How to Transition Your Clients to ACA Plans

ObamaMerge2Health Partners America is offering a white paper to help health insurance agents and brokers advise clients about transitioning to ACA-compliant plans and the law’s employer mandate. The Affordable Care Act (ACA) has a huge effect on individuals and employers, but that effect is different for different market segments, according to the white paper. For example, individuals and families can purchase health coverage regardless of pre-existing conditions, but the guaranteed issue provision and enhanced benefits drive up the price significantly for anyone who doesn’t qualify for a government subsidy. New community rating rules will drive up premiums for many small employers. Large employers, which are not as susceptible to rate hikes, could pay a penalty if they don’t offer affordable coverage.

To make the transition a little easier for individuals and employers, the law provides several forms of relief for those who qualify. The problem is that the rules are unclear, and many individuals have had trouble determining if they can take advantage of the money-saving options. For example, insurance companies in the individual and small group markets can renew non-compliant plan designs through October 2016, but they don’t have to make the same decisions for each line of business, and states can block this practice. There’s also the issue of companies that have grown bigger since they purchased coverage in the small group market. There is confusion over whether they can renew their plans.

There are several types of transition relief for large employers. With one option, some companies with non-calendar-year plans can wait until renewal time to become compliant. Eligibility is based on the percentage of employees who have been eligible or enrolled in coverage on a fixed date. With another option, companies with fewer than 100 employees can avoid shared responsibility penalties in 2015, but only if they keep doing what they were doing before. Companies that already offered group health coverage would have to keep doing so in 2015 while those who haven’t offered coverage may be able to wait another year. A third option is for larger employers that are required to provide health coverage in 2015; it reduces the penalty if they drop their plan altogether.

Mel Blackwell, CEO of Health Partners America said, “Agents need to study the law. Many of the news stories about transition relief have been misreported, causing employers and agents to make bad decisions.” Blackwell tells the story of an agent who advised a 75-person group that it could drop coverage in 2015 without paying penalties, which is incorrect. The agent didn’t realize that employers that drop their coverage don’t qualify for the transition relief. Also, penalty calculations are different for companies with more or less than 100 employees. Blackwell says that dropping coverage was actually the right decision for this group. But, he said, “Even if it’s the right thing to do, you don’t want to surprise your client with a 90-thousand-dollar bill from the IRS. A lot of companies will do well to abandon their group health plan and let their employees take advantage of the government subsidies, but they do need to understand the financial implications of the decision.” Health Partners America is offering the full report at no cost through the company’s website.

WellPoint Dominates the Market

WellPoint Inc. has a bigger geographic footprint than any other private health insurer in the United States, according to a study by the American Medical Association (AMA). WellPoint, soon to be renamed “Anthem,” is the largest health insurer, by market share, in 82 of 388 metropolitan areas examined by the AMA. WellPoint’s commanding position stretches across metropolitan markets in 13 states including: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, New Hampshire, Nevada, Ohio, Virginia and West Virginia. Health Care Service Corp. was second with a market share lead in 37 metropolitan areas, followed by UnitedHealth Group (UNH) with a market share lead in 35 metropolitan areas.

AMA President Robert M. Wah, M.D. said, “The AMA is greatly concerned that a single health insurer had at least a 50% share of the commercial health insurance market in 41% of metropolitan areas. The dominant market power of big health insurers increases the risk of anti-competitive behavior that harms patients and physicians, and presents a significant barrier to the market success of smaller insurance rivals.” The study also reveals the following:

  • There was a significant absence of health insurer competition in 72% of the metropolitan areas studied.
  • Seventeen states had a single health insurer with a commercial market share of 50% or more.
  • Forty-five states had two health insurers with a combined commercial market share of 50% or more.
  • The 10 states with the least competitive commercial health insurance markets were:
    1. Alabama, 2. Hawaii, 3. Michigan, 4. Delaware, 5. Louisiana, 6. South Carolina, 7. Alaska, 8. Illinois, 9. Nebraska, and 10. North Dakota. Illinois has made its first appearance in the annual AMA list, displacing Rhode Island from last year’s list. Louisiana entered the top 5, moving from 9th on last year’s list.
  • The 10 states that experienced the biggest drop in competition levels between 2011 and 2012 were: 1. Illinois, 2. Louisiana, 3. Indiana, 4. New Jersey, 5. New Hampshire, 6. Vermont, 7. Montana, 8. Wyoming, 9. Idaho, and 10. Tennessee.

To order a copy, visit the online AMA Store, or call 800-621-8335 and mention item number OP427113.

Professionals Want Better Health Care Benefits, Not Perks

Sixty-four percent of working professionals say that employee benefits have a big effect on their workplace satisfaction, according to a study by One Medical Group. Thirty-one percent say that benefits are somewhat important. Two out of three professionals would rather have better health and wellness benefits than more perks. Three out of four professionals over 45 prefer getting better health benefits over more perks.

Benefits are most important when it comes to attracting and retaining older professionals. Sixty-nine percent of workers over 60 rate benefits as very important, as do 68% of those 45 to 60, 63% of those 30 to 40, and 55% of those 18 to 29. Seventy-two percent say they might choose one job over another if it offered better employee benefits.

Sixty-seven percent say that one of the top goals of the company benefit program should be to keep them healthy. And yet, only 49% say that health is actually a top priority for their company. Sixty-seven percent say their employer focuses on managing costs.

Eighty-eight percent of companies provide medical insurance, and more than half offer wellness programs. The most common programs include employee assistance programs (45%), on-site vaccinations (45%), fitness benefits (31%), workshops (31%) and on-site health screening (25%). In spite of these programs, only 52% say their company is making sufficient investments in their wellness and preventative care, and only 29% say their company’s health and wellness programs actually make them healthier.


Symetra Agrees to Death Master File Reforms

Symetra National Life has agreed to business practice reforms concerning its use of the Social Security Death Master File database. Symetra joins 14 other life insurers that agreed to such reforms in using the Death Master File database to search for deceased policyholders and make benefit payments. Symetra will now compare all company records against the Death Master File to determine if there are unclaimed death benefits and conduct a thorough search for beneficiaries to whom unclaimed benefits may be owed. Symetra also agreed to make a payment, which will be disbursed among the states that participated in the settlement. The company will pay $1.2 million to the participating states. California was managing lead state on the exam.

Covered California Enrollment Has a Strong Start

Covered California announced that 69,245 consumers submitted applications for health coverage, including Medi-Cal, during the first four days of the 2015 open-enrollment period. Executive director Peter V. Lee said, “We had a strong start when we opened Saturday for Covered California, and we are continuing to see tremendous interest from people seeking security for themselves and their families in Covered California plans and Medi-Cal coverage.”

As of Tuesday, November 18, about 35,877 consumers were determined to be eligible for coverage through Covered California, and 11,357 picked a plan. In comparison, in October 2013, it took 15 days to reach 10,972 plan selections. About 33,368 applicants were deemed to be likely eligible for Medi-Cal from November 15 to November 18. So far in 2014, Medi-Cal has enrolled more than 2.2 million Californians.

The second open enrollment of the Affordable Care Act began on Saturday, November 15, and continues through Feb. 15, 2015. Californians used the enhanced website at to apply for coverage using a single, streamlined application.

The website is working well for the vast majority of consumers. In four days, there were 314,100 unique visitors to The upgraded enrollment portal allows for greater user capacity and faster page loads so that consumers do not have to return later to complete an application.  More than 12,000 certified insurance agents, 10,000 county eligibility workers and more than 6,000 certified enrollment counselors are partnered with Covered California, ready to help enroll consumers.

Covered California anticipates a total enrollment of 1.7 million Californians (excluding Medi-Cal enrollees) by the end of the second open-enrollment period: 1.5 million in subsidized coverage and 230,000 in unsubsidized coverage. This forecast represents an increase of about 500,000 in total enrollment.

Target & Kaiser Team Up for Onsite Clinics

Target Corp. and Kaiser Permanente are teaming up to launch four Target Clinics in Southern California in November and December. Target customers will have access to a wide array of primary health care services and expanded services that are not typically available in retail clinics. Expanded health services include pediatric and adolescent care, well-woman care, family planning, and management of chronic conditions like diabetes and high blood pressure. Through this collaboration, Kaiser Permanente will provide care to Kaiser Permanente members and non-members.

Kaiser Permanente will staff the new clinics with licensed nurse practitioners, licensed vocational nurses, and will have physicians available by telemedicine consultations, giving local Target guests access to Kaiser Permanente’s high-quality affordable health care services. The clinics will be located within Target stores and will provide walk-in care, along with the convenience of the Target Pharmacy.

Target Clinic has 79 locations in seven states. Target Clinics are also in the process of contracting with Medicare, MediCal, and with Blue Shield of California and other leading health insurance plans in the area for certain services. This access will provide greater, more affordable access to the world-class medical care that Kaiser Permanente delivers.

Kaiser Permanente-staffed clinics at Target locations open November 17 in Vista, San Diego, and Fontana, and a fourth clinic in West Fullerton will open on December 6.

Dept. of Insurance Reaches Out to the Sandwich Generation

Millions of middle-aged Californians in the sandwich generation are feeling the financial pressure of serving as primary caregivers for their aging parents while shouldering more financial responsibilities of their adult children. The California Department of Insurance (CDI) urges people in the sandwich generation to understand their insurance needs. To help consumers get educated about insurance needs for age 50 and beyond, CDI encourages consumers to access Get Ready Resources for Turning 50.


Term, Survivorship Indexed Universal Life 

Lincoln Financial Group enhanced its term and survivorship indexed universal life (SIUL) offerings. The Lincoln LifeEnhance accelerated benefits rider (ABR) is now available with Lincoln WealthPreserve SIUL policies, which insure two people in a single policy. The Lincoln LifeEnhance ABR provides tax-advantaged funds through acceleration of the policy death benefit when insureds or the surviving insured develop a qualifying permanent chronic or terminal illness. Lincoln WealthPreserve SIUL, which provides an income tax-free death benefit at the end of the second insured’s life, enables policyholders to transfer a greater inheritance to beneficiaries, pay estate taxes, continue a business, or meet other financial needs. Lincoln LifeElements Level Term features improved premium competitiveness. Beginning in year four, death benefit decreases are allowed, subject to a minimum requirement. Policyholders can reduce the death benefit one time per year beginning in the fourth year, and premiums will be adjusted accordingly. For more information, visit

New Life Insurance Field Underwriting Tool 

MetLife launched an individual life insurance field-underwriting tool to help financial professionals improve their clients’ service experience. A rules-based tool designed for maximum ease of use, MetLife QuickPredict estimates a client’s likely rating class in a simple-to-use on line format – viewable on computer, tablet, or smartphone – allowing financial professionals to provide more accurate policy premium estimates. For more information, visit


NAFA Honors Founder of Fairlane Financial 

Samuel R. Lane, the founder of Fairlane Financial, received the NAFA Insurance Marketing Advisory Council’s (IMAC) Bo Johnson Spirit Award for Lifetime Achievement. The award recognizes courage, spirit, and determination that challenges the status quo, inspires others to achieve, contributes unselfishly to others, and works ethically and conscientiously to improve the fixed annuity marketplace. The award was presented at the 2014 NAFA IMO Summit, and accepted by Sam’s grandson, Ronald D. Lane, Jr. a third generation insurance professional and senior vice president at Fairlane Financial.

Kim O’Brien, president & CEO of NAFA said, “Sam is a true original in the insurance industry. Dating back to 1955, Sam helped pioneer the national distribution of fixed annuities through independently licensed brokers. He is responsible for setting the stage for Life companies to manufacture insurance products, and then delegate their distribution to marketing specialists. Without Sam, the phrase ‘national marketing company’ and [the] concept of distribution, might never have been born.” After founding Fairlane Financial in 1955, Sam remains CEO and chairman of the company. The next major career milestone for Sam will occur in 2015 when Fairlane Financial celebrates its 60th anniversary. As a truly dedicated business owner, he continues to consult with staff and is in the office by 8:30 AM most days. On days when Sam is not in the office, he enjoys spending time with Lucille, his wife of 72 years.


How To Get Americans Talking About Long-Term Care

One out of every four adults would rather go to the dentist than talk about their long-term care or aging needs, according to a Genworth study. Creating a long-term care plan can seem impossible to families who are juggling the stresses of everyday life. However, 57% of consumers who learned one startling fact got motivated to take action for their own long-term care needs. That fact is that 70% of adults after 65 will need long-term care. Women (64%) are significantly more motivated than men (40%) to take action.

Less than 30% of adults have had a conversation about planning for their long-term care or aging needs. If an unexpected long-term care event happened to a spouse or loved one tomorrow, 20% of adults say they wouldn’t be able or willing to provide assistance. Dr. Barbara Nusbaum, New York-based psychologist and money coach shares the following tips:

  1. Embrace the New Reality: Older-age is a true life-stage and a long one. With medical advances, we are living longer. Knowing that it is part of a life cycle allows us to embrace it and cope with it sooner.
  2. Create Learning Conversations with Family: A learning conversation is one in which we learn about each other’s points of view. It is not a conversation with a correct solution or with pre-conceived notions about what others are thinking. The idea is to build a plan together by listening to others’ ideas and feelings.
  3. Understand that it’s a Process: There is no right answer. Gathering perspectives for the plan that is right for you and your family will grow from these conversations. Multiple conversations must occur over time. Start with your own thoughts, ideas and feelings then move onto conversations and share your long-term care plan with others.

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Growing LTC Sales Are a Boon for Home Care Providers

Home health care aides and service providers can expect significantly increased revenue as a result of growing sales of long-term care insurance products. “We expect that 300,000 Americans will purchase a new traditional long-term care insurance policy or a combo product in 2015,” said Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI). The maximum potential benefit value for just 2015 new sales will be about $5 billion in future benefit payments for home care services.

Some eight million Americans have some form of long-term care (LTC) benefits. While sales of traditional LTC insurance products have declined in recent years, sales are increasing for life insurance and annuity policies that offer long-term care benefits. “For the first time, we project annual sales of the newer options will equal and quite possibly surpass sales of traditional long-term care insurance policies,” he said. By 2032, insurers expect to pay out more than $34 billion when today’s 60-year old policyholders reach their 80s, Slome notes. Of the billions paid out each year, nearly 30% is for home care service. That percentage will grow significantly in the years ahead. The most recent Association analysis found that 51% of all newly opened claims in 2013 were for home care services. The number of Americans needing help with daily living at home is expected to more than double to 27 million by 2050. For more information, call 818-597-3227 or email


Most Employers Say Retirement Readiness Is a Big Issue 

Retirement readiness has become a major issue for 78% of large and midsize U.S. employers that sponsor 401(k) and 403(b) defined contribution (DC) plans, according to a survey by Towers Watson. Additionally, 82% say retirement security will become a more important issue for employees in the next three years.

A vast majority of plan sponsors have taken steps to meet this growing challenge by boosting their savings and investment education programs and embracing automatic features and target-date funds for their DC plans. However, employers understand that more education is necessary. Only 12% say employees know how much they need for a secure retirement while only 20% say their employees feel comfortable making investment decisions.

Fifty-three percent are concerned about older workers delaying retirement. Robyn Credico of Towers Watson said, “With concern over retirement readiness at such high levels, many employers face the risk of having older workers delay retirement. These delayed retirements can weaken productivity, since employees who stay on the job because they cannot afford to retire are more likely to be less engaged and productive than other workers. To minimize this possibility, employers should measure the effectiveness of their plans in meeting retirement goals and, if necessary, determine opportunities where various design, investment and communication features can be used more effectively to optimize the overall program. These efforts will need to be balanced with the benefit plan cost constraints most employers have. Getting employees to understand their savings needs and feel comfortable about retirement remains a significant challenge. New plan features, alone, are not the answer. If employers are to make progress, they must also rely heavily on education and communication so their employees know their options and make informed savings decisions.”

The most common plan features include simple, but diverse investment lineups as well as automated enrollment and deferral features with flexibility for pre-tax and after-tax contributions. Fifty-four percent offer an automatic increase feature for participants’ contributions annually, but only 28% mandate it. Fifty-four percent offer an option to make Roth contributions, but less than 11% of their employees take advantage of these features.

The Health savings account (HSA) is another tax-efficient vehicle for retirement savings. Virtually all companies that offer HSAs and DC plans allocate the contributions separately. Of those that offer HSAs, only 19% educate their workers on the wealth accumulation benefits of a DC plan versus an HSA.

In support of more effective solutions, sponsors continue to simplify the investment offerings to align with participant needs. Sixty-six percent offer 10 to 19 investment options, and 86% use target-date funds as their default option. Sixty-one percent of employers focus their retirement education programs on traditional, passive methods, including account statements, newsletters, group meetings and online webcasts. Less than 10% use mobile apps extensively or have tried gamification, which uses game design to motivate employees to achieve savings goals.

Learn more at

Millennial Workers Not Saving Enough to Get Company Matching Contributions 

Participation in 401(k) plans is strong among workers in their 20s and 30s, but many are not saving enough to take full advantage of their employer’s 401(k) match – potentially leaving thousands of dollars on the table and hurting their long-term financial health, according to a study by Aon Hewitt. While the average participation rate of young Millennial workers (age 20 to 29) is 73%- and 77% for older Millennials (age 30-39), many are saving at a low rate. Nearly 40% of 20 to 29 year olds and 31% of 30 to 39 year olds are saving at a level that is below the company match threshold.

Rob Austin, director of Retirement Research at Aon Hewitt said, “Automatic enrollment has significantly improved participation in 401(k) plans for all employees over the past 10 years—but even more so for young workers. However, once they’re in the plan, young workers seem to fall victim to inertia with many continuing to save only at the default rate, or slightly above, and risking their long-term savings by not receiving the full employer matching contributions that are offered.”

Leaving matching contributions on the table can cost young workers a significant amount of long-term savings. Consider a 25-year old worker who makes $30,000 annually and works for an employer that provides the typically company match – $1-for-$1 up to 6 percent. If that 25-year old starts saving the full match amount of 6% immediately upon employment and continues to do so until she reaches age 65, she’ll have more than $950,000 saved in her 401(k).  If that same worker waits until age 30 to begin saving 6%, she will have less than $715,000 saved at age 65. Five years of missed 401(K) contributions will cost the employee her $225,000 over her career. In order to make up the gap, she would need to increase her savings by 4% percent and start saving 10% of pay each year for the next 35 years.

“For young workers, it may seem insignificant to increase 401(k) contributions by a few percentage points, particularly at a point in their career and life when they’re likely earning a smaller salary, but the long-term effects can be remarkable,” explained Austin. “Employers can help Millennials improve their financial outlook by encouraging them to save at least at the match threshold through targeted communications and online tools and resources. To take it a step further, they can also increase the default contributions so that workers are saving at the match threshold immediately upon enrollment into the plan, or by offering automatic contribution escalation, which increases a workers’ contribution rate over time. The bottom line is young workers need to save more, starting now.” For more information, visit

Employers Fail to Engage Workers Year Round 

Fifty-six percent of employers say that their main focus with benefits is to improve employees’ understanding of the value of the benefit offerings. Yet many companies still don’t have personalized benefit communications at a time when employees commonly expect it. These are the findings of a survey of more than 330 employers conducted by the non-profit National Business Coalition on Health and Benz Communications. The following are key findings:

  • Professionals spent the most time over the last year working to improve employees’ understanding and perceived value of benefits (56%). Time dedicated to lowering health plan costs was second (47%), followed by maintaining compliance (47%).
  • More than 80% reached all or some of their benefit goals last year. Communication played a major part in this success as 73% say benefits communication helped them meet their goals last year.
  • Keeping employees and families engaged in their benefits year-round was noted as the largest communications challenge (75%). However, 64% only communicate with employees once a year at annual enrollment, and 46% only measure success by reduced calls to the HR/benefits department.
  • Forty-one percent rely on feedback from employee surveys and focus groups to gauge success. Employers also use metrics, such as reduced benefit costs (40%), improved wellness biometrics (26%), reduced employee health risks (25%), and increased retirement plan participation/account balances (24%)
  • 90% put benefit information online. However, only 50% offer information outside the firewall so that it is accessible to spouses/partners and other family members. Only 40% have their Internet sites optimized for viewing on mobile devices.
  • Just 15% use social media in benefit communications. Fifty percent of these forward-thinking employers use Facebook to communicate; 37% use blogs, and 31% use Twitter. Fifty-seven percent of them have been using social media for one to three years, indicating these channels have just begun to scratch the surface of benefit communications.
  • Sixty percent of 2014 respondents say their annual budget for benefit communication is less than $25,000. Three-quarters say that amount has remained flat over the last year. Plus, one-half spend the majority of that budget on one-time costs in printing or mailing.

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