October 2011 California Broker

Non-Qualified Annuities –Help Your Clients Avoid Negative Tax Consequences by Thomas H. Duncan •  A discussion of the top 10 asked questions from advisors on non-qualified annuities.

529 Plan News by Leila Morris •  A close-up look at different 529 plans.

Emerging Markets Can Deliver Increased Sales Opportunities for Brokers by Ron Agypt • To improve sales, brokers need to focus on the consumer segments that have a greater need for a particular insurance product.

Getting to the Core of California’s HMOs with Our Annual Survey : How Do They All Measure Up?  Each year California Broker surveys HMOs in the state with direct questions about their plans. We then present the answers to the professional agent or broker.

Questions To Help Find the Right Annuity Carrier by Rich LaneFor a carrier to be a good fit for a broker and their clients’ needs, an annuity provider must get the fundamentals right.

How to Educate Employers and Employees on the Importance of Disability Benefits by J. Edward Quinlan, Jr. • Brokers should use the 2011 enrollment period as a jumping-off point for conversations about how to incorporate disability insurance into the full long-term benefit package.

Are ACOs the Real Deal or Déjà Vu’? by Sima Reid • Are we trying to put too much hope and expectation in ACOs as our silver bullet in reducing healthcare costs?

Mobile Communications: Putting Healthcare Solutions in the Palm of Their Hands by Robert S. Oscar, R.PhInsurance brokers are positioned to help their clients take advantage mobile purchase opportunities.

 Controlling Healthcare Costs is the Top Priority for Southern California Mid-Market Employers by Ed Bray  •  Brokers need to lead the charge through healthcare reform and aware of changes that occur on an almost daily basis.

Life Settlement News  by Leila Morris •  A look at up coming life settlement conferences and how 401(k)s are including life settlements.

What Your Eyes Reveal About Your Health: Why vision benefits make a difference in employees’ health by Karen M. Gustin • How to look for a quality plan that covers comprehensive wellness exams as well as the materials and services important to employees and their families.

Non-Qualified Annuities – Help Your Clients Avoid Negative Tax Consequences

by Thomas H. Duncan, JD, CLU, ChFC

Several questions about non-qualified annuities surface frequently in my conversations with advisors. Many questions focus on the tax consequences of ownership changes, annuity death distribution options, and annuity losses. Below is a discussion of the top 10 questions we get most often from advisors on non-qualified annuities.

1. Can you change the ownership of a non-qualified deferred annuity from one spouse to another without creating a negative tax consequence?

Changing ownership of non-qualified deferred annuities between spouses is not an income taxable or gift taxable event. It is usually done to equalize the estates for estate planning purposes. Also, adding or removing a spousal joint owner will not create an income or gift taxable event.

2. Can you change the ownership of a non-qualified deferred annuity between non-spouses without creating negative tax consequences?

If the ownership from a non-qualified deferred annuity is changed from one individual to another, deferred gains within the annuity will be taxable if the individuals are not spouses. These gains will be reported as income to the original owner of the annuity.

This type of ownership change is also considered a taxable gift from the original owner to the new owner although you can mitigate the gift taxation by using the annual gift exclusion amount (currently $13,000) and/or the lifetime gifting exemption (currently $5,000,000 and scheduled to decrease to $1,000,000 beginning in 2013).

Lastly, the addition to or removal of a non-spouse joint owner from a non-qualified deferred annuity is also an income taxable and gift taxable event.

3. Can the ownership of a non-qualified deferred annuity be changed from an individual to their revocable trust without the individual incurring tax liabilities?

Changing ownership of a non-qualified deferred annuity from an individual to the individual’s revocable trust is not an income taxable or gift taxable event. This is because the individual, the grantor, is still reporting income from the trust under their tax identification number.

4. Can you change the ownership of a non-qualified deferred annuity from an individual to an irrevocable trust without negative tax consequences?

If the irrevocable trust is a non-grantor trust, the change of ownership is considered to be an income taxable event. The deferred gains in the annuity are taxed as ordinary income to the original owner.

If it is an irrevocable grantor trust, the grantor is still taxed on the trust income. The client should seek the guidance of their tax professional before making the ownership change to determine whether it would be an income taxable event. (An irrevocable grantor trust is sometimes referred to as “defective trust” since the grantor is still taxed on the trust income.) Personal professional guidance is needed for this situation because, at this time, there is no clear authority as to the income tax nature of annuity transfers to this type of trust.

Changing ownership of a non-qualified deferred annuity from an individual to an irrevocable trust (regardless of type) is a gift and thus a gift taxable event. However, the gift taxation can be mitigated by using the annual gift exclusion amount and/or the lifetime gifting exemption.

5. What are the tax consequences when a non-qualified deferred annuity is given to charity?

When a non-qualified deferred annuity is given to a charity, the deferred gains in the annuity become taxable income to the owner. However, the owner can take an itemized charitable income tax deduction for the full value of the annuity.

6. What are the distribution options for a spousal beneficiary of a non-qualified deferred annuity?

If the beneficiary is a spouse, they can re-register the annuity in their own name. There are no forced distributions from the annuity when the surviving spouse decides to re-register.

7. What are the distribution options for an individual non-spousal beneficiary of a non-qualified deferred annuity? 

a. Lump Sum – The beneficiary can take a full distribution of the annuity proceeds. Lump sum distributions are taxable to the extent of gains in the contract, but are not subject to the 10% tax penalty.

b. Five Year Rule – A beneficiary can delay taking proceeds from an annuity for up to five years. However, the entire account must be liquidated by the fifth anniversary of the owner’s death. The beneficiary can wait until the very end of this period to liquidate the annuity or can take varying amounts of money out in years one through four as needed. Distributions will come from gains first and be taxable to the extent of those gains. No 10% tax penalty will apply.

c. Annuitization – The beneficiary can annuitize the cash value and begin taking fixed, guaranteed payments over the selected payout method. Different annuity carriers offer beneficiaries various payout options. Each payment will contain a portion of gains and a portion of  “cost basis.” Only the gain portion of the payment will be taxable and no 10% tax penalty will apply. Annuitization must begin payout within one year of the owner’s death.

d. Systematic Withdrawal –  The beneficiary can take systematic withdrawals from the annuity using their life expectancy to calculate each minimum payment. This is the so-called “non-qualified stretch” option. The beneficiary can choose to take more in any one year. With this option, the payment fluctuates based on the performance of the underlying investments; not all annuity carriers offer this option. Distributions come from gains first and will be taxable to the extent of those gains. The 10% tax penalty will not apply. Systematic withdrawal over life expectancy must be elected within one year of the owner’s death.

8. What are the distribution options when a trust is the beneficiary of a non-qualified deferred annuity?

When a trust is the beneficiary of a non-qualified deferred annuity, the trust has up to five years to liquidate the proceeds of the annuity. The trust cannot use the life expectancies of the trust beneficiaries to annuitize or stretch the proceeds of a non-qualified annuity.

9. What are the distribution options when an estate is the beneficiary of a non-qualified annuity that has not been annuitized?

When an estate is the beneficiary of a non-qualified annuity the estate has up to five years to liquidate the proceeds of the annuity. There is no option for the estate to annuitize or stretch the proceeds of the annuity.

10. Are annuity losses tax deductible?

According to IRS Publication 575, if a loss has been realized upon the surrender of a non-qualified deferred annuity, the loss is deductible on Schedule A of the owner’s tax return in the year of the surrender. The surrender must be of the entire annuity. The loss is a miscellaneous deduction subject to the 2% floor.

Non-qualified annuities can be useful tools in helping clients reach their financial goals. However, it’s important to understand the tax rules associated with these products to help your clients maximize benefits and avoid unintended negative tax consequences.

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Tom Duncan, JD, CLU, ChFC is director of advanced sales for Nationwide Financial Services and can be reached at duncant2@nationwide.com. Duncan is a registered representative of Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svs. Corp.

Federal income tax laws are complex and subject to change. The information in this brochure is based on current interpretations of the law and is not guaranteed. Neither Nationwide nor its representatives give legal or tax advice. Please consult your attorney or tax advisor for answers to specific questions.

529 Plan News

How 529 Plans Make a Difference in College Savings

A survey by the College Savings Foundation reveals that 529 plans are doing a good job of helping parents save for college. The following statistics reveal that parents with 529s are dramatically more successful savers than are parents without 529 plans with 45% saving nothing at all:

• 76% of 529 plan owners saved more than $5,000 per child compared to only 29% of those without a 529 plan.

• 15% of 529 plan owners saved $5,000 to $10,000, compared to 10% of those without a 529 plan.

• 21% of 529 plan owners saved $10,000 to $25,000 compared to only 8% of those without a 529 plan.

• 21 % of 529 plan owners saved $25,000 to $50,000 per child, versus only 4% of those without a 529 plan.

• 9% of 529 plan owners saved $50,000 to $100,000 versus 4% of those without a 529 plan.

• 11% of 529 plan owners saved more than $100,000 per child versus 3% of those without a 529 plan.

For more information, visit www.collegesavingsfoundation.org.

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Five Strategies to Improve 529 Plan Access for All Income Levels

Low- and moderate-income families are less likely to have college savings compared to higher-income families. To address this inequity, a number of states have launched 529 savings match incentive programs. Students who expect to graduate from a four-year college are approximately six times more likely to attend college if they have a 529 account, according to researchers from the Center for Social Development (CSD) at Washington University in St. Louis.

A recent CSD report offers the following recommendations:

• Require a low minimum deposit — The steeper minimum deposits (as high as $250 in Nevada and Rhode Island) might be too burdensome for low- and moderate- income families. State plans sold directly usually require a minimum initial deposit of $25 to open a 529 account.

• Omit the separate savings match application — Most states require a 529 plan account owner to complete an annual match application. A couple of states use information on the one-time 529 plan enrollment form instead.

• Share tax records — Many states require account owners to mail copies of tax returns (state, federal or both) with their savings match application each year to prove income eligibility. Other states could follow Louisiana, which determines match eligibility using electronic tax records from the Department of Revenue.

• Make initial deposit programs automatic for newborns — Programs that do not enroll all eligible children automatically run the risk of benefitting savvy families disproportionately.

• Collect additional data — It would be useful for states to collect and report on who saves and benefits from a state 529 plan and the specific saving match program.

The full report is available at http://csd.wustl.edu/Publications/Documents/RP11-28.pdf.

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The Role of Advisors in 529 Plans

Thirty-seven percent of parents who have started saving for college are using a dedicated college savings account like a 529 plan, up from 26% in 2007, according to a study by Fidelity. And thirty-three percent are using financial professionals to help guide their college savings decisions, an increase from 21% five years ago.

Sixty-two percent of parents who are using an advisor say they are closer to achieving their college savings goals than they would be without an advisor. Sixty-one percent of those using an advisor are saving systematically (versus 51% of those who are not working with an advisor).

Sixty-five percent of parents with advisors received guidance on paying for college in the current market environment including adjusting investment strategies (33%), exploring supplemental funding sources (24%), and using reward programs to boost savings (22%).

Similar to findings from last year, financial advisors are providing a broader range of guidance on college costs beyond accumulating savings and distribution strategies. However, there has been a decline in the number of advisors who are helping with the financial aid process, the grant process, and research of schools.

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Activities for Which Advisors Currently Help 

2011 2010 

The financial aid process 25% 37%

Strategies for efficient college savings 45% 41%

Strategies for efficient withdrawals of college savings 33% 35%

Researching schools 15% 25%

The grant process 22% 30%

Determining the share of college costs you and your child should bear 27% 32%

Tax benefits of 529 plans 37% 41%

None of the above 38% 38%

Seventy-five percent of parents say they do not want to burden their children with college loans (up from 65% in 2007). “One statistic that hasn’t fluctuated in five years of tracking attitudes toward college savings is that 80% of parents believe that a college education is a minimum requirement for a decent job. This is why more financial advisors are providing advice around financing that critical degree, and recommending a 529 plan as a tax-advantaged savings vehicle,” said Matt Golden, vice president, Fidelity Financial Advisor Solutions College Planning. For more information, visit advisor.fidelity.com/529 or call Fidelity at 1-800-544-9999.

Disability

Emerging Markets Can Deliver Increased Sales Opportunities for Brokers

by Ron Agypt

While it can be an obvious notion, it’s worth stating again:  To improve sales, brokers need to focus on the consumer segments that have a greater need for a particular insurance product. Narrowing in on a target audience will improve your sales pipeline, especially if you pinpoint your efforts on those with the motivation to take decisive action. Case in point:  disability insurance for the Hispanic market.

According to the 2011 AflacWorkForces Report, 30% of Hispanic workers have disability insurance, yet only 27% of them feel that their family will be financially prepared in the event of an unexpected emergency, and 67% say that adequate insurance benefit coverage provides a big  help coping with  issues. Furthermore, only 1% of Hispanic employees are extremely satisfied with their benefit package, yet 61% of Hispanic of employees say that that a comprehensive benefit package is important because it safeguards their health and wellness.

The discrepancy is clear — very few Hispanic workers have disability insurance, yet many believe that this product would contribute greatly to their happiness and financial security. This gap suggests that Hispanic workers are ideal candidates for disability insurance products.

Put Voluntary Insurance to Work in Your Organization

Disability insurance has been a core workplace benefit, but with the sluggish economy, many companies are scaling back on the coverage or removing it altogether. As companies continue to face economic challenges and rising healthcare costs, workers can no longer assume that they will be offered this coverage.

Employers need to understand that there are alternatives to cutting disability options. They can maintain disability coverage options by offering voluntary short-term disability insurance policies as a no-cost solution. Offering voluntary disability insurance demonstrates a company’s commitment to its workforce without affecting the bottom line.

Sixty-four percent of employees who are enrolled in voluntary insurance, such as short- and long-term disability insurance, say that their employer has a reputation as being a great place to work, which is a full 10% higher than businesses without voluntary insurance. This statistic underscores the fact that supplemental insurance leads to greater employee satisfaction.

Agents and brokers can provide important education to the Hispanic market about what disability insurance truly protects and they can reinforce important factors in choosing coverage. For example, having a loss of income makes it difficult to build retirement savings. Without sufficient income, consumers can be forced to withdraw from retirement accounts to pay for current expenses.

The Hispanic Business Owner

According to the U.S. Census Bureau, Hispanic-owned businesses are the fastest-growing segment of small businesses. Since the majority of small businesses do not carry disability insurance, Hispanic-owned small businesses offer promising opportunities for brokers to grow sales, particularly by introducing group short-term disability and individual short-term disability insurance plans.

Since voluntary insurance providers vary in their offerings, it is important to identify the best options for your clients. The following advantages of voluntary plans will resonate with Hispanic-owned small businesses:

Ease of administration: Voluntary insurance providers offer easy administration and enrollment since applications, rates, and underwriting are consistent from state to state.

Customization: Voluntary options, sold under a group policy can be customized to suit the needs of the company.

Low participation minimums: Group short-term disability insurance can be offered to accounts with five applications or 15% participation, whichever is greater. That means that customers with 35 or fewer employees can offer group short-term disability insurance with just five applications.

Guaranteed-Issue option: This option allows active full-time employees to qualify for coverage (subject to income requirements) without having to pass underwriting requirements.

Hispanic business owners want to provide quality insurance products in their employee benefit packages. And voluntary disability policies offer a cost-efficient way for many business owners to help protect their employees’ income against an unexpected health event.

Focus on the Facts: The Need Is There

It can be hard to think about a disability when you’re healthy and working, but the truth is that anyone can become disabled. According to the National Center for Health Statistics, 62 million people in the United States have a disability that affects daily activity and about two-thirds of those with disabilities are younger than 65.

Becoming disabled is often an unexpected experience that can interrupt one’s job and lifestyle – and the financial obligations can be overwhelming. Thankfully, available disability insurance policies can provide peace of mind so people can focus on recovering.

New business prospecting is tough in any business. Insurance sales are especially challenging, but a helpful tip for brokers is to focus where there is an unmet need. Closing sales will come much easier if you target a group that has a demonstrated need for and interest in a particular product. Many Hispanic employees have stated that, while their current benefit packages are incredibly important to them, they still feel under-protected. Disability insurance will give them greater tranquility in knowing that they have added protection that will make them feel financially secure if an unexpected accident happens.

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Ron Agypt, a 34-year insurance industry veteran, is Aflac’s senior vice president of Market Development and Broker Sales, U.S. He is responsible for setting corporate strategy and developing market and broker growth. He leads Aflac’s Broker Development team.  For more information, visit aflacforbrokers.com, call 1-888-861-0251, or send an email to brokerrelations@aflac.com to learn more.

Getting to the Core of California’s HMOs with Our Annual Survey How Do They All Measure Up?

 

Welcome to the 15th annual agents’ guide to managed care. Each year California Broker surveys health maintenance organizations (HMOs) in the state with direct questions about their plans. We then present the answers to such questions here for you—the professional agent or broker. We hope that this valuable information will help you serve your savvy healthcare clients better.

1. Do you guarantee a time limit on getting referral/treatment routine, urgent, emergency? If not, how many days does it take?

Aetna: Our internal policy is five days for routine, two days for urgent pre-certification, and no referral is required for urgent or emergency care.

Anthem Blue Cross: Authorization by the PMG/IPA requires a decision in the following time frames: 72 hours for an urgent request; 14 calendar days for specialty referrals; and no prior authorization is required for emergency services.

Blue Shield: Our appointment wait time standards are: 30 days for preventive care, seven days for non-acute and routine care with a personal physician; 14 days for non-acute or routine care with a specialist; 24 hours for urgent care; immediately for an emergency (acute, life-threatening). Targets for plan-wide compliance with these standards for contracted HMO providers are: 90% for preventive and regular/routine care, and 100% for urgent and emergent care.

Health Net of CA: For urgent pre-service requests, a decision must be made in a timely fashion appropriate for the member’s condition, not to exceed 72 hours after receipt of the request. The practitioner needs to be notified within 24 hours of the decision, not to exceed 72 hours of receipt of the request (for approvals and denials). The member is to be notified within 72 hours of the request (for approval decisions). For routine/standing referrals, a decision must be made in a timely fashion appropriate for the member’s condition, not to exceed three business days from receipt of the request.

Kaiser Permanente: No, our members have open access to all our primary care services. The maximum wait time is 30 days; however routine appointments usually are scheduled within two to three weeks. For urgent care issues that are not emergencies, but require medical attention, it’s usually within 24 to 48 hours.  Members can also just simply call the urgent care number at the facility closest to their home, their doctor’s office, a nurse practitioner, or the advice nurse. Emergency care is available immediately at our hospital emergency rooms, which are listed in “Your Guidebook to Kaiser Permanente Services.” Pre-authorizations are not required for urgent and emergency care.

PacifiCare: Optimally, the specialist referral process should take less than 30 days from referral to appointment. We monitor this standard annually using the Consumer Assessment of Health Plans Survey (CAHPS) member satisfaction survey. We adjust our goals by market depending upon past performance and national percentile benchmarks. Our standards are as follows: Routine appointment <30 days, specialist appointment <30 calendar days, and urgent care <24 hours. We also have the Express Referrals program that streamlines the referral process. A primary care physician (PCP) in a participating Express Referrals provider group may refer a member to a specialist in one of many specialties in their group without prior authorization from the group’s utilization review committee. Members pay their normal office visit co-payment for a referral to a specialist.

2. Do you have any conditions/diagnoses/symptoms that are referred automatically?

Aetna: Yes.

Anthem Blue Cross: The PCP, PMG/IPA determines automatic referrals for conditions, diagnoses, and symptoms. Members can self-refer to a contracted OB/GYN provider. Provider groups can participate in the Speedy Referral and Direct Access programs for referral of certain types of specialties for initial consultation and evaluation. There are also requirements for standing specialist referrals for chronic conditions and HIV/AIDS diagnoses.

Blue Shield: The personal physician and the corresponding IPA or medical group is responsible for coordinating referrals and authorizations for specialist care. We ask our HMO physicians to refer members to specialists within their IPA or medical group as these in-network referrals help control cost and institutional utilization through capitation. Blue Shield’s mental health service administrator assists members in locating appropriate referrals and issuing authorizations for mental health and substance abuse services.

CIGNA: Yes.

Health Net of CA: Health Net delegates medical management activities to participating physician groups (PPGs). Each PPG has its pre-certification requirements and systems, which may include direct access to specialty care. For members who are not delegated to a PPG for management, such as Health Net’s Direct Network HMO membership or other fee-for-service membership, authorization for specialty consultations is not required. Members with a chronic condition or disease that requires continuing specialized medical care are eligible for a standing referral to a specialist. A standing referral allows extended access to a specialist for members who have life-threatening, degenerative or disabling conditions.

Kaiser Permanente: Yes, our doctors automatically refer their patients with specific conditions, diagnoses, and symptoms to any of our specialty care centers.  Members also have direct access to all primary care services and can easily self-refer to specialty care in the Obstetrics/Gynecology, Optometry, Psychiatry, and Chemical Dependency/Addiction Medicine Departments. At some facilities, members may also self-refer for Mammograms and Ophthalmology and Dermatology Department services.

PacifiCare: Yes.

3. Can a pregnant member go directly to a gynecologist without waiting for approval?

Aetna: Yes.

Anthem Blue Cross: Yes, pregnant members can self-refer to an obstetrician/gynecologist in the PMG/IPA.

Blue Shield: Yes, women may self-refer to an OB/GYN or family practice physician in their PCP’s IPA or medical group for OB/GYN services. The member pays the regular office visit co-payment since this is not considered an Access+ Specialist self-referral. Additionally, if a network IPA or medical group contracts with the OB/GYN as a network primary care physician, the OB/GYN may be available to be chosen as a primary care physician.

CIGNA: Yes

Health Net of CA: Yes.

Kaiser Permanente: Yes, since members have direct access to all primary care services and may self-refer, expectant mothers can easily access our specialty care services in Obstetrics/Gynecology.  For all other specialty care, the member’s primary care physician (PCP) arranges for referrals through our electronic referral and appointment system. Following the referral guidelines built into the system, the PCP will also order all recommended pre-visit tests so that the specialist has the results before the member’s appointment. Referrals are valid for the entire length of the specialty care. We manage specialty referrals this way to reduce the need for multiple specialty visits, to save our members time, and to help ensure that members have access to the right type of specialist when they need it.

PacifiCare: Yes.

4. Do you have self-referral to a gynecologist for an annual well-woman exam?

Aetna: Yes.

Anthem Blue Cross: Yes

Blue Shield: Yes.

CIGNA: Yes.

Health Net of CA: Yes.

Kaiser Permanente: Yes. To make access to Obstetrics/Gynecology services as convenient as possible, women can self-refer for Ob/Gyn appointments without the need for approval of their PCP. They can also choose to be seen either by a doctor or by the department’s nurse practitioners.  Routine Ob/Gyn care often includes basic health maintenance counseling and screening such as recommendations and reminders for immunizations, managing cholesterol, smoking cessation, and mammograms.

PacifiCare: Yes.

5. Can a member with severe back pain get an appointment with an orthopedist immediately?

Aetna: The PCP determines this.

Anthem Blue Cross: The PMG/IPA/PCP will evaluate the member’s conditions and symptoms and assess the need for a specialist visit following the group’s process for referrals as necessary.

Blue Shield: Yes.

CIGNA: Members in our Open Access Plus and PPO products can go directly to any specialist. Other members should confer with their primary care physician who can contact an orthopedist or other specialist (neurosurgeon, neurologist) to arrange for an immediate appointment. At the direction of the physician, a member can also be enrolled in CIGNA HealthCare’s WellAware disease management program for lower back pain. A registered nurse helps coordinate timely care.

Health Net of CA: Yes, as an emergency.

Kaiser Permanente: Yes, our PCPs can refer members to the appropriate specialists internally and without prior authorization.

PacifiCare: Yes, with a PCP referral.

6.  How long does it take to get an MRI or equivalent test when a lump is found in a member’s breast or uterus?

Aetna: The PCP determines this.

Anthem Blue Cross: The PMG/IPA/PCP determines whether to make an urgent referral for diagnostic tests and whether an authorization is needed. When a member faces an imminent and serious threat to her health, this is an emergency situation in which according the Prudent Lay Person Rule the member is instructed to seek care in an ER. For urgent non-emergent situations it is 72 hours.

Blue Shield: Seven days or immediately in an emergency.

CIGNA: The member’s physician determines the exact time frame. But, an appointment can be made immediately if medically necessary.

Health Net of CA: Health Net delegates utilization management activities to medical groups. Therefore, if the member belongs to a delegated participating physician group (PPG), the PPG has its own pre-certification requirements, and an MRI may or may not require pre-certification. If the member does not belong to a delegated PPG and Health Net is responsible for conducting utilization management, MRIs require pre-certification. Health Net processes urgent pre-certification requests within 72 hours of receipt of all information. Requests for elective MRIs are processed within five business days.

Kaiser Permanente: Members get MRIs or equivalent tests based on their doctor’s clinical decision without the need of heath plan authorization. The wait time for a test is based on clinical urgency and can be shortened at the referring physician’s request.

PacifiCare: Immediately.

7. Can the member get a second opinion outside of the IPA or the medical group?

Aetna: When medically appropriate.

Anthem Blue Cross: Yes, members have the right to a second opinion from a qualified healthcare professional in the Anthem network, as long as they have already received one from their PCP or a SCP in the group’s network.

Blue Shield: Yes, all Access+ HMO members have the right to get a referral for a second opinion from their personal physician. A physician in the same medical group/IPA generally provides second opinions of care from a personal physician. Any specialist of the same or equivalent specialty in Blue Shield’s HMO network can provide second opinions of care from a specialist. All second opinion consultations require Blue Shield authorization.

CIGNA: Yes.

Health Net of CA: Yes, a member’s authorized representative or provider may request a second opinion for medical, surgical or behavioral health conditions.

Kaiser Permanente: Yes, however, as a multi-specialty group model health plan, second opinions outside of our medical group are not generally required. Our members can get a second medical opinion from a plan physician upon request. Our doctors can refer members to non-plan providers for a second opinion when medical expertise relevant to the member’s condition is not available internally.

PacifiCare: Members can get a second opinion in accordance with the specifications of the evidence of coverage (EOC) and disclosure form, as summarized below. A second medical opinion is a reevaluation of your condition or health care treatment by an appropriately qualified provider. This provider must be either a primary care physician or a specialist acting within his or her scope of practice, and must possess the clinical background necessary for examining the illness or condition associated with the request for a second medical opinion. Upon completing the examination, the provider’s opinion is included in a consultation report. Either the patient or the treating participating provider may submit a request for a second medical opinion. For additional information, please refer to the “evidence of coverage” brochure.

8. Where are decisions made about specialist referrals, testing, treatment, surgery, and hospitalization?

Aetna: For our delegated groups, the PCP makes decisions with their PMG/IPA. The health plan makes this determination for non-delegated groups.

Anthem Blue Cross: Delegated PMGs/IPAs make decisions about utilization management approval and denial. The provider group’s medical director makes all denial decisions.

Blue Shield: These decisions are made at the IPA/medical grouplevel. Blue Shield can be involved if there is a dispute about appropriateness or if a member is dissatisfied.

CIGNA: Primary and specialty care providers make decisions about referrals, testing, and treatment. At times, they can coordinate care with their medical groups or IPAs. Hospitalization can require CIGNA authorization.

Kaiser Permanente: The member’s PCP makes the decisions about specialist referrals, testing, treatment, surgery, and hospitalization. Our physicians do not need authorization regarding their medical decisions.

PacifiCare: Our contracted PCPs act as the single point of contact, resource, and consultation for all health services provided to members, including specialty referrals. We believe this approach promotes familiarity with the member’s medical history and permits a single physician to monitor the member through complete episodes of care. These physicians look at the whole medical picture, as opposed to looking at symptoms from a specialist’s point of view. This method reinforces a strong doctor-patient relationship, provides early detection of medical problems, and ensures that medical referrals are appropriate and necessary.

9.  What criteria are used to authorize or deny specialist referrals, treatments, or tests?

Aetna: There are a variety of reference tools, including Milliman and many that the plan has developed and copyrighted. A medical director must make all denials for medical necessity. In addition, the plan has adopted an external review process for all fully insured members.

Anthem Blue Cross: Referral processes are delegated to PMGs IPAs. Provider groups are required to use evidence based utilization management criteria, which has been reviewed annually, approved, and adopted for use by their utilization management committee. If Anthem Blue Cross has a medical policy concerning a specific service, test or procedure, the provider groups are required to follow these policies.

Blue Shield: In addition to their own medical necessity criteria, Blue Shield’s contracted IPA/medical groups refer to the Blue Shield Medical Policy and HMO Benefit Guidelines in authorizing/denying specialist referrals, treatments, or tests. The IPA/medical groups’ criteria must be consistent with Blue Shield’s criteria. Blue Shield uses nationally recognized utilization management criteria, such as InterQual Criteria, to determine medical necessity. Medical literature and patient clinical information are also considered.

CIGNA: CIGNA uses Milliman care guidelines. In addition, CIGNA continually assesses developing technologies using evidence-based medicine and independent expert opinion to develop coverage positions, which are posted on the Internet. All medical decisions are based on clinical guidelines. A physician who is knowledgeable in the area makes the decisions.

Health Net of CA: A Health Net member’s participating physician group (PPG) authorizes all treatment, including specialty referrals for testing, treatment, surgery or hospitalization. A member with a chronic condition or disease requiring continuing specialized medical care is eligible for a standing referral to a specialist. A standing referral allows extended access to a specialist for members with life-threatening, degenerative or disabling conditions. The member’s PCP will refer the member to practitioners who have demonstrated expertise in treating a condition or disease involving a complicated treatment regimen requiring ongoing monitoring.

Kaiser Permanente: Our doctors are not required to seek authorization for medical services in the course of a member’s treatment.

PacifiCare: We require our provider groups to demonstrate the use of appropriate medical management guidelines. We conduct annual reviews of written procedures and consider the following factors for cases that may not meet criteria: age, co-morbidities and complications, response to treatment, the psychosocial situation, and home environment. We use written criteria based on sound clinical evidence and specific procedures for applying the criteria to make utilization decisions. In addition, we apply objective and evidence-based criteria and consider individual circumstances and the local delivery system. We require our delegated providers to do the same.

10.  Are you monitoring the length of time for referral authorizations? What are you doing to reduce or eliminate delays?

Aetna: Yes, timeliness of decisions is part of a monthly case assessment audit. Turn-around time is monitored by annual audits and quarterly report submissions. Audits and training are used to address performance gaps.

Anthem Blue Cross: PMGs/IPAs must have systems to monitor utilization review activities. Anthem evaluates compliance with standards for regulatory and accrediting timeliness through annual on-site audits. If there are issues with non-compliance, the provider group is educated at the audit and a corrective action plan is requested. A subsequent audit is conducted in 180 days. Anthem also monitors this process through the member grievance process. Anthem and the PMGs/IPAs further evaluate this through provider satisfaction surveys. This survey is administered annually to a random sample of PMG/IPA members. The results are included in a medical group quality score, which is used with other quality metrics as the basis of a quality bonus. Groups with higher scores receive larger bonuses.

Blue Shield: Blue Shield’s contracted IPA/medical groups are responsible for the timeliness of decisions about referral authorization. They must comply with our standard of two working days to get all necessary information for a non-urgent referral, one calendar day for urgent referral/treatment, and immediately for emergency care. Blue Shield-delegated oversight consultant nurses perform annual audits to ensure that standards for timeliness are met. An IPA/medical group that does not meet timeliness standards for utilization management must take corrective action.

CIGNA: CIGNA works closely with physicians and medical groups to expedite referrals and measures member satisfaction regularly with the referral process.

Health Net of CA: Yes, it is done through access audit reports,member satisfaction surveys, HEDIS indicators, physician profiles, medical group comparison reports and member complaints. Delays are remedied through corrective action.

Kaiser Permanente: Typically, authorization of any kind is not required for our physicians to seek medical services in the course of treatment.  However, in the event that it is, we do review referral authorization wait times and implement processes to reduce it whenever possible.

PacifiCare: Yes. We perform annual utilization management assessments of delegated providers, including re-audits as needed to ensure provider groups are compliant with our standard. As part of the assessment we review a random selection of up to 30 pre-service denials, 30 concurrent denials and 30 retrospective denials (primarily emergency room services) to allow for a full review of authorization patterns, including those for authorizations for referrals. We review for evidence of the following:

• Physician review of denial for medical appropriateness

• Alternative direction for follow-up care when service is denied

• Timeliness of non-urgent, urgent and concurrent decisions

• Timeliness of notification to the practitioner

• Timeliness of written notification to the member and to the practitioner

• Provision of expedited appeal information for urgent or concurrent denial to the member and to the practitioner

• Consistent gathering of relevant clinical information to support utilization management decision making

• Notification to practitioner of reviewer availability to discuss decision

• Clear documentation of the reason for denial in the written notification, including specific utilization review criteria or benefit provisions used in the determination

• Inclusion of information about the appeals process in all denial notifications
Additionally, we require provider groups to submit for our approval all changes to their denial notices prior to issuance. The groups must submit utilization data at least quarterly. Where organized provider groups are the predominate system of care, we monitor quarterly provider information related to under-utilization, appeals and grievances to identify trends in delays or denial of service.

11. What are the criteria and processes for getting a referral to a specialist outside of the MG/IPA or plan?

Aetna: Out-of-plan approval is done if one or more of these criteria
are met: required services are not available in the group or network; required non-emergency service is available in the plan option, but is not accessible in reasonable timeframe; or the patient is a new member and was receiving services from an out-of-plan provider (reviewed on case-by-case basis).

Anthem Blue Cross: If a needed specialty is not available in a
signed PMG/IPA, the provider group arranges for the member to be seen by the appropriate specialist. The Anthem Transition Assistance Unit facilitates second opinions outside of the provider group when the member or provider requests it and a PCP or specialist in the provider group’s network has already seen them.

Blue Shield: Personal physicians can refer patients out of the net
work with the agreement of the IPA/medical group or authorization from Blue Shield. Blue Shield is involved in referrals only when an IPA/medical group wants to refer out-of-network and not be financially responsible. The IPA/medical group would then contact Blue Shield for authorization and request that Blue Shield be financially liable.

CIGNA: A primary care physician can request referral for service
outside the medical group or plan when the service is not available. Members can also contact CIGNA directly to arrange a second opinion.

Health Net of CA: Health Net’s contracted participating physician
groups (PPGs) are delegated to provide member care, including all specialty referrals. If the PPG does not have a particular kind of specialist with which it contracts, the PPG is still responsible to find a specialist out of its network for the member. The PPG has the financial responsibility for paying the specialist. The PPG may deny the request if it has a particular kind of specialist within its network and a member requests to see a specialist that is outside the PPG’s network. The member has the option to appeal the denial with Health Net.

Kaiser Permanente: Our physicians handle all referrals within our medical groups.  They also have the authority to recommend treatment outside our system as medical needs dictate.

PacifiCare: Our contracted provider network is comprehensive and provides a qualified specialist for every covered benefit. When a service is not available within a member’s provider group, the member receives a referral to a qualified provider or specialist outside the member’s provider group, but contracted with PacifiCare. Either the provider group or we will assess the medical necessity for these requests and authorize care as necessary. Referrals to non-contracted providers rarely happen, generally only in emergencies or for specialized services not available through a contracted provider; therefore, we do not track this statistic.

12. Which complementary medical disciplines are covered or will be covered?

Aetna: Chiro rider. Acupuncture is covered when administered.

Anthem Blue Cross: We cover physical therapy, occupational therapy and outpatient speech therapy.  Physical therapy and spinal manipulation may be performed by a licensed chiropractor if in the scope of their license.

Blue Shield: Complementary medical disciplines available include: substance abuse rider; chiropractic care rider; acupuncture services; specialty dental care coverage; discount programs for chiropractic, acupuncture, and massage therapy; and vision supplies and services. Resources are available to members on the phone, online (www.blueshieldca.com) and in person including nurses and counselors and health-management programs for chronic diseases, childbirth, newborns, and recovery from surgery.

CIGNA: When medically necessary, some members can access acupuncture and chiropractic services as a component of short-term rehabilitation. Other benefit plans offer homeopathic and naturopathic services as riders. In addition, CIGNA’s Healthy Rewards program offers members alternative/complementary medicine and other health related discount programs for the following services: acupuncture, chiropractic services, fitness club membership, hearing care/instruments, laser vision surgery, massage therapy, vitamins, herbal supplements, non-prescription medications, Mayo Clinic books on health, and smoking cessation programs.

Health Net of CA: Health Net offers chiropractic and acupuncture benefits as supplemental benefit riders to its traditional medical benefit plans. The riders may be purchased with the HMO and POS medical plans. They are designed to complement the benefits plans, rather than replace them. The rider is only available to groups. A variety of benefit plan designs is available, including chiropractic only, acupuncture only, and a combination of chiropractic and acupuncture.

Kaiser Permanente: Complementary/alternative medicine (CAM) is part of our holistic approach to improving the health and productivity of our members. The CAM services and benefits we offer add value to group health benefits and help to reduce health care costs. They include: Chiropractic Coverage, Acupuncture Benefits, CAM Health Classes, Member Discount Program, Member Education and Research and Evaluation.  Decisions about whether to offer or cover select CAM therapies are based on our evaluations of the evidence of their safety and effectiveness and our doctors’ determination of medical necessity.

PacifiCare: PacifiCare of California does not offer alternative medicine benefits as part of its design. However, all members have access to discounts on alternative medicine benefits through an affinity program. Employer groups can purchase supplemental plans that cover acupuncture and chiropractic benefits.

13. Do you cover blood tests for prostate cancer for non-symptomatic men? If so, at what age?

Aetna: Yes, age 40+.

Anthem Blue Cross: Yes, preventive care guidelines address the a propriate frequency of different testing schedules. We cover prostate cancer screenings including, but not limited to, prostate specific antigen (PSA) testing when medically necessary and consistent with good professional practice, regardless of age.

Blue Shield: Yes, regardless of age.

CIGNA: Yes, for men over 50 annually or more frequently when medi- cally indicated.

Health Net of CA: Yes, as determined by the PCP.

Kaiser Permanente: Yes, prostate cancer screenings are part of our basic coverage regardless of a man’s age or personal or family medical history. Early detection of prostate cancer can lead to better outcomes, and having regular cancer screenings is an essential part of preventive medicine. Members do not need a referral to make an appointment for a prostate cancer screening.

PacifiCare: Yes, these blood tests are covered benefits. The mem-
ber’s primary care physician determines the necessity of this and all other blood tests.

14. Do you cover mammograms for women with no history of breast cancer?

Aetna: Baseline at age 35, annually 40+.

Anthem Blue Cross: Yes, Anthem Blue Cross covers Preventive Services for our members in accordance with U.S. Preventive Services Task Force Guidelines.

Blue Shield: Yes, with a personal physician referral.

CIGNA: Yes, for women over 40 annually or more frequently as directed by their physician.

Health Net of CA: Yes, typically, every one to two years from ages
40 to 65+, but the PCP may authorize mammograms at his or her discretion.

Kaiser Permanente: Yes.  Mammograms are part of our basic coverage regardless of a woman’s personal or family history of breast cancer. Early detection of breast cancer can lead to better outcomes, and having regular cancer screenings is an essential part of preventive medicine. Members do not need a referral to make an appointment for a mammogram.  Medicare members are covered for annual mammograms for women 40 and over with no referral required.

PacifiCare: Yes. Mammograms for women with no history of breast cancer are covered in accordance with U.S. Preventive Services Task Force Guidelines.

 Key Questions To Help Find the Right Annuity Carrier

by Rich Lane

In a crowded and competitive marketplace, finding the right annuity carrier can be a challenging, if not overwhelming, given the multitude of factors that a broker must consider. For a carrier to be a good fit for a broker and their clients’ needs, an annuity provider must get the fundamentals right. These fundamentals include providing competitive product features, equitable interest rates, strong industry ratings, and attractive compensation terms.

While these factors certainly play a critical role in determining the right fit with an annuity carrier, brokers should go a step further to ensure that a provider will be a solid and dependable long-term partner. At the end of the day, a broker must ask themselves this, “Is my annuity carrier adding value to the service I provide my clients and are they helping me stand apart from the competition as an exceptional financial advisor?”

In order to answer yes to these questions, brokers should look at a provider’s underlying qualities. To do that, brokers can use these four additional questions as a guide to selecting the best carrier:

1. Does the annuity carrier have a customer-driven approach?
2. Does the carrier have the financial strength to back up its annuities?
3. Does the carrier help alleviate some of the burden of the sales process by providing helpful sales tools that boost broker production?
4. Does the carrier show a commitment to providing brokers with customized marketing support?

Customer-Driven Approach

It’s fairly common for annuity providers to put a strong emphasis on the customer in an effort to attract more business from brokers. However, it’s often only a claim; the provider tends to be out of reach just when a broker needs them the most.

The way to build trust and loyalty with customers is to engage in a partnership with a customer-centric carrier instead of a provider that takes a one-size-fits-all approach to annuities. Each broker has different needs that must be met and a provider must be prepared and able to deliver.

A customer-driven carrier always has the broker’s – and broker’s clients’ best interest in mind – from quality customer service to consumer-friendly product options. Because customer service differs among providers, brokers should look for a carrier that provides easy contracting and commission payments, speedy new business turnaround times, and user-friendly forms. Additionally, even though quality online support is essential, a provider should offer a broker live personal support and help when it’s needed.

This type of carrier is also more likely to invest significant effort up front to design and offer products and services that meet a range of consumers’ short- and long-term needs. The following are some carrier product features that brokers should pay attention to:

• Guarantee of principal — Guarantee of principal assures that, regardless of economic fluctuations, an annuity owner will never receive less than the total premium of payments, less any previous withdrawals or outstanding loan balances.

• Interest rate bailouts — An interest rate bailout allows the client access to funds if the renewal rates are not competitive.

• Full accumulation value of annuity at death of owner — Look for annuity products that, upon death of the annuity owner, will pay full accumulation value of the annuity to the named beneficiary without imposing surrender charges.

• Surrender charges — If the surrender charges are based on date-of-issue versus day-of-deposit (which assign surrender charges to each deposit), they are more advantageous to the annuity owner by giving them easier access to their annuity funds.

• Life changing provisions — Annuity products with a life-changing event provision will give the annuity owner access to annuity funds without surrender charges based on qualifying life-changing events, such as a terminal condition or nursing home confinement.

Last and most important, a provider should share its renewal history on its annuity products with a broker. This can provide valuable insight into whether a provider’s rates decrease dramatically once the initial rate guarantee period expires.

Brokers who welcome a customer-focused approach and practice it themselves, will find a valuable, quality partner in a like-minded carrier.

Financial strength

A provider that is a financially strong and stable entity is built for meeting long-term needs. A broker who recommends an annuity carrier’s products must be confident that the carrier can weather a variety of economic conditions, such as the recent turbulence in the financial market. The instability of today’s economy reinforces this urgency.

Strong financial support is the backbone of a successful annuity and therefore a reputable history of financial stability is an essential quality in a carrier. Brokers can easily find this information with help from well-known and respected ratings agencies (A.M. Best, Moody’s, Standard & Poor’s [S&P] and Fitch) for an accurate read on favorable and poor ratings. Financial strength ratings factor in a company’s operational history, earnings patterns, cash flows, investment portfolio composition, and a number of other internal and external factors. Ratings ultimately serve as an indication of a provider’s vulnerability to adverse economic conditions and its ability to meet ongoing financial obligations.

Brokers also can dig deeper into a company’s financial wealth and history to confirm its strength and stability. Brokers can request a breakdown of a company’s investment portfolio. While every company must make investments to back up its annuity obligations, investment portfolios can vary greatly from company to company.

Additionally, if the annuity provider is part of a publicly traded company, a broker also can read its quarterly earnings reports and listen in on quarterly earnings calls. This can give brokers deeper insight into the quality and character of an annuity provider.

Sales support

Much of a broker’s time can be spent dealing with sales administration rather than prospecting new customers or spending time strengthening current customer relationships. A provider can relieve some of this stress and provide the resources necessary to help brokers further build their business.

Carriers can offer various types of sales assistance that may help brokers become successful in making an actual sale and retaining customers, including innovative sales tips, technical support, and high-caliber training and materials.

A provider also should help keep brokers up to speed on all industry updates and regulatory and legislative alerts to ensure that their customers’ policies remain current. Maintaining conformity with regulatory changes ensures that brokers and their clients can rely on the carrier’s products and operations in meeting state and federal requirements. Meeting and maintaining compliance with applicable laws and rules is an essential component of a successful broker/carrier partnership.

Marketing support

Another way that a carrier can add value to its relationship with a broker is by offering timely and applicable marketing support.

Taking on the production of marketing materials such as ads, brochures, presentations and other sales collateral can be a very time-consuming and resource-intensive process for a broker. It’s especially challenging today to create messaging and advertisements that meet a wide variety of customer needs and catch the attention of different generations. It can take a significant amount of time away from prospecting and selling.

The carrier can take on this responsibility and offer custom marketing support. The provider may offer a catalog of tools for brokers to choose from, which can range from basic newspaper advertising to eye-catching inserts, postcards or self-mailers.

A broker’s productivity is related directly to the effectiveness of their marketing efforts, so it’s important to be well-equipped with the most efficient and attractive tools to leave a positive impact on customers after the sales meeting has ended.

The annuity game can be tough, especially in such a volatile market. To be a successful player takes a strong provider and broker partnership focused on helping consumers make safe and smart investments through efficient guidance and education. As a result, brokers can retain and attract customers, better accommodate changing needs and likely increase sales.

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Rich Lane is the national sales director for Standard Insurance Company’s fixed annuity business. He has been leading various fixed annuity companies for more than 17 years with an emphasis on product and distribution development for brokerages, banks and broker/dealers. He can be reached via email at rich.lane@standard.com.

The Standard is a leading provider of financial products and services. The company serves approximately 7.5 million customers nationwide as of June 30, 2011, with group and individual disability insurance, group life, AD&D, dental and vision insurance, retirement plans products and services, individual annuities and investment advice. For more information about The Standard, visit www.standard.com.

Disability–How to Educate Employers and Employees on the Importance of Disability Benefits

by J. Edward Quinlan, Jr.

Brokers should use the 2011 enrollment period as a jumping-off point for conversations about how to incorporate disability insurance into the full long-term benefit package. With roughly 12% of the total population on disability, it is crucial for Americans to prepare in case a disability occurs. Ninety-percent of disabling accidents and illnesses are not work-related. So employers can protect themselves and their employees’ well-being by providing disability insurance in case a worker needs to take an extended leave of absence.

At any given age, the odds of becoming disabled are much higher than the odds of dying. More than 36 million Americans are classified as disabled and more than 50% of them are in their working years from 18 to 64, according to the U.S. Census Bureau.

Unfortunately, workers underestimate the risk, with only half planning for the possibility of going on disability, according to a 2009 survey from the Council for Disability Awareness. As a result, disability is sometimes referred to as a forgotten risk.

Medical and dental plans are largely considered standard components of an employer’s health and risk benefits strategy. But disability insurance should always be considered in the same conversation as medical and dental plans since more than one in five workers are estimated to be disabled for five or more years during their careers. Disability insurance can go a long way toward providing lost income to an employee who suffers from an injury or illness. By offering disability insurance, employers can demonstrate that they have a strong benefit portfolio and they can create a workplace environment that fosters lifelong well-being.

More employers are investing in comprehensive programs that promote lifelong health and well-being. It is critical for them to reevaluate their long-term benefit strategies, especially as the rise in healthcare costs may result in a decrease of supplemental benefit coverage, including disability. Brokers should use every opportunity to educate them about why disability insurance is a crucial component of their long-term benefit strategies, especially when sitting down with clients during this enrollment period.

Identifying the Employer

The way an employer presents and operates the company benefit package can have a significant affect on its acceptance from employees. Much can hinge on the tools that carriers provide, enrollment meetings, and the resources available, which are often based on a company’s size.

Google is one example of a large employer with an impressive employee benefit strategy. From on-site health clinics, gyms and on-staff nutritionists to generous health and disability plans, Google has made its employees’ lifelong health and well-being a priority. Not surprisingly, Google is consistently ranked as one of Fortune magazine’s most admired companies in the world. Employers can emulate this kind of work culture by incorporating key components – within the constraint of resources – into their employees’ benefit portfolios.

Large employers usually have human resource departments that can coordinate company-wide benefit programs. Small to mid-sized companies are less likely to offer disability plans because they have little or no human resource staffing. They may have just one person who is responsible for all human resources or even outsource their benefit functions.

Although disability costs can affect any business, they can be overwhelming for small businesses when the absence of a key employee has a huge effect on productivity and business operations. Despite the costs, employers of any size should understand that disability insurance can provide a good return on investment because the funding allows employees to return to work in an efficient time period after a disability leave.

The basic information that’s available about disability coverage often does not explain the value of this insurance. That’s why brokers should always be accessible to employers of all sizes to discuss the benefits. Since the details of benefit plans may seem daunting to many, it’s important to provide onsite training and call centers. It is also important to present hypothetical situations that employees can relate to – via a virtual guidance tool, for instance. The easier it is for employees to get the information they need, the easier it will be for the human resources manager or benefit provider.

One way for your clients to invest in their employees’ health is to work with a company that provides onsite and offsite medical clinics for employers of any size. These companies can provide insight and metrics to identify referral patterns, including consultations, diagnostic testing and communication. These resources can further validate the importance of disability insurance among employers since costs are more dependent on the timing and accuracy of medical procedures than on the quantity performed.

Breaking Down the Benefits

Instead of seeing disability insurance as simply a benefit, employers need to see is it as an important component of the entire employee well-being portfolio. They should consult with brokers to determine what best suits the health needs of their employees to allow them to return to work healthy and productive.

While the definition of what constitutes a disability leave is unique to each carrier, it’s important to examine an employer’s benefit plan closely. What may surprise many is that most group plans have a benefit cap of $5,000 per month or $60,000 per year and only an employee’s regular salary is insured. That means that bonuses typically aren’t factored into the equation.

These little details can have a significant effect on employees, depending on their disability situations. Take, for example, a full-time employee who gets sick and reduces their hours to part time. Their condition does not improve and the employee is forced to quit. That worker was no longer entitled to disability benefits since they reduced their hours to part-time.

Engaging the Employee

Many employees are hesitant to put their hard-earned money toward disability insurance. So it’s important to provide effective education that explains why investing in disability benefits is worth it in the long run. A March 2011 report from the Bureau of Labor Statistics provides some perspective on the impact benefits can have on an employee’s income – wages and salaries average $20.91 per hour worked and benefits make up 30.4%, or $9.15 with a disability policy that costs only 1% to 3% of an employee’s annual gross income can add up to big savings in case an illness or injury occurs.

Employees need to understand why it is important to have a disability plan, especially since one type of insurance won’t cover all of their expenses in case they are forced to take a leave of absence. Educational resources, such as a virtual guidance tool that shares stories and scenarios, can illustrates how disability benefits can affect and be affected by certain scenarios.

Seventy-one percent of employees believe that disability is most likely caused by serious accidents, according to a recent poll by the Council of Disability Awareness. However, fewer than one out of 10 long-term claims result from injuries. Most are from health issues, such as musculoskeletal and connective tissue disorders, nervous system-related disorders, cardiovascular and circulatory disorders, and cancer. Considering that the average long-term disability absence lasts 32.1 months, the loss of income can have a devastating effect.

As the recession continues to increase the number of personal bankruptcies, it is imperative for the millions of people lacking disability benefits to protect themselves from the financial pressures. Sixty-two percent of all personal bankruptcies in the United States in 2007 were caused by medical problems and 78% of those filers had health insurance, according to a 2009 study by Harvard researchers,

Final Thoughts on Disability Benefits

It can be challenging to present disability insurance, especially in California where residents are entitled to state disability insurance. But providing the right tools from the right carriers can help brokers convey the importance of having this supplemental insurance. After all, going beyond the basic plans and providing top-of-the-line benefits is a win-win for employers and employees who are on the quest for optimal well-being.

Employers that depend on highly skilled workers need to be confident that they are attracting the best talent and that their employees are the healthiest they can be. In turn, employees want to feel secure about their health and financial obligations in case an illness or injury occurs.

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J. Edward Quinlan, Jr. is president of Humana for Southern California. Quinlan joined Humana in February 2011 and leads the overall management and strategic planning for Humana’s products and services sales in Southern California.

Humana Inc., headquartered in Louisville, Ky., offers a wide range of insurance products and health and wellness services that incorporate an integrated approach to lifelong well-being.



Healthcare–Are ACOs the Real Deal or Déjà Vu’?

by Sima Reid

In March of 2010, with the passage of The Patient Protection and Affordable Care (PPACA), Section 3022 requires the Department of Health and Human Services (HHS) to establish an initiative for Medicare Parts A and B called a “Shared Savings Program.”  The intent of this program is to help control costs under Medicare by bringing healthcare providers together in the management and coordination of patient care.

In addition, the expectation is that healthcare organizations will invest in infrastructure and redesigned care processes for high quality medical service delivery.

Accountable care organizations (ACOs) are the vehicle through which the Medicare Shared Savings Program will be implemented. The ACO will be eligible to share in the financial savings they are able to achieve. Claims incurred through the ACO will continue to be submitted directly to Medicare and will receive Medicare reimbursement in the same manner as they would if they were not in an ACO.

This new model for Medicare is to start no later than January 1, 2012. So what exactly is an account care organization (ACO)? ACOs bring doctors, hospitals and ancillary healthcare providers together in the form of an organization. In order for providers to be considered an ACO, they must meet specific criteria. Early ACOs might have 65 quality measurement requirements. PPACA addresses ACOs relative to the Medicare population. Individuals covered under traditional Medicare Parts A and B will be assigned to an ACO. The Medicare Shared Savings Program will pay the ACO an annual shared savings payment if it achieves a threshold savings amount for total per-beneficiary spending.

The benchmark will be set annually for three years based on the estimated average per-beneficiary spending, adjusted for beneficiary characteristics. The ACO must also attain quality performance standards to receive any payment. The Medicare program will retain the remainder of the shared savings amount. PPACA does not require a specific legal structure for the ACO.

Under Section 3022 to qualify as an ACO, a group of eligible healthcare providers must satisfy a number of requirements including the following:

• Participation in the program for at least three years.

• Responsibility for at least 5,000 Medicare fee-for-service beneficiaries; who would be assigned to the ACO.

• A process to promote evidence based medicine, patient engagement and coordination of care is expected.

• Enough primary care physicians to take care of the population assigned to the ACO.

• Standardized reporting including shared savings information, disclosure of joint ventures among doctors, hospitals, and other healthcare providers.

• Hospitals may participate in multiple ACOs; primary care physicians can only participate in one ACO

• Patient survey tools.

• There must be a process to identify their patient’s healthcare needs.

But what about ACOs in the commercial market place and how this might affect the medical program you provide your employees?  Private insurers seem to be eager to pilot the use of an ACO for employee plans. Anthem Blue Cross, the largest health insurer in the country has announced the formation of three ACOs in Southern California. Their pilot was rolled out in May 2011. The three ACOs are Healthcare Partners, Monarch HealthCare and Sharp Medical. Individuals currently in an Anthem Blue Cross PPO who have seen doctors at one of the ACOs were invited to participate. Employees were sent a letter advising that they would receive the same benefits, but now when they or their covered dependent visit their ACO doctor the member receives additional support and services at no additional cost. When using a PPO plan currently there is little coordination among providers unless the patient makes it happen. Through the use of shared information, the patient should see better management and coordination of their care with the expectation this will reduce costs while providing coordinated care.

By providing employees with new ID cards identifying the ACO, the hope is that the member will choose to get all their care through the ACO. If they wish to do so they are instructed to destroy their existing ID card. In a Webinar with consultants and brokers, Anthem Blue Cross advised that the IT connectivity between all providers is key to the success of the ACO. Anthem Blue Cross does not offer an ACO program today, but expects to offer the ACO as an additional option to the HMO and PPO plans it sells today. Blue Shield of California has also created an ACO. This ACO is in Northern California with Catholic HealthCare West and Hill Physicians and is serving CalPERS members. Blue Shield has reported that the ACO has already reported savings to the CalPERS program. The same philosophy exists with these pilot programs as with the ACO under Medicare; the expectation is that we will see reduced healthcare costs through improved quality healthcare and reduced fragmentation in healthcare.

If the payment structure in the future under an ACO for a commercial population is global capitation, then how is this really different than an HMO?  I remember over 30 years ago when HMOs were becoming popular. I seem to recall that many providers were involved in shared risk capitation that resulted in many problems. Will the increased technological capabilities that exist today combined with a formal, methodical information sharing be enough to make it work this time?

Following the release of the proposed rules in March, the government accepted public comment. For the most part, healthcare providers are concerned that the requirements are overly burdensome and the expected financial outcomes of an ACO are questionable. The American Medical Group Association (AMGA) represents close to 400 physician groups as reported in The Washington Post (May 17, 2011). A survey of its members revealed that 90% would not sign up as an ACO. The American Hospital Association (AHA) stated that one of the concerns for hospitals is the financial commitment needed to meet the ACO requirements.

An AHA study reveals that the financial investment would be six to 14 times as high as what the federal officials envision.  Cleveland Clinic, Mayo Clinic, and Geisinger Heath System have been quoted as large hospital systems throughout the country and their perspective of participating in an ACO.  Their comments were consistent. Thomas Graf, Chairman of the Community Practice Service of Geisinger was quoted stating that Giesinger is unclear if they will participate in an ACO at this time.

If large physician groups, large hospital systems and the hospital association are all concerned about ACOs as are being discussed today, will HHS/CMS revise the proposed rules such that providers will embrace the concept?  What about small physician groups, independent physicians, community hospitals; how will they fit into this new healthcare model?  Are we trying to put too much hope and expectation in ACOs as our silver bullet in reducing healthcare costs?  I think so but that is just my opinion.

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Sima Reid is the president of twentytwenty Insurance Services, an employee benefits consulting, brokerage firm located in Lakewood, Calif. She has over 30 years of experience in the insurance industry specializing in the development of employee benefit programs for regional and national employers and managed care captitation stop loss/reinsurance products for healthcare providers and self- insured employer plans. Reid is a graduate of Rutgers University, New Brunswick, NJ. She can be reached at 562-496-3760 or sima@twentytwentyins.com.

Healthcare–Mobile Communications: Putting Healthcare Solutions in the Palm of Their Hands

by Robert S. Oscar, R.Ph

Consumers are using smartphones to find the best buys for products ranging from blue jeans to lattes. At least 50% of Americans use a mobile device to shop, according to a study by the marketing firm Arc Worldwide. Now, the healthcare industry is recognizing the potential of mobile devices to affect purchasing decisions. And insurance brokers are positioned to help their clients take advantage of the opportunities.

Just What the Doctor Ordered

 

Despite its radical growth, the mobile health craze is still in its infancy. Health plans have only begun to dial into these ingenious advances to market benefit offerings that coincide with reduced costs and greater efficiency to their on-the-go populations whose needs are demanding to be met.

The Wireless Association reports that nearly eight in 10 Americans are interested in receiving healthcare services through their mobile connections.

While the market appears ripe for advanced mobile communications, a vacuum remains for health-related apps. Americans want their doctors and health plans to prescribe technology as part of their daily healthcare diet. And that is precisely where brokers can help to educate their customers on the wide variety of opportunities that await them.

Members with select benefit packages can now operate their smartphones to interact with physicians and pharmacists, research prices, refill prescriptions, check order status, or find the nearest location to pick up medications. Customers can also pay for prescriptions online through specialized applications, and locate medication histories to verify cost and purchase decisions. Scores of prescription-drug patients save, on average, 80% toward popular brand name medications purchased online, up from 73% in 2008.

A Dose of Smart Business

Today’s technology savvy pharmacists already know that e-prescribing and automated refill and status tools help them to communicate efficiently with patients and customers. As their busy schedules get more demanding and their specialty exceedingly focused, mobile communications can be a vital professional lifeline for fostering patient relationships, quickly and accurately answering customer queries, and eliminating unnecessary visits for follow-ups on transactions.

Health plans that choose to ignore the mobile experience risk losing some valuable customers, especially those who sign up for high-deductible plans that enable comparative shopping for services and medications.

Mobile devices – unlike desktop Internet resources – have the capability to answer the call for customer service by providing data from claims and provider files anytime, anywhere a consumer needs care and has to make a health-related decision.

Insurers can combine customer satisfaction with the bottom line by executing a well-planned mobile strategy that reduces administrative costs – medications represents 12% to 16% of their total healthcare spending – takes advantage of intervention opportunities and grows market share.

The Bottom Line — No Regrets

Certainly, not everyone owns a smartphone – yet. By the end of 2011, half of all Americans are expected to. Health plans are among the many that have joined the race to develop mobile Web sites. The bet is that these plans won’t make the finish line in time – only long after the majority of consumers are using smartphones.

Health plans will need to be on their toes to offer flexible experiences that support a maximum return on their investments and satisfy a hungry populace that changes products on the flip of a dime.

Health plans that offer phone service data capability, data security methods, rule-based configuration, and customizable content will harvest the biggest rewards in customer satisfaction and the bottom line.

Certainly, as brokers look for products and services that differentiate their offerings, they should learn not only what is being offered today, but they should also look to partner with the companies that can deliver the best solution.

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Robert Oscar is CEO of RxEOB has more than 25 years of experience in healthcare. Throughout much of his career Mr. Oscar has developed and implemented successful programs to effectively manage pharmacy benefit risk, including pioneering work in the Medicare HMO market. Before founding RxEOB, over a decade ago, Oscar worked in the medical information systems industry-designing, developing and implementing several different claims analysis tools. Oscar, a registered pharmacist licensed in Va. and is a graduate of Ohio Northern University. 

Wellness–Controlling Healthcare Costs is the Top Priority for Southern California Mid-Market Employers

by Ed Bray

If you ask a California employer what’s on their mind, you will most likely get the following questions:
• How can I control my plan’s increasing healthcare costs?
• Are there wellness programs that truly generate a return-on-investment?
• Do I have the resources to implement the healthcare reform requirements?

Sixty-six percent of Southern California’s mid-market employers say that controlling healthcare costs has been their number one priority in 2011. Employers are also uncertain about the value of wellness programs and how to implement compliant healthcare reform programs, according to a recent survey by Burnham Benefits.

Controlling Healthcare Costs

The fact that employers listed controlling healthcare costs as their top objective comes is not surprising  since they are trying to manage their healthcare programs in a down economy amid significant healthcare reform volatility. In fact, a separate Burnham Benefits study reveals that employer medical insurance costs increased an average of 3% to 5% in 2011 simply as a result of new healthcare reform requirements.

When asked how they plan on controlling such costs, employers’ top three answers are: negotiate current costs with the current provider (45%), increase the employees’ share of premiums (30%), and explore the market or change carriers/TPAs (20%).

What’s interesting is that employers’ top three solutions to controlling costs do not include changing features of the plan, such as coinsurance, copayments, and deductibles. This shows that employers think they have tweaked their plans to a point in which any further changes would significantly reduce the plan’s value. As such, it will be imperative for brokers to sharpen their negotiating skills to provide cost savings for an employer’s current plan while minimizing  the effect on members. In fact, minimizing cost increases becomes that much more important when employers feel that their next step is to pass additional costs on to employees.

Introducing Wellness Programs with a Return-on-Investment 

Sixty percent of Southern California employers have introduced a wellness program to help control healthcare costs. But most don’t know what to expect as a return-on-investment in two years or five years.

As brokers help their clients introduce and maintain wellness programs, the key is to find programs that are the right fit — in which the employer’s input can translate into a positive wellness outcome. This will involve reviewing and analyzing  the employer’s budget, resources, commitment, and goals. The end result can be anything from introducing a third-party wellness vendor driven program to simply offering a medical carrier-based wellness program that gives employees a better understanding of their health risks and issues. This would result in a more productive workforce with little work required from the HR department. The moral of the story is that you can minimize any misunderstanding or confusion about the return- on-investment if you take the time to develop a wellness program that is the right fit for your clients — a program in which you pay particular attention to how the input should translate to output.

Managing the Impact of Healthcare Reform      

As employers consider how to manage the effects of healthcare reform, they don’t know how it will affect their plans or what major organizational decisions they should make. When asked whom they counted on to help with benefit planning and compliance, 86% said it was their broker.

As the overseer of an employee benefits program, it makes sense for a broker to lead the charge through healthcare reform. This not only involves providing significant education and communication to the senior management as well as employees, but also being aware of the changes that healthcare reform is introducing on an almost daily basis. As such, it will be critical for brokers to play that role or engage a compliance officer to help them manage healthcare reform for their clients. Falling behind is most likely to result in legal and plan non-compliance issues.

How to Use the Survey Results to Help Your Clients

The survey results validated what many brokers have already been thinking and experiencing:  plan cost control is required;  employers are interested in wellness plans as well as return-on- investment uncertainty; and healthcare reform planning and compliance is top of mind. You will be in a favorable position to manage your clients’ health plans now and into the future if you can handle these issues effectively and communicate to your clients that they are not alone in dealing with their uncertainty, especially around wellness and healthcare reform.

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Ed Bray is director of compliance for Burnham Benefits. He’s responsible for helping Burnham Benefits’ clients establish and maintain regulatory compliance for their health and welfare benefit plans. He is also leading Burnham’s efforts to usher clients into the age of healthcare reform during a time of unprecedented regulatory complexity. Before joining Burnham Benefits, Bray managed and directed employee benefit programs at The First American Corporation, Irvine Company and Apria Healthcare. Bray has served  on the California Chamber of Commerce’s Health Care Policy Committee and as an appointed member to the U.S. Chamber of Commerce’s Employee Benefits Committee. He is also a licensed attorney. Bray presented at the 2010 National Healthcare Reform Conference. Based in Irvine, Calif., Burnham Benefits Insurance Services Inc., is one of the largest employee benefits brokerages in Southern California and one of the few to specialize solely in employee benefits. For more information, visit www.burnhambenefits.com.

Life Settlement News

ACLI to Address Life Settlement Conference in D.C.

Michael Lovendusky, vice president of the American Council of Life Insurers, will open the 8th Annual Fasano Life Settlement & Longevity Conference on October 24th in Washington, D.C. with a presentation on “The Relationship Between Life Insurance and Life Settlements: Can We Get Along?” Michael Fasano, President of Fasano Associates said, “The Life Insurance and Life Settlement industries have more to gain from each other than to lose. We need to get a constructive dialogue going and I am delighted that the ACLI has agreed to speak directly to us.”

Fasano added, “As in prior conferences, our focus is strongly oriented towards the investor and we are fortunate to have such high caliber investment experts share their insights with us.” For more information, visit www.fasanoassociates.com.

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401(k) Includes Life Settlement Investments 

GlobalBridge Inc. and Provident Trust Group LLC launched a series of collective investment funds that shield U.S. retirees and other investors from an environment of elevated global risk. The Wealth Fund is the only investment product on the market that incorporates life settlements and conventional securities-oriented asset allocation in a form that 401(k) accounts and certain other retirement plans can offer to participants. The rationale for bringing life settlements into retirement accounts is added diversification and the possibility of lower risk and higher returns. Wealth Fund I contains 80% life settlements, with the remaining 20% allocated to a well-diversified blend of traditional and non-traditional, non-correlated securities.

GlobalBridge CEO Kelly Coughlin said, “I first got interested in life settlements as a non-correlated asset class when I heard that a subsidiary of Berkshire Hathaway Inc. made some significant investments in these assets. And if it is good for Warren Buffett’s company, it might just be good for our clients.”

Coughlin said that the fund further refines the life settlement investment process by incorporating various pooled life settlement vehicles along with an asset management architecture. It allows participating advisors to gauge the risk and return characteristics of these vehicles in relation to stocks, bonds, and various alternative asset classes.”

Aliya Lifespan LLC created the life settlement portion of the portfolio to mesh with the debt, equity, and other holdings that make Wealth Fund I unique in the life settlement space.

Theresa Fette, CEO of Provident, says the products fill a demonstrated need for 401(k) providers and sponsors to provide less volatile investment options to retirement plan participants.

Fette said, “Being a self-directed IRA custodian, we have individual clients who had invested in life settlements for their individual accounts. But many of those same individuals were also business owners who wanted to add life settlements to their employer-sponsored plans.” For more information, visit www.globalbridge.com.

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SEC Alleges That a Fraudster Posed as a Legitimate Life Settlement Company

The Securities and Exchange Commission got an emergency court order to halt an alleged $4.5 million investment scheme by a Los Angeles-based company that purports to broker life settlements. The SEC alleges that Daniel C.S. Powell and his company — Christian Stanley Inc. spent the past seven years posing as a legitimate life settlement industry company while fleecing investors. In fact, Christian Stanley has never purchased or generated any revenue as a result of brokering the sale of a single life settlement and has barely derived any revenue from any of its purported business ventures.

The SEC alleges that, instead of using investor money to purchase life settlements or develop the coal and gold mines, Powell and Christian Stanley used investors’ money for sales commissions and Ponzi-like payments to existing note holders. Powell also used investor funds for $21,000 toward his school loans, more than $5,000 for cowboy boots, and nearly $5,000 for a dating service.

The Honorable George H. King for the U.S. District Court for the Central District of California granted the SEC’s request for a temporary restraining order and asset freeze against Powell and his companies. The court appointed Robb Evans & Associates LLC as temporary receiver over the entities.

According to the SEC’s complaint, Powell raised funds from at least 50 investors nationwide in the fraudulent debenture offering, promising investors fixed interest returns ranging from 5% to 15.5% annually for five-year terms. Powell claimed the notes were backed by assets such as a gold mine in Nevada and a coal mine valued at $11.8 billion.

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Life Settlement Fall Conference In Atlanta

The Life Insurance Settlement Assn. is holding its annual fall conference in Atlanta October 3 to 5. Institutional investors, life settlement brokers, providers, intermediaries and regulators will come together to address the most pressing issues in the life settlement industry. A special emphasis will be on attracting long term capital investment to the life settlement market.

For more information, visit http://www.thevoiceoftheindustry.com/content/29/LISA-Events.aspx

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Life Settlements as Collateral

Atlanta-based Tradewind Settlements is negotiating with several area banks to use its Life Insurance Financial Enhancement (LIFE) program as collateral for a new loans with prepaid interest while purchasing non-performing loans or assets from the bank. For more information, visit www.fasanoassociates.com.

Vision–What Your Eyes Reveal About Your Health
Why Vision Benefits Make a Difference in Employees’ Health

by Karen M. Gustin

When someone looks into your eyes, do they see just the color of your iris? Or can they pick up clues about how healthy you are? Medical researchers have discovered that our eyes may communicate the existence of health problems, sometimes even before physical symptoms appear.

Eye problems are the second most prevalent health concern in the United States, affecting more than 120 million adults. Vision loss is among the top 10 causes of disability, with an estimated 60 million Americans at risk.

What health concerns could your eyes communicate to others? Consider the following list of physical characteristics that may reveal a health issue:

• Droopy eyelids, difficulty closing one eye, no control of tears – These symptoms often appear suddenly and may be an indication of Bell’s palsy, an impairment of the nerve that controls the facial muscles. Described as a temporary paralysis in only half of the face, most cases of Bell’s palsy follow a viral infection, including shingles, mono, HIV or a bacterial infection, such as Lyme disease. Fortunately, the symptoms usually recede within a few weeks. Depending on the severity of the palsy, physical therapy assistance may be helpful to regain facial muscle control.

• Dry, sensitive eyes – A possible indication of an immune system disorder known as Sjogren’s syndrome. It affects the glands in the eyes and causes dryness and sensitivity, especially in women over age 40 who have rheumatoid arthritis or lupus. It also affects glands in the mouth diminishing saliva which can create difficulties in chewing or swallowing. Treatment options include lubricating drops for the eyes and increased water consumption.

• Double, dim or loss of vision – An early visual sign of stroke that comes on suddenly, which may be accompanied by sudden numbness or weakness in the arm, leg or face on one side of the body, loss of balance and coordination, slurred speech or painful headache. Immediate medical assistance is important.

• Small hemorrhages in the eye – People with diabetes are at risk of developing diabetic retinopathy, which affects the eye’s circulatory system and may cause small, visible hemorrhages, glaucoma or cataracts. Often diabetics see floaters or tiny dark spots, but do not experience any pain. Eye doctors recommend that individuals with diabetes should schedule eye exams annually to monitor vision changes.

• Gunk in the eye – Crusty debris in the lashes, corner of the eyes or on the eyelid may be a sign of dandruff or acne rosacea. Since it may cause skin inflammation, apply a warm, damp washcloth to the eyes for several minutes to loosen the debris. If the irritation continues, use artificial tears or contact your eye doctor for an antibiotic to heal the skin.

• Shimmering lights, wavy lines or blind spots – Usually these are signs of an ocular migraine. Although the condition is usually painless and doesn’t damage the eye, if the problem frequently returns, schedule an eye exam to have your vision checked.

• Red, itchy eyes – Allergies frequently cause irritated eyes. An over-the-counter antihistamine may help treat the itchiness, and eye drops may provide relief to the inflamed eye tissue. If the problem continues, check with your eye doctor for other remedies.

• Yellow eyes – A yellow color in the area of the eye that is normally white may signal a problem with the liver, gallbladder or bile ducts, hepatitis or cirrhosis. The yellow color develops when old red blood cells build up and cannot be processed by the liver. This condition should be evaluated and treated by your medical doctor.

• Eyelid bump or brown spot – This is usually the sign of a malignant eyelid tumor known as basal cell carcinoma. Individuals who are fair-skinned or elderly are at highest risk of developing eyelid spots. Contact a dermatologist, eye doctor or physician to have the spot evaluated. Early detection is vital to preventing the cancer from spreading to the lymph nodes.

• Bulging eyes – Over time, some individuals develop protruding or bulging eyes due to an overactive thyroid gland. These individuals may appear to stare at others, especially since they do not blink their eyes as often. This condition is sometimes associated with Graves’ disease, with symptoms that include blurred vision, restlessness, fatigue, increased appetite, weight loss, tremors or palpitations. Treatment options usually include medications and surgery to correct the problem.

• Disappearing eyebrow – If you have ever noticed that the outer third of someone’s eyebrow is missing, this may be a sign of thyroid disease. Although people often lose eyebrow hairs as they age, this disease causes selective dropout at the ends. Other signs of thyroid disease include early graying and a loss of hair on other parts of the body. Schedule an appointment with your physician for a complete evaluation and treatment.

• Reddish bump on the outer or inner eyelid – The bump may be a sty, known as a clogged eyelash follicle. Usually the problem disappears independently, but if it continually recurs in the same spot, it may be a sign of rare cancer called sebaceous gland carcinoma. Check with your physician or ophthalmologist to have the sty evaluated.

• Bumpy, yellow patches on the eyelid – These fatty deposits of several bumps together are considered a sign of high cholesterol. Don’t confuse this problem with a sty. Seek medical attention to have your cholesterol levels and risk for coronary artery disease evaluated.

• Burning eyes – If you experience dry, irritated eyes or blurry vision after using the computer for an extended time, you may have computer vision syndrome. The best solutions are to take frequent breaks while working at the computer, look up at a distance and bring your vision back to the screen, and reduce glare on the computer screen or wear glasses with an antireflective coating.

Early Detection is Vital

Vision problems can be detected during an annual eye exam. Unfortunately, many Americans do not regularly schedule eye exams because of the cost or lack of vision insurance, reports the Centers for Disease Control and Prevention. There is a common belief among individuals that scheduling a regular eye exam isn’t necessary unless they detect an eye problem. But many eye and vision concerns do not exhibit obvious signs or symptoms.

During a comprehensive exam, eye professionals conduct a variety of tests to assess patients’ eyes. These tests provide an unobstructed, noninvasive view of blood vessels, enabling eye doctors to discover potential eye diseases, as well as up to 30 systemic disorders, including cancer, arterial blockage, thyroid disease, diabetes, high blood pressure, high cholesterol, strokes and multiple sclerosis.

Economic Value of Vision Exams

According to Prevent Blindness America (PBA), each year the total economic impact of adult vision problems is approximately $51.4 billon, costing businesses an estimated $8 billion annually due to lost employee work hours and reduced productivity.

Surveys by the American Optometric Association show that businesses with vision plans save up to $7 for every $1 spent for coverage costs. And the Federal Bureau of Labor Statistics reports that employers spend only $70 to $80 per employee annually for premium vision insurance benefits, compared to thousands of dollars in medical premiums. PBA also states that employees with access to comprehensive vision coverage and who practice eye safety have better attendance, higher levels of productivity and fewer medical costs.

Right Plan Saves Time and Money

Look for a quality plan that covers comprehensive wellness exams as well as the materials and services important to employees and their families.

It is beneficial to work with a carrier experienced with vision plans, one that has a reputation for excellent customer service to partner with you in designing benefits that can be adjusted to meet changing group needs.

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Karen M. Gustin, LLIF, is senior vice president – group marketing, national accounts and block acquisitions for Ameritas Group, a division of Ameritas Life Insurance Corp. (a UNIFI Company). A provider of dental and vision products and services, Ameritas Group added hearing care to its product portfolio in 2008. Gustin joined Ameritas Group in 1983. She is vice chair of the National Association of Dental Plans’ board of directors and its statistical task force and also serves on NADP’s executive committee.