How to Improve Your Employee Benefit Plan

How to Improve Your Employee Benefit PlanEMPLOYEE BENEFITS
How to Improve Your Employee Benefit Plan
Just three factors are integral a successful employee benefit plan, according to a study by Navera and Met Life. They are: having the right mix of benefits, having more choice within a broader range of benefits, and having effective enrollment education and selection confidence. The study reveals the following:

  • Employees who have five or fewer benefits are less loyal and less likely to recommend the company as a great place to work.
  • Employees who have 11 or more benefits are more loyal and more likely to recommend the company as a great place to work.
  • The two main drivers of employee confidence in their benefit selection are having easy-to-understand benefit information and effective benefit communications.
  • Less than half of employees agree strongly that their company’s benefit communications educated them on benefits and helped them understand how much they would pay for services.

Navera CEO Steve Adams said, “It’s now time to take technology-enabled self-service benefit enrollment from theory to reality…Technology-enabled platforms deliver information in a way that is easy to navigate and available anytime…A portfolio approach to benefit selection replaces the traditional serial process of selecting benefits. In the serial approach, employees make their medical selections first, then dental, and then vision, then disability, then group life, and so on. Employees are required to make an independent purchase decision about each of these benefits. Alternatively, a portfolio approach enables employees and their families to see how the benefits they select work together to provide them with the most complete and cost-effective coverage.” For more information, visit

A Strong Market for Voluntary Personal Injury Accident Plans
Accident products consistently represent around 12% to 14% of voluntary sales in 2014.  With health care reform, these benefits are expected to maintain or even increase this share in the coming years, according to a report by Eastbridge. Sales for personal injury accident products totaled $886.7 million, representing about 13% of voluntary sales. That’s also an increase of 14% over accident sales in 2013. The majority of accident products on the market have been introduced in the past few years.
Only six of the 19 participating carriers offer an individual product, but all of those also offer a group accident product. Carriers believe that flexibility and the specific benefits provided are key market differentiators for accident products today and in the future. For more information, visit

How A Whole Life Policy Can Strengthen Retirement planning
A white paper a by Wade Pfau, Ph.D., CFA argues for integrated retirement planning. Using investments, income annuities, and whole life insurance may yield higher income and greater legacy wealth than would an investment-only strategy, according to the paper, which was distributed by OneAmerica at its annual Economic Summit.

“For years, Americans have focused on building a nest egg for retirement. This research suggests that using income annuities and whole life insurance combined with investments can create a more efficient retirement strategy. The markets have to perform extremely well to beat this integrated approach,” said Dr. Pfau, who is a professor of retirement income at The American College for Financial Services.

The white paper compare three retirement scenarios for 35-year old and 50-year old couples. The research assumes that the 35-year old couple has $65,000 in a retirement account and $15,000 available per year to invest for retirement. The integrated option provides 40%  more income at age 65 and 228% more legacy wealth at age 100 than does the  investments-only option. For more information, visit

Patients Are Less Satisfied With Health Care
Patient satisfaction continues to fall in the health care and social assistance categories, according to the American Customer Satisfaction Index (ACSI).  Patient satisfaction is down 3.2% to an ACSI score of 75.1, the lowest level in nearly a decade. Patients say that visits to doctors, dentists, and optometrists (76) are better than hospital services (74), but the quality of care is lower than it was a year ago.

The demand for health care services is rising, with preliminary figures on household health care spending up nearly 6% in 2014 – the largest increase since before the recession. This is probably because more Americans have health insurance.

The rate of growth in the health care workforce slowed, which likely contributed to less efficient access to care. However, since the middle of 2014, the health care sector has been adding workers at a significantly faster pace, which may lead to higher patient satisfaction in the near future.

ACSI managing director David VanAmburg said, “The influx of the newly insured is putting pressure on a system that is still playing catch up. Rising demand that is outpacing supply, coupled with increasing healthcare costs, is a formula for lower satisfaction.”

Satisfaction with outpatient hospital care improved 5% to a score of 80 compared to considerably lower satisfaction with inpatient services and emergency room service (-10% to 64). For more information, visit

Consumers See Massive Increase in Health Care Costs
While the U.S. government has become an even more dominant force in the nation’s health care system, individuals are taking on a greater share of the costs, according to the latest index by U.S. News & World Report. Though data from the Affordable Care Act are not measured in the first iteration of the index, the federal government’s expanded role is already apparent. Government-sponsored health care, including Medicare and Medicaid, have grown at a faster rate than private health insurance. The percentage of people under 65 with public health insurance coverage increased from 12.9% in 2000 to 23.8% in 2013. Private health insurance coverage decreased from 71.8% to 61% during the same period.

Americans have taken on a higher burden of health care costs, spending 1.7 times more out-of-pocket on health care by 2013. The average cost of deductibles more than doubled over a decade. The percentage of premiums paid by employees increased 4% for single and family plans. Meanwhile, there has been a 55% growth in consumers’ prescription drug  prices.
In 2012, the U.S. spent 17.9% of its GDP on health care, more than any other developed nation.  For more information, visit

Insurers to Take Advantage of Wearable Devices
Nearly two-thirds of insurers expect wearable technologies to have a significant effect on their industry, according to a survey of more than 200 insurance executives by Accenture. Insurers have traditionally based their underwriting and pricing processes on a limited view of certain customer variables. But emerging technologies, such as wearables and other connected devices, can help insurers provide outcome-based services for their customers, according to the report.

Seventy-three percent of insurers say that providing a personalized customer experience is one of their top three priorities, and 50% have already seen a positive return from their investment in personalized technologies. 
John Hancock recently announced that it will give new policyholders a free fitness band to track their health progress – and then reward their healthy living with a reduction in life insurance premiums.

However, most insurers struggle to fully use their existing data. Fifty-six percent say that managing data is very challenging. At the same time, 86% expect software intelligence to be integral to simplifying their IT functions. Sixty-six percent of insurers experiment with intelligence technology, and 76% believe that successful businesses will soon manage employees alongside intelligent machines.

The majority of insurers are taking part in open innovation initiatives. Seventy-five percent say that the next generation of platforms will be led by insurance players, not technology companies. Fifty-one percent plan to partner with major digital technology and cloud platform leaders; 64% plan to team up with new digital partners in the insurance industry, and 45% plan to find partners outside the industry. For more information, visit

Bills Would Repeal the Cadillac Tax
The National Association of Professional Insurance Agents (PIA) has endorsed two bills that would repeal the ACA’s excise tax on certain employer-sponsored health plans. The 40% excise tax on so-called “overly generous” employer plans is set to take effect in 2018. Commonly referred to as the “Cadillac Tax,” it will have a much broader effect than Congress intended and is likely to affect certain groups more severely, according to the PIA.

PIA National executive vice president & CEO Mike Becker said, “The Cadillac Tax is a ticking bomb that is set to explode in 2018 and deny health coverage to millions of middle-class Americans. It has the potential to create more market disruption than we’ve seen since the inception of the ACA, all to benefit government programs.”

PIA has endorsed two similar pieces of legislation: the “Ax the Tax on Middle Class Americans’ Health Plans Act” (H.R. 879), introduced by Congressman Frank Guinta (R-NH), and H.R. 2050, a bill to repeal the excise tax introduced by Rep. Joe Courtney (D-CT).

PIA national director of Federal Affairs Jon Gentile said, “PIA strongly supports repeal of the Cadillac Tax because it will impact not just high-benefit plans, but moderate-benefit plans, and it could have an unequal impact based on the age, gender, family-size, and the geographic location of an employer’s workforce. This tax has the added consequence of punishing people enrolled in private sector health plans by hitting them with a 40% surtax, simply because they have good coverage. That’s inherently unfair.”

“The tax is intended to target only high cost employer-sponsored health plans, not moderate benefit plans. However, a Mercer survey recently estimated that it would impact 31% of employers in 2018 and 51% of employers by 2022, indicating that the excise tax will have a much broader effect than Congress intended,” said PIA national counsel & director of Regulatory Affairs, Jennifer Webb, in comments to the IRS.  PIA’s web address is

Med Supp Plans Continue to Grow
Membership in Medicare supplement plans continued to increase in 2014, according to a report by Mark Farrah Associates. Medicare supplement plans covered approximately 11.2 million seniors as of December 31, 2014, a 5.2% increase from 2013. From 2013 to 2014, enrollment in Medicare supplement plans increased by 551,135 covered lives. Though UnitedHealth was the growth leader, many other insurers experienced growth in Med Supp business.

Plan F, the most popular design, enrolled more than 6 million members and accounted for 54% of the market. Membership in Plan F increased by 494,599 enrollees from 2013 to 2014. Enrollment growth was also significant in standardized plan types G and N, with increases of 141,024 and 188,256 members.

The Affordable Care Act has had little effect on Medicare Supplement business. Reforms have not imposed major plan design changes or minimum loss ratio requirements for these plans. Many carriers have sustained a significant presence in the market by selling products at competitive rates while maintaining favorable loss ratios. For more information, visit

ER Visits Continue to Rise since Implementation of Affordable Care Act
Three-quarters of emergency physicians say that emergency visits are going up, according to a poll by the American College of Emergency Physicians (ACEP). This is a significant increase from just a year ago when less than half reported increases. Most report little or no reduction in emergency visits due to the availability of urgent care centers, retail clinics, and telephone triage lines. About 90% of more than 2,000 respondents have also seen an increase in the severity of illness or injury among emergency patients.

Michael Gerardi, MD, FAAP, FACEP, president of the ACEP said, “The reliance on emergency care remains stronger than ever. It’s the only place that’s open 24/7, and we never turn anyone away. Rather than trying to put a moat around us to keep people out, it’s time to recognize the incredible value of this model of medicine.”

Twenty-eight percent report significant increases in all emergency patients since the requirement to have health insurance took effect. In addition, 56% say the number of Medicaid patients is increasing.

A report by Health Policy Alternatives finds that policymakers and health insurance plans are failing in their efforts to drive Medicaid patients out of emergency departments and into primary care. More than half of providers listed by Medicaid managed care plans could not offer appointments to enrollees, despite a provision in the ACA boosting pay to primary care physicians who treat Medicaid patients. The median wait time was two weeks, but over one-quarter of providers had wait times of more than a month for an appointment.

“Medicaid access to primary and specialty care is not timely, leaving Medicaid patients with few options other than the emergency department. In addition, states with punitive policies toward Medicaid patients in the ER may be discouraging low-income patients with serious medical conditions from seeking necessary care, which is dangerous and wrong,” said Orlee Panitch, MD, FACEP, chair of EMAF and emergency physician for MEPHealth in Germantown, Maryland.

Gerardi said, “America has severe primary care physician shortages, and many physicians will not accept Medicaid patients because Medicaid pays so inadequately. Just because people have health insurance does not mean they have access to timely medical care.”

Dr. Gerardi raised concerns about the closure of hospitals and emergency departments in states that have not expanded Medicaid. “Hospitals received less Medicaid funding for charity care when the ACA took effect, because more people were supposed to have health insurance coverage. But hospitals are hurting in states that didn’t expand Medicaid. For example, the closure of a hospital in Baton Rouge resulted in a crisis for another hospital that inherited all the patients, many of whom are uninsured, and now this hospital may close as well. The average reimbursement for a Medicaid patient in the ER is about $43, but it’s much lower in many states,” he said.

Forty-two percent of emergency physicians would expect an increase in emergency visits if federal subsidies for health insurance coverage were to be eliminated in their states, which may happen if the Supreme Court decides in favor of the plaintiff in King v. Burwell. For more information, visit

Molina Healthcare Reports First Quarter 2015 Results
Molina Healthcare, Inc. (NYSE: MOH) reported strong financial results for the first quarter of 2015. “We are off to a very good start in 2015, and remain confident that we can deliver top-line and bottom-line growth in 2015,” said J. Mario Molina, M.D., CEO of Molina Healthcare.

Financial results for the first quarter of 2015 improved markedly over the first quarter of 2014 due to higher revenue, greater administrative cost efficiency, and steady medical care costs. Both income from continuing operations before income tax expense and net income per diluted share, continuing operations, were approximately six times greater in the first quarter of 2015 than in the first quarter of 2014.

Premium revenue increased approximately 53% in the first quarter of 2015 compared with the first quarter of 2014, resulting from the following:

An increase of over 38% in enrollment due to growth across all health plan programs.
  • An increase of nearly 15% in premium revenue per-member/per-month due to membership growth in programs serving members with more complex medical conditions for whom the company receives higher monthly premiums. For more information, visit

Broad Coalition Urges California to Fully Fund Medi-Cal
“We Care for California,” a broad coalition of doctors, nurses, hospitals, workers, and other healthcare leaders, launched a media campaign calling on California to make Medi-Cal providers payments in line with Medicare rates.

The eight-week campaign kicks off a sustained effort to help Californians and state leaders understand how severe underfunding of Medi-Cal harms millions of children, seniors in nursing homes, pregnant women, and people with disabilities, all of whom have difficulty getting access to the healthcare.

The campaign includes English and Spanish TV, radio, direct mail, outdoor billboards, and online calls ads. The TV ads are running in Los Angeles, San Francisco, San Diego, and Sacramento. A selection of TV advertisements can be viewed on

More than half of California children rely on Medi-Cal for basic healthcare, as do two-thirds of the state’s nursing home patients. But today, Medi-Cal is critically underfunded, preventing millions from getting quality healthcare or even getting an appointment with a health provider.

The coalition is seeking passage of two bills, SB 243 and AB 366, which would fully fund Medi-Cal. They also want Gov. Jerry Brown to make significant movement toward fully funding Medi-Cal in his May revised budget.  With the chronic underfunding of Medi-Cal, California ranks 48th in the nation in payments to health providers. As a result, 56% of Medi-Cal patients report difficulty finding a doctor, and the severe under-funding costs the state’s hospitals more than $6 billion annually.

“When my son Xavier was suffering from potentially life-threatening allergies, it took more than two months just to see a specialist through Medi-Cal. No child should have to wait months just for basic healthcare, and we have the power to change this and save lives of California children,” said Emily Avila from Cathedral City in Riverside County, who also is featured in the TV ads. For more information, visit

Student Loan Employee Benefit
“” launched, a student loan employee benefit product. Employers can contribute directly to their employees’ student loans. It is designed to serve as a hiring and retention tool, similar to a 401(k) match. To put this product into context for borrowers, an employer contribution of $600 annually on an average loan balance of $30,000 with a 6.6% interest rate and a term of 10 years would yield interest savings and pay-off time savings of nearly 20%.  For more information, visit

Retirement Savings App
Retirement savers can now tap into their account information any time day or night by pressing the new MassMutual RetireSmart mobile app on their Apple and Android smartphones. For information, visit

ACA Tax Reporting
Greatland is developing comprehensive Affordable Care Act (ACA) reporting capabilities with tools to assist businesses with the law’s mandatory requirements.  Greatland is able to assist businesses and insurance companies file Form 1095-B and Form 1095-C along with required 1094 transmittal forms, required for ACA reporting to the IRS and will provide copies to employees, with three filing options: paper forms, online filing or desktop software. For more information, visit

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