December 2011 California Broker Back IssueCritical Illness Insurance – Filling the Gaps in Post Reform World
by Chris Swanker • Critical illness insurance fills an essential need in today’s healthcare benefit marketplace, particularly in a post-reform world. For proof, look no further than premium sales growth.

Dental Benefits– Dive Deeper into Dental Benefits
by Chris McConathy • Diving a little deeper into the world of dental benefits includes taking a closer look at the difference between unique dentists and access points; out-of-network reimbursements; and trends in dental plans.

Dental Benefits – How Today’s DHMO Plans Can Add Real Value
by David Guarrera, DDSD • HMOs tend to be viewed as the low-cost option for dental benefit plans, but they can have a big impact on an employer’s benefit package and increase employee health and satisfaction.

Vision Benefits – Are Your Clients Winning With Vision? Ten Strategies for Selling Vision Benefits in 10 Minutes
by Rick Walker • The vision benefit is an easy sell. It has one of the highest returns on investment in terms of avoided medical costs and productivity gains.

Healthcare – Mobile Communications: Putting Healthcare Solutions in the Palm of their Hands
by Robert S. Oscar, R.Ph. • The healthcare industry is recognizing the potential of mobile devices, like smartphones, to deliver messaging that affects purchasing decisions. Insurance brokers are positioned to help their clients take advantage of the opportunities.

Medical Tourism – Bringing Medical Tourism Onshore to Save on Healthcare Costs
by Susan Middaugh, CEBS • Despite the uneven experience of employers in adopting medical travel, the average U.S. consumer appears to be ready for medical travel.

Medicare Supplements – Guiding Clients Through the Medicare Maze
by Kyal Moody • Every eight seconds, someone in America ages into Medicare. That means that, every eight seconds, there is a potential new business opportunity For California’s health insurance brokers.

Long-Term Care with an Annuity – The New Rules of the Game: Planning for Long-Term Care with an Annuity Contract
by Daniel Herr • The provisions of The Pension Protection Act of 2006 have made combination LTC annuity products a viable option for those who are preparing for retirement and for potential LTC needs.

Voluntary Benefits Survey – Helping Clients Think Outside the Benefits Box:
Using Voluntary Benefits to Boost Employee Morale: Our Annual Survey

by Leila Morris • This is our second annual voluntary benefits survey. The strong support among carriers shows how popular voluntary benefits are becoming in today’s market.

Life Settlements – Keeping Safe in the Life Settlements Market
by Ellis Largent • Despite the life settlements industry’s best efforts, reports of executive malfeasance hit the news with an upsetting frequency. How do investors identify reputable life settlement firms?

Life Settlements of Corporate Owned Life Insurance Policies
by Doug Himmel • More than ever, diligence and creativity play a larger role in maintaining a company’s health and viability.

Filling the Gaps in Post Reform WorldCritical Illness Insurance

 by Chris Swanker

Critical illness insurance fills an essential need in today’s healthcare benefit marketplace, particularly in a post-reform world. For proof, look no further than premium sales growth. It has continued an upward trend in recent years, even in the slow economy. According to LIMRA, voluntary premium sales in the U.S. were up an exceptional 41% year-over-year in the first quarter and 17% in the second quarter of this year. Worksite sales which are by far the largest share of the critical illness market, leapt 104% from 2009 to 2010.

There’s a clear reason driving the popularity of critical illness insurance: it can act as a stopgap. Consider the following: Life insurance insures your life. Major illnesses like heart attacks, strokes and cancer used to kill people. Now they survive. Critical illness was developed to help people afford the significant cost of survival.

Policyholders receive their benefit in a lump sum with no limitations on how claim money is spent letting critical illness coverage extend to a host of expenses and out of pocket costs from copayments to travel back and forth to the hospital, from experimental treatments to at-home care.

Critical illness coverage also dovetails very well with developments in the medical insurance market as growing numbers of companies and consumers move to cut healthcare costs by coupling a health savings account with high deductible medical plans. At the beginning of 2011, American’s Health Insurance Plans reported that 11.4 million had signed on for a health savings account/high deductible plan option, an 87% jump from 2008.  Many policyholders have turned to critical illness as a safety net by taking out coverage to backstop their health plan’s deductible.

Benefits in a Post-Reform World

Although the biggest changes to be brought about by healthcare reform legislation have yet to take effect, preliminary indications are that demand for critical illness is likely to increase rather than decrease in the years ahead. The reason is that reform probably won’t have much effect on the steady and steep climb of health insurance premiums. In fact, some experts expect medical insurance expenses to double in the next six to 10 years for employees who get coverage through their job. The upshot: In order to cope with higher costs, companies and employees will have no choice but to continue the move to higher deductible plans or take steps to limit coverage for certain treatments. In the end, that means policyholders will need to seek solutions like critical illness insurance to supplement worksite health plans. That way, they’ll have the protection to guard against large, one-time out-of-pocket expenses they incur as a result of serious ailment or injury.

The fact is that, all too often your clients aren’t prepared for common medical conditions that could send their families into a financial tailspin. Research published by Harvard University in 2009 found that medical problems were a contributing factor to 62% of all U.S. bankruptcies — a nearly 50% increase over statistics gathered in 2001. The same study found that nearly 80% of participants who had been pushed into bankruptcy by an illness had health insurance when they first fell ill. Those figures are all the more sobering in California, where one in every six of the nation’s bankruptcies is filed.

The Market Is There

Tough times may have helped American households grasp just what’s at stake, but there’s still a considerable opportunity for brokers. In fact, findings from a recent Guardian survey point to a growing gap between awareness and action. The study showed that just 25% of U.S. employees had critical illness coverage. At the same time, 68% of the same group said they were aware of the burden a critical illness would pose on their finances. Roughly two-thirds said they had experienced a critical illness or disability or knew friends or relatives who had; 43% of participants had offered financial help to friends or family who had to cope with an illness or disability.

Those numbers aren’t based on a lack of interest in the product but rather, a lack of understanding of its role; nearly 60% of employees indicated being open to purchasing voluntary critical illness insurance if it was offered by employers.

Sales Points – Pricing, Coverage

Making headway in the market will depend on two things. In today’s cost-conscious market it certainly helps to focus on pricing. It’s important to note that critical illness doesn’t cost as much as people might think; extra medical protection for serious medical conditions costs $1 a day or less. The second selling point is the flexibility of critical illness insurance. The benefits are paid up front as a lump sum upon a medical professional’s diagnosis of cancer, stroke, heart attack, kidney failure or a major organ transplant.

In some cases, coverage can be enhanced with a hospitalization rider that can provide insured’s up to $500 a day in the event of an accident or injury. Beyond that, the coverage for non-medical expenses is one of the most valuable features. The critical illness lifeline can extend to caregiving, babysitting, the cost of a cab to and from the hospital, or the expense of a new experimental treatment.

Opportunity Knocks

These are times when good products stand out. Critical illness insurance is coverage that is in step with your client’s concerns. It’s sound protection that makes it possible for business clients to offer employers a meaningful benefit at a reasonable cost. It’s a source of stability and comfort in California and throughout the U.S. — households that are looking for safety in uncertain times. And finally, it’s a boon to your business — a way to increase your sales and still do customers an important service.


Chris Swanker is vice president, Guardian Group Dental & Vision

Dental–Dive Deeper into the World of Dental Benefits

by Chris McConathy

Most of us know that dental benefits are highly favored and frequently used. Good dental health is important to overall health and productivity. And poor oral health is an indication of poor overall health, which leads to lost days of work.

In fact, more than 164 million work hours are lost, each year, because of poor oral health, according to a Surgeon General report titled, “Oral Health in America.” Employers understand this, which is why more and more employers include dental in their benefit packages.

Approximately eight in 10 people with employment-based health insurance have dental coverage. Most large employers offer dental benefits. Dental benefit penetration is nearly 100% for employers with more than 1,000 employees. However, there are opportunities to increase penetration in small- and mid-sized businesses. Thirty two percent of small employers that offer benefits say that, if they could expand their employee benefits, dental insurance would be among the first benefits that they would add, according to a 2009 LIMRA study.

I am sure that you understand the importance of dental health and dental benefits. So, I want to dive a little deeper into the world of dental benefits and highlight some information that can be easily overlooked or misunderstood, such as the following:

• The difference between unique dentists and access points.

• How out-of-network reimbursements work.

• Current trends in dental plans.

Counting Numbers in Networks and Understanding the Difference Between Unique Dentists and Access Points

We know how important it is to offer clients access to a big dental network. While a network with big numbers is a great feature, you should make sure that the network numbers are valid. When it comes to comparing the networks of different dental carriers, be sure to ask, “How do you make sure that you are not counting each dentist more than once, especially if dentists have multiple offices or are part of large practices but don’t work at every location?”

Accurate counting and reporting makes all the difference with dental networks. For example, the carrier should provide counts of unique dentists because it gives an accurate count of the total number of network dentists in California who are ready and able to provide dental care.

The carrier should also provide counts of dentists’ access points. (An access point is a location where a dentist practices.) For example, a dentist who works at three different offices has three access points. However, there are different ways of counting access points. And some ways can skew the numbers to make it look like a carrier has more network dentists than they really have. For instance, if a dentist has offices in three counties, is the carrier counting that dentist one time when determining their state total or once per county? The carrier should only count the dentist once when calculating the total number of dentists in the state, otherwise it skews numbers and makes it look like there are more dentists in the network, The bottom-line is that you should find out how each carrier counts the dentists in its network and focus on unique dentist counts, not access points.

Procedure Code Description 50th percentile 60th percentile 70th percentile 80th percentile 90th percentile
D0120 Office visit $48 $50 $52 $55 $62
D2150 Filling $150 $160 $185 $210 $245
D2750 Crown $975 $1,000 1,075 $1,150 $1,249
These are examples for illustrative purposes only. Actual rates and experiences will vary.

How Do Out-Of-Network Reimbursements Work and What Is The Importance Of Having a Good Network?

Your clients will have a number of factors to consider when selecting a dental plan, such as plan designs, network access, service quality, and provider reimbursement. The reimbursement methodology used when members go to an out-of-network dentist can be a driver of member satisfaction and plan costs. Out-of-network reimbursement can be based on the following factors:

• A fixed fee schedule.

• A percentile of data from a third-party vendor.

• A maximum allowable schedule developed by the carrier.

When it comes to using maximum allowable fixed fee schedules, one of the following methods can be used to determine the maximum allowed amount:

• An out-of-network dental fee schedule that’s based on items, such as reimbursement amounts that have been accepted by dentists that are contracted with the carrier’s dental plans or other industry cost, reimbursement, and utilization data.

• An in-network dental fee schedule (otherwise known as a “MAC plan”).

• Information provided by a third-party vendor that gathers similar costs for dental services.

Third-party vendors, such as FAIR Health, provide cost data for dental services by zip code and plans can offer reimbursement based on a percentile of that data. For example, many insurers set reimbursement for out-of-network dental services at the 80th percentile, which means the amount that is allowed is equal to or less than the 80th percentile maximum in the third-party vendor’s database for that particular dental service/geographic zip code combination. (In short, 80% of the services charged are allowed at the full charge.) The example in the chart below shows the maximum allowable amount at different percentiles for three procedures:

In the example below, we’re comparing plans allowing up to the 80th- and 90th percentile and how that affects an employee’s out-of-pocket expenses:

In addition, some carriers use percentiles of their own data. For example, the 80th percentile will not be the same if the data is coming from a different source, so make sure you ask the carrier “80th percentile of what?” You want to know what the carrier is basing the percentiles on. Is it data from a third-party vendor, such as FAIR Health or their own data. These are not necessarily the same.

Another methodology used for out-of-network reimbursement is a fixed-fee schedule (for example, $50 per filling, $25 for an office visit). These schedules can be set at a variety of levels. For instance, one option is to use the 80th percentile of comparable provider charge data. Another option is to use lower schedules based on a negotiated fee schedule for contracted dentists in the same geographic region (for example, 70% of the dental plan’s contracted rate for the same service in the same geographic region).

How does this affect a member’s out-of-pocket expenses? It’s important to have a good network because it will reduce out-of-pocket expenses and help ensure that your client’s employees have access to quality care.

Procedure CodeDescriptionProvider ChargePlan pays at the 80th percentile

Procedure Code  Description Provider Charge Co-
Plan pays at the 80th percentile Plan pays at the 90th percentile
D0150 Comprehensive oral evaluation – new or established patient 80th percentile Insurer Pays Member Pays 90th percentile Insurer Pays Member Pays
$80 100% $85 $80 $0 $90 $80 $0
$95 100% $85 $85 $10* $90 $90 $5*
*There is a $5 difference in the out-of-pocket costs for the member when you compare the costs for this procedure between the 80th and the 90th percentiles

What Are Some of The Trends Featured Within Different Plan Offerings?

According to the National Association of Dental Plans, employers are looking for these five features in their employee dental benefit plan in addition to preventive procedures such as cleanings, exams and x-rays:

1. Sealants (77%)

2. Benefit rollovers (76%)

3. Enhanced benefits for related medical conditions (75%)

4. Adult orthodontia (73%)

5. Dental implants (72%)

As a result, more dental plans are incorporating these features into their benefit offerings.

In short, the items highlighted in this article are often overlooked, but are very important in the world of dental benefits. I hope this information makes you feel even more prepared to help your clients choose the best dental plan for their employees. Happy selling!


Chris McConathy is director of Sales, Specialty Sales for Anthem Blue Cross Life and Health Insurance Company.


Dental–How Today’s DHMO Plans Can Add Real Value

by David Guarrera, DDS

DHMOs tend to be viewed as the low cost option for dental benefit plans, but this type of plan can make a big impact on an employer’s benefit package and increase employee health and satisfaction when designed appropriately.

Despite economic challenges, dental benefits and DHMO plans, in particular, remain a key element of the employee benefit mix in California. Employees rank dental coverage among their top five most important benefits according to the MetLife 9th Annual Employee Benefits Trends Study. Moreover, the prior year’s study found that employees with dental benefits are more likely to visit a dentist than those without dental benefits, which is important given the research underscoring the links between oral health and overall health.

Brokers should encourage their clients and prospects to take a closer look at DHMO plans since employees value cost-savings and choice in the dental marketplace. While DHMOs tend to be viewed as the low cost option, this type of dental benefit plan can actually make a positive impact on an employer’s benefit package as well as employee health and satisfaction, when designed appropriately. The right DHMO can add real value and addresses the needs of employers and employees in markets, such as Calif., Texas, Fla., and others that contain strong, stable DHMO networks.

Brokers are uniquely positioned to help clients assess the value of these plans, not just by cost, but also by features that ensure a quality experience for their employer groups and employees. Brokers should discuss DHMO plans as a value-added addition to or as an alternative to DPPO plans with their cost conscious employer clients, especially those who have not reviewed their dental plans in years. Brokers can use the following list of questions to help analyze if a DHMO offering is a fit for their clients and whether it offers a quality DHMO experience to covered members. The following questions can be used to assess the quality and variety of available DHMO plans:

1. Is a DHMO offering a possibility based on the geography and demographics of the target client group?

California is a strong market for DHMOs. California boasts the highest number of residents belonging to a DHMO plan at 2.8 million (more than double second ranked Florida with 1.3 million), according to Enrollment and Network Statistics’ 2010 NADP/DDPA Joint Dental Benefit Reports. Not surprisingly, at 7.5%, California also has the highest participation rate as a percentage of state population. About 30% of DHMO members in the United States live in California. And more than any other state, California offers a high level of access to general dentists and specialists throughout the state. Other states and regions with a particularly strong DHMO presence are Texas, Fla., regions of Nev., Ga., N.Y, N.J, Ill., and, to a lesser extent, various other regions and metropolitan areas.

2. Does the plan demonstrate a holistic approach to deliver value for employers, members and dentists?

An effective DHMO plan addresses the needs of all stakeholders – employers, members, and network providers. The DHMO plan should deliver savings, service, and quality to employers and employees and allow dentists to receive adequate reimbursement for appropriate dental treatment. Some DHMO plans sacrifice network provider interaction for price and cost, which could lead to increased grievance rates from dissatisfied members, as well as provider disputes and provider turnover.

To maximize satisfaction and participation, a DHMO plan should balance value that employers and members expect (comprehensive benefits at an affordable cost) with the compensation that dentists expect. How does the plan accomplish this? For example, how does the plan promote efficiencies and profitability for participating network dentists so that the network remains stable?

Contracted dentists and members must be served so that the member has a smooth, seamless dental benefit experience. Providers should know the plan and benefit company requirements and members should get detailed plan information on how to use their benefit plan with maximum ease and efficiency.

There is innovation in DHMO plan design and breadth of coverage as some plans offer more comprehensive products that may provide coverage for some of the most in-demand procedures, such as implants and cosmetic procedures. Plan designs that integrate current clinical research and marketplace trends can be more cost-effective and more clinically appropriate. They can also improve employee satisfaction. A comprehensive DHMO plan design can address how the plan assimilates evidence-based research, treatment protocols, and market demand into the benefit design to ensure coverage aligns with today’s standards of dental care and patient expectations.

3. Is the DHMO plan designed to promote oral health and value or to show well on a spreadsheet?

As employees bear a larger cost burden, they expect more from the plan. Does the DHMO plan cover what the members value, such as posterior composites, bruxing appliances, and cosmetics? But value isn’t always readily apparent to the broker who simply compares spreadsheets of procedure codes or to the employee who does not appreciate what services are necessary and appropriate to support their oral health long after they’ve purchased coverage. For example, services, such as periodontal maintenance and local chemotherapeutics, may be viewed as important adjuncts to periodontal treatment. Does the DHMO plan provide coverage for services, such as implants (and the services that support implants like grafts and cone beam images)? Dental implants have traditionally been excluded from DHMO coverage, but many dental research sources now view them as standard treatment considerations.

4. Does the DHMO plan deliver on employee needs and expectations for care?

Providing a level of care that’s necessary for good dental health is the baseline for a quality DHMO plan. Given the consequences of poor oral health, a well-designed DHMO plan should offer affordable access to necessary care and encourage appropriate treatment and/or follow-up care. This may include periodontal maintenance visits, local chemotherapeutics, implants, grafts, and other elements.

DHMO plans should include operational features that help to ensure that employers address employee satisfaction, control dental plan costs, and provide a meaningful benefit. DHMO plans should also provide coverage for services and procedures that consumers view as necessary and important. Brokers should examine each plan to determine whether it is consistent with market trends, dental research, and treatment protocols (For example, posterior composites, bruxing appliances, etc.) When evaluating plans, assessing the type and number of covered codes may be important, along with the distribution of the covered procedures across diagnostic, preventive, restorative, surgical, and periodontal categories.

5. Does the DHMO plan offer a large, well-managed network?

Plan participants expect to have conveniently located, high quality dentists in the network. Dentists must be able to accept new patients and offer convenient appointment times. A worthwhile DHMO plan has a large enough network in the necessary business regions so that employees have sufficient access to dental care and dentists can grow their patient base, achieve operational efficiencies, and receive adequate compensation. To accomplish this, the DHMO plan must have a large and expanding membership coupled with rigorous and ongoing network management processes.

The DHMO plan must also deliver tools and processes pertaining to health and safety issues that go beyond regulatory mandates. How does DHMO achieve this? How does the plan work with the provider community, in academia and in practice, to identify and disseminate best practices that promote health and safety for members?

6. Are network providers properly qualified?

Plans can create a positive DHMO experience for members by evaluating the credentials of each provider at a facility and giving members information about the providers on an ongoing basis.

Plans should have active quality management and/or utilization management programs that can identify significant patterns of care or service and provide educational experiences to contracted providers. Such plans keep their members and providers satisfied through ongoing dialog between the plan and the provider. Some plans include active monitoring as well as educational and re-training components in their interactions with providers to ensure that members always get smooth service, which contributes to minimal provider turnover. Evolved plans offer value to their providers, so they continue to join and stay in the network.

Having less turnover means that employees can build those long-term relationships with their providers. Plans that periodically visit providers onsite can create optimal working relationships with providers, which can lead to higher member satisfaction, higher provider satisfaction, and fewer complaints for the employer.

Plans that publish expected clinical and utilization policies can remove further misunderstandings among stakeholders.

7. Is the plan language clear?

Unambiguous DHMO plan language promotes better understanding of financial obligations, which increases member and provider satisfaction and protects the plan and its members. If charges are clear, appropriate and fair, participants and providers will more readily accept and understand contractual terms and conditions.

A plan’s schedule of benefits, limitations, exclusions, and policies should be clear and readily available to all stakeholders. Offerings of covered services to handle most commonly encountered dental conditions and non-covered services should make sense.

Do the plan designs and plan documents protect members from inappropriate charges? Some plans may have minimal or no features to control inappropriate member charges, such as potentially unbundled charges that often accompany fillings. Or they may have an unclear copayment policy for office visits or lab fees associated with crowns or bridges. Are dentists compensated fairly for services, such as provisional crowns or is the plan’s reimbursement methodology fundamentally deficient by encouraging dentists to find and charge for non-covered services or alternatives?

In conclusion, brokers in California should educate clients and prospects on the value DHMO benefits as a stand-alone or dual-option offering. Brokers can guide employers to a solution that provides the best value for their resources and needs by understanding the various elements of DHMO plan choices and comparing the various features, including cost, coverage, design and operational policies. By examining DHMO plan options according to the questions above, brokers can make confident recommendations to clients and position their own businesses for steady growth.


Dr. David Guarrera, DDS, is vice president of MetLife’s Dental Product Management. He is responsible for the oversight of sales training and market positioning. He is also responsible for setting clinical policies in relation to the practice of dentistry as it relates to MetLife’s dental products, the oversight of MetLife’s professional claim review process as well as disease management and wellness initiatives. 

Vision – 10 Strategies for Selling Vision Benefits in 10 minutes
Are Your Clients Winning With Vision?

by Rick Walker

When it comes to winning with vision benefits, you don’t have to have tiger’s blood and Adonis DNA. (Sorry, Charlie.) That’s because the vision benefit is arguably an easy sell.

It has one of the highest returns on investment in terms of avoided medical costs and productivity gains. Plus, offering vision coverage remains a cost-effective way for employers to help their employees see, feel and perform better. With vision coverage, everyone wins.

So, why are just 17% of employers taking advantage of a vision plan for their employees (Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2008)? And why are half of employees not taking advantage of their vision benefit even when it is offered (Survey of 2,046 employees conducted by Synovate from October 4-14, 2010)?

The challenge lies in educating employers about the value of vision benefits and making sure they are communicating these messages to their employees during the enrollment period and beyond. As a benefit broker with more than 25 years of experience, I can attest that there is a lot of education to do and very little time to do it in. In fact, some of my colleagues will argue that, when it comes to the benefit discussion, we can only afford vision just a few short minutes, given all the other demands of our time.

I believe, wholeheartedly, that a vision benefit will almost sell itself in very little time with the right tools and techniques. I always position vision as a core element of every employee benefit package and have had much success. I’m willing to share 10 of my best selling strategies and encourage you use a few of these to make vision an important part of your overall benefit discussions. Are you ready to take the 10-minute challenge?

Strategy 1: Open The Window – Est. Time 1 Minute 

The eye is a window to many systemic diseases including diabetes, hypertension, neurological disorders, and even certain cancers. The eye doctor is often the first health professional to detect many of these diseases, often in their earlier stages when treatment or avoidance is still an option. Think of all the money, not to mention lost work days, that could be saved through early detection and treatment of diseases like diabetes, especially considering that half of all people with diabetes don’t even know they have it (World Health Organization).

Despite this, many employers still have a limited understanding of the benefits that eye exams provide. While 97% associate going to an eye doctor with getting a new prescription, only 60% associate it with diagnosing systemic disease (Survey of 2,046 employees conducted by Synovate from October 4-14, 2010).

You can put the value of the vision benefit into perspective by simply reinforcing that comprehensive eye exams, covered by most vision benefits, can help provide early detection and treatment of serious diseases, like diabetes. Always let them know that they can come to you if they’re interested in learning more.

Strategy 2: Show Them The Money – Est. Time 1 Minute 

While most employers care about the health and wellness of their workforce, almost everyone can relate to dollars and cents. Take a minute to explain what your clients can save through a vision benefit. Consider tossing around some of these statistics:

The average employer will gain up to $7 for every $1 invested in vision coverage (Vision Care: Focusing on the Workplace Benefit, The Vision Council, Fall 2008).

Each year, diabetes alone costs the nation an estimated $116 billion in excess medical expenditures, $58 billion in reduced national productivity and $3 billion in increased absenteeism (Study by the Lewin Group for the American Diabetes Association, 2008). Regular, comprehensive eye exams can help avoid these costs by providing early detection of diabetes while treatment is still an option.

If your employees aren’t seeing well, they may not be as productive. Even slightly mis-corrected vision can reduce an employee’s productivity by 20% (Daum, Kent, et al. Productivity associated with visual status of computer users. Optometry 2004; 75.).

Strategy 3: Sum It Up And Get Personal – Est. Time 2-5 Minutes

Providing data that is relevant to your client’s workforce will help you make the case for offering a comprehensive vision benefit package and may make your clients feel more comfortable about their decision. If you have the time, I highly recommend walking your clients through the Healthy Sight Calculator, publicly available at

The Healthy Sight Calculator uses data from the Center for Disease Control to estimate the number of employees who are at risk for eye- and overall- health issues and then provides a breakdown of the potential medical costs and productivity loss that could be avoided through utilization of a vision benefit. Because the calculator takes into consideration ethnic background, results will be different for each workforce. To save time, make an educated guess about your client’s workforce; plug the numbers into the Calculator; and show up to your appointment with a printout of results. You can always direct your client to the Calculator website to see for themselves.

Table 1

Talk About the NeedReflections from bright light, computer screens or off the eyeglasses themselves can be distracting and lead to eyestrain, fatigue and reduced employee productivity. Reinforce What’s CoveredI can offer you a vision plan that offers discounts on anti-reflective coatings on eyeglasses for your employees.
Long-term exposure to ultraviolet (UV) rays can lead to sight-stealing and costly diseases such as cataract and age-related macular degeneration. Damage is cumulative and can’t be reversed. I can offer you a vision plan that offers discounts on eyewear that blocks 100% of UVA and UVB rays.
Kids, specifically, are involved in sports and are susceptible to preventable eye injuries. I can offer you a vision plan that fully covers impact-resistant materials (polycarbonate) for kids.
Everyone over the age of 40 will develop presbyopia, which makes it difficult to focus on objects up-close. This can make it more difficult to do computer work or other every day tasks. Your employees can get discounts on progressive lens options through the comprehensive vision benefit package
Eyestrain is the #1-complaint of all workers and 80% of Americans agree that glare and bright light outdoors can affect eyesight. Photochromic lenses adapt to changing outdoor lighting conditions to help your employees see better and more comfortably. They reduce glare and block 100% of UV rays, helping to protect and enhance vision.Your comprehensive vision benefit package offers discounts on photochromic lenses for both adults and kids.

Strategy 4: Let Them Be The Hero – Est. Time 1 Minute

Even though only six out of 10 people need vision correction, eight out of 10 say that having a vision plan is important to them (2008 Consumer Perceptions of Managed Vision Care, Jobson Research). Reinforce to your clients that their employees want to be covered – and that offering vision benefits is a cost-effective way to make their employees happy, while achieving a high return on investment.

Strategy 5: Talk About What’s Covered – Est. Time 2-5 Minutes

Sixty-four percent of employees say they’d be more likely to keep using or enroll in their vision plan if it covered premium lens options (Survey of 1,152 employees conducted in January 2010 by Harris Interactive). Fortunately, many of today’s vision plans offer full coverage of or discounts on the most desired lens upgrades. Take a couple of minutes to explain the discounts available and make sure your clients understand why each lens option is important (See Table 1).

I find it helpful to use flyers and handouts that explain what’s covered through each vision plan and reinforce the importance of various lens options. Be sure to leave a stack of resources that your clients can give to their employees as a way to further encourage them to enroll.

Strategy 6: Don’t Be Afraid To Kid Around – Est. Time 1-2 Minutes

Approximately one in three of your client’s employees has kids under 19. In fact, 70% of employees say that a main reason they enrolled in their company’s benefit was to provide eye health for their family (Survey of 2,046 employees conducted by Synovate from October 4-14, 2010).

To reinforce the overall value of the vision benefit, emphasize the important role that eye health plays in a child’s overall health, development, and even school performance. To sweeten the pot for your clients, remind them that parents who take advantage of vision benefits for their children will have, on average, healthier children who do better in school. As a result, the parents may miss less time from work or may be less stressed and more focused while on the job, increasing productivity.

Many plans offer coverage of special lens options for children to help them see better and protect their vision. If kids’ vision is an interest area for your client, don’t forget to bring it up.

Strategy 7: Ask About Demographics – Est. Time 1-2 Minutes

While vision care is important for everyone, several ethnic groups are at higher risk for vision problems. Ask your clients what demographic groups make up their workforce and then explain the risks faced by each of these populations. Your vision plan partners may be able to provide additional information and tools to help you tell the story, or you can visit for quick statistics and targeted resources.

Strategy 8: Tell A Success Story – Est. Time 1-2 Minutes

Drive home the conversation with a quick anecdote or success story. For example, during an educational event –  Transitions Academy – I met an ophthalmologist named Dr. Vincent Young. He shared a story of a young woman who learned, during her first eye exam, that she had brain cancer that had already progressed too far to save her life. In another case, another conference attendee knew of a woman who learned she had a brain aneurysm during an eye exam. She was able to receive immediate treatment.

To create an open relationship, I always like to tell my own story as well. I wear both photochromic lenses and progressive lenses, so I am able to talk extensively about these features and their benefits when reviewing the plan options with my clients.

Strategy 9: Make Employee Education Easy – Est. Time 1-2 Minutes

Four out of 10 employers never discuss vision benefits with their employees (The Vision Council. Vision Watch, 2009. Consumer Awareness Report: Managed Vision Care and Eyewear Perspectives) and just six out of 10 employees feel they are somewhat or highly knowledgeable about their vision plan options (2008 Consumer Perceptions of Managed Vision Care, Jobson Research).

You can make it easy for employers to discuss vision benefits with their employees by providing simple educational tools, such as flyers, newsletters, and job stuffers. These tools are often available through vision plan providers or through optical companies. Just take the time to explain what you’re leaving behind and let your clients take it from there!

Strategy 10: You Have To Follow Through – Est. Time 0 Minutes During Initial Discussion

While 60% of employees say their employer talks to them about their vision benefit during the annual enrollment period, just 30% say the discussions occur during other times throughout the year. Considering that 32% of employees who enroll in their company’s vision benefit don’t use it for a comprehensive eye exam, there is a lot of room for improvement (Survey of 2,046 employees conducted by Synovate from October 4-14, 2010).

You may be thinking, “I already sold the vision benefit, so why does it matter if the employees aren’t using it?” Think about it this way: How likely are your clients to buy a vision plan again if the utilization rates are low? How likely would they be to renew their vision plan if their employees were seeing better and enjoying the health benefits possible through their vision plan?

Keep your clients coming back for more by following up with them throughout the year to offer information and resources that they can pass along to their employees. For example, a series of eye health-focused e-newsletters is available through​

There are versions that brokers can send to educate employers, which also include links to e-newsletters that they can distribute to their employees.


Rick Walker is a vice president of J. Smith Lanier & Co, which is one of the largest privately held agencies in Georgia. With more than 25 years of experience in insurance, Walker positions vision as a core element of every employee benefit package and strives to present his HR clients with innovative, value-based vision plans that will best serve their workforce. He was recently honored during the 2011 Transitions Academy as a Vision Benefits Broker of the Year finalist.


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

by Robert S. Oscar, R.Ph.

The healthcare industry is recognizing the potential of mobile devices, like smartphones, to deliver messaging that affects purchasing decisions. Insurance brokers are positioned to help their clients take advantage of the opportunities.

Brokers should be aware of the uptake in this medium and understand the scope of the marketplace: At least 50% of Americans use a mobile device to shop, according to a study by the marketing firm Arc Worldwide. This trend creates multiple paths for purchasing. It completely transforms consumer relationships and the way consumers research and buy products.

This fact certainly rings true to the scores of prescription-drug patients who now save an average of 80% on popular brand name medications purchased online, up from 73% in 2008.

Gadget geeks aren’t the only bargain hunters turned on by the communication capabilities and the ease of access. Morgan Stanley reports that mobile Internet use is growing faster than comparable desktop service and will reach parity in 2013.  The cell phone revolution has promised enormous potential beyond idle texting or expendable calls to a friend.  Look around – at work, at play, at home.  Americans are wired.

Just What the Doctor Ordered

Some people you see using smartphones might be making connections to service providers or retailers in the healthcare marketplace where mobile technologies have encouraged patient involvement, streamlined efficiency, and influenced lifestyle behaviors.

Despite its radical growth, the mobile health craze is still in its infancy. PricewaterhouseCoopers’ Health Research Institute estimates the annual consumer market for remote/mobile monitoring devices and services to be $7.7 billion to $43 billion.

Health plans have only begun to dial into these ingenious advances to market benefit offerings. Last year, 175 million used mobile devices, such as iPhones, Blackberries, and Androids, to search online for health information, according to a Harris survey. 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 to support the consumer demand for innovations that enhance self-care management, convenience, personalization and control of information. Simply put: 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.

Healthy smartphones are starting to whet their appetites. Members with select benefit packages can now -use their smartphones to interact with physicians and pharmacists to 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.

Health plans that 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.

Keep in mind that people keep choosing higher deductible plans for access to lower premiums, some 10 million in 2010 compared to 4.5 million in 2007, according to an America’s Health Insurance Plan survey of its members. Businesses are choosing to self-fund their benefit offerings like the high deductible plans because it’s cheaper to insure an employee. Forty-seven percent of those insured through their employers have high-deductible plans and save about $133 less per family, according to the American Journal of Managed Care.

The number of employers offering high-deductible plans should continue to rise as more companies choose to self-fund. It could mean a decrease in healthcare costs, but only if people continue to comparison shop and ask how much services cost.

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.

Consumers who are accustomed to carrying their mobile devices throughout the day can collect and receive information to self-manage health-related conditions or check for provider network participation, nearby pharmacies, allergy history, immunization records, and lab results.

On the other hand, insurers can combine customer satisfaction with the bottom line by executing a well-planned mobile strategy that reduces administrative costs.

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 to accommodate this population that is ready and willing to drop their current feature phones. The bet is that these plans won’t make the finish line in time – only long after the majority of consumers are using smartphones.

That said, consumers are still learning how to incorporate smartphones into their lives and are likely to choose the most-updated, advanced mobile communications platforms.

Commercial advertising and incentive ploys that encourage upgrades or new purchases promise to keep inundating consumers with the latest and greatest of cell phones. 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.

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


Robert Oscar 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, Mr. Oscar worked in the medical information systems industry-designing, developing and implementing several different claims analysis tools.  Mr. Oscar, a Registered Pharmacist licensed in Virginia, is a graduate of Ohio Northern University, and is certified in pharmacy-based immunization.

Medical Tourism–Bringing Medical Tourism Onshore to Save on Healthcare Costs

by Susan Middaugh, CEBS

U.S. healthcare costs are projected to climb 6% a year through 2019. Having run out of options for reducing healthcare costs, some employers are exploring medical tourism as a practical, albeit exotic, alternative. The figures are persuasive. When enrollees go abroad for treatment Employers with self-insured medical plans can save as much as 70% on doctor and hospital bills (after travel expenses), according to a 2009 report by the Deloitte Center for Health Solutions.

A few years ago patient safety concerns appeared to be the largest obstacle to acceptance, but today, the largest obstacle involves liability issues. Fortunately, liability insurance is now available through joint agreements among medical providers and liability insurers.

A Good Fit

A big proponent of medical tourism is Bill Ford, director of risk management for IDMI Systems, a software developer in Warner Robins, Ga,. Last fall, he introduced a voluntary overseas medical tourism benefit to the company’s high deductible health plan (HDHP), which offers a health savings account. Through a medical travel facilitator, IDMI employees have access to 29 hospitals accredited by the Joint Commission International (JCI) and four dental clinics around the world.

The travel facilitator handles the patient’s round-trip arrangements, transfer of medical records, case management, claims filing and so on. It also offers rigid and strictly enforced standards as well as inspections at all approved facilities. Such oversight provides an extra measure of security in offering the benefit.

The benefit is a good fit for IDMI’s independent-minded employees who like having control and flexibility, says Ford. “They can use their HSA accounts to go offshore for elective surgery not covered under the plan or for dental work such as implants for a fraction of the cost here. The difference pays for the trip, accommodations . . . and a vacation.”

Two employees plan to use the overseas option later this year — one for back surgery and another for cosmetic dentistry. Ford believes the demand for medical tourism at his company will grow as employees age and their HSA account balances increase in value, along with their need for medical care.

No Takers?

IDMI’s experience is not universal, however. Of the 4000 U.S. adults who responded to Deloitte’s 2009 Survey of Healthcare Consumers, just 1% used an offshore healthcare provider and a mere 9% said they’d be likely to do so.

Serigraph, Inc. a specialty graphics company in West Bend, Wisconsin, has found overseas medical tourism to be a tough sell despite offering significant bells and whistles. Since January 2008, the company has encouraged its 500 U.S. employees and their dependents to seek treatment for a select group of elective procedures at the Apollo Hospital in India. As an incentive, the medical plan waives its customary co-pays and deductibles, covers the procedure at 100% and pays the airfare and hotel expenses for the patient and a companion. If necessary, Human Resources will also grant an additional week of short-term disability leave to an employee obtaining overseas medical care. Furthermore, if a portion of the companion’s travel expenses is taxable, the company adjusts reimbursements to make them cost neutral.

Linda Buntrock, Serigraph’s senior vice president of human resources said, “We knew we had a limited audience. Our workforce is cautious about going outside their local area for medical care. We thought we could save $20,000 to $30,000 even if just one person used it.”

Hannaford Bros., a supermarket chain in Maine, has had a similar experience with its international medical tourism program at a Center of Excellence facility in Singapore. After more than two years, not one of the 9,000 employees enrolled in the company’s medical plan has used the benefit, says Christopher Washburn, Hannaford’s supervisor of employee benefits.

Consider Domestic Providers

Undeterred, Serigraph and Hannaford have shifted to plan B. Only this time, they have brought medical tourism closer to home. Their experience in the overseas arena has taught them that domestic providers outside their geographic area are also willing to reduce costs without sacrificing the quality of patient care.

“Working with our third party administrator, we’ve found the partners we needed to bring about changes,” says Joanne Abate, Hannaford’s director of health and wellness strategy. Since last year, Hannaford has had an agreement with two U.S. Centers of Excellence that offer non-emergency knee and hip replacements at significant savings and with improved patient outcomes. The response by enrollees has been very positive. In 2010, fifty percent of employees and dependents who were candidates for the program took advantage of it, says Abate.

One key to success has been having patients call to pre-certify their surgery, a plan requirement. At that time, a registered nurse dedicated to their account explains the advantages of going to a Center of Excellence in New England. “With the proper communication, our associates have been very open-minded to change,” says Abate. Later this year, Hannaford plans to expand its domestic medical tourism benefit to heart and back surgery.

Americans are Ready for Alternatives

Despite the uneven experience of employers adopting medical travel, the average U.S. consumer appears to be ready for medical travel. A recent Gallup poll found that a sizable proportion of Americans would consider traveling outside the United States for treatment in a foreign country for a variety of procedures and medical treatments. Twenty-nine percent of respondents would consider traveling out of the United States for alternative medical treatments for a major medical problem, and 24% would seek cancer diagnosis and treatment abroad.

According to the 2010 outlook by CDHC magazine, the medical travel option is beginning to penetrate the mainstream discussion and, inevitably, will become a de facto option for all Americans.

Deloitte Report Key Findings

• 8% of respondents sought healthcare services outside their immediate community.
• More than 40% said they would travel outside their immediate area for care if their physician recommended it or for a 50% savings.
• The Joint Commission International (JCI) increased the number of foreign medical sites from 76 in 2005 to more than 220 in 2008.
• Several health insurers have launched medical tourism pilots as part of health benefit plans.
• Healthcare reform could increase growth in the elective outpatient market, especially if expenditures are limited to $2,000 or less.
• “Medical Tourism: Update and Implications – 2009 Report,” Deloitte Center for Health Solutions


Susan Middaugh, CEBS, is a magazine and newspaper feature writer. She produced this article for AWARE, a newsletter published by Minnesota Life Insurance Company, a subsidiary of Securian Financial Group, Inc. Insurance products are issued by Minnesota Life Insurance Company in all states except New York. The article was prepared by Securian as an informational piece for its clients.

Securian Life Insurance Company, a New York admitted insurer. Both companies are headquartered in Saint Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues. 

Since 1880, Securian Financial Group and its affiliates have provided financial security for individuals and businesses in the form of insurance, investments and retirement plans. Now one of the nation’s largest financial services providers, it is the holding company parent of a group that includes Minnesota Life Insurance Company and its New York affiliate, Securian Life Insurance Company.

Medicare–Guiding Clients Through the Medicare Maze

by Kyal Moody

Every eight seconds, someone in America ages into Medicare. That means that, every eight seconds, there is a potential new business opportunity For California’s health insurance brokers.

The aging of America can be attributed primarily to two factors. The first is the coming of age of the Baby Boomer generation — 77 million Americans who started entering the Medicare ranks in 2010. The second is the fact that Americans are living longer than any prior generation thanks to sophisticated medical technologies, healthy lifestyle habits, and new drug discoveries. Not only is 60 the new 40, but adults are also leading active and productive lives well into their 80s and even 90s. By 2030, one in every five Americans will be elderly. By the midpoint of this century, there will be one million Americans over 100.

The confluence of these two dynamics makes it more important than ever for health insurance brokers to play close attention to the Medicare market and seize the developing opportunities.

Medicare Advantage Plans

With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to remain on traditional Medicare or get their Medicare benefits through private health insurance plans known as “Medicare+Choice.” Pursuant to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Medicare+Choice plans became more attractive with the addition of prescription drug coverage. They became known as “Medicare Advantage (MA) plans.”

Medicare Advantage plans (Medicare Part C) are offered by private insurance companies approved by Medicare, which, in turn, pays these insurance companies to provide health services to those who enroll in these plans. Medicare Advantage Plans are required to cover all of the services that original Medicare covers (except hospice care) including emergency and urgent care. Beyond that, Medicare Advantage Plans may offer extra benefits, such as vision, hearing and dental coverage, in an attempt to attract members through product differentiation. As in any managed care arrangement, the plans typically offer a network of providers that patients can use. Going outside that network will usually require permission or additional fees.

While these companies must follow rules set by Medicare, each Medicare Advantage plan can charge different out-of-pocket costs and have different rules for how a member receives services, such as whether they need a referral to see a specialist. Most plans also include Medicare prescription drug coverage (Part D). Another important distinction between Medicare Advantage and traditional Medicare is that MA plans have specific programs and interventions to encourage preventive care and wellness and to closely coordinate patient care. Medicare Advantage plans continue to grow in popularity, here in California and throughout much of the country, because of the added benefits they provide, coupled with the cost savings to members (seniors don’t need to purchase supplemental coverage).

The Annual Enrollment Period and Beyond

Until 2006, seniors who enrolled in a Medicare+Choice (now Medicare Advantage) plan could move in and out of such plans throughout the year since there was no annual enrollment period akin to what is seen in the commercial marketplace. That led to confusion and added costs as many seniors learned how to game the system. For example, a senior who exhausted their prescription drug benefit, midyear, would simply switch to another plan and restart the clock. Not surprisingly, in 2006, the Centers for Medicare and Medicaid Services (CMS) established an annual enrollment period from November 15 to December 31. This year, for the first time, that period was compressed to October 15 to December 7. Or was it?

Brokers who think that their opportunity ended December 7 should think again. That’s because some Medicare beneficiaries may still have a chance to make a change through “special election periods,” which affect people who have seen a significant change in their plan. Two current examples of this would be Anthem Blue Cross, which withdrew some of the California plans for 2012 and the CMS decision to discontinue some special needs plans in select markets. People affected by these decisions may have until December 31 to make their replacement selection.

For Medi-Medi members (MediCal and Medicare), the special-election period continues all year long, providing even more opportunities for brokers to help seniors in their selection process. And don’t forget about people who are aging in to the Medicare market every eight seconds. They actually have a seven-month window to make their initial coverage selection — beginning three months before their 65th birthday and ending three months after. That’s why savvy brokers monitor their existing book of business carefully to know precisely when a client is turning 65. They are ready with the information necessary to provide added value to their clients when they need it the most.

Looking ahead 10 months, brokers should have a strategy to help seniors with their 2012 selections. There are no assurances as to what the enrollment period will look like a year from now (Legislation is already trying to bring back an open enrollment period from January 1 to March 31). But, the fact remains that 46 million Americans will have a short period of time to make a critical decision. Most health plans simply can’t handle this volume making the need that much greater for informed, participating brokers.

Viewing Medicare Advantage Plans as a Health Insurance Exchange

Health insurance exchanges are beginning to grab a fair share of attention in the media and in the commercial healthcare marketplace. It’s no wonder. The Patient Protection and Affordable Care Act mandates that every state launch its own state-run health insurance exchange by January 1, 2014 or default to a federal fallback program. While some public (Massachusetts and Utah) and private (CaliforniaChoice) exchanges already exist, perhaps one of the best examples of the exchange concept successfully working (and growing in popularity) is found in the Medicare market. And here again, that provides great opportunities for brokers.

Traditional Medicare provides seniors with a core set of benefits for hospital and doctor (Part A and B, respectfully). Seniors then have the option of covering any co-pays or deductibles out of their own pocket or adding a supplemental plan to cover the difference. But more and more seniors are opting out of traditional Medicare altogether and instead going to a Medicare Advantage plan.

Seniors who are moving in this direction are using the same fundamentals that the commercial market uses when shopping through an exchange: multiple plans from which to choose, a single point of coordination, and varying benefit levels and costs. In this case it is the federal government (Medicare) and not the state or private company that has established the exchange by determining which health plans may participate and establishing minimum coverage standards to which they must adhere. It is then up to each shopping consumer to look at each plan –  SCAN, Blue Shield, Anthem Blue Cross, United HealthCare, etc. –  to find the one that best meets their needs based on provider network, benefits offered, and cost.

Anyone who has gone through the process of making Medicare coverage choices knows how challenging it can be. There are so many plans to choose from, and they can seem to be so similar. Similar to what has been seen in the commercial exchange marketplace, what seniors need most to make an intelligent decision is to have access to unbiased, reliable, and understandable information that will help them determine what’s right for them.  For them, there are two ways to go.

The first is to tap into a dynamic search engine, which allows seniors and others on Medicare to view all of their options side-by-side. Through online resources such as, seniors can go through a simple needs assessment and narrow down hundreds of plans through criteria that are specific to them, such as what medications are covered, cost of co-payment, and provider network. This online resource is complemented by live, telephone customer support so seniors can talk through their options with a trusted, unbiased source. Here, too, the similarities continue with soon-to-be-run state health insurance exchanges, which must have at their core, a comprehensive Web portal for information and enrollment supported by a well-trained and empathetic call center staff.

The other option seniors have (often in conjunction with doing their own research through sites such as Joppel) is to sit down with a broker who can explain their options including how the different types of Medicare Advantage plans, special needs plans, and other options compare and contrast to traditional Medicare. Given that seniors are bombarded with television commercials, direct mailings and in-person presentations from Medicare Advantage plans all trying to get their business, there is a sense of confidence, security and trust in sitting down with a broker who has their best interest at heart. This is especially true of those seniors who have a history of working with brokers in their health plan selection when they were part of the commercial market.

Why Brokers Matter

To the commercial population, buying health insurance is similar, in many ways, to buying auto or home insurance – anticipating the unexpected and being prepared. But for seniors, health insurance is a key part of their life. They know they are likely going to consume healthcare resources with greater frequency than their younger counterparts. As a result, the decision of which direction to go is of paramount importance.

Fortunately, many seniors have a support network in adult children, professional caregivers, and concerned friends to help them with this important choice. But many do not. In either case, the answer as to “Why would a senior use a broker to help select their healthcare coverage?” is the same as the reason why employers or those in the commercial market use a broker when they can go directly to a carrier. It’s because brokers, more than anyone else, can provide the information and unbiased recommendations purchasers need to make well-informed decisions as well as provide year-round service for routine issues or serious policy interpretations.

As more options for seniors become available, the need for the broker as ombudsman and trusted advisor will only increase. So, too, will the need for competent and responsive service. And it is for that reason that brokers, even those who haven’t traditionally played in this arena, are taking a good long look at the Medicare market and sizing up their business potential.


Kyal Moody is vice president of Joppel by HealthCompare, an online resource expressly designed to help consumers and brokers easily evaluate, compare and enroll in private insurance plans participating in the nation’s Medicare program. 

Annuities–The New Rules of the Game: Planning for Long-Term Care with an Annuity Contract

by Daniel Herr

The recent economic downturn was a stark reminder that unforeseen factors can threaten a retirement lifestyle and change the course of thinking among those who are saving for their future.

One of the most overlooked risks is the potential for needing long-term care services. In fact, approximately 70% of Americans age 65 or older will need some type of long-term care services and 40% of those who are receiving this care are under age 65, according to a report by Lincoln Financial. The rapidly rising cost of healthcare can easily drain retirement savings. The odds are that most Americans will need long-term care sooner than they think.

Despite these statistics, many people don’t think they will ever need long-term care services and, therefore, cannot have enough savings or long-term care insurance (LTCI) to cover these expenses, but these unanticipated costs can have a profound effect on retirement savings. In some cases, these costs can result in a rapid depletion of assets, which will certainly threaten one’s lifestyle.

While the need and price for long-term care continues to climb, new provisions of existing laws have opened the door for industry innovation and the creation of combination annuity products (also known as “hybrid” or “linked benefit” products). They allow people to save for unanticipated long-term expenses without putting their savings at risk. Now more than ever, it is critical for financial advisors to educate their clients on this new protection option.

The Pension Protection Act

The Pension Protection Act of 2006 (PPA), which took effect in January, has created an opportunity for financial advisors to help clients fund potential long-term care needs with annuities. These provisions are shaping product development in the industry because annuities can now be combined with riders that offer long-term care (LTC) coverage. Previously, that combination was only permitted for life insurance contracts.

The PPA provisions also clarified rules that govern tax-free exchanges of contracts offering qualified long-term care insurance coverage. Under modified rules, a non-qualified annuity owner can exchange their existing contract for an annuity that offers a qualified long-term care rider. The owner can also exchange their contract for a stand-alone qualified long-term care insurance contract. These exchanges can generally be partial or full exchanges of the existing annuity.

Advisors should become familiar with the new combination annuity options that are now available to their clients as well as with the modified rules that govern these tax-free exchanges of annuities.

LTC Annuities – A New Protection Option

A combination LTC annuity product features an annuity combined with a qualified long-term care insurance rider. It provides financial protection for retirement assets by offering benefits for a potential long-term care event. The combination LTC annuity product can utilize a variable or a fixed annuity contract.

Under this combination design, the insured’s non-qualified assets can be repositioned for benefit growth. Amounts, including investment gains, can be paid out as tax-free LTC benefits [IRS code Section 104(a)(3)]. The insured also retains the account value and death benefit within the annuity to the extent that these amounts are not used for LTC benefits. Withdrawals taken for purposes other than for qualified long-term expenses can reduce the total LTC guaranteed benefit.

The industry has focused on two product designs so far. The tail design and the coinsurance design differ in how amounts are paid from the annuity contract and the insurance company. A third approach, the GLWB design, has been discussed at a high level within the industry, but no company has yet offered a product based on this approach.

Tail Design

The tail design is the favored design of the few annuity combination products that are available for sale. One hundred percent of benefits are paid first from the annuity account value until it is exhausted. The insurance company pays 100% of the remaining benefits under the contract. The key component of this approach is that benefits paid from the insurance company come after the LTC benefit payments exhaust the annuity account value. This design works as a high deductible plan and helps lever down the LTC premiums.

Coinsurance Design

The coinsurance design differs from the tail design in that each and every benefit payment under the contract is paid in part out of the annuity account value and in part by the insurance company (for example 80% from account value, 20% from insurance company). This design, which is not widely available, allows the insured to preserve the account value and death benefit for a longer period. The LTC premiums in the coinsurance design are likely to be higher than premiums in the tail design.

GLWB Design

The guaranteed lifetime withdrawal benefit (GLWB) approach has been discussed at a high level within the industry. Under this approach, the withdrawal guarantee would be available as normal. But if a LTC need arises, the available withdrawal guarantee would be replaced by a higher LTC benefit for a defined benefit period. The GLWB design is compatible with the tail design and the coinsurance design. It could be used to combine product design with a standard annuity withdrawal benefit.

LTC Annuities – Innovations Ahead

Growth Benefits – Combination LTC annuity products allow LTC benefits to grow as the annuity’s cash value increases. This option could be very beneficial in a variable or fixed annuity combination product (purchased pre-retirement) in which any growth of the account value can be locked in periodically as additional LTC benefits. This growth benefit feature helps address the increasing cost of LTC services.

Cash Payments – Most traditional LTC benefits are paid as reimbursements. Clients have to collect and submit receipts for services monthly to receive LTC benefits, which can be time consuming and difficult. An LTC annuity combination product offers a beneficial solution by providing cash payments of LTC benefits. Once a qualified LTC event is established and a plan of care is in place, the monthly LTC benefit is paid to the insured in the same manner as an annuity benefit. It does require ongoing confirmation of services and annual renewal of the plan of care. Cash benefits eliminate the need to manage receipts and file for benefits every month.

Self-Underwriting – The typical underwriting process for traditional qualified long-term care insurance can be daunting. Even a simplified underwriting process may require telephone calls and medical records. In a self-underwriting process, the prospective client gets a list, upfront, of medical history questions and prescription medications. The client will know immediately that their application will be approved for qualified long-term care insurance if they can respond appropriately to the medical questions and confirm that they are not taking any of the listed prescription medications. The home office will perform a prescription drug screen to verify every application.

Phased Benefits – Another innovative way to reduce the cost of the LTC premiums is to phase in LTC benefit increases. A lower monthly benefit for a longer coverage period is available in the early years. The greatest monthly benefit for the minimum coverage period is available when a claim for benefits does not occur until after a specific period. For example, if the first claim for LTC benefits occurs after the fourth policy anniversary, a monthly benefit would be paid for $3,333 for 108 months (nine years) with a total available LTC benefit of $360,000. However, if the insured made the first claim for LTC benefits after the fifth policy anniversary, a monthly benefit of $5,000 would be available for 72 months (six years) with the same total available LTC benefit. This approach is marketable to younger clientele who are still preparing for retirement, especially when coupled with the growth benefits described above.

A Look to the Future – The provisions of the PPA have made combination LTC annuity products a viable option for those who are preparing for retirement and for potential LTC needs. As combination LTC annuity products evolve and innovation continues, planners should be prepared to provide clients with a clear understanding of their benefits as well as information about the financial strength of the companies offering these contracts.

Having no plan for covering LTC expenses is still a plan, just not a well thought out plan. Clients who plan for unanticipated LTC expenses can benefit from these additional annuity combination protection options and the favorable tax treatment they provide. While no one can predict the future, those who understand the possibility of LTC needs in retirement stand to gain by being prepared.


Daniel Herr is the assistant vice president of Product Research & Development for Retirement Solutions at Lincoln Financial Group. Herr began his career with Lincoln in 1986, and has served in a variety of product development and pricing roles throughout the enterprise. After leading the development and pricing of individual disability income products and HMO/PPO health plans, Herr has spent the past 15+ years at the forefront of developing and promoting innovative fixed and variable annuity income solutions.

He received his Bachelor of Science degree in Business Administration from the University of Nebraska — Lincoln.


Our Annual SurveyHelping Clients Think Outside the Benefits Box
Using Voluntary Benefits to Boost Employee Morale

1.  Please list the voluntary/employee-paid benefits that you offer along with the minimum group size for each offering: 

Aflac: Aflac’s policies, from accident/disability to vision, offer direct to the-policyholder cash benefits, unless otherwise assigned, help cover what other insurance does not. Following is a list of individual plans* available through Aflac:

• Accident.
• Cancer/specified-disease.
• Critical Care & Recovery.
• Dental.
• Hospital confinement indemnity.
• Hospital confinement Sickness Indemnity.
• Hospital intensive care.
• Juvenile life.
• Life.
• Lump sum cancer.
• Lump sum critical illness.
• Short-term disability
• Vision.
*Certain policies may not be available in all states.

The following is a list of group plans available through Aflac Group:

• Accident.
• Critical illness.
• Dental.
• Life.
• Disability.

There is no minimum participation requirement for our individual plans. We only ask that the client establish an account with us by completing and signing a Payroll Account Acknowledgement form and allowing three separate W-2 employees to enroll in at least one of our plans. Aflac Group requires a minimum of 25 payors to establish group billing.

Ameritas: Ameritas Group offers dental, vision and hearing on a voluntary basis. Dental and vision begin at three enrolled lives and hearing at 50; we also offer individual plans.

Blue Shield Vision: Blue Shield offers a voluntary vision plan to small groups with a minimum of five enrolling employees. Voluntary vision plans are available to mid-large groups with a minimum of 10 enrolling employees with the purchase of a Blue Shield medical plan, or 25% of eligible employees without purchasing a Blue Shield medical plan. For all groups, our plan is a 0/25/120 plan with a 12/24/24 frequency.

For mid-large groups we also offer a  25/130 plan with a  24/24 frequency and a voluntary online-only vision materials plan. This plan covers materials only, and allows members to use their vision benefits to purchase eyewear on the network provider’s Website.

Blue Shield Dental: Blue Shield also offers voluntary dental plans (HMO, PPO, and in-network only) to small groups with a minimum of two enrolling employees; there is no minimum for mid-large groups.

Cigna: CIGNA Voluntary is a division of CIGNA HealthCare, offering limited-benefit medical, dental, pharmacy and vision care plans and discount programs, as well as group life and accident disability insurance. All CIGNA voluntary products are available to groups with at least 51 eligible individuals.

Colonial Life: Colonial Life offers voluntary benefits to businesses with as few as three employees up to thousands of employees. Our product portfolio includes individual and group voluntary products for short-term disability; term, whole life and universal life; hospital confinement; cancer; critical illness; and accident.

Delta Dental: Delta Dental of California’s voluntary dental plans are for employers, associations, affinity groups, and other trust organizations that wish to offer employee-paid comprehensive dental coverage. Delta Dental offers a variety of features and benefit plan designs that allow employers to offer our Delta Dental PPO, Delta Dental Premier and/or DeltaCare USA products to meet their needs. These dental plans have the same quality standards, cost savings, and ease of use as our employer-financed products. Plans are available based on a variety of premium contribution levels from fully employee paid to some level of employer contribution. Voluntary plans require a minimum participation of five primary enrollees.

Guardian: Voluntary LTD – minimum group size: 10

Voluntary STD – minimum group size: 10

Voluntary AD&D – minimum group size: 10

Voluntary Life – minimum group size: 10

Voluntary Critical Illness – minimum group size: 10

Voluntary Dental – minimum group size: 5

Voluntary Vision -– minimum group size: 50

Health Net: Health Net offers voluntary dental, voluntary vision, and voluntary term supplemental coverage to groups of two or more. Voluntary term supplemental is offered as a buy-up option to basic group term life coverage.

Humana: The minimum group size for the voluntary products is five lives. Humana offers a comprehensive suite of products that includes: life, disability, accident, critical illness, cancer and supplemental health.

MetLife: In addition to traditional voluntary, employee-paid options for life, dental and disability insurance for employers with 10+ employees, MetLife and its affiliates offer the following voluntary/employee-paid benefits: group auto and home (employers with 500 or more employees); underwritten by Metropolitan Property and Casualty Insurance Company and its affiliates: Metropolitan Casualty Insurance Company, Metropolitan Direct Property and Casualty Insurance Company, Metropolitan General Insurance Company, Metropolitan Group Property and Casualty Insurance Company, and Metropolitan Lloyds Insurance Company of Texas, all with administrative home offices in Warwick, RI. Group Legal (employers with approximately 10 or more employees) through Hyatt Legal Plans, Inc., Cleveland, Ohio, or, in certain states, underwritten by Metropolitan Property and Casualty Insurance Company, Warwick, RI and in Florida provided by Hyatt Legal Plans of Florida, Inc. Critical Illness (employers with 500 or more employees).


AccidentAdvance – 2
Accident Select – 2
CancerSelect Plus – 2
CriticalAssistance Plus – 2
CriticalAssistance Select – 2
Dental – 10
Family Legal – 10
myPack – 5
TAC$Advantage – 2
TransConnect – 2
TransChoice Plus – 50
TransDI Plus – 2
TransLegacy – 2
TransSure – 2
Vision – 10

Unum: Accident: 10 lives, specified critical illness: 10, Group critical illness: 250, MedSupport: 10, term life: 10, Interest-sensitive whole life: 10, universal life: 10, group voluntary short term disability: 10, voluntary individual short-term disability: 10, group voluntary long-term disability: 10, individual disability: three, group voluntary long term care: 15, individual long-term care: three, and AD&D: 25

2. Do you have any benefit offerings for employees that work fewer than 40 hours a week? 

Aflac: Yes. All of our individual and group plans are available to all full time employees, as defined by your client, that work less than 40 hours per week. Please note the following:

•  Individual accident and short-term disability plans — Employees must work a minimum of 30 hours per week.
• Group accident and short-term disability plans — Employees must work a minimum of 16 hours or more per week. Seasonal and temporary employees are not eligible for coverage under our group plans.

Ameritas: All our benefits can be reviewed and customized to accommodate work hours less than 40 per week.

Blue Shield: Yes. Blue Shield can create benefit plan designs that include offerings for employees who work fewer than 40 hours per week, depending on what the client would like to offer.

Cigna: Yes. CIGNA Voluntary is a leading provider of limited-benefit health plans for full-time and part-time hourly employees. We serve industries, such as hospitality, retail, staffing, and construction. Our plans offer a reasonably priced health insurance option for employees who don’t qualify for major medical plans. Employers who offer our plans can experience reduced turnover, improved recruiting and more predictable benefit expenses for their hourly workforce.

Colonial Life: Yes. All of our products are available to employees who work a minimum of 20 hours a week. Employees must be actively at work and permanent employees of the employer group.

Delta Dental: Yes. The client specifies eligibility rules. Our voluntary plans are a solution to the benefit needs of part-time employees, retirees, association members and cafeteria plan participants.

Guardian: Yes. Guardian benefits can be offered to employees that work less than 40 hours a week.

Health Net: Yes. Health Net allows coverage for full-time employees working 30 or more hours per week.

Humana: Yes. Many of our groups have associates who work 20 hours a week. We also offer solutions for various groups and classes within one employer group. Long-term care (employers with approximately 10 or more employees); Pet insurance (employers with 500 or more employees) through National Casualty Company, Madison, WI, and veterinary pet insurance Company, Inc., Brea, Calif.; Disability (employers with approximately 10 or more employees); life (employers with approximately 10 or more employees); and vision (employers with 500 or more employees), through EyeMed Vision Care, Mason, Ohio.

MetLife: Yes, MetLife and its affiliates work with each employer to determine the eligibility requirements for the employee population. However, we also adhere to all applicable laws and regulations concerning eligibility, which, in some states, exclude those not working more than 24 or 30 hours a week.

Transamerica: Yes.

Unum: Yes, our offerings are available to employees who work 20 hours.

3. Do you offer flexible enrollment data, billing capabilities and processes that work with the employers’ systems instead of the other way around? 

Aflac: Yes. Aflac Wingspan Enrollment Solutions help remove enrollment obstacles by streamlining the benefit enrollment process for your client and their employees. Our technology-based services can help simplify the enrollment process. We offer the following enrollment methods:

• One-on-one laptop.
• Call center.
• Web self-service.
• A combination of the above.

These services are provided to your client and their employees at no direct cost. Through our SmartApp Next Generation software, we can process a large number of policies quickly and accurately. Business submitted through our software, located on our agents’ laptop systems, can be issued without human intervention (resulting in a 24-hour turnaround time). These services apply to our individual plans only. Aflac has the capability to transmit billing data to an account in a variety of different ways. Aflac agents will work with your client to discuss available enrollment and billing options and determine which options will best meet their needs.

Ameritas: Yes, our goal is to keep the difficulties of administration behind our walls. We offer many flexible solutions that work with our customers’ systems.

Blue Shield: Blue Shield can accept electronic eligibility from any employer group or vendor that can submit the data in one of Blue Shield’s accepted electronic formats. Blue Shield requires that all eligibility and enrollment data be submitted in full compliance with EDI standards under HIPAA requirements.

Although we have few limitations in receiving eligibility data electronically, we do require the eligibility information be sent in one of our two preferred formats, the HIPAA-compliant ANSI 834 format or our proprietary Common Record Format (CRF).

Billing Capabilities: If the client elects to have Blue Shield pay claims on their behalf, the client is responsible for establishing a bank account for reimbursement.

If the client chooses to pay via Automated Clearing House (AHC) credit, the client is responsible for paying account set-up fees and incremental bank charges.

If the client chooses ACH debit for claims payment, Blue Shield will cover the ACH setup fees and incremental transaction charges.

Cigna: Yes. Whether an organization represents a few hundred or thousands of part-time and hourly workers across the nation, we have a solution that will reduce the burden of plan administration. We can provide files that can be uploaded to interface with a client’s own payroll system.

Colonial Life: Yes. Colonial Life’s Harmony enrollment system is built to accommodate the many specialized needs businesses have for enrollments and data reporting. We can provide face-to-face enrollments at any business location and during any work shift. We can also give employers daily enrollment reporting, such as which employees have been seen and what they’re buying. This reporting capability allows the employer to assess the enrollment’s progress daily and make any necessary adjustments. Colonial Life also has several convenient electronic services for businesses that allow them to get their bills, make payments and adjust their bills, as necessary, online.

Delta Dental: Delta Dental has extensive experience working with a wide variety of employers’ systems and third- party administrators for the purposes of eligibility, enrollment and billing. We can accept eligibility transmission in the following formats:

• Secure File Transfer Protocol (SFTP).
• FTP with PGP encryption.
• E-mail with PGP encryption.
• Secure e-mail monitoring system.
• Secure Website (Delta Dental pick up or customer drop off).
• Web enrollment/directly online.
• Enrollment cards.

Guardian: Yes. Guardian offers a wide range of enrollment options (electronic eligibility files, online and paper enrollment) as well as billing options (online, paper and electronic fund transfer) to meet the varied needs of employers and ensure ease of administration.

Guardian recently announced the launch of a multi-carrier online enrollment platform as part of their EnrollmentWorks program.  This new system enables organizations of 50 or more employees to manage their benefits carriers with a single online system.

The EnrollmentWorks platform, powered by PlanSource, one of the industry’s leading providers of employee benefits management services, offers the ability to:

•  Give employees electronic access to their portfolio of benefits, regardless of carrier, from any location
• Enroll in benefits and make life events changes online
• Support employee decision-making with helpful tools (e.g. compare benefits, view plan summaries)
• View detailed employee information and access a full record of employee changes
• Provide electronic data feeds to carriers
• View and edit bills
• Export files in common formats for COBRA, FSA and payroll
• Produce a current census and other useful reports

In addition to Guardian’s multi-carrier online enrollment platform, Guardian’s comprehensive EnrollmentWorks program includes 24/7 online access through Guardian Anytime, provider directories, a nationwide team of benefits advisors, a 24-hour employee benefits hotline, personalized enrollment kits, post enrollment support tools and the WorkLife Matters employee assistance program

Health Net: Health Net has a variety of enrollment and billing options, including electronic eligibility data transmission and Web-based tools. The company also offers a standard format for electronic eligibility transmission. If a client has a preferred format, Health Net will accommodate employers’ preferred formats whenever possible. For Medicare beneficiaries, Health Net uses paper enrollment applications.

Humana: Our goal is always to put the customers’ needs first. Enrollment data can be captured and transmitted via paper or most EDI files. Billing can be set up as a self bill or list bill and the client can remit payment via check or electronically online.

MetLife: Yes, MetLife, for itself, and as the billing service provider for its affiliates, is able to work with virtually all types of payroll systems.

Transamerica: Not necessarily. We have paper and electronic enrollment. The latter consists of  Translink, Common Census or Excel spreadsheeting of enrollment data. We also have Web bill, self-bill and paper bill.

Unum: Yes

4. Do you offer the flexibility to conduct enrollments through one-on-one benefit sessions, group meetings, call centers, and online self-enrollments? 

Aflac: Yes. We have the flexibility to conduct enrollments through each of the methods listed. However, the availability of each method is determined by the number of eligible employees.

Ameritas: Yes, Ameritas Group offers many different ways to enroll depending on the needs of the customer. All options above are involved depending on the number of lives being enrolled.

Blue Shield: Our commitment to providing our clients with high quality health care begins with responsive service and account management. Upon selection, Blue Shield will begin training the assigned member service team on the client’s benefits to ensure calls from the client’s employees will be handled in a timely and accurate manner. Team meetings will be held just before and after the effective date to re-emphasize the client’s plans.

During the enrollment process, the client will be assigned an account management team that will coordinate with the appropriate personnel to set up enrollment meeting dates and times. Blue Shield enrollment support staff will coordinate and conduct on-site employee meetings at client locations to educate potential enrollees about their Blue Shield health benefits package.

During these on-site employee meetings, we will provide and distribute member information materials, such as a provider directory, a participating pharmacy directory, a user’s guide to our products, an evidence of coverage booklet, and a continuity of care notice.

Blue Shield’s assigned account manager has the ultimate responsibility to work with the account service representative and the implementation team to ensure that the client’s implementation and enrollment process is completed in a timely and accurate manner. The client’s account manager will also respond directly to any questions and issues that may arise during and after implementation and enrollment.

Cigna: Yes. Each client is unique; how they communicate with their employees often depends on worksite characteristics. Our goal is to work with our clients to determine the enrollment support that makes sense. CIGNA Voluntary clients can choose enrollment methods that best meet their needs and fit with their culture:

•  Paper enrollment forms (we can provide or the client can customize).
• The CIGNA voluntary enrollment center (we also offer foreign-language assistance).
The CIGNA voluntary on-line/Web enrollment (24/7 user-friendly access).

Colonial Life: Yes. Colonial Life offers a full spectrum of benefits communication and enrollment options, including group meetings, one-to-one meetings, call centers and online self-enrollments. Our national team of local, professional benefit counselors uses the Harmony enrollment system to educate and communicate benefits to employees face-to-face so they can make better benefits decisions. For hard-to-reach employees, we can offer the same benefit communication and education experience by co-browsing with employees on the Internet, meeting through a call center or setting up online self-enrollments.

Delta Dental: For groups over 100, Delta Dental representatives are available to participate at open enrollment meetings and health fairs to provide information about our dental plans. We provide open enrollment support at no additional cost. Customized videos are also available in a variety of formats that explain the client’s benefit information and can be played at open enrollments or new hire orientations. Customer service is available to support questions about a plan’s coverage, but cannot accept enrollments. Enrollment is facilitated by the benefit administrator. Delta Dental gives benefit administrators access to an application that allows enrollees to select a benefit package online during open enrollment and update personal information online year-round.

Guardian: Guardian offers the flexibility for employers to offer a choice of enrollment methods to employees, including online self-enrollment and paper enrollment kits that can be personalized to each employee (in English & Spanish). In addition, Guardian offers additional support services, such as group meetings conducted by a certified enrollment specialist, toll-free benefit hotline in over 50 languages and turnkey employee communications at no additional cost to ensure the enrollment process is simple and easy for employers and their employees.

Health Net: Health Net provides on-site support, including bilingual representatives, if needed, to help employer groups with new case and renewal enrollment meetings. Additionally, our Customer Contact Center is available to answer any questions from and prospective members and clients.

Humana: One of our key selling points is the ability to offer comprehensive enrollment solutions. As part of Humana’s consumerism philosophy, our goal is to educate the employees about the products and services available to them and their families. A typical enrollment scenario may include payroll stuffers, enrollment posters, email blasts, then a face-to-face enrollment with the ability to capture any other associates through our call center or online enrollment capabilities.

MetLife: Yes, MetLife and its affiliates conduct enrollments/application processes through group meetings, our call center, and online. We work with the broker and employer to determine which enrollment/application channels will provide the best experience for a particular employee population.

Transamerica: Yes. We offer all of these options.

Unum: Yes

5. Do you honor broker-of-record letters? 

Aflac: Yes.

Ameritas: Depending on the situation, we can honor them.

Blue Shield: Yes. Blue Shield Producer Services representatives can release information about application status to a broker if the broker is listed in our system as the broker of record and a signed Business Associate Agreement is on file. No additional information should be released to brokers unless the standard Verification of Identity policy is followed

Cigna: Yes.

Colonial Life: Yes.

Delta Dental: Yes.

Guardian: Yes, Guardian honors broker-of-record letters.

Health Net: Yes.

Humana: Yes. Additionally, all of our broker contracts are vested.

MetLife: Yes.

Transamerica: Yes.

Unum: Broker-of-record letters apply to voluntary at a case level (while the individual policies remain vested).

6.  Do you offer simple and hassle-free account billing and payment processes? 

Aflac: Yes. Our goal is to make billing and payment of premiums simple and hassle-free for your client. Aflac’s systems are flexible enough to accommodate a variety of billing methods and handle almost any type of billing layout. Your client can be billed electronically, via paper, or your client can participate in Aflac Wingspan Online Services for accounts. Depending upon the billing method selected, your client will get an invoice containing the premium amounts due for the policies of the employees participating in our plans. The payroll-deducted premiums, for the employees, can then be remitted to Aflac via check, wire transfer, or through an automated clearinghouse.

Ameritas: Absolutely, our goal is to take the burden off of our customers. We listen to their needs and then enhance our billing and payment processes, whenever necessary, to make sure we’re meeting those needs.

Blue Shield: Yes. Under an ASO arrangement, there are several types of electronic payments for claims reimbursement. Through Automated Clearing House (ACH-Credit), ACH-Debit, or wire transfer arrangements, Blue Shield’s Accounting department will give the client our banking information and the client will then be responsible for managing the transaction. If the client chooses pre-funding, Blue Shield’s underwriting department calculates an initial deposit amount to be collected from the client, as well as the funding replenishment amounts and frequency. The client will remit the initial deposit to Blue Shield, then the replenishment amount by wire transfer or check. In all of these scenarios, a Blue Shield accountant will call or fax the claims check-write amount to the client’s contact person twice a week plus at month end. The Blue Shield accountant will then mail (or email upon request) the claims payment register report to the client as back-up documentation for the funding activity. The amount due can be segregated by predetermined client groups or divisions. Blue Shield accounting will give the client a detailed claims report (DCR) that summarizes all claims activity.

Under a fully insured arrangement, the client is responsible for managing the wire transfer process with their bank and Blue Shield’s bank. The monthly dues bill is generated and mailed to the client. It details the client’s employees and their dependents covered as of the 14th of that month as well as those who were deleted from coverage.

Cigna: Yes. We offer automated premium tracking with auto-termination functions to alleviate management of any outstanding balances and missed deductions. After our clients collect premium through payroll deductions, they can easily forward amounts to CIGNA Voluntary by check, wire or ACH.

Colonial Life: Yes. Colonial Life offers many electronic services for businesses that allow them to conduct transactions online such as receiving their bills, making payments and making any necessary billing adjustments. Colonial Life also offers Ez Billing to reconcile bills for accounts.

Delta Dental: Yes. Delta Dental has several billing and payment formats available depending on the client’s plan and preference. Our online billing and reconciliation application allows benefit administrators to view, pay, and reconcile enrollment online. Online features include the following.

Invoice Presentment:
• Shows the details of a selected invoice.
• Allows the administrator to attach a note to an invoice and submit back to Delta Dental’s Enrollment & Billing department.
• Enables the benefit administrator to download an invoice and save it as an Excel spreadsheet.
• Provides easy access to historical invoices and their associated notes.


• Provides a convenient and secure method for invoice payments.
• Provides option of paying invoices online or printing or mailing the remittance statement with payment.
•  Allows the benefit administrator to view and track payment history.

Group reconciliation:

• Enables benefit administrators to submit enrollee additions, changes and terminations.
• Includes tools to automatically compare a Delta Dental invoice to client’s remittance file and view and/or download results.
• Offers a view of the line-item adjustment summary.

Guardian: Yes. Guardian offers a range of billing and payment options from online to paper to electronic fund transfer to help meet the varied needs of employers and ensure ease of administration.

Health Net: Yes, Health Net offers simple, hassle-free account billing and payment processes including Web-based tools to help our clients and their brokers.

Humana: Once a case is sold, a dedicated account installation manager will implement it. Each case will also be assigned a dedicated billing representative who will ensure that the monthly bill is timely and accurate.

MetLife: Yes. A single bill file platform is available for all voluntary benefit products, which allows a single customer payment on a per-pay period or monthly basis.

Transamerica: Yes.

Unum: Yes.

7. Does your billing system allow plan administrators to make online deletions and changes to their plan account? 

Aflac: Through Wingspan Online Services for Accounts, online billing allows your client to safely update, reconcile, and pay their Aflac invoice electronically. This automated service enhances accuracy, speeds transactions, and minimizes paperwork. Your client will save time and money as their electronically remitted payments and changes are processed faster.

Ameritas: Yes

Blue Shield: For groups new to Blue Shield, once eligibility data is got, an eligibility file is created in our processing system. An eligibility processor is then assigned to manage the account’s eligibility information, including additions and deletions, on an ongoing basis.

Colonial Life: Yes. Colonial Life offers online billing capabilities. A plan administrator also has the ability to make changes online, and update employees’ coverage and general information through a secure Website.

Delta Dental: Yes. Delta Dental’s online eligibility management system allows the clients’ representatives to add or terminate enrollees and dependents and modify enrollee information through a secure Website. Enrollment changes made by the client using our online eligibility system are made to the system in real time.

Guardian: Yes. Guardian’s benefit Website offers a one-stop source  for plan administrators to manage their account online, including submitting eligibility changes that affect their bill. Plan administrators have the flexibility to recalculate their bill online to take any eligibility changes into account so they can adjust payments accordingly.

Health Net: Yes. Plan administrators can make most enrollment changes online.

Humana: Currently, the system permits groups who have purchased group term life to make such edits, but functionality for the voluntary benefits will not be available in 2011.

MetLife: Yes. Through our online billing system per pay period deduction amounts can be changed in accordance with each payroll run.

Transamerica: Yes. Unum: Yes.

8. Does your billing/payroll deduction process make it easy for the employer to offer multiple products? 

Aflac: Yes. Aflac can facilitate even the most complex enrollment scenarios. Our Core Benefits Plus Aflac enrollment system allows employees to keep their coverage with other carriers. This system enables employees to enroll for core, voluntary, and ancillary benefits on a single software platform. Our Core Benefits Plus Aflac enrollment system is developed to meet the needs of each individual client. Aflac’s Response Requirements for Core Benefits Plus Aflac:

• 100 or more eligible employees for a laptop enrollment.
• 500 or more eligible employees for a Web self-service enrollment.
• Six weeks lead-time.
• Minimum of three Aflac plans offered.
• 1GB RAM for laptop enrollments (may require up to 2GB RAM).
• A customer agreement on the implementation schedule/timeline.

The number of total lives on our Core Benefits Plus Aflac system is more than 21,000.

Aflac’s largest client that utilizes our Core Benefits Plus Aflac system has 2,000 employees with a 25% to 35% penetration rate.

Blue Shield: Yes. By choosing a comprehensive solution from Blue Shield, clients can address their healthcare cost, choice, and administration concerns. We provide streamlined plan options and one-stop shopping for medical, dental, vision, and life products. Our one-stop shop will allow clients to enjoy the advantages of joint administration, which includes a single billing statement for medical and ancillary plans.

Ameritas: Yes. Making it easy to offer multiple plans is our expertise.

Cigna: Yes.

Colonial Life: Yes. Colonial Life can enroll an employer’s core and voluntary benefits and provide the account with enrollment data on all employee elections in an easy-to-use Excel spreadsheet. Employers can electronically submit this information through a secure Website, and Colonial Life reconciles the bill to eliminate any additional work for the employer.

Delta Dental: Yes. Delta Dental has several billing and payment formats available depending on the client’s plans and preference and will work with the client to determine the best process. The group sponsor is responsible for collecting the monthly premiums (through payroll deduction or automatic clearinghouse and submitting premiums and eligibility data each month.

Guardian: Yes. Guardian offers a single bill (online or in the mail) for all Guardian coverages a client has in order to ensure the payment process is easy to manage.

Health Net: Yes, Health Net offers consolidated billing for medical, dental, and vision products so that they appear on a single statement. Life Supplemental insurance is billed separately.

MetLife: Yes. MetLife can allow for a single voluntary benefit deduction for numerous benefits or separate deductions for each benefit on one single bill.

Transamerica: Yes. We offer list billing.

Unum: Yes.

9.  Does your system offer online searches for employee policy status, coverage effective dates and policy/coverage type? 

Aflac: We offer the Aflac Wingspan online service for policyholders.

Policyholders can log on to 24/7 to do the following:

• Check claim status.
• Update their personal profiles.
• Request forms or copies of their policies.
• Get contact information for Aflac agents.
• File claims quickly using Aflac SmartClaim.

Ameritas: Yes

Blue Shield: Within the My Health Plan section of, members are provided with a plan summary that is designed to answer common questions and personalized for their particular plan type. Available information includes eligibility for all members on a subscriber’s health plan, the type of plan, effective dates, copays for common services, deductible and copayment maximums, and plan options, and links to initiate common transactions.

Colonial Life: Yes. Colonial Life’s Ez Administration system offers online searches for employee policy status, coverage effective dates and policy/coverage type.

Delta Dental: Yes. Delta Dental’s online eligibility application allows benefit administrators to view and maintain coverage effective dates and coverage types, make real-time updates to eligibility data and improve the efficiency, accuracy and security of eligibility reporting. In addition, Delta Dental’s Website,, provides a multitude of useful features to registered enrollees behind a secure sign-on, including the ability to view benefits and eligibility information, including coverage effective dates and coverage types; print ID cards; verify plan deductible and maximum information; and view claims status and claims history for the past 18 months.

Health Net: Employees/members can confirm their coverage effective date and policy/coverage type online or by calling Health Net’s Customer Contact Center.

Humana: The employee can go online to view any EOBs about any of the health-based products.

Guardian: Yes, Guardian’s benefit Website offers a one stop source for plan administrators to manage their account online, including look ups for an employee’s policy status, coverage effective date and policy/coverage type.

MetLife: Our online billing system allows the employer to sort the bill by different criteria.

Transamerica: Yes.

Unum: No

10. Do you offer downloadable claim forms? 

Aflac: Yes. Policyholders can download claim forms from

They also get tips on expediting forms and a direct link for sending a message to our Claims Department. Aflac also offers SmartClaim, an online claim filing process.

Ameritas: Yes

Blue Shield: Yes. Members can download printable claim forms from Claim forms are organized by pre-sale, post-sale, and product type.

Cigna: Yes.

Colonial Life: Yes. Colonial life provides claim forms on its Website at that policyholders and plan administrators can download and print.

Delta Dental: Yes. Enrollees can download and print claim forms directly
from our Website. However, Delta Dental dentists agree to submit claims on behalf of the enrollee and to accept payment directly from Delta Dental; therefore, the only time an enrollee may be responsible for submitting a claim form to Delta Dental is when treatment is provided by a non-Delta Dental dentist.

Guardian: Yes, Guardian’s benefit Website offers a one stop source for plan administrators to manage their account online, including the ability to download claim forms or e-mail a claim form directly to someone.

Health Net: Yes. Employees/members can find claims forms on

Humana: Yes. PDFs of all claim forms can be downloaded from the Website.

MetLife: Yes. For several product offerings that require claim forms. MetLife Auto & Home even accepts towing claims online in many states.

Transamerica: Yes.

Unum: Yes.

11. Do you require carrier reps. to have a comprehensive knowledge of all of the products they deal with

Aflac: Yes. Training for Aflac agents hits every facet of Aflac’s plans and sales cycle, such as field-tested scripts, brochures, one-on-one mentoring and online courses. Here are a few of the resources available to our agents:

• New Associate Sales School (features comprehensive training sessions for new sales agents).
• Ongoing training on new plans, services, and technology led by experienced trainers in a classroom setting.
• Coaching and mentoring from sales managers and veteran agents.
• Specialized training.
• Continuing education via Aflac University courses online (provides product, leadership, and industry training for agents at their convenience).
• Webinars and other online training materials available through Aflac’s Website. With the years of experience of Aflac’s District, Regional, and State Sales, Coordinator and our extensive training, agents have the knowledge to provide the best service to your client and their employees.

Ameritas: Yes. Our reps are experts on all products they sell.

Blue Shield: Yes.

Cigna: Yes.

Colonial Life: Yes. Colonial Life has a 10,000-member national organization of benefits professionals. These individuals get comprehensive product training through Colonial Life College on voluntary products and the employer’s core benefits, at the employer’s discretion. A major part of our mission is to help employees better understand their benefits programs, help them uncover their insurance needs and help them select the coverage they need to protect themselves and their families from financial risk.

Delta Dental: Yes. Throughout the year, we provide support through continuing education for consultants and brokers, such as lunch and learn presentations, CE courses and personalized support from our sales staff.

Guardian: Yes. Guardian sales representatives achieve a high level of comprehensive knowledge of the Guardian products they present through intensive and ongoing training. According to an independent survey conducted by JHA, producers rated us as exceeding the industry standard in the measurement of sales rep knowledge or product.

Health Net: Yes. Health Net’s Sales and Account Management teams must have a comprehensive knowledge of all Health Net products that they offer and support.

Humana: Yes. Each sales representative must go through an extensive sales learning academy, pass multiple tests, and continue to be accredited each year.

MetLife: Yes. Our licensed reps. specialize in voluntary benefits and many have extensive experience in designing benefit programs.

Transamerica: Yes. We require study of all Producer Guides and signed acknowledgments from producers.

Unum: Yes. We have an extensive training process, and sales reps are expected have an extensive and comprehensive knowledge of our group and VB products. They’re first year is dedicated to development, with a nine-month self-directed process of activities and testing.

12. How does your company support a good working relationships between brokers and carrier reps? 

Aflac: Aflac offers complete insurance broker training, personalized support, sales materials, industry leading tools, and competitive compensation. Aflac is not about once and done. We are committed to providing continuous training to our brokers on the latest news and information, and presentations on industry topics and continuing education. In addition, our internal insurance broker team is always available to answer questions and provide personalized support.

Ameritas: Relationships are key with our brokers/producers. Our goal is to provide solutions they can offer our customers throughout the life of our relationship. Our service is not just at the beginning of a sale; it remains throughout the process and for the life of the case. This takes great relationship skills among all partners.

Blue Shield: Blue Shield recognizes the invaluable role brokers and consultants play on behalf of our shared clients. To this end, our mid-large Sales team members are assigned to brokerage firms so we can develop and maintain good working relationships with brokers. Additionally, we invite brokers and consultants to participate in our Shield University to share information about new and developing products and services to ensure our shared clients become aware of how Blue Shield can best meet their needs.

Cigna: Simple: We help our brokers offer solutions to their clients. First, we offer products and services that meet a critical market need. Then, we support those products with pricing, service and materials that clearly communicate the value of what we offer. In addition, our sales force maintains regular contact with brokers through lunch and learn events and market events. We often partner with our parent organization, CIGNA Healthcare, to produce broker forums and other conferences.

Colonial Life: Colonial Life places a high priority on working with brokers to help solve their clients’ benefit challenges. Colonial Life has regional broker marketing managers who are dedicated to strengthening broker relationships nationally and regionally, supporting national alliance partners and interacting with worksite specialist brokers. Because of our dedication to broker marketing, brokers have named Colonial Life their top choice six years in a row in a nationwide readers’ survey conducted by a major benefits industry magazine.

Delta Dental: Delta Dental focuses on providing brokers and consultants easy access to their client’s data during the RFP and renewal process. We believe that we provide more hands-on service than any other dental carrier before and after the sale.

Guardian: With one of the longest-tenured sales forces in the employee benefit industry, Guardian has a history of understanding the needs of growing businesses, which strengthens good working relationships. Guardian’s promise is to give brokers more ways to take good care of their clients. Our flexible and comprehensive product portfolio and responsive, personalized service support local relationships in delivering on this promise.

Health Net: To support the needs of our brokers and reps, Health Net has a dedicated account management team. We give small business group brokers direct access to account management teams responsible for territory and broker assignment/relationships. Brokers also have immediate, toll-free access to the Account Management team during business hours. In addition, our Account Service Unit within Health Net’s Customer Contact Center can provide claim and benefit information quickly.

Humana: Humana has a long history of strong relationships among brokers and our internal representatives. Brokers are integral to the success of our business and we provide opportunities, such as field advisory counsels, as a way for brokers to help develop the framework for developing new products and services that they believe are important to our employer groups. It is through these continued initiatives that we create a partnership between our sales associates, our brokers, employer groups, and the employees.

MetLife: Our reps. work closely with brokers to help provide solutions that meet the needs of their clients.

Transamerica: Corporate home office visits are regularly scheduled along with continuing education seminars, and sponsorship of educational workshops.

Unum: Yes. Unum has strong relationships with its sales partners throughout the United States, with 40 field offices that provide local sales and service support. Unum provides broker training opportunities throughout the year, including CE course offerings. We publish a quarterly newsletter for brokers and welcome brokerage firms to the home offices for information sessions and tours of its claims and service operations.

13.  Do you offer marketing materials that are easy to present and simple for clients to understand? 

Aflac: Your client’s Aflac service team is dedicated to working with them to ensure that the marketing campaign they select best suits their employees’ needs. All benefit education material is provided at no direct cost to your client. Here are a few ways we can educate your client’s employees about our plans and services: posters, flyers, brochures, payroll stuffers, flash presentations, an account Website, employer Website information, newsletter articles, and e-mails.

Ameritas: Yes. Ameritas Group insists on providing marketing material that is easy to understand. This is maintained throughout all our material, including correspondence. As far as we’re concerned, insurance does not need to be complicated.

Blue Shield: Yes. We create materials that simplify the most important aspects of each product so that our brokers can present the information in a clear and concise yet compelling manner.

Colonial Life: Yes. Colonial Life realizes benefits and insurance terms can be complicated. That’s why the company’s marketing materials are easy to understand. Simplified enrollment materials help employees better understand their insurance needs so they can make better decisions to meet their needs.

Cigna: Yes. CIGNA Voluntary is committed to improved communications with its customers through education and simplicity. Feedback gathered in focus groups and surveys has resulted in improved communication tools that help customers understand how limited-benefit medical plans work, the services available and how to maximize their health care dollars.

Delta Dental: Yes. We have a strong commitment to educating all of our customers. For brokers, consultants and benefit administrators, Delta Dental publishes an e-mail news-blast for key groups and brokers or consultants, a quarterly e-mail newsletter that provides dental benefit market news for brokers, consultants and general agents, and quarterly e-mail newsletter provides benefit administrators with the most up-to-date dental benefit news. Delta Dental also features online broker tools with information regarding: Our products, dental benefit pricing and sales, an RFP submission checklist, and a benefit administrator support guide.

Guardian: Yes. From marketing materials shared with brokers to bound enrollment kits personalized to each employee and beyond, the foundation of Guardian’s communications are centered on being easy to present and simple for clients to understand.

Health Net: Yes. Health Net takes great pride in the ease of use of our marketing materials. For example, Health Net has got tremendous positive feedback from brokers on the plan wheel, a visual aid that helps small business group brokers better understand our full portfolio of plans.

Humana: Yes. We have a comprehensive suite of materials that brokers can present to employers and another set of materials that are designed for the employees. Our research has shown that employees want benefits that are concise and easy to understand and our marketing materials reflect their needs.

MetLife: Yes. We offer a broad range of materials that are easy to understand and demonstrate the value of voluntary benefits to employees. MetLife will work closely with brokers and their clients to understand an employer’s workplace culture, communications style and preferences. This approach, coupled with our experience and knowledge of proven communications practices, will help to ensure that the simplest and most effective communications are implemented.

Transamerica: Yes.

Unum: Yes

14. How do you track the quality of the customer service you provide to employers? For example, do you set annual service goals and measure and report results? 

Aflac: We constantly measure our customer satisfaction level with policyholders and business accounts in a variety of ways, such as surveys and audits. We monitor satisfaction with the total Aflac experience and satisfaction with enrollment, claims and billing. Our customer service quality program is administered by the Administrative Best Practices Quality Department. Each major business function, (i.e. primary, claims, and specialty) is sampled monthly. Additionally, for quality scoring, Administrative Best Practices guarantees a minimum of five audits per month for each customer service center representative. All scoring and error trending are reported weekly, monthly, and quarterly to management. Our Internal Audit Department also conducts audits by line of business in addition to their annual assessment of internal claims controls.

Ameritas: All Ameritas Group’s customer service is measured through metrics down to the individual customer service associate. The tracking is done through our own systems and is based on all the major drivers of satisfaction for our customers. All metrics are integrated into our associates’ salaries to ensure common drivers of service.

Blue Shield: Blue Shield conducts annual internal member satisfaction surveys to gauge the overall satisfaction of our membership. Member satisfaction is evaluated through mailed and emailed annual satisfaction surveys and quarterly telephone surveys. We also encourage active dialogue between our clients and their assigned account management team to get a picture of overall satisfaction at the employer group level.

Cigna: Customer satisfaction is an extremely important component of assessing the overall quality of service provided by CIGNA Voluntary. CIGNA Voluntary uses established annual service goals to evaluate the performance of our Customer Service Representatives. Through a partnership with Convergys, CIGNA Voluntary implements regular customer satisfaction surveys.

Colonial Life: Colonial Life provides superior customer service to all of its customer groups: brokers, employers and policyholders. The company sets internal annual customer service goals and results are measured quarterly. Colonial Life also works with LIMRA to conduct quarterly and semiannual surveys of plan administrators and policyholders. Colonial Life reports those results through news releases and a quarterly service report card on its Website. In addition, all employees who meet with a Colonial Life benefits counselor are asked to rate their one-to-one benefit counseling experience during their enrollment. Every account participating in the post-enrollment survey gets a report card with the survey results.

Delta Dental: To ensure we consistently provide quality customer service, Delta Dental records all incoming customer service calls verbatim and actively monitors a random sample of calls to identify areas for ongoing training and service improvement. Customer Service management is responsible for evaluating politeness, professionalism, responsiveness and accuracy of information provided. Service goals are tracked daily, measured globally and reported annually. Delta Dental also conducts random surveys of participants to measure their general satisfaction with Delta Dental and their benefit plans and costs, the professionalism of dentists and dental office staff and the treatment provided, customer service and claims processing

Guardian: Guardian sets service goals, and tracks and reports the results each year.

Health Net: Yes, Health Net sets goals and tracks performance against key service metrics. We also conduct customer satisfaction surveys about Health Net’s services and support. Information is also gathered on customers’ perceptions of other health care insurers to provide Health Net with competitive benchmarks.

Humana: Humana has established metrics for each division of the company. For example, our service goal for customer service is 98% and in 2008 our actual number was 99.7%. Our average claim time for disability claims is five days or less. We constantly audit all calls and look for ways to improve our metrics to exceed our customers’ expectations.

MetLife: We provide utilization and participation reports to employers at their request. We also monitor our customer satisfaction levels through our call center on an ongoing basis.

Transamerica: We track customer service results according to average answer speed, abandonment rates, average turnaround time, and qualitative analysis. Annual goals are set, monitored and reported for performance improvement.

Unum: We certainly set goals around responsiveness and accuracy of service. We also have a quality assurance program that checks to see if we delivered our services in a timely and accurate manner as well. Additionally, we survey customers several times each year to better understand how they view their Unum experience.

15. Do you have an established local sales and service team that can provide critical service in the same cities that the broker’s clients are in? 

Aflac: Yes. Aflac is represented by more than 70,000 licensed independent sales agents and brokers throughout the United States. Our certified enrollers are available to service multi-location accounts and we have a national sales coordinator team to manage these relationships.

Ameritas: Yes, Ameritas has local and remote service teams to provide all critical service. If claims information is needed after hours, our customer connections department is open until midnight central standard time.

Blue Shield: Yes. Our sales team is regionalized so that brokers have access to local sales support in their area, for new sales and renewals.

Cigna: Yes, CIGNA Voluntary has established territories that are serviced by new business managers and client managers across the nation.

Colonial Life: Yes. Colonial Life has a national team of 10,000 benefits professionals who provide local enrollment support and service for its broker partners’ clients. For example, the company has an account with 7,000 employees in 150 locations across the country. Colonial Life benefits counselors met with employees at each location and conducted individual counseling sessions with them. Because the benefits counselors are local, they can be on hand to help out with next year’s enrollment and any ongoing service needs. The goal is for the company’s benefits counselors to build strong relationships with employees in the account.

Delta Dental: Every client is assigned a designated account manager who is responsible for overseeing program implementation, subsequent renewal activities, day-to-day issue resolution, and for participating in information meetings with benefit managers and enrollees as needed. Delta Dental of California has sales offices in San Francisco, Sacramento, Cerritos, San Diego and Fresno.

Guardian: Guardian has over 55 local sales offices nationwide to support the needs of brokers and their clients.

Health Net: Yes, Health Net has several regional sales and service teams throughout California to support brokers and their clients.

Humana: We have account managers in most of our sales office (approximately 50 offices around the country) who can handle most calls as part of our single point of service. The claims and customer service team is primary in our Lancaster, South Carolina office, where 450 people are dedicated to our workplace voluntary benefits.

MetLife: Yes. We have representatives that specialize in voluntary benefits located in major cities throughout the U.S.

 Transamerica: Not in the same city. We have local representation and a dedicated account manager for service support assigned to each region.

Unum: Yes. Unum has 40 local sales and service offices located throughout the U.S. with four locations in Calif.

16. Do you have a sales rep. and a service rep? (The sales rep helps the broker market and position products, manage blocks of business, and develop target markets and the service rep. helps implement and fulfill account enrollments.) 

Ameritas: Yes.

Blue Shield: Yes.

Cigna: Yes. CIGNA Voluntary New Business Managers partner with Brokers to present our product to prospective clients. Once a client chooses to offer CIGNA Voluntary products to their employees, we assign a dedicated client manager and a service team to implement the plans and provide ongoing service for day-to-day issues.

Colonial Life: Yes. Colonial Life’s national team of benefits professionals has specialized roles they perform during the enrollment process. Benefits professionals work with brokers and their clients to help develop voluntary benefit strategies that will help clients solve their benefit challenges. Account coordinators help manage the enrollment logistics and report. And benefits counselors meet individually with all employees to educate them on their benefits, help uncover any unmet needs and select insurance plans to meet those needs.

Delta Dental: Yes. To ensure that our clients get a high level of service, Delta Dental uses a team approach to provide service and rapid response. A client’s team will include a sales account executive and an account manager. Together, they are supported by account management specialists and administrative assistants.

Guardian: Yes. Guardian has over 250 local sales representatives to help brokers market over 120 benefit advisors dedicated to supporting enrollment efforts and customer services representatives available to serve the distinct needs of brokers and their clients.

Health Net: Yes. Health Net has sales and service representatives to help brokers and their clients.

Humana: Humana provides a dedicated team of account managers, renewal specialists, and account installation managers to each case. We realize that much of the work begins after the case is sold and our goal is to provide dedicated resources for our clients for the duration of the case.

MetLife: Yes, we have a sales team and service team that work closely together to meet the needs of our brokers and customers.

Transamerica: Yes.

Unum: Yes. Unum has more than 500 sales professionals across the country, backed by a local service force of 1,000 professionals. The service team includes those who support Unum Enroll, our in-house enrollment team that supports voluntary benefit enrollment for employer groups of fewer than 500 lives.

17. Do you specialize in voluntary benefits? 

Aflac: Yes. Aflac is a leader in guaranteed-renewable insurance policies sold on a voluntary basis that pay cash benefits directly to policyholders, unless assigned. With a broad range of policies and value-added services, Aflac’s  offerings suit virtually every business size and type. From three employees to 30,000, Aflac fits easily within any benefit package. Many times in the voluntary insurance business, companies tend to use the same approach to market similar benefits. Aflac is different. We back our unique plans up with the following:

• Innovative marketing campaigns.
• Strong financial stability.
• Brand recognition.
• Solid company reputation.
• Industry recognized and rewarded claims and customer service.

Ameritas: Yes. Ameritas has been providing voluntary benefits since 1990. We consider ourselves specialists in that arena because of our extremely high satisfaction levels from our customers and our constant systems evolutions to accommodate the needs of our customers. To specialize in voluntary benefits, we believe this is critical to achieve a win/win for all.

Blue Shield: No. Blue Shield specializes in offering quality medical health care plans to create innovative solutions to California’s health needs. Blue Shield has been a leading provider of health care plans for more than 70 years, and our networks are among the largest in the state. We continue to maintain our commitment to our providers and consumers by offering innovative products and services to improve members’ access to quality and cost-effective healthcare services.

Cigna: Yes. CIGNA Voluntary’s mission is to improve the health and well being of the working uninsured by providing affordable and easy-to-understand coverage. CIGNA Voluntary is the dedicated voluntary plan unit of CIGNA. We offer a premier package of voluntary plans across the country.

Colonial Life: Yes. When Colonial Life was founded in 1939, it sold accidental death coverage to individuals. In fact, the company pioneered the concept of offering voluntary benefits at the worksite in the 1950s. Colonial Life has always marketed only voluntary benefits, and during the 70 years it has been in business, the company has developed strong expertise and experience in the voluntary benefits industry.

Delta Dental: Delta Dental specializes in non-voluntary, partially voluntary and totally voluntary dental benefit programs.

Guardian: Voluntary benefits are an incredibly important part of our group business. We do also offer plans that can be fully or partially funded by the employer.

Health Net: Health Net does not specialize in voluntary benefits. However, Health Net does offer the types of voluntary plans that are most commonly requested by our health plan customers.

Humana: Yes. Humana acquired Kanawha Insurance Company in 2007. Kanawha has been providing voluntary benefits for 50 years and is a licensed insurer in 48 jurisdictions.

MetLife: Yes. Our affiliates and we have been offering voluntary benefits for over 30 years and have a broad suite of market-leading products.

Transamerica: Yes.

Unum: Yes. Unum is ranked second in inforce premium in the voluntary benefit market as reported by Eastbridge Consulting Group in 2008. Unum leads the voluntary market in sales of critical illness insurance and universal and whole life insurance.

Life Settlements–Keeping Safe in the Life Settlements Market

by Ellis Largent

Despite the life settlements industry’s best efforts, reports of executive malfeasance still hit the news with an upsetting frequency. One recent case involves a group of investors in Texas who lost $30 million they’d invested in life settlements with National Life Settlements LLC, by National Life Settlements LLC, a now-defunct firm that was shut down by Texas securities cops in 2009 after selling $30 million in unregistered investments. To date, the Texas Supreme Court was able to recover 69% of those investments. The charges are that the life settlements were fraudulent and unregistered brokers and agents were doing the selling.

This case is unfortunate because it stains an industry that has made great inroads into the investment world. Life settlements are now regulated with the same stringent measures as used for insurance policies. There is a larger measure of accountability on the life settlements market now more than ever. And the majority of life settlements brokers are welcoming the added consumer protection as it serves to legitimize further the industry.

But that begs the question: How do investors identify reputable life settlement firms? As the case in Texas proves, it’s not enough to assume that your state authorities have a handle on all life settlement business. By following the checklist below, investors can perform a little due diligence themselves, which could save millions in potential losses down the line.

• Is your life settlement broker registered? Check with the state insurance department to determine if your broker and firm have the required licensure to practice in your state. If your state doesn’t have such requirements in place, check with the Attorney General’s office and the Better Business Bureau to determine if the company and broker are in good standing. When in doubt, don’t.

• What are the state’s licensing policies? It’s hard to imagine, but some states only require life settlement brokers to pay a fee and fill out an application to get up and running. Look for companies that have obtained licensure in states with strict laws on the books; Ohio, Pennsylvania, Texas, and Florida have some of the toughest laws in the country. It’s a fairly safe bet that a company that’s operating in Oklahoma and has licensure in Ohio is a reputable firm.

• How transparent is your deal? Is your broker answering your questions? Brokers are able to tell you who the buyers are, what the offers consist of, and how the process works from end to end.

• Is your broker also a buyer? If so, don’t deal with that broker. Such conflicts of interest, not allowed in any other industry, can greatly affect your investment. Instead, look for a broker who works for you, not himself as well.

• Does your broker seek institutional investors? Fraud can be thwarted if you do business with a broker whose main client base are those large companies used to assessing risks and funding larger investments.

• Is your broker insured? Good brokers qualify for errors & omissions insurance. If your broker isn’t insured, that’s a red flag. It’s also a sign that your broker doesn’t have the means to pay back any bad investment claims.

• Does your broker comply with NAIC standards? Compliance with National Association of Insurance Commissioners standards is not mandatory, but it’s a great measurement of your broker’s commitment to conducting business fairly.

Life Settlements can be a vital restorative transaction for many financially distressed seniors. Many retirees are living longer, healthier lives and are finding that their nest eggs are insufficient to carry them the distance, especially in these challenging economic times.  A Life Settlement can turn a net loss policy lapse scenario into a net gain, providing significant liquid capital to pay for bills, medical care, taking a vacation, anything that our clients desire.”

When selecting a Life Settlement firm, make sure to follow the guidelines listed above.  These can save you and your clients headaches during the transaction and will maximize the cash value of the settlement they will receive.


Ellis Largent is director at Opulen Capital. He has been with Opulen Capital since the company’s inception and serves as managing director of New Business Development. He oversees selected national accounts and alliances with some of the insurance industry’s top producers.  Another focus of Largent’s is informing Opulen’s affiliates on all new programs and compliance through direct training.  Largent has over 10 years of sales, management and operational experience focused in the insurance industry.  He is a graduate of the University of Missouri with a Bachelor’s degree in business management and marketing. Largent holds his California life, accident, and health insurance producers’ licenses. For more information, call 877-678-5361 or visit

Life Settlements of Corporate Owned Life Insurance Policies
A Meaningful Recovery at a Perfect Time

by Doug Himmel 

In today’s turbulent economic climate, companies and their advisors must maximize the value of all corporate assets, whether because of succession planning, the sale of a company, reorganization, or liquidation. More than ever, diligence and creativity play a larger role in maintaining a company’s health and viability.

Key person (and other corporate owned) life insurance policies have long been an integral part of corporate America. They are usually viewed as a contingent asset since the policy has no value unless the key person dies. In a typical scenario, the company pays the premiums and is designated as the owner and beneficiary of the policy. It can be a very effective way to offset any financial impact associated with the sudden loss of the key executive, but the policy often has little or no value to a company that is going through a sale, cash crunch, reorganization, or liquidation. Moreover, due to the ongoing premium obligation, these policies are often viewed as a liability instead of an asset. The same is often true with other types of life insurance policies, including policies that have been used to fund buy-sell agreements, split-dollar policies, and personally owned policies that the company has assigned to its lenders.

The Mechanics of a Life Settlement

Until somewhat recently, there were only three options the policy owner, whether it’s the company itself or a court appointed trustee:

1. Allow the policy to lapse, thereby discontinuing future premium payments.

2. Continue paying the premiums and keep the policy in place.

3. Surrender the policy to the issuing insurance company for the cash-surrender value.

A life settlement may be the perfect solution for a company whose needs or financial condition has changed. A life settlement is the sale of an existing life insurance policy to institutional investors from the current owner or assignee (the company, if it is a key person policy). The buyers are institutional investors, which are typically, although not exclusively, commercial; investment banks; pension and hedge funds; and insurance companies. These investors underwrite the policies’ fair market value and purchase them from the policy owner for a one-time lump-sum payment. Upon the settlement, the purchaser assumes title and responsibility for all future premium payments.

Most varieties of life insurance are eligible for this option including universal life, variable universal life, and convertible term policies. Also, since many corporate-owned policies are term in structure, they may prove to be the most hidden and valuable asset. These policies are rarely disclosed on schedules or statements of financial condition and they are frequently overlooked when the due diligence is being done.

Since they do not accrue any cash-surrender value, they are often cancelled, ignored, or otherwise permitted to lapse for non-payment at the first sign that a company is changing hands or is in trouble. Since most term policies have a conversion feature, providing the owner with the right to convert to a permanent policy may be a very useful way to extract value from an asset that had been considered worthless. The life agent who is advising the company would look great in this scenario because they looked at outside-the-box solutions to solve their client’s issues. Also, the agent may be writing a sizable term conversion and could possibly participate in the compensation from the life settlement transaction.

To qualify for a life settlement, the general rule of thumb is that the insured must be over 65 and have at least $500,000 of life insurance coverage. In addition, several factors influence the policy’s purchase price including age, gender, health of the insured, size of the policy, insurance carrier, and type of policy.

The process of selling a policy is relatively simple. It’s strictly paperwork. There are no doctor visits or blood tests, which are required on a new policy issue. An application is signed; medical information is collected; life expectancy reports and policy information are gathered; and then a comprehensive package of information is sent out to the market. At that point, a life settlement broker conducts an auction-like process in which bids are presented to the broker for acceptance. The broker should handle this process on a contingent basis.

Legal Justifications for Selling a Policy

In 1899, New York’s highest court held that policy owners have property rights with regards to their life insurance and, as such, they can go to the best market they can find to sell or borrow money on it (Steinback v. Diepenbrock).

In 1911, The U.S. Supreme Court laid some of the groundwork for today’s life settlement marketplace when it established the policy owner’s right to transfer an insurance policy (Grigsby v. Russell).

In the bankruptcy world, once a petition is filed, an estate is created pursuant to section 541, of title 11, United States Code, section 101 et seq. (the Bankruptcy Code). The bankruptcy estate is comprised of all legal or equitable interests of the debtor in property wherever located and by whomever held. As such, a life insurance policy that is owned by the bankrupt corporation upon the life of an owner, officer and/or large stockholder, at the expense of the corporation, passes to the trustee as an asset of the estate (estate of Lellock v. Prudential Ins. Co. of Am). Any money from the sale of the life insurance policy becomes the property of the company/debtor’s bankruptcy estate (See generally, In the Matter of Insulation & Acoustical Specialties, Inc.). In addition, a debtor or trustee may use, sell, or lease property of the estate (other than in the ordinary course of business) upon notice to parties in interest and a hearing by the bankruptcy court.

Here are a couple of examples of bankruptcy cases in which life settlements were used to monetize insurance assets: The Illinois bankruptcy case called, “Wilder” was assigned to a Chapter 7 trustee. The estate had minimal assets, but had in excess of $200 million in claims. Among the assets of the estate were three life insurance policies on the key man. Despite the trustee’s efforts, they generated only a $250,000 bid from a group of creditors. Since the trustee had never encountered life insurance policy assets in a case, she felt overwhelmed and conflicted about what was already a challenging case so she used a life settlement broker. Within a few weeks, the trustee filed to sell the three policies for $8.9 million, which is 20 times greater than the previous bid she secured on her own.

A $15 million term policy was on the verge of lapsing in the Ronco matter, which was in a California bankruptcy court, but it was converted into a universal life policy and thereafter marketed and sold. The proceeds of the sale were approximately $3.3 million. The proceeds were delivered to the trustee and yielded enough to pay off the senior secured lender, in full.

In Conclusion

Advisors to companies that are in transition at any point on the continuum (from very healthy to bankruptcy) have an opportunity and an obligation, in cases such as bankruptcy, to maximize the value of the assets/estates for the benefit of all parties involved.

In scenarios that include insurance assets, the policy should not be surrendered arbitrarily for the cash-surrender value, or worse, allowed to lapse without an appraisal of its fair market value. Advisors should consult with an experienced life settlement broker who has significant knowledge of the corporate space and specifically the restructuring and bankruptcy world, in order to obtain the highest monetary value for these assets.

If a company is being sold, the sale of a policy may be what’s needed to get the buyer and seller aligned on the overall price. With a troubled company, the potential for a successful reorganization always depends on the amount of available cash. Alternatives are needed when a debtor is unable to increase revenues or borrowing to bridge the gap. Often, an item that’s not on the balance sheet, like the sale of a life insurance policy, can make the difference between staying in business and filing bankruptcy. A life settlement should be considered even in situations in which the policy has positive cash-surrender value since it may provide additional dollars and a significant cash infusion at exactly when it’s needed.


Doug Himmel is the managing director of Melville Capital, MC a life settlement broker practicing in the corporate and insolvency arena with headquarters in New York City and offices in Los Angeles, Phoenix, and Charleston, S.C.  Melville Capital has been retained in numerous bankruptcy cases. For more information, please contact Doug Himmel at 866-511-5990 or or visit