Bill Would Limit Financial Incentives In Wellness Plans

• Bill Would Limit Financial Incentives In Wellness Plans
• Health Reform Summit for Brokers
• HHS Delays SHOP Exchange, But Not California
• Health Reform Leads Small Employers to Reduce Hiring
• Are Smarter CDHP Consumers a Myth?
• 90% Don’t Know When the Exchanges Will Be Open
• Individual Vision Plan Options
• Whole Life Policy with Living Benefits
• Group Accident Insurance
• What are the True Costs of Dementia in the United States?
• Avoiding Dangerous Waters With Fixed Annuities
• It Pays to Get a Professional Designation
• Hartford Enhances Voluntary Benefit Capabilities


Bill Would Limit Financial Incentives in Wellness Plans

WellnessCalifornia Health Underwriters is alerting members to Senate Bill 189 (Monning).It would ban all wellness programs until 2020 unless they meet a number of restrictive conditions. A health plan could not offer an incentive or reward under a group health care service plan contract or group health insurance policy unless it met these requirements:

Incentives can only include rewards for participation that are not linked to premiums, deductibles, copayments, or coinsurance.

A program must have a reasonable chance of improving the health of, or preventing disease. It cannot be overly burdensome, cannot be a subterfuge for discriminating based on a health status factor, cannot lead to cost shifting, and cannot use a highly suspect method to promote health or prevent disease.
Participation must be voluntary.
An individual cannot be offered an incentive or reward for participating the program based on satisfying a standard that is related to a health status factor. The following would be acceptable:
  • A program that reimburses all or part of the cost for memberships in a fitness center.
  • A diagnostic testing program that provides a reward for participation, but does not base any part of the reward on outcomes.
  • A program rewards people for attending a health education seminar as long as participation is not related to a particular health condition or any other health status factor.
Participation in the program must be offered to all similarly situated individuals.
People with disabilities must be offered reasonable accommodations to participate.
There must be a reasonably available and equivalent alternative for those who are unable to participate due to occupational requirements, a medical condition, or other hardship.
All materials related to the program must disclose the availability of these accommodations.
The program must assesses the cultural competency needs of the health plan’s population.
The program must provide language assistance for those who speak limited English.
The program cannot not result in any decrease in benefits coverage.
The program cannot not result in an increase in premium for the product as demonstrated through rate review consistent with Article 6.2 (commencing with Section 1385.01).
The incentive or reward cannot not exceed the amounts determined to be unreasonable by regulation by the director in consultation with the Insurance Commissioner
The incentive or reward can not exceed the percentage of the cost of coverage under the plan contract identified in Section 2705(j)(3)(A) of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-4) or regulations adopted thereunder.

The state notes that PPACA prohibits a carrier from requiring a person to pay a greater premium or contribution based on a health status-related factor. Senator Bill Monning said, “There is growing concern among consumer advocates that wellness programs could become a subterfuge for discrimination against those with pre-existing conditions…Wellness incentives should be about making people healthier, not pricing insurance premiums based on pre-existing conditions…” The intent of SB 189 is supported by AARP, American Cancer Society Action Network, American Heart Association, California Black Health Network, California Pan-Ethnic Health Network, Consumers Union, Health Access, Greenlining Institute, and Prevention Institute.

According to a CAHU statement, “As health care coverage specialists, you know the value of wellness programs and positive impact they have on the lives and affordability. CAHU is asking you to join with other licensed insurance agents and their clients in letting your state Senator know you oppose SB 189.” Click here to oppose SB 189.

Health Reform Summit for Brokers

Health insurance leaders and brokers throughout California will gather for a special Health Reform Summit on April 23 in Los Angeles and Orange counties. Featured speakers will include Paul Markovich, chief executive officer of Blue Shield of California, as well as John Word and Rusty Brown, co-founders of The Word & Brown Companies. Other speakers include Michael Lujan, director of sales and marketing for Covered California; Ron Goldstein, president and CEO of CHOICE Administrators; and Don Goldmann, vice president of Word & Brown University. The event is being sponsored by Word & Brown General Agency.

As keynote speaker, Markovich will address the changing California healthcare landscape from the perspective of the carriers and will discuss how health reform will affect small groups, individuals and mid-market groups. Blue Shield of California provides health, life, dental, vision, and Medicare insurance and healthcare service plans to more than 3.3 million members in California.

In representing the state’s public exchange scheduled to launch January 1, Lujan will discuss the status of Covered California, including a look at broker training and certification, carrier selection and more. Goldstein, a pioneer in the development of private exchanges, will give an update on how CaliforniaChoice will continue to be a viable option in the market and what changes may lie ahead. CaliforniaChoice is the nation’s most mature small-group private exchange with more than 150,000 members and 10,000 employer groups. For more information, visit


HHS May Delay SHOP Exchange, But Not California

The Department of Health and Human Services (HHS) issued a proposed rule delaying implementation of the Small Business Health Options Program (SHOP) for small businesses under the Protection and Affordability Act (PPACA). HHS said that  “Implementation challenges” led to the proposed one-year delay to January 1, 2015. Despite the delay in the federally operated exchanges, several states, including California, intend to move forward with the choice option for their state-operated exchanges.The choice option allows small employers to select a level of coverage (known as the bronze, silver, gold, and platinum coverage tier) from which their employees can choose any qualified health plan within the exchange, according to Intercare, a HUB International company.

Covered California exchange spokesperson, Dana Howard, told Intercare that exchanges are “not new territory for California. We are confident that Covered California will be ready for enrollment and implementation for a January 1, 2014 effective date.”

Small employers will still be able to purchase coverage though the federal exchange, but in 2014 that coverage is limited to the single health plan selected by the employer. A single health plan is another exchange option, which allows employers to select a single qualified health plan to offer employees. Beginning in 2014, those small employers that are eligible for the employer tax credit must purchase their plan through a state or federal exchange to qualify.

This delay does not affect individual coverage under the exchange. With 2014 right around the corner, the activity level for exchanges will increase rapidly.

Health Reform Leads Small Employers to Reduce Hiring

Thirty-two percent of small businesses plan to reduce hiring as a result of the employer mandate under the Patient Protections and Affordable Care Act (ACA). Thirty-one percent plan to cut back hours to reduce the number of full time employees, according to a study by the U.S. Chamber of Commerce. Seventy-seven percent say the health care law will make coverage for their employees more expensive; and 71% say the law makes it harder for them to hire more employees. Requirements of the health care law are now the biggest concern for small businesses, having bumped economic uncertainty from the top spot, which it has held for the last two years. For more information, click here.

Are Smarter CDHP Consumers a Myth?

Consumer Driven Health Plans CDHPs do not stimulate price shopping for most common outpatient services, according to a survey by the independent Berlin-based publishing group, De Gruyter. For eight out of nine services analyzed, prices paid by CDHP and traditional plan enrollees did not differ significantly. The only exception is that CDHP enrollees paid 2.3% less for office visits.

There was no evidence that consumers with CDHP plans who had lower than expected medical expenses did more price shopping or that consumers did more price shopping before reaching the deductible. Patients may be returning to the same providers they used before meeting their deductible or they are not sensitive to this within-year change in the price. Consumers may not have been able to shop for some diagnostic services if the service was bundled with a physician visit. Also, a patient’s physician may always use a particular facility for such services. There may be a limited scope of low-cost providers. Other studies have shown that the price transparency of health services is low; and early state-level efforts to improve price transparency have shown little effect so far .

The authors say that the findings should be viewed in light of the study’s limitations. For example, traditional plans may be able to negotiate a lower price point for a larger share of their providers. Also, a traditional plan may have larger networks with many providers offering the same relativly low price point. This would make low price providers the default option for many traditional plan enrollees, whereas CDHP enrollees may have a harder time finding prices at the lower end of the distribution. Second, the study only looks at price outcomes, but not quality. So CDHP enrollees may make value-based decisions using quality outcomes that researchers did not observe.

Price shopping may not be an immediate response to enrolling in a CDHP plan, perhaps because patients don’t  perceive the degree of price variation. A key to encourage price shopping may be the availability of clear signals of price, such as generic drugs, or out-of-network providers. Another important determinant of price shopping may be repeated use of a service. The researchers say that giving enrollees more education about benefit designs and launching carrier specific, price and quality transparency initiatives may be the next steps for employers, health plans, and policy makers to increase consumerism in health care decision-making. For more information, click here.

90% Don’t Know When the Exchanges Will Be Open

Ninety percent of Americans don’t know that the new health insurance exchanges will open in October, according to a survey by Laura Adams, senior insurance analyst, said, “We found a very inconsistent understanding of the Affordable Care Act, and we fear that many people will miss key deadlines and benefits because they don’t adequately understand the new law.”

A majority did answer correctly that health plans cannot deny coverage based on preexisting health conditions and must extend coverage to dependent children up to age 26. Just under half of Americans know that health plans must limit the money that patients have to pay out of pocket each year and that health plans cannot place limits on the total dollar value of benefits that patients receive. Thirty-nine percent of Americans surveyed say they are somewhat knowledgeable about the Affordable Care Act, 28% are not very knowledgeable; and 21% are not at all knowledgeable. Only 10% are very knowledgeable. Forty percent 40% expect health care reform to have a major effect on their lives; 39% expect a minor effect; and 19% expect no effect. For more information, visit

Uninsured May Have Better Access to Care than Medicaid Patients

About 47% of providers surveyed by the American Physicians and Surgeons (AAPS) said say that it is harder to get an appointment with a primary-care physician if you are a Medicaid patient than if you are an uninsured patient. For specialist appointments, 44% say uninsured patients were better off; and 32% say Medicaid patients were better off. Only 2% say that Medicaid patients have no problem getting an appointment with a specialist.

Forty-eight percent say it can be extremely difficult for a Medicaid beneficiary to get drugs, medical equipment, or diagnostic tests; 27% say it can be moderately difficult at times; and only 13% say it’s no problem.

Providers’ comments were overwhelmingly negative about Medicaid. Rural patients who can’t drive or travel may have no access to care except through charity. Some areas have no hand surgeons, endocrinologists, dentists, or rheumatologists who accept Medicaid. Many cardiology tests are questioned or denied, even echocardiograms for inpatients. Many drugs, even common generics, are not available without jumping through bureaucratic hoops. Treatment for chronic pain is especially difficult. It may be very challenging to get non-emergency surgery approved, no matter how necessary.

One physician writes called Medicaid simply a jobs program for administrators and quasi-medical professionals with little money going to the health care part of the equation. Another said that t poor customer service and excessive paperwork a commonplace with Medicaid. It can cost more to file a Medicaid claim than a physician can ever hope to collect. In fact, a physician may lose less money by just seeing the patient for free. One physician said that, since denials for appropriate treatment are much more common than approvals, it is insane to expand “such a horrendous program.” For more information, visit


Expanding Individual Vision  Plan Options

VSP Vision Care is offering individual plans with a monthly pay option in nearly every state. Consumers can pay as little as $13 a month, depending on the state in which they live. Coverage includes an eye exam with a low co-payment, allowance for glasses or contacts, fully covered lens options with 20% to 25% off any non-covered options, and access to a large doctor network all backed by a 100% satisfaction guarantee. VSP is hosting an Eye Got You Covered sweepstakes on Facebook ( From now until May 1, 2013, consumers can enter for a chance to win a VSP Individual Plan, providing a year’s worth of free vision insurance coverage that winners can keep or give as a gift.

Whole Life Policy with Living Benefit

OneAmerica introduced a living benefit for whole life policies. Chronic and terminal illness riders allow a policyholder to accelerate the death benefit in the event of a qualifying illness and access the cash value of the policy to cover medical expenses; receive in-home care; make needed modifications to a home; or use the money for any other purpose. For more information, visit

Group Accident Insurance

MetLife added Group Accident Insurance to its portfolio of supplemental health insurance products. It provides the following:

• Over 150 different events that pay a benefit.
• Coverage for active employees of any age, their spouses, and their children (up to age 26) without a medical exam.
• No minimum employee participation requirements.
• No waiting period.
• No limitations on the number of accidents covered.
• Portability.
• Premiums paid through payroll deduction.

For more information visit


What Are the True Costs of Dementia in the United States?

In the United States, 14.7% of people older than 70 had dementia in 2010. Researchers predict that an aging population will result in an increase of nearly 80% in total societal costs per adult by 2040, according to a study published in the New England Journal of Medicine. Dementia leads to total annual societal costs of $41,000 to $56,000 per case.

The total monetary cost of dementia in 2010 was $157 billion to $215 billion. Medicare paid about $11 billion of this cost. The cost for dementia care purchased in the marketplace ($109 billion) was similar to direct health care expenditures for heart disease ($102 billion) and significantly higher than the direct health care expenditures for cancer ($77 billion). In addition, the costs of informal care are likely to be larger for dementia than for heart disease or cancer. Costs for nursing home care as well as formal and informal home care represent 75% to 84% of attributable costs.

As alarming as these statistics are, the cost estimates are considerably smaller than those reported by the Alzheimer’s Association. The Association estimated that monetary costs, alone, were $172 billion in 2010. Estimates by the Alzheimer’s Association were based on a sample from a more severely impaired population (people identified in the Medicare Beneficiary Survey as having dementia). The higher cost is also based on a significantly larger estimate of the prevalence of dementia. In the Alzheimer Assn. study, the diagnostic criteria for dementia did not require the presence of a limitation in ADLs or IADLs,  probably led to a substantially higher estimate of the prevalence of dementia. Finally, the cost estimate was not adjusted for the costs of coexisting conditions. For more information, visit


Avoiding Dangerous Waters With Fixed Annuities

The National Assn for Fixed Annuities is holding a webcast that will help viewers avoid “suitability tempests, transfer treacheries, and dangerous designations.” It will be held Thursday, April 25 at 8:30 a.m. Pacific. For more information, visit


It Pays to Get a Professional Designation

It can be a big challenge to take time from your busy day to study for a professional designation, but it pays off according to a study by The American College. The survey reveals the following:
• Financial advisors with a CLU earn 22% more than their peers without the designation, and advisors with a ChFC earn 51% more.
• By year nine in the business – moving into mid-career – 13.8% of the advisors in the study hold a CLU, a ChFC or both. These advisors have 40% higher aggregate productivity than those with no designation.
• Advisors who complete one of The College’s skills-training designation programs (such as the LUTCF or FSS) within their first four years in the business are more likely to survive in the profession; their average tenure is 90% longer than those without a designation. These programs are designed to give advisors the skills required to better understand products, how to ethically service clients, and how to meet customer needs.
• Those earning the LUTCF or FSS within their first four years have earnings that average 72% more than those with no designation.
• Career-long learning is critical. Advisors who earn an LUTCF or FSS early in their careers, but don’t continue their education with advanced designations will see their earnings advantage erode to just 7% by their ninth year.
• Financial advisors who hold a CLU or a ChFC have 13% longer average tenure at their companies over their entire careers compared to those without these designations.
• Field leaders are 59% more likely to hold a CLU or a ChFC compared to their peers.
• Advisors who do not hold the CLU and ChFC designations are responsible for 81.4% of compliance issues.

For more information, visit: Study


Hartford Enhances Voluntary Benefit Capabilities

The Hartford is boosting its voluntary benefit business with a new partnership for advanced enrollment capabilities, an expanded sales and service team, and increased availability of its new voluntary disability product. Mike Concannon, executive vice president of The Hartford’s Group Benefits The Hartford said, “We are committed to…expanding our voluntary benefits capabilities to respond to the needs of benefits brokers, employers, and employees.”

The Hartford teamed up with Selerix Systems to provide an expanded enrollment platform, which launches this fall. The new platform will integrate with The Hartford’s existing digital tools to support self-service enrollment for companies with 50 or more employees. The Hartford’s service teams will support enrollment and medical underwriting, but employers and brokers can also work directly with Selerix to support non-Hartford core benefits enrollment.

A voluntary sales manager and regional sales executives will support field sales and account management teams in delivering expert consultation to brokers and employers. The Hartford also created national practice leads to provide case-level consulting for complex cases while supporting strategic voluntary initiatives, such as DisabilityFLEX. The Hartford is also expanding its product availability, making DisabilityFLEX available to employers with more than 1,000 employees. For more information, visit

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