

Blue Shield: Members have network access to over 8,000 HMO and 20,000 PPO providers in Calif., 
and nearly 110,000 providers nationwide.

CIGNA: Nationally we have more than 47,000 DHMO contracted access points and more than 167,400 DPPO Radius Network contracted access points. In Calif. we have more than 10,200 DHMO contracted access points and more than 31,200 DPPO Radius Network contracted access points. CIGNAPlus Savings (dental discount card, not insurance) includes more than 121,500 of our DPPO contracted access points.

Dearborn National: Dearborn National has the largest PPO network of dental access points nationwide offering over 150,000 access points for our members to chose from.

Delta Dental: In Calif., Delta Dental Premier, 33,600, Delta Dental
PPO, 20,700, and DeltaCare USA (DHMO), 4,200. We also give our enrollees access to the national Delta Dental networks.

Dental Health Services: Our network of participating dentists consists of nearly 800 general practice offices with 2,698 participating dentists, and an additional 1,751 specialists. Our PPO network carries more than 16,000 dentists.

Golden West: Our National WellPoint PPO Network contracts with over 79,000 providers. Our DHMO network has over 14,700 statewide participating providers.

Guardian: There are over 131,500 PPO dentist-locations across the country and more than 22,000 in Calif. We are the largest PPO network in the state based on unique dentists. Guardian recently purchased the Preferred Dental Network in Nevada and is no longer leasing access to the Diversified network. For the DHMO, there are 10,730 locations across the country and 4,854 in Calif.

Health Net Dental: As of May 2010, our California PPO network includes 23,988 access points in 8,438 locations. Our California DHMO network includes 2,677 locations. 

HumanaDental: Our dental PPO network is one of the largest in California, which encourages dentists to participate in our network, enabling us to negotiate attractive dental fee schedules. We have a PPO network with more than 27,000 dentist locations in California, and continue to grow daily. Almost 99% of the dentists who join our network stay in our network. Also, HumanaDental has a unique recruiting campaign targeting all dentists used by employees.

MetLife: As of May, our Dental PPO network includes over 135,000 participating dentist locations nationwide (12% growth from 2009), including over 22,800 in Calif. And, the Dental HMO network includes more than 13,000 participating dentist locations in Calif., Fla. and Texas (18% growth from 2009), including over 6,900 in Calif., over 4,000 in Fla. and over 2,100 in Texas.

Principal Financial Group: We have approximately 25,500 PPO provider locations and 14,000 EPO provider locations.

Securian Dental: 87,000 dentist access points.

United Concordia Dental: We have more than 69,000 dentists at nearly 112,000 practicing locations nationwide in our Advantage Plus PPO network. In Calif. alone, we have more than 13,100 dentists at over 29,600 total locations. Our DHMO network includes more than 2,600 primary dental offices and 1,500 specialists nationwide, with over 1,500 primary dental offices and 590 specialists in Calif.

Western Dental: Our provider network is unique among DMO carriers because it has over 220 Western Dental Centers (staff model) in addition to more than 1, 000 IPA offices with more than 2500 dentists.

9. Can Insureds change providers easily if they are unhappy?

Aetna: Yes, members in our PPO/indemnity plan can change any time and do not need to notify us. Members in our DMO plan can choose a new provider as often as once per month through Navigator, our online web tool for members, or by calling the toll-free telephone number on the back of their ID card.

Aflac: Yes. Policyholders can change providers at any time.

Ameritas PPO and the FDH Networks: Insureds can choose any provider at any time for procedures.

Anthem Blue Cross: Dental Blue PPO members can visit any licensed dentist and will normally have more cost-savings when services are completed by a Dental Blue provider. There is no gatekeeper for the dental Blue PPO dental plans. The same is true for our traditional Prudent Buyer dental PPO plans. The DHMO members can change providers once a month.

BEN-E-LECT: Yes, members may change providers at any time by selecting to use another provider. No further documentation or process in necessary. Freedom pre-paid Dental is the only plan in which a member would select a specific provider.

BEST Health Plans: Members may request another network provider on a monthly basis. Members can request a provider change online or by calling Member Services. Requests must be made by the 25th of the month to become effective on the 1st of the following month.

Blue Shield: Yes, DPPO members may change providers at any time without notice. DHMO members may change in-network dentists on a monthly basis; requests made by the 10th of the month become effective the first of the following month.

CIGNA: Yes, the DPPO/DEPO/indemnity plans allow individuals to change dentists whenever they want. No call is necessary. DHMO enrollees can easily change their primary-care dentist online via myCIGNA.com – our secure website. They can also use our automated Quick Transfer option, or simply call customer service. The change is effective on the first day of the month following the date they make the change. The CIGNAFlex Advantage feature provides individuals the flexibility to switch monthly between DHMO and DPPO or indemnity plans, depending on the plan design options chosen by the employer.

Dearborn National: In our PPO dental plan, members can see any dentist they like, whether in-network or out-of-network. However greater savings are gained by utilizing network dentists.

In the DHMO plan, members must select a dentist that is in the network.

Delta Dental: Fee-for-service enrollees can change dentists any time without notifying us. DHMO enrollees can change their contract dentist by contacting customer service or online at www.deltadentalins.com. Requests submitted prior to the 21st of each month are effective the first of the following month.

Dental Health Services: Members can change their dentist at any time by contacting their Member Service Specialist by calling 800-637-6453 or online at www.dentalhealthservices.com.

Golden West: DHMO members can change their providers once a month by calling our member services department and requesting the change. In addition, members are allowed up to three dental offices per family unit. For the PPO plan, members choose their dental office from a list of participating providers through our Website or their own (non-contract) provider.

Guardian: Members covered under Guardian’s PPO plans can change dentists at will, regardless of whether the dentists are participating or non-participating. Members covered under our DHMO plan may change dentists by using our on-line web tool, GuardianAnytime.com, or by calling our toll-fee number. Requests made by the 20th of the month are effective the first of the following month. We also offer a dual choice monthly switch plan, which enables members to switch between the DHMO and PPO as often as desired on a monthly basis.

Health Net Dental: With our PPO plan design, there is no need to select a primary care dentist or to obtain referrals for specialty care. Under our DHMO plans, members may change their primary care dentists once a month by calling Health Net Dental Member Services or via our on-line Web portal. The change is effective the first of the month, provided that the request is made by the 20th of the previous month.

HumanaDental: With the PPO plan design, the member can change dentists without notifying the dental plan.

MetLife: With our Dental PPO benefit plans, there is no need to select a primary care dentist or get referrals for specialty care. For the Dental HMO, a member can easily change their selected dentist online or by calling customer service.

Principal Financial Group: Yes.

Securian Dental: Yes.

United Concordia Dental: Yes, members can change PPO providers at any time without notice. DHMO participants may change dentists by writing or calling customer service and requesting a new DHMO provider, as long as there is no existing balance due to the current dentist or treatment in progress.

Western Dental: Our membership can change providers, on a monthly basis, by phone or in writing.

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Medical Tourism
Medical Travel and Surgery Managmenet: The Consumer-Driven Product that Sells Itself

by Victor Lazzaro, Jr

American businesses are finding it harder to compete in the global marketplace and many blame staggering and ever increasing healthcare costs. The declining world economies, coupled with overwhelming healthcare costs, have exerted massive pressure on the U.S. healthcare system and on employers. HR executives need all the help they can get when it comes to managing health benefits.

Centers of Excellence: The Best of All Worlds

Brokers who introduce a proven medical travel health benefit to an employer demonstrate themselves to be innovators in lowering healthcare costs. Employers can reap significant savings while giving their employees greater choice. Consider this: Surgery costs represent one-third of the total annual medical spending of $2.3 trillion. But, unlike pharmacy benefits or disease benefits, surgery expenditures are almost completely unmanaged, according to a study by the Dartmouth Institute for Health Policy and Clinical Practice. Given this fact, surgery costs represent the largest untapped source of health savings.
The latest healthcare innovation is having better surgical cost management through medical travel. This option gives employees access to high-quality, value-driven domestic and international centers of excellence — literally, the best of all worlds. Medical travel provides access to multiple networks, so surgery cost and quality comparisons can be made easily among domestic centers of excellences, international centers of excellences, and local surgery choices.

Significant Savings: Coupling Surgery Education and Access to Centers of Excellences

Coupling a medical travel alternative with surgery education can provide enormous savings to employers. The Dartmouth Institute for Health Policy and Clinical Practice has demonstrated that giving patients information about surgical and non-surgical options can reduce surgery expenditures dramatically. Surgery education teaches employees to make informed decisions about surgical risks and less invasive alternatives. It also teaches patients to become better-informed advocates of their own care. By reducing unnecessary surgeries and educating patients, this aspect of the medical travel option makes it truly consumer-directed. Thirty percent of patients who went through a shared decision-making process about surgery opted out of surgery altogether.

A Window of Opportunity for Brokers and Stakeholders

This approach lowers costs, provides higher-quality alternatives, and allows employees to choose among a wider field of options. It gives brokers a chance to present a leading-edge product that is truly consumer-driven. Now is the time to get in on this creative opportunity. The Deloitte Center for Health Solutions predicts a 35% annual growth rate for the medical tourism industry over the next few years. The American healthcare system has become so expensive that companies are dropping coverage and healthcare has become virtually unaffordable for those without insurance.

This option makes sense for employers in terms of cost control, quality improvement, and employee satisfaction. It gives the employer a chance to be the good guy by adding options rather than cutting them. Medical travel adds value for employees by giving them control of important decisions involving their health with greater and higher quality choices. The result is higher satisfaction for every stakeholder and lower costs.

Choosing the Best Service Provider to Optimize Stakeholder Benefit

It is important for brokers and employers to use a surgery management and medical travel service provider with domestic and international networks that only include healthcare organizations (physician networks, hospitals and clinics) that operate as true centers of excellences where customer service is a priority—not a slogan. Centers of excellences generate significant savings on high-value medical procedures and help curb the trend toward defensive medicine. They offer a clear fixed price by using a case-rate diagnosis related group (DRG) pricing method. They also track service and quality outcomes rigorously based on measurement systems.
A premier medical travel service provider incorporates patient surgery education from initial contact through recovery. A premier service also provides transparent costs and simplified billing as well as the chance to participate in paying a per-case fee or per-employee/per-month fee. The service provider should be willing to structure the fee schedule for a true win-win for all parties. Remember that flexibility is a key factor in the decision.

The Ideal Solution for Self-Insured Employers

It is critical to distinguish qualified service providers from operators that are little more than glorified travel agents. A medical travel provider offers surgery education, turnkey member care, concierge services, and full data reporting (outcomes, savings, claims) to assist in adoption and implementation. It’s equally important for companies to align with a provider that can demonstrate genuine healthcare experience and leadership, proven, HIPAA-compliant operating systems, an emerging suite of vendors, and in-depth understanding of the healthcare continuum.

What to Look for In A Medical Travel Provider

Here’s a quick run-down of what to look for in a medical travel service provider:
• HIPAA compliant.
• Coordinates the pre-travel communications for the client to the hospital and physician.
• Arranges after-care needs.
• Tracks satisfaction and medical outcomes.
The plan should also include surgery/procedure costs, airfare, lodging, transfers, 24/7 concierge service, savings potential, and accredited hospitals.

Final Thoughts

Armed with a clear understanding of the medical travel advantage and a check list for finding the right medical travel coordinator, you can demonstrate to your clients that you are thinking several steps ahead to find the best, most innovative products on the market for reducing corporate and employee costs, sustaining or increasing benefit, and improving quality. An added bonus is that medical travel can be added off cycle. Brokers who offer this option from the best providers will differentiate themselves in the marketplace. It is a perfect time to be the bearer of good news.
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Victor Lazzaro, Jr., is the chief executive officer of BridgeHealth Medical. With over 20 years of senior management experience in the health and managed care fields, he has held positions responsible for marketing, finance, administration and healthcare delivery. He is also the managing director of Volante Capital, previously was CEO of UHC—Mountain States, and has served on the advisory board of MediExpress, a UHC affiliate, in Kuala Lumpur. He is also a guest lecturer at the University of Colorado at Denver MBA in Health Administration program. For more information, visit www.bridgehealthmedical.com, e-mail: vlazzaro@bridgehealthmedical.com, or call 303-457-5725.

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Medical Tourism
Providing Health Coverage Beyond Borders

by Jose Loaiza
Going for a check-up at the doctor’s office can be a bit like going to school – it can be a daunting experience at first, but you leave learning new things that you’ve never heard of before. Now imagine getting that lesson in a foreign country, communicated in a different language and in a different cultural environment. You might feel uncomfortable and confused, which is how many non-native English speakers can feel at the doctor’s office.
But there are options to make the doctor’s office less intimidating for non-native English speakers. Health plans are always seeking ways to help consumers feel more comfortable accessing care, and several California health plans offer cross-border coverage options to those who live or work near the Mexican border. These cross-border health plans can make consumers feel more comfortable going to their doctor and ensure they get the right care that they need.

How does a Mexico cross-border health plan work in California?

Cross-border health plans work the same way as traditional U.S. health plans. Members who sign up for a cross-border health plan have co-pays and choose their network healthcare provider from within the cross-border service area, which is generally the two major gateways into Baja California, Mexico – Tijuana and Mexicali.
Additionally, members covered under cross-border plans can still receive care in the U.S. if the service is not available in Mexico. For example, one major carrier allows members who need special transplants, such as heart and lung transplants, to have the procedure done in the U.S. through a bi-national referral process. It comes with no additional cost than what is outlined in the member’s plan. However, being referred for care in California does not guarantee the member’s entrance into the United States. They’ll have to make sure they have the proper paperwork filed with the U.S. Immigration and Naturalization Services (INS).

Why Should Brokers Consider Selling Cross-Border Coverage?

The demand for cross-border coverage continues to grow. Nearly one million people cross the border to Mexico to seek healthcare in a year, of which half are Mexican immigrants. An estimated 150,000 are insured through private health plans in the U.S and Mexico, according to a 2009 research article: “Heading South.”
Many seek cross-border health plans because they feel more comfortable going to a doctor in their native country. However, an additional selling point is that the cost of cross-border coverage plans can be significantly lower than traditional U.S. plans—by as much as a third of the cost. For example, the average monthly HMO premium for an individual under a U.S. plan falls in the $300 range while the same premium to receive care in Mexico is about $100 under one major carrier’s plan. Typically, the general cost of medicine in Mexico is about 50% to 60% lower than in the U.S.

What Should Brokers Discuss With Clients When
Advising Them On Cross-Border Coverage Plans?

There are many factors to consider when talking to your clients about a cross-border health plan. First, brokers should make sure their clients are comfortable with receiving care in Mexico. Affordability alone doesn’t make sense if a client isn’t willing to cross the border for coverage.

Second, it is important to look out for certain eligibility requirements outlined by health plans. For example, to qualify for a one particular plan, employees and their dependants must live or work within the service area, which is approximately within 50 miles of the Mexican/U.S. Border. Enrollees can be Mexican citizens, U.S. citizens, or U.S. resident aliens or employees, who live or work in the plan service area, but receive salary and benefits from a California employer.

Third, brokers should take the time to compare costs with traditional health plans to show their clients how much money they can save with a cross-border coverage plan. A price list of office visits and hospital procedures can help a client determine if this kind of plan makes sense for their employees.
Finally, talk to your employer groups about how offering a wider variety of health plan options that suit their employee needs can give employers a leg up on hiring and retaining their workers.

Is It Safe To Receive Care In Mexico?

The old adage that “you get what you pay for” isn’t always true. Rates are lower in Mexico because healthcare typically costs less. Mexican hospitals are regulated under Mexican law. Its healthcare system is ranked 61 out of 191 countries by the World Health Organization. The organization also ranked the U.S. at 37.
Health plans contract with providers that meet quality standards. This holds true for cross-border provider networks too. For instance, with the plan we mentioned, all network physicians are licensed to practice in Mexico and are in good standing with their local medical society, and network hospitals are licensed by the state of Baja California and certified by the Mexican National Commission on Hospital Certification. Members who have the plan also have the same rights as any other HMO member in California. For example, members have the right to a second opinion and the right to file for grievances and medical appeals with the Department of Managed Healthcare.

What Lies Ahead For Cross-Border Coverage?

Cross-border coverage is a niche market in California; it’s not for everyone. But it’s an option to consider for members who live or work in the U.S. and have ties to Mexico or prefer to seek health services from Mexico. Today, the demand for cross-border coverage continues to build as companies seek workable healthcare solutions and alternatives to current offerings. It’s too early to tell how healthcare reform will impact cross-border coverage in California, but there could be a tremendous opportunity to save on healthcare expenses if individual coverage mandates are followed and those living near the Mexican border are willing to receive health services in Mexico. In the near term, we can expect to see cross-border programs expand across the state to meet members’ needs, and give previously underserved populations a health lesson they can understand. q
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Jose M. Loaiza is currently a Senior Network Manager for Blue Shield of California with network management responsibility for Access Baja HMO, Blue Shield’s cross-border health plan serving thousands of families living within 50 miles of the U.S./Mexican border. For more information on Blue Shield’s Access Baja program, call 800-559-5905, or email producerconnection@blueshieldca.com, or go to: www.blueshieldca.com

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Medical Tourism
Dental Tourism: Saving Employers
and Individuals Thousands On Dental Bills

by Dr. Juan Pablo Eng

With the recent signing of President Obama’s landmark healthcare reform bill, affordable healthcare has been top-of-mind among U.S. individuals and employers. However, even with this bill passed, individuals will still need more affordable health and dental care options despite being covered by insurance.
As a result, consumers are more willing than ever to travel internationally for safe, effective, and affordable medical procedures, including dental. Stemming from the growing concern of costly dental care, a new concept has emerged: dental tourism.

Dental tourism, the practice of traveling internationally to receive quality dental care at a fraction of domestic costs, can be beneficial to individuals and employers; it serves as an excellent employee motivation, recruitment and retention tool. Due to its close proximity to the U.S., Mexico has become a top medical tourism destination. According to the Medical Care Journal, nearly one million Californians cross the Mexican border each year to save money on healthcare and dental care ranks among the most common medical services sought after by medical tourists.

Benefits of Dental Tourism to Employers

What many employees don’t realize is that many U.S. health insurance providers already cover the dental tourism option. It is important for employers to inform their employees about the benefits of dental tourism since it benefits both the company and its workforce. These benefits include the following:
• When employees go to Mexico for more cost-effective care, it reduces out-of-pocket expenses and helps keep the employer’s insurance premiums from increasing. Cost-effective dental care translates to fewer claims for each employee, which reduces premium prices for the next year.
• Adding a dental tourism program to an employer’s health plan serves as an excellent employee motivation, recruitment, and retention tool. Dental tourism makes high-quality dental coverage accessible to more employers who previously could not afford to offer a dental plan. As a result, employers are more likely to attract higher-qualified employees while keeping their existing staff happy, healthy, and productive.

Benefits of Dental Tourism to Individuals

Dental tourism can save patients two-thirds on the total cost of a procedure done in the U.S. For example, a pair of braces in the U.S. is approximately $5,000, but costs closer to $1,500 by simply going to a quality dental facility in Mexico. For years, U.S. patients have been saving thousands on their dental bills, but there remain a few myths about dental tourism.

Myth #1: Low Cost Means Low Quality

Low costs are due to a lower cost of operation, not a lower quality of care. In fact, there are dental offices in Mexico that are in-network providers of U.S. insurance companies.

Myth #2: Health Insurance Doesn’t Cover Dental Tourism

Dental tourism is an affordable option for the 47 million uninsured Americans. It’s also very beneficial for those with health insurance. Most dental plans only cover a percentage of procedures, leaving it to the patient to pay high fees and co-pays for basic dental care. By going to a facility that is a U.S. insurance in-network provider, insured patients can also benefit from more affordable dental fees and co-pays.

Myth #3: Traveling to Mexico is Unsafe

The increased demand for dental tourism has made dental facilities in Mexico offer services to patients to provide them with ease-of-mind. These services include providing reliable transportation services across the border for local patients, as well as providing transportation from the San Diego airport to dental facilities across the border for patients traveling from out-of-town.
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Dr. Eng is founder and president of DentiCenter. He’s been a dental tourism pioneer and advocate for exemplary patient care. He obtained his degree from the highly respected Universidad Autonoma de Guadalajara dental school and completed his post-graduate work in periodontology at University of Southern California. Since 1991, DentiCenter has been dedicated to providing its patients with excellent quality, affordable dental care at state-of-the-art facilities. Founded by dental tourism pioneer and periodontist, Dr. Juan Pablo Eng, all five DentiCenter locations are conveniently located within safe and easy access to the U.S. border.
DentiCenter is an in-network member of two of the largest U.S. insurance providers, Delta Dental and Aetna. For more information about DentiCenter, or for a list of locations, visit the company’s Web site at http://www.denticenter.com.

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COBRA
Leave COBRA to the Pros
Outsourcing Administration Serves Clients Well

by Kristin Komen

One mid-sized employer, a building services company in southern California, discovered a problem shortly after switching medical plans. The human resources department had forgotten to notify six ex-employees who were receiving group health coverage under COBRA. As a result, the company had to keep its initial insurance plan in force, at its own expense, to maintain coverage for those former employees.

This true story highlights the consequences of failing to comply with the highly complex law (formally known as the Consolidated Omnibus Budget Reconciliation Act) and underscores the challenges that employers face in trying to administer the benefit on their own. 

Chris Patton, market director for Benefit Mall, offers his clients some blunt advice about COBRA, “We really emphasize to our customers not to mess around with COBRA. Don’t make recommendations. Don’t get involved. Don’t do anything but make sure your client turns to a really competent third-party administrator (TPA) to run COBRA,” says Patton.

Patton and other California benefit advisors invest time in finding the right TPA to team up with and recommend to clients. Some even pay for all or part of the service because they are adamant that COBRA administration belongs in the hands of professionals who specialize in this multifaceted benefit law.

COBRA at Two Levels In California

Managing COBRA and its California cousin, “Cal-COBRA” has become increasingly difficult and time-consuming, which keeps human resources professionals from taking care of other responsibilities.
Under COBRA, employers with 20 or more employees that provide group health coverage are generally required to offer that coverage upon the occurrence of certain events to current, former, and retired employees and their spouses and dependent children.

In the most common scenario, the law enables employees who are terminated or whose hours are reduced to a level below that required for benefit eligibility, to continue receiving health coverage at group rates for up to 18 months. Plan sponsors are allowed to charge the terminated employee up to 102% of the cost of coverage. The coverage must also be offered to the covered spouse and dependent children of the terminated employee. Other events, such as death or divorce, may entitle an employee’s spouse and dependent children to coverage under COBRA for up to 36 months.

Cal-COBRA generally applies to insured plans offered by California employers with two to 19 employees. Thus, a 17-employee California business that offers insured group health coverage is subject to Cal-COBRA. Hiring three additional employees may trigger application of federal COBRA rules; the timing of when the federal rules apply will depend on when the employees are hired.
Cal-COBRA differs from the federal law in other ways. Cal-COBRA allows eligible participants to keep their health insurance for up to 36 months for most qualified events. When the federal COBRA coverage expires after 18 months, coverage may be extended, in some instances, for an additional 18 months.
Layers of Complexity
COBRA has never been easy to administer, Congress recently added several layers of complexity. The American Recovery and Reinvestment Act of 2009 temporarily reduced the premium for COBRA or comparable state continuation coverage for eligible individuals. Under the law, eligible individuals pay only 35% of the premium for COBRA coverage under their plans for up to 15 months. The remaining 65% is reimbursed to the coverage provider or employer through a tax credit. This is commonly known as the premium “subsidy.”

Several subsequent laws have been extended and modified temporary subsidy provisions. For example, the Department of Defense Appropriations Act, enacted on December 19, 2009, changed the length of the subsidy period from nine to 15 months.

Many brokers and employers spent hours poring over the new rules trying to determine which qualified beneficiaries could re-enroll in COBRA and pay the applicable premiums. They also had to figure out who needed to be notified of the various extensions and by what date.

As Congress continues to look for ways to provide relief to the unemployed, there is a possibility that it will extend the COBRA subsidy period again or make other changes. In addition, several states are enacting laws that provide continuation of coverage extensions after COBRA benefits expire. These changes will likely add to the growing maze of rules.
Game Changer
“The subsidy changed the game completely for brokers and employers,” notes San Diego-based insurance agent Bill Hammett. “The typical HR professional, who has to know a little about a lot of subjects, now has to know a lot about COBRA specifically. They just can’t operate efficiently any longer,” Hammett maintains. 

Hammett, who is the president of the San Diego Association of Health Underwriters, has had many discussions with clients in the past year about the value of handing over COBRA administration to an outside expert. “Clients will tell me, ‘Oh, our turnover isn’t extreme and we have enough talent in house to handle COBRA ourselves.’ But, if you fail to send out a notice on time to a former employee with cancer and become liable for his costly treatment, “you might be permanently shutting your doors.”

Rudy Mommens, new business marketing manager for brokerage firm Andreini & Company says, “It seems like the law is changing practically every month. We have clients who try to manage COBRA on their own. But they are mostly unsuccessful because they aren’t aware of the latest regulations or when to send out notices.”

Mommens, who is based in San Mateo, Calif., encourages fellow brokers not to take on the task, either. “We, as brokers, are well-versed in COBRA, but we are not set up to administer it for a client,” he says. 

The message seems to be sinking in. Almost all of Hammett’s group clients who are subject to federal COBRA (mostly firms of 30 to 50 employees) are now using a third-party administrator.

Sweetening the Pot

Some benefit advisors are so convinced that their clients will benefit from outsourcing COBRA administration to a third party that they help subsidize the cost. “We feel so strongly about it that we are willing to pay for the first year of COBRA administration to show clients how it should be done,” asserts Patton.

Hammett believes in financial incentives, too. “I start by telling clients that they should let a professional third party handle COBRA and what it will cost. If I get any pushback, I generally offer to split or pay in full the set-up fee charged by the third party administrator. Even though it’s a legitimate business expense that businesses ought to pay themselves, it sends a message that we are in this together. I don’t want clients to think this is just another product for which I’m getting paid a commission,” he says.

Hammett will generally assume that liability as well when taking over a COBRA account from a previous broker who paid ongoing monthly COBRA administration fees. “It’s an opportunity for me as a broker to gain more equity in the relationship,” he adds.
Mommens explains paying for his clients’ COBRA administration service fees this way, “We know that managing benefit continuation is a big burden, which isn’t fair to the HR staff, which is already stretched thin.”

Finding the Right TPA

Mommens stresses that brokers have to be very diligent when recommending a TPA to a client. “It can be hard to distinguish one from another since they all tend to look the same on the outside. But, obviously, there are differences.” Mommens says the following steps will help you discern the differences among TPAs:
• Check out the reports the TPA offers. You should be able to find out quickly who is on COBRA, whether payments have been posted, and who is late with their payments.
• Find out what other services the TPA offers besides COBRA administration. Some TPAs don’t handle all benefits. So if your client also needs expertise in managing its health savings account or flexible spending account programs, for example, it may make sense to select a provider with the ability to manage those as well.
• Focus on service. If a client asks me a COBRA question instead of the TPA, I will ask the TPA for help if I can’t answer it. But I can’t help my client if the TPA doesn’t return my call quickly.
The tide has turned for brokers who are considering whether to recommend that their clients seek outside expertise in managing benefit continuation laws. Here’s how Hammett puts it, “A year ago, my advice wasn’t necessarily to outsource COBRA. Now, I insist on it. I don’t want my staff bogged down by wading through government web sites to find the latest forms. I also don’t want my client’s HR departments fumbling through the new regulations and potentially making mistakes.”
With those sentiments in mind, it seems clear that brokers who recommend outsourcing COBRA administration can serve their clients well and advance their own role as strategic consultants.

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Kristin Komen is the regional sales director in California for OptumHealth Financial Services. She can be reached by email at kristin.komen@optumhealthfinancial.com or by phone at 949-251-9540.

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Disability Spotlight
Gaps in Coverage for More 
Highly Compensated Employees

by Michael Fradkin

In today’s economy, employees have an even greater need to secure a financial safety net. At the same time, employers are trying to trim expenses while retaining their high-performing employees who may also be highly compensated. Benefits offered through the workplace can play a major role in retaining key talent, which is a top benefit objective among employers.

Forty-seven percent of employees earning $100,000 or more a year say their workplace benefits form the foundation of their financial safety net, according to MetLife’s eighth annual Employee Benefits Trends Study. However, many highly compensated employees lack a critical component of their safety net — adequate disability insurance. 

About one-third of highly compensated workers who have disability income protection do not feel they have enough coverage or they are unsure whether they have enough. These findings clearly point to the need for education and guidance for employees at every level of the workforce. Since employees rely on the workplace for financial protection products, employers have an opportunity to provide access to this much-needed guidance.

Gaps in Coverage Exist, but Employees Are Taking Steps

The economic conditions have brought home to employees their need to secure a financial safety net, but the importance of disability income insurance transcends the current financial climate. Trying to keep up with expenses without a steady paycheck can erode even the most substantial safety net. Even in times of economic prosperity, the ability to earn an income is often a person’s most important asset. Disability income insurance can give employees much-needed peace of mind and security. The economy has given consumers a wake-up call about the need for several financial protection products, including disability coverage, but people need help to move from awareness to action.

According to the MetLife study, 57% of people earning $100,000 or more a year are very concerned about how the family would be affected financially if the principal wage earner suffered a disability. More than half are also very concerned about having enough money to pay their bills during a period of sudden income loss. Despite these concerns, about 20% of employees who earn $100,000 or more a year don’t know how much of their income is protected. Even among those who know how much of their income is protected, 31% don’t if that protection is adequate. About one-third say they are covered for less than 60% of their salary. In the event of a disability, that proportion would most likely prohibit them from meeting their financial obligations. 
Higher wage earners may recognize the importance of evaluating their financial needs, but education and targeted communications from employers are necessary to move employees to action.

New Options Abound

Fortunately, employees have more options than ever to protect their income against a disability-related absence. Since the majority of higher-income employees get disability insurance through the workplace, now is an opportune time to give them the tools, insight, and knowledge they need to shore up their financial safety nets.

Providing group short-term disability (STD) and long-term disability (LTD) insurance through the workplace is an excellent start, but employees need to understand some limitations. Short-term disability plans are just that, short-term, with most paying benefits for less than six months. Long-term disability plans do pay benefits for a longer period, but they usually only cover up to 60% of an employee’s salary. Most plans don’t cover bonuses and commissions. In addition, if the employer is paying the premium, any benefits received will be taxable. Finally, since most LTD plans have a maximum monthly benefit, higher income earners may receive a lower percentage of income replacement. With more income to protect, high earners may want to take a closer look at their disability coverage.

Individual disability income (IDI) insurance – offered in the workplace – is a great option for highly compensated employees to supplement their current coverage. The addition of an IDI policy will increase the level of coverage, which will result in a more appropriate income replacement in the event of a disability. A supplemental IDI policy covers total income (not just salary); the benefits paid will be tax free if the employee pays the premium with post-tax dollars. Since it is an individual policy, the employee maintains the coverage even when they leave the company and go to work for another employer. In addition, some employers may qualify for a guaranteed standard issue (GSI) program, which will offer simplified underwriting, premium discounts and streamlined enrollment to their highly compensated employees.

An example of how group LTD coverage can be enhanced when there is a supplemental IDI policy in place might prove useful: “Joe Smith” has a base gross salary of $100,000 and earns an additional bonus of $15,000 for the year. Assuming a 28% tax rate, his net income is $83,000. If his LTD covers his salary only up to a maximum of $5,000 a month, his gross LTD benefit would be $60,000. Since his employer sponsors the benefits, taxability would reduce the group disability benefit to $43,000 or 52% of his net income. Joe also has an IDI policy, which provides $26,000 in coverage over the course of the year. The coverage is tax-free because the employee paid for it was with post-tax dollars. By working along with his group LTD coverage, Joe’s IDI coverage now brings his total disability income replacement to $69,000 or 83% of his net income – bringing him closer to his pre-disability net earnings. 
New, flexible options include the following:

• Future increase riders

• Riders that allow individuals to receive benefits even if they are prevented from performing the duties of their regular occupation, due to a disability, but are gainfully employed in another occupation.

• Spousal catastrophic disability riders that provide additional benefits to the primary insured in the event the insured’s unemployed or part-time employed spouse becomes catastrophically disabled. 
These riders allow employers and brokers to tailor coverage to high-income employees. In many cases, employees will be able to purchase supplemental disability income coverage on a voluntary basis, which allows them to add an important benefit without adding to the overall cost of their benefit programs. Considering the diverse needs of an employee population is critical when designing a disability benefits program.
The trends in disability insurance for the highly compensated worker present a way for you to open the door to a discussion with your clients about the gap in coverage among their top-earning employees and ways your client can help employees mitigate their financial risks. The key to the conversation is to help employees and employers see how disability insurance can be the foundation of a sound safety net and help employers understand the importance of devoting resources to workforce education.

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Michael Fradkin is vice president, Disability, Long-Term Care and Critical Illness Products for MetLife. MetLife has been providing employers with quality disability products and services for over 50 years and is among the largest disability carriers in the industry, with over $2.32 billion of premiums and equivalents in force, according to the 2008 U.S. Group Disability Survey, LIMRA International. Michael can be reached at mfradkin@metlife.com.

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Healthcare
Regulations Limit Changes to Existing Health Plans
Outsourcing Administration Serves Clients Well

by Leila Morris

The Obama Administration issued new regulations allowing it to revoke the “grandfather status” of health plans when employers significantly cut benefits or increase out-of-pocket spending for employees and shift -significant new healthcare cost burdens onto employees.

J.D. Piro, head of Hewitt’s Health Law Consulting practice said, “According to the government’s own projections, anywhere from 49% to 80% of small employers will end up dropping their plan’s grandfathered status between now and 2014.”

Randel Johnson, a U.S. Chamber of Commerce senior vice president complained that a plan could lose grandfathered status by changing a co-pay more than $5. “Once grandfathered status is lost, employers will be forced to follow a number of expensive new insurance rules, which will increase costs for employers and employees, threatening the coverage Americans currently have.”

Johnson said, “According to the Administration’s own analysis, 51% of people will not be able to stay in grandfathered healthcare plans, meaning it will be difficult for employees to keep the coverage they have. The Administration used rosy scenarios, assuming in their analyses a sum of only 4% medical inflation and that employers will not need to make the kind of changes in the coming years that they needed to make in the last few. In the real world. employers will be under greater pressure, meaning that affording these rules will be even tougher and that even more than 51% of people will not be able to keep their plans.”

The grandfather rule applies to health plans that already existed on March 23 2010 when the Affordable Care Act was signed into law. Businesses can make “routine and modest” adjustments to their premium, co-pay, and deductible requirements. These routine changes include cost adjustments to keep pace with medical inflation, new benefits, modest adjustments to existing benefits, new consumer protections under the new law, or changes to comply with State or other Federal laws. Premium changes are not taken into account when determining whether a plan is grandfathered.

If a plan loses its grandfathered status, members gain new -benefits including the following:
• Coverage of recommended prevention services with no cost sharing.

• Patient protections, such as access to OB-GYNs and pediatricians, without a referral by a separate primary care provider.
Plans that make “significant” cost and coverage changes (if they have negative effects on employees) will lose their grandfather status.
Plans cannot do the following without losing their grandfather status:

• If a plan covers care for people with diseases, such as diabetes, cystic fibrosis or HIV/AIDS, the plan cannot eliminate coverage for those diseases.

• A plan cannot raise co-insurance charges (for example, by increasing the employee’s share of a hospital bill from 20% to 25%).

• A plan cannot significantly raise co-payment charges (for example, raising a co-payment from $30 to $50 over the next two years).

• A plan cannot significantly raise -deductibles (for example, raising a $1,000 deductible by $500 over the next two years).

• A plan cannot significantly lower employer contributions by more than 5% (for example, increasing the workers’ share of the premium from 15% to 25%).

• A plan cannot add or tighten an annual limit on what the insurer pays.  Some insurers cap what they pay for covered services each year. 

Plans cannot tighten any annual dollar limit in place as of March 23, 2010.  Moreover, plans that do not have an annual dollar limit cannot add a new one unless they are replacing a lifetime dollar limit with an annual dollar limit that is at least as high as the lifetime limit.

The regulations will have the biggest affect on small employers. According to HHS, most Americans with health insurance through large employers will maintain their coverage. Large employer-based plans already offer most of the comprehensive benefits and consumer protections under the Affordable Care Act.
HHS says that the roughly 42 million people insured through small businesses will likely transition from their plan to one with the new Affordable Care Act protections over the next few years. Small plans tend to make substantial changes to cost sharing, employer contributions, and health insurance issuers more often than do large plans.

To help small businesses afford employee coverage, the Affordable Care Act includes a tax credit for up to 35% of their premium contributions.

People who are covered in the individual health insurance market will get the new protections of the Affordable Care Act sooner rather than later. In the short run, individuals whose plan is no longer grandfathered will gain access to free preventive services, protections against restricted annual limits, and patient protections, such as improved access to emergency rooms.

In 2014, small businesses and individuals who purchase insurance on their own will gain access to the competitive market exchanges. The Congressional Budget Office (CBO) has estimated that premiums in the excha nge will be 14% to 20% lower than they would be in 2016 due to competition, lower insurance overhead, and increased pooling and purchasing power.

CBO has estimated that a family policy for small businesses would be available in the Exchanges at a premium that is $4,000 lower in 2016. These reduced premiums do not take into account the tax credits available to small businesses and middle class families to help make insurance affordable. These additional new choices and cost savings may further lower the likelihood that small business workers will remain in grandfathered health plans. Consumers insured through large employers are more likely to remain in grandfathered plans in 2014 and beyond.

All health plans, whether or not they are grandfathered, must provide certain benefits to their customers for plan years starting on or after September 23, 2010 including the following:

• No lifetime limits on coverage for all plans.

• No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application.

• Extension of parents’ coverage to young adults under 26 years old.

For more information, visit http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html.

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Leila Morris is editor of California Broker Magazine.

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Healthcare Marketing
Converting Internet Shoppers 
into Health Insurance Customers

by Ron Goldstein

While many in the health insurance industry are wringing their hands about how health insurance reform will shake out, thousands of John and Jane Does, who have lost their jobs or had their group coverage dropped, are out shopping for individual and family health insurance plans.
The number of potential individual insurance purchasers grows with every painful layoff or employer cost-cutting initiative. Producers must stay focused on reaching and assisting as many of these shoppers as possible through the multitude of venues in which they are shopping today.
Top producers are using a mix of online and traditional marketing tools to capture individual insurance leads and generate sales. In fact, more and more producers who explore the Internet are making this channel the marketing tool of choice for reaching potential buyers and converting shoppers to buyers. It’s pretty simple to make the case that online marketing of insurance products is here to stay. Here are four undeniable truths:

1. The purchase point is shifting, as consumers become comfortable shopping online. 
The Internet gives shoppers fast and easy access to any kind of product or information they are seeking without leaving their homes. Sixty-six percent of online Americans say they have purchased a product off of the Internet, according to the 2008 Pew Internet & American Life Project. What’s more, those seeking insurance are gravitating toward online purchases. In its 2007 market analysis, research firm Celent estimated that the following would happen from 2007 to 2011:

• Web influenced individual insurance purchases would increase from over 50% in 2007 to 90% in 2011.

• Web initiated sales would increase from 20% to nearly 60%.

• The percentage of 100% online purchases would grow from 10% to more than 50%.

2. The largest segment of the uninsured market is the most Internet-savvy segment.
According to the Census Bureau, 25- to 34-year-olds represent 23% of the total uninsured population. This segment of the uninsured market also happens to be one of the most Internet-savvy consumer groups. In order to be successful and to build a sustainable business, agents and brokers must reach these populations where they shop and where they are influenced – on Internet research sites, on buying sites, and on social media sites, such as YouTube, Facebook, and Twitter.

3. Insurance search and quoting engines are facilitating online insurance buying. 
Shopping for health insurance is faster and easier than ever. The vast numbers of health insurance search and quoting engines appeal to those who prefer doing their own research prior to purchasing. Consumers strongly prefer to do their own online research instead of speaking to a knowledgeable sales associate, according to the 2010 Social Shopping Study conducted by the e-tailing group, Inc and PowerReviews. Respondents say they prefer online research for the following reasons:

• It saves time (79% say they save somewhat more time to much more time doing their own online research).

• It increases confidence. (83% say they are somewhat more confident to much more confident about purchasing after doing their own research.

• It provides credible information. (82% percent say they are somewhat satisfied or very satisfied with product information available online).

4. Online Marketing Makes Financial Sense For Brokers and Agents
Marketing online is less costly for brokers and agents compared to traditional marketing tools, such as direct mail and mass media print advertising. Agent websites can be designed, launched, and maintained easily and for a very low cost. In fact, brokers using online applications generally note considerable reductions in their customer acquisition costs. New, cost-free social media channels provide yet another set of online tools for brokers to incorporate into their marketing bags.
Savvy producers are leveraging the reach of the Internet to locate and convert individual insurance shoppers into buyers. With custom-branded websites, multi-carrier quoting engines, and e-mail drip-marketing programs, they are enabling their organizations to meet the buying needs of today’s sophisticated shoppers. Below are four ways to leverage the power of the Internet.

Enhance Your Visibility With Customized Websites

In today’s marketplace, an interactive website allows you to expand your visibility beyond your bricks and mortar office and your community advertising. A website gives you an online storefront, which allows customers to find you easily without the confines of a traditional nine-to-five workday. And online websites are easily customizable with photos, bios, customer testimonials, and other tools that allow you to build or maintain your brand. They also allow you to offer interactive opportunities, such as webinars, and they can link your prospects to a vast array of reference materials, quoting engines, carriers, and plans. When establishing a website, brokers should align themselves with industry-leading providers that offer a range of web customization options, standards-based coding, and search engine optimization capabilities to ensure that your site serves your brand well and generates traffic. Many also offer other bells and whistles through proprietary applications that can amp up your marketing and service capabilities. Look for proposal and contact management tools, email drip-marketing campaigns, and customizable proposals and reports.

Simplify The Buying Process Using Real-Time Quoting Engines

If you’re not providing your customers with online search, quoting, and enrollment tools, you’re simply missing out on the real power of the Internet and so are your customers! Real-time quoting engines allow you and your clients to instantly compare hundreds of different health insurance plans, benefits, and prices to find the plan that best meets a person’s individual needs. Agents and brokers can establish online quoting capabilities by aligning themselves with an individual and family plan quoting and enrollment service. Be sure to seek out one that meets or exceeds the industry standard in quoting accuracy and carrier partnerships. The health insurance leaders in quoting technology have: established relationships with hundreds of insurance carriers offering thousands of plans; the ability to provide quotes in all 50 states; and proven standards of quoting accuracy.

Expand Your Brand Through Social Media Channels

Most top-producing agents have invested years and considerable dollars to build a brand in their local communities, so investing more resources to build an online brand seems daunting. But if you break it down, you may be surprised at how quickly you can establish a solid online brand. Social media allows agents to network with prospects in new and interesting ways, offering both one-way and two-way communications through sites like Twitter, Linked In, Facebook, and YouTube. How do you leverage these tools to generate leads? Here are some quick tips.

• Network with potential clients: Linked In, Facebook, and YouTube let you post information about your brand on widely visited sites and they let you seek out and link up with other industry experts, agents, and prospects. Set up profiles on these sites and link with others already on the sites to maximize your connections.

• Position yourself as an expert resource: Blogs, insurance forums, Twitter, and YouTube give you an online voice. You can enhance your profile as an expert in the marketplace by seeking out individual insurance blogs and forums and posting comments and relevant information, such and videos and article links.

• Share your news and important information in multi-media channels: Tweet your latest agency news on Twitter; share informational videos, photos, or webinars on YouTube, Flickr, and Slideshare; and build your online reputation by asking trusted sources and customers to post testimonials and referrals about your business online at sites like Yelp, Angies’s List, and epinions.
Once you are connected in your social media channels, you’ll begin to see how your posts can drive traffic to your website, and vice versa. Be careful not to try to cover too many sites at once. Dip your toe in the social media waters by starting with one or two sites to gauge the amount of time it takes to maintain a presence on the site.

Don’t Forget the Personal Touch

Sometimes, all the technology in the world is no substitute for a friendly face or voice over the phone. Let’s face it, shopping for insurance is not simple. And shopping online — where you can access hundreds of different plan choices, options and prices — can be downright overwhelming. According to the Pew Internet & American Life Project, 32% of shoppers have been confused by information they found online during their shopping or research and 30% felt overwhelmed by the amount of information they found. That’s why brokers and agents will always be the go-to-resource for consumers, playing an invaluable role in helping to navigate buyers through the product comparison and selection process, as well as the application and purchasing process.

If You Build It, They Will Come

Purchasing heath insurance is one of the most important buying decisions consumers can make, ranking right alongside purchasing a home and investing for retirement. Choosing the wrong plan can have devastating consequences. So it behooves brokers and consumers alike to be able to compare all of the possible options and opportunities. Building a customized website and adopting online quoting and application capabilities will bring consumers knocking at your virtual door, seeking your counsel and expertise. Don’t miss the calling. If you build it, they will come.

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Ron Goldstein is president of Quotit, the health insurance industry’s leading Individual and Family Plan quoting and enrollment service. Setting the industry standard in quoting accuracy, Quotit has established relationships with over 150 insurance companies in 50 states, providing brokers the ability to offer nearly 37,000 plans in the health, life, dental and vision insurance markets. Goldstein also is president of CHOICE Administrators® Exchanges, the administrative branch of America’s longest-standing, state-approved health insurance exchange, CaliforniaChoice Exchange. Quotit and CHOICE Administrators are part of The Word & Brown Companies. You may reach Ron at rgoldstein@choiceadmin.com or call 1-866-478-6848.