- Adding non-medical benefits would break the company’s budget: Affordable group dental, disability, vision, and life insurance options are available for companies with two to 99 employees. Adding benefits doesn’t have to mean adding to the benefit budget. Fifty-six percent of employees are willing to bear the cost of ancillary benefits, according to a recent MetLife study. Sixty-five percent of employees agree that having customized benefits would increase their loyalty. Employees who are satisfied with their benefits are nearly four times as likely to be satisfied with their job. A study from the Center for American Progress estimates that replacing an employee costs an average of 20% of their annual salary. So if a worker making $50,000 a year quits, you’ll pay roughly $10,000 to cover the lost productivity and then recruit and train someone new. It’s a better strategy for employers to focus on retaining key employees and driving increased satisfaction through benefits. This is especially important for small businesses where the cost of replacing an employee may be higher because it may be less likely that other employees have been cross-trained to fill in the gap. Brokers should discuss how the cost of benefits can be shared and that employees are willing to take some of the responsibility. Also, address the financial implications early on to show small business decision makers how non-medical benefits can add to their businesses.
- Administering Group Benefits Is Too Time-Consuming: Consolidating multiple coverages with a single carrier can reduce administration. Exploring new channels, such as private exchanges, can help identify opportunities for increasing benefit choices while reducing administrative burdens. Making carrier recommendations based on services, ease of implementation, educational resources, and customer understanding as well as price will give small business decision makers the support they need.
- Dental Insurance Isn’t Important: Dental insurance is a benefit that is in high demand—and highly utilized—by employees. Sixty-three percent of Gen Y and Baby Boomers are interested in purchasing dental insurance at work. More than half of Gen X are interested in purchasing this coverage. According to the National Association of Dental Plans (NADP), people without dental insurance are less likely to get dental care, which means missed opportunities for prevention and early treatment. In fact, the NADP finds that those without dental benefits report higher incidences of other illnesses: sixty-seven percent are more likely to have heart disease; 50% are more likely to have osteoporosis; and 29% are more likely to have diabetes. The Centers for Disease Control and Prevention finds that more than 164 million work hours are lost each year due to dental problems. By offering dental benefits, employers can capitalize on the link between oral health and overall health and lay the foundation for a healthier, more productive workforce. Small business brokers should discuss this link with their clients.
- Benefits Won’t Help Attract Employees: According to a 2014 study from the Employee Benefit Research Institute, 76% of employees say benefits are a very or extremely important in their consideration of a job offer. Brokers should explain how small business owners can leverage the benefits they provide.
- Benefits Won’t Help Retain Employees: According to Glassdoor.com, 48% of employees are confident that they can find a job that matches their compensation level within six months of starting a job search. With that in mind, small business owners need to evaluate what they are offering to employees beyond salary. What added perks will make employees feel valued enough to keep them from looking around in the first place? CareerBuilder reports that 58% of respondents identified better benefits as the best way to improve employee retention. Offering better benefits means offering a range of benefits to meet a variety of employee needs; this includes medical plus ancillary options that employees can choose from and pay for on their own. Employees who are satisfied with their benefits are nearly four times more likely to be satisfied with their jobs, according to MetLife’s study, once again reinforcing the impact benefits can have on existing talent. Not offering a range of employee benefits opens the door to competitors looking to attract high-performing employees.
For more information, visit metlife.com.
- Oppose AB 248 (Hernandez): Minimum value for large group market policies: This bill takes options off the table for large employers who want to build their own health insurance plan from scratch through direct negotiation with a plan or carrier. AB 248 would force employers to move their insurance plan “situs” to a state that protects their rights under the Affordable Care Act (ACA). If the plan situs moves across state lines, agents in other states will sell and service those policies. This will reduce sales of large policies in California by licensed health insurance agents. Local insurance agents are Main Street businesses throughout the state. The California marketplace can offer base plans below the 60% actuarial value that are then paired with a health savings account (HSA) or health reimbursement arrangement (HRA). This building block approach brings the plan value to well above 60% value. HSAs and HRAs were included in the ACA to maintain affordable health care costs for employers. AB 248 takes away this approved tool for California’s large employers. Large employers in other states will keep their ability to negotiate their plans. AB 248 will take that option away from California employers.
- Support AB 1163 (Rodriguez) Health Care Services Plan and Health Insurers: Agents and Brokers: Notice of Contract Changes: This bill would require health insurers and HMOs to give appointed agents 45 days notice of any material change in their agent agreement. A health insurer or HMO would have to wait at least 45 days to implement any substantive contract change after notifying the agent of the change. AB 1163 was introduced in response to recent actions by a health insurance carrier that changed its agreements with licensed health insurance agents. This fair notice would be applicable to changes made on the private market and the state-based marketplace. It helps mitigate confusion and business disruption for the more than 30,000 licensed agents who serve California’s individual consumers and employers.
- Support federal legislation S. 1099 (Scott) Protecting Affordable Coverage for Employees Act: The legislation designed to protect America’s small businesses from potential healthcare premium increases under the Affordable Care Act. The Protecting Affordable Coverage for Employees (PACE) Act, S.1099, would allow states to maintain the current small group market definition, which applies to businesses with up to 50 employees, in order to prevent premium increases and disruption for small and mid-sized businesses. Under the Affordable Care Act, on January 1, 2016, the definition of the state based small group markets is scheduled to change from 50 to include employers with up to 100 employees. This change would require many small and mid-sized businesses to be subject to different rating rules and requirements, with the potential of increasing the health insurance premiums for small businesses, their employees, and their families. According to an Oliver Wyman report, if the small group definition moves to 100, premiums could increase by approximately 18% for a majority of the mid-sized employers.
For more information on these bills and how to get involved, visit cahu.org.
How Medicaid Decides What to Cover
The California HealthCare Foundation issued a report on how Medicaid and other large public health insurance programs determine what to cover. Given Medicare’s central role in the health insurance market, the way it determines what to cover has significant implications for the entire health care system. For more information, visit chcf.org.
Exchange Consumers Are Not That Happy
Only 30% of enrollees in a public health exchange are satisfied with their plan, which is significantly lower than other insured cohorts. One in three enrollees in a health exchange has had trouble paying out-of-pocket health care expenses, according to a survey by Deloitte. Compared to other insured cohorts, exchanges enrollees are less confident that they can get affordable care. They feel less prepared financially to handle future health care costs. More consumers are willing to accept limited provider networks for lower prices, especially younger enrollees, signaling that these kinds of tradeoffs may be part of the solution.
The exchanges have improved access to care, but affordability remains a problem. Enrollees report getting care that they may not have been able to afford without their exchange coverage. They are connecting with primary care providers at twice the rate of the uninsured. However, potential buyers may need better guidance in selecting affordable coverage and might be open to plans that offer value-based incentives or that swap coverage limits for lower premiums and copayments. Potential buyers may need better guidance in selecting affordable coverage, and might be open to plans that offer value-based incentives or that swap coverage limits for lower premiums and copayments.
Eight in ten renewing enrollees stayed with the same insurance carrier. Nearly half of renewing enrollees switched insurance products. Price is the most common driver of dissatisfaction and switching, but switchers are also looking for broader coverage or better alignment with their needs.
Exchanges customers are more cost-conscious. By the time they enroll, exchanges customers have a better understanding of plan benefits and costs than people with coverage through employers, Medicaid, or Medicare. They are inclined to compare plans, providers, and services on price, but show interest in quality measures, too. These early signs suggest that exchange enrollees are becoming savvy consumers who are geared to shop around for health insurance as well as health care services and products. What is needed to equip this new generation of health care consumers? Survey findings point to multiple purchasing channels, more reliable information sources, better decision support, and further development of online resources and digital technologies. For more information, visit deloitte.com.
A Guide to Essential Health Benefits
The Congressional Research Service is offering a helpful guide to Essential Health Benefits under the ACA. To get the guide, visit fas.org.
Consumers Overlook HSA Investment Options
Investment options in health savings accounts (HSAs) are fairly new and not widely used, but they tend to draw larger contributions and have higher balances. In many cases, HSAs allow account owners to invest in mutual funds and other options, much like a 401(k) plan. So how are they working? A report by the Employee Benefits Research Institute finds the following:
- In 2014, 6.4% of HSA owners used the investment option portion of the account.
- People contributed $2,636 annually on average when they had investments and $1,224 when they did not have investments.
- Annual distributions for health care claims averaged $1,777 from HSAs with investments, and $1,293 from HSAs without investments.
- End-of-year account balances averaged $10,261 among HSAs with investments, and $1,709 in HSAs without them.
For more information, visit ebri.org.
The Costs of Denying Care for Transgender Surgery
The Obama administration is proposing rules that would prevent health care providers from discriminating against transgender patients. A survey by True Benefits finds that, when care is denied, there are important costs for insurers and the public. As a result of being denied coverage for transition-related care, 35% of respondents needed psychotherapy; 23% became unemployed; 15% attempted suicide; and 15% needed public assistance programs.
Thirty-seven percent of those who were denied care turned to drugs and/or alcohol, and 36% developed other physical symptoms. John Hodson, president of True Benefit said, “Insurers and policymakers have had an antiquated list of exclusions that haven’t evolved for several decades. The thought was that denying transgender medical care saved policy holders money. This report shows that it’s not true. There are important costs to insurers and the public associated with denying care to transgender individuals, including the costs of therapy, public assistance, unemployment, and care for new physical symptoms.”
An insurance industry professional, Hudson became interested in the issue when his own daughter was denied coverage just weeks before a gender-reassignment operation was planned two years earlier. She eventually became the first person covered by a new Connecticut mandate in 2014.
The survey of 355 transgender individuals, among the first to focus on denial of health care, was conducted by TrueChild in May, 2015. Their average age was 35. Eighty-five percent were living full-time in a gender other than their birth sex, but only 54% had completed all or part of their physical transitions. For more information, visit truechild.org.
MOVERS & SHAKERS
PlanSource Partners with United Benefit Advisors
PlanSource has entered into a partnership with United Benefit Advisors. UBA promotes PlanSource’s cloud-based platform to employers for employee benefit shopping, enrollment, billing, compliance, and administration. The software offers employees step-by-step guidance and personalized plan recommendations during the shopping and enrollment process. For more information, visit plansource.com.
Aflac Names Director of U.S. Sales
Aflac has named Andrew Glaub as senior vice president and director of Aflac U.S. Sales, reporting to Teresa White, president of Aflac U.S. Glaub will focus on the day-to-day operations of the sales force, developing programs and initiatives to enhance the U.S. sales strategy. Glaub has extensive field leadership experience with Aflac, having begun his career with the company 30 years ago as an associate. For more information, visit aflac.com.
Medical Tourism Conference
The Eighth World Medical Tourism & Healthcare Congress will be held September 27 to 30 in Orlando. For more information, visit medicaltourismcongress.com.
The Guardian introduced the index participation feature (IPF) to whole life insurance. This patent-pending feature allows whole life policyholders to link a portion of their cash value to the performance of the S&P 500 Price Return Index, subject to a cap and floor. No other whole life insurance carrier offers this feature. With the IPF, policyholders can allocate a portion of their paid-up additions’ cash value, choosing an allocation from zero to 100%. When a policyholder allocates money to the IPF, dividends on these paid-up additions are adjusted based on the performance of the S&P 500 Index, subject to a 12.5% cap and a 4% guaranteed floor – ensuring that the policy’s downside exposure is limited. Policyholders can change their IPF allocation for future index periods, providing flexibility over time. For more information, visit NextGenWholeLife.com.
Video Explains Whole Life Living Benefits
The Guardian has a video explaining the living benefits of whole life insurance. In this three-minute video, Brad Hoffner, a Guardian client, believes he no longer needs whole life insurance policy after he loses his partner and his mother in a short space of time. With no immediate beneficiaries, Brad questions the need for continuing this coverage. His financial representative explains how the cash value of his policy can be used as an important financial resource. By staying the course, Brad has funds for a down payment on a house as a new chapter in his life begins. To see the video, visit https://www.youtube.com/watch?v=QjFldhIosDE.
Animated Video Demystifies Life Insurance
An easy-to-follow animated video from the Insurance Information Institute provides answers to these and other questions:
- Reasons for buying life insurance.
- The various types of life insurance.
- How to find the right type and amount of life coverage for your needs and budget.
For more information, visit iii.org.
CHOICE Administrators introduced its suite of smart decision technology tools. The tools help brokers enroll groups more quickly and enable employers and their employees to make more informed decisions. The resources include Online Provider Search, Online Rx Search for prescription drugs, a new Automated Choice Profiler, and new Online Enrollment for groups taking part in the CaliforniaChoice small group multi-carrier health insurance exchange, which has been operating since 1996. The Automated Choice Profiler allows employees to evaluate premiums, deductibles, and additional out-of-pocket costs, such as copays and co-insurance, to get a better estimate of their cost of health coverage. Employees can look at plans side-by-side based on doctor availability, cost, risk, and quality. They can also identify coverage that meets their ongoing, potential, or planned health conditions like asthma, diabetes, a pregnancy, or even upcoming surgery.
Online enrollment helps brokers enroll cases more efficiently and lets employers and employees go paperless if they choose. It allows employers to track enrollment and identify which employees still need to complete an application. It helps groups eliminate incomplete applications and expedites processing, so cases are issued faster. The CaliforniaChoice Online Provider Search allows employers and employees to search for a health care provider or specialist based on location, provider gender, or health plan affiliation. Online Rx Search allows employees to compare health plans based on prescription drug coverage. CaliforniaChoice also offers a wide range of discounted and no-cost products and services to employers through its Business Solutions Suite. For more information, visit calchoice.com or choiceadmin.com.
Aflac introduced Aflac Accident Advantage. The new supplemental accident insurance policy offers more flexibility for individual policyholders to choose different levels of coverage and several industry-leading and enhanced benefits to help further protect consumers from high out-of-pocket costs related to accidents and injuries.
Never before offered benefits under the new policy include the following:
- A benefit designed to cover injuries sustained while participating in an organized sporting activity.
- A home modification benefit, waiver of premium benefit and family support benefit.
- A prosthesis repair and replacement benefit.
- Speech and occupational therapy are now covered in addition to physical therapy under the Therapy Benefit.
Upgrades to benefits offered in previous Aflac accident policies include the following:
- More flexibility, with four options of coverage for injuries such as fractures, dislocations, lacerations, concussions, burns, emergency dental work, eye injuries and surgical procedures.
- No waiting period for the wellness benefit, which pays policyholders for routine medical exams and immunizations. The wellness benefit is now payable every calendar year.
- An enhanced accident treatment benefit that includes different levels of benefits according to whether X-rays are ordered during an emergency room visit or at another location such as a doctor’s office. Plus, coverage for care has expanded to include physician’s assistants or nurse practitioners.
For more information, visit aflac.com/accident.
Digital Legacy for Life Beneficiaries
MetLife Advantages is a suite of value-added services that accompany group life insurance policies. In addition to services, such as will preparation and grief counseling, the suite now offers the innovative Infinity app, which enables people to create a digital legacy for beneficiaries, estate administrators and others who play an important role in the major events in their life. For more information, visit metlife.com.