Dental Coverage and Employee Wellness
A Focused Approach to Managing Health Care Costs
by James Bramson, D.D.S •  Wellness is key to managing future medical care costs. But when it comes to wellness programs in the workplace, no one really talks about dental – specifi cally, the role good oral health can play in improving overall health.
Vision–Sports and Vision: Finding Your Competitive Edge
Providing Added Value to Active Employees Through Their Vision Plan
by Lawrence D. Lampert • Good vision skills and peak performance go hand-in-hand. With proper vision training, active employees will better understand how their vision works and will use certain techniques to fl ourish in sports and in the workplace.
Wellness–Promoting Workplace Wellness with Innovative Technologies
by Annmarie Fini • There are innovative technologies to promote wellness including apps that offer personalized alerts as well as steps to prevent predisposed illnesses or conditions.
Wellness Plans Get a Major Boost from Health Reform
Help Your Clients Sort Out the Options
by Mark Roberts • Starting Jan. 1, 2014, employers can offer discounts of up to 30% to employees who participate in employer-sponsored wellness programs, an increase from the current 20%.
Employee Benefits–Transformation to Consumerism: Gone Are the Days of One Size Fits All
by Steve Shearer •  Consulting employers to offer a choice of product offerings will help you maximize your competitive edge and profi tability and ultimately meet the needs of a consumer-driven market in the wake of healthcare reform.
Targeting Chronic Diseases Can Lead to a Healthier Bottom Line 
by Wade Overgaard • Given the busy activities in the workplace, it’s easy to overlook the importance of tracking the overall health of your client’s workforce. But chronic conditions – including diabetes, asthma and obesity — currently account for more than 75% of health care spending in the United States, which can be an expensive proposition for employers.
Taking an Integrated Approach to Disability Management
by Michael Klachefsky • Brokers can help their client companies prevent some absences that result from mental health conditions or chronic physical ailments. One successful integrated approach uses an on-site consultant.
Chiropractic/AcupunctureAlternative Medicine Therapies and Their Potential Inclusion in Health Plans
Gregory D. Darnell, M.S, Ph.D.  • Complementary and alternative medicines have been utilized by increasing numbers of American patients and medical practitioners.
Voluntary Benefits–Voluntary Benefi ts Are Easy to Sell Following Three Key Points
by Art Dammers • Voluntary benefi ts are easy to sell provided you do the simple things well.
HSAS– Consumer Driven Plansin 2012 and Beyond
by Leila Morris • The momentum for CDHPs slowed while employers dealt with health reform, but it’s back. Consumer driven plans not only help individual employers reduce healthcare costs, but may also reduce the nation’s healthcare costs.
Life Insurance – Protect Clients and Profi tability: Add Life Insurance to Your Practice
by Jason J. Dudum, LUTCF •  If you are not selling life insurance, there’s no better time to add it to your repertoire of products.
Getting More from a BGA
by Kenneth A. Shapiro • Some of the most valuable insights often come from unusual and unexpected encounters. In her chairman’s remarks at NAILBA’s 2011 annual meeting, Christi M. Daughenbaugh told of talking to her hairdresser, a 24-year-old mother-to-be, about life insurance.

Dental Coverage and Employee Wellness – A Focused Approach to Managing Health Care Costs

by James Bramson, D.D.S

Employee wellness is a major key to managing future medical care costs. But when it comes to wellness programs in the workplace, no one really talks about dental — specifically, the role good oral health can play in improving overall health. It’s surprising when you consider all the research that shows gum disease is associated with a number of medical conditions, such as stroke, heart disease, and diabetes. In fact, gum disease has even been shown as a risk factor for low birth weight and premature delivery of infants, and just recently, colon cancer.

Three out of four companies in 2011 used incentives to encourage employees to take advantage of health improvement programs, according to recent survey by Fidelity Investments and the National Business Group on Health. These programs typically focus on lifestyle changes, including nutrition, weight loss, and exercise. But when was the last time a wellness profile asked about dental health and dental care patterns?

It makes sense to stress the importance of good dental care, such as brushing, flossing, and preventive maintenance, especially for people with certain chronic disease like diabetes. Employers don’t typically think about oral health as an important component of a wellness approach, but here is why they should:

* A recent study sponsored by United Concordia and Highmark Inc. shows annual savings of $1,814 when employees with diabetes are treated appropriately for gum disease. These savings came from fewer hospitalizations and physician visits for diabetics who treated their gum disease problems.

* More than 75% of adults, age 35 and older, will be affected by periodontal disease, according to a 2012 fact sheet by the American Academy of Periodontology.

* In 2009, there were more than 830,000 visits to hospital emergency rooms for preventable dental conditions — a 16% increase since 2006, according to a 2012 report by the Pew Center on the States.

* Nearly 60% of children, ages five to 17, have cavities, making tooth decay the most common childhood illness — five times more common than asthma, according to a 2000 report by the Surgeon General.

Clearly, the data shows that, for employees with diabetes, unattended dental issues can affect wellness and drive up an employerís medical costs. The cost of health care is one of the most talked about subjects in our nation. Data from the Centers for Medicaid and Medicare Services and National Health Expenditure Accounts reveals the following:

* 30% of the nationís health care dollar is spent on hospital care.

* 22% is spent on physician care.

* 11% is spent on prescription drugs

* 7% is spent on nursing home and program administration costs.

* 19% is spent on other items, such as home health care and durable medical products.

* 4% is spent n dental care.

The cost of treating chronic medical conditions is very high while the cost of treating many dental issues, such as gum disease, is relatively low. In addition, gum disease is often preventable. So, it has become increasingly important for carriers, producers, and employers to include dental as a key part of the wellness definition.

So how does including dental as part of the wellness definition go from a good idea to a solid set of actions? The answer is two-fold:

* Recognize that dental and medical carriers can come together to have an impact on both cost and health. Understand that offering oral health initiatives is an inexpensive way to promote wellness and help save on costly medical treatments.

* Provide products and services tailored to the needs of the groups and individuals using them (also called “mass customization”).

For years, the dental insurance industry has provided one-size-fits all offerings with little consideration for the specific make-up of a group. As our knowledge about the oral and overall health connection grows, it becomes increasingly important for dental insurers to offer solutions that provide a sound level of coverage for all members while targeting people who can benefit from a greater focus. This means offering plan designs that target individuals with certain medical conditions. It means focusing our efforts on where we know interventions can enhance the effectiveness of a wellness program, such as targeted benefit design or education programs.

A mass customization approach can give producers an even wider range of solutions to help employers control costs. Employers are able to do more to keep employees healthy when they have a wider variety of options to control costs, including dental as part of a wellness initiative. It’s good for the employees, good for the business, and good for the bottom line.

Producers who embrace the role oral health plays in overall health can help employers select the right partners, products, and services — all of which will enhance employee health while reducing medical costs. And at the end of the day, producers who help employers manage their employees’ health and their medical costs can deliver a better return on investment.

For more information, contact United Concordia at 888-884-8224, or

Dr. James Bramson is chief dental officer at United Concordia, where he directs the professional relations department, professional quality assurance activities, utilization review, claims review process and clinical aspects of product offerings and communications. Dr. Bramson has 30 years of dental industry experience, including national experience as executive director of the American Dental Association (ADA) and secretary of the ADA Foundation.

Sports And Vision: Finding Your Competitive Edge
Providing Added Value to Active Employees Through Their Vision Plan

by Lawrence D. Lampert, O.D., F.C.O.V.D

Face it. Today’s employees aren’t getting much exercise at work. Consider that less than 20% of all jobs require even moderate physical exertion – down from half of all jobs 50 years ago.

Many scientists believe that this dangerous trend is contributing to America’s obesity epidemic and the correlated surge in health problems, such as heart disease and diabetes, which can drastically reduce employee productivity and cause healthcare costs to skyrocket.

Fortunately, there is hope for even the desk-job employers, as employees seek ways to stay active outside of work. The average person participates in at least one active hobby. Plus, today’s employees are staying active longer – helping to beat the mid-life bulge and stay healthier throughout their working years and well into retirement. In fact, since 2004, there has been a surge in the popularity of sports among seniors age 65 to 74, according to the National Sporting Goods Association.

This desire to remain active and healthy is a good thing, especially considering the typical employee is planning to stay in the workforce longer. In order to thrive, employers must not only encourage their staff to remain active outside of the work day, but also make an effort to attract and retain those who do remain active. A great way to encourage this is by offering a comprehensive vision plan that covers eye exams and eyewear options for sports and outdoor activities. At the same time, it is important to educate employees about their plan so they can take advantage.

Let me explain. All athletes, whether professional or amateur, are looking for ways to take their game to the next level, but they often take their most important asset – their sight – for granted. Take golf for example. You can knock a few strokes off your score by taking lessons or investing in the right clubs, but how well can you play if you can’t see your best?

As a sports vision trainer, I’ve worked with many athletes who were able to greatly improve their game simply by improving their vision – from learning vision skills, to wearing the right eyeglass prescription, to choosing the right eyewear for specific playing conditions. You may be wondering why it is so important for employers to help their employees do better in sports. It’s quite simple. Better performance on the court, the greens, wherever they may be translates to better performance on the job.

Keep in mind that nearly nine out of 10 employees say it is very important that their vision plan covers the latest lens technologies, according to the Transitions Optical Employee Perceptions of Vision Benefits Survey, October 2011. But if you provide a plan that covers new technologies, you need to make sure your employees are aware of it. Consider that less than half of employees don’t know what eyeglass lens options are included in their vision benefit, according to the Transitions study. A comprehensive vision plan offering, paired with the right education, can go a long way in helping employers boost both employee satisfaction and their bottom lines.

Got skills?

Good vision skills and peak performance go hand-in-hand. With proper vision training, active employees will better understand how their vision works and will be able to use certain techniques to flourish in sports and in the workplace. These are some of the must-know vision skills for any athlete.

• Eye-hand Coordination – allows your eyes to focus on a target and provide spatial information to help guide the movement of your hands.

• Dynamic Visual Acuity – helps you better see objects in motion.

• Eye Tracking – helps you keep your eyes on the ball.

• Eye Focusing – helps you quickly change your focus from one distance to another.

• Peripheral Vision – allows you to see objects out of the corner of your eye while concentrating on a fixed point.

• Fusion Flexibility and Stamina – helps your eyes work together, regardless of speed or physical stress.

• Depth Perception – allows you to judge the distance and speed of objects.

• Visualization – asks athletes to envision themselves performing a particular task in order to do it better in real time.

Bringing in a sports vision expert for a special training session is a great way for employers to encourage their active employees to develop these skills and add some excitement to the workday. This could be held along with a conversation about the value of vision benefits. Employers who don’t have the time or assets to bring in an expert can still get involved by distributing handouts about sports and vision or by emailing links to short video tips. Free resources – including vision tips from some of the athletes I’ve worked with personally – are available through Transitions Optical at

Encourage Regular Eye Exams

While knowing the right vision skills can make a big difference, the first step in improving performance is to get regular eye exams. Most vision plans cover annual, comprehensive exams to measure vision and determine whether glasses are needed. Comprehensive eye exams also allow the eye doctor to check for eye diseases and even detect overall health issues like diabetes and high blood pressure.

Keeping up-to-date with vision care is important because when employees are seeing their best, they’re playing their best, and they’re feeling their best. This translates to fewer sick days, increased productivity, and lower healthcare costs.

Unfortunately, despite these advantages, one in three employees does not use his or her vision benefit to get a comprehensive eye exam, according to the study. This makes employee education critical.

Identify Vision Sand Traps 

Aside from wearing the right vision correction and avoiding vision problems, all active employees must be on the lookout for what I like to call vision sand traps. Left ignored, vision sand traps can impede performance ever so slightly or to a point where a monkey could do it better. (And no employer wants Bobo on the job!)

There are four main vision sand traps that can affect anyone at any time. Perhaps the most common is glare, which can be an active employees’ worst nightmare. More than 80% of Americans say glare affects their vision outdoors and 70% say their eyes are sensitive to light, according to a 2009 Transitions survey. Squinting caused by glare or bright light reduces peripheral vision, causes eye fatigue, and leads to tenser muscles. Glare can even contribute to headaches, which can stand in the way of peak performance during a game or lead to more frequent breaks or time away from work.

Changing lighting conditions can also affect the quality of vision in addition to performance. Picture a woman riding her bicycle through the park on a sunny day. She’s wearing dark sunglasses so she can see just fine, but then she turns onto a shady path, and suddenly it’s too dark. Similarly, someone wearing clear lenses in the shade is likely to have trouble adapting to sudden sunny conditions.

A third sand trap is ultraviolet (UV) rays. Avoiding UV rays is critical because, while they are invisible to the naked eye, they can cause serious damage and contribute to eye diseases leading to higher healthcare costs for employers.

Finally, all active employees should protect their eyes from visual trauma, especially considering that more than 90% of all injuries to the eye can be prevented with the proper eyewear, according to a study by the American Academy of Ophthalmology.

Combat Vision Sand Traps With A Vision Plan

The good news is that the typical comprehensive vision plan offers full coverage of or discounts on eyewear options to address the four main vision sand traps. Keep these options in mind when talking about vision plans.

• Light Filtration – Tinted lenses (sunglasses or photochromic lenses that change from clear to tinted) reduce bright light to more comfortable levels and help to reduce glare. Some plans offer coverage or discounts on these options, even if purchased as a second pair.

• Polarization – Polarized lenses contain a special filter that blocks certain types of intense, reflected light. They can improve vision in situations where light is reflected off of a flat surface, like water, ice, concrete, or snow. While conventional polarized lenses have a fixed tint or go from dark to darker when paired with photochromic technology, new Transitions Vantage lenses have variable polarization. They are clear indoors and become polarized outdoors, providing a great option for active employees and appealing to those who want the latest technologies.

• Lens Color – Specific lens tints and colors can help a person see and perform better in certain situations. For example, yellow or orange lenses can help cut through hazy or foggy conditions while gray or green-gray tints enhance true color perception.

• UV Protection – All lenses should block 100% of UVA and UVB rays to protect the eyes from cumulative sun exposure and long-term eye damage.

• Impact Protection – Lenses made from polycarbonate or Trivex material can reduce the risk of trauma to the eye. Impact-resistant lenses are important for active employees as well as children.

• Frame Selection – Finally, frame selection can make a difference in performance. A good frame should fit the face perfectly and won’t move. Some athletes may also prefer lenses with or without rims.

By improving their vision, any active employee can improve their performance. But even though the best eyewear solutions are often right under their noses – tucked within their vision plans – many employees don’t know where to look. By taking the time to educate their active employees on what their vision plan offers and why they should use it, employers can stand out as the hero, while r a better bottom line. q


Dr. Lawrence D. Lampert is a board-certified optometrist with a private practice in Boca Raton, Fla. He specializes in sports vision training, and has worked with players from the PGA, LPGA, New York Yankees, Chicago Cubs, Cleveland Indians and Miami Dolphins. Dr. Lampert is the author of The Pro’s Edge: Vision Training for Golf and is a contributor to Transitions Optical’s Improve Your Vision, Improve Your Game initiative.

Promoting Workplace Wellness With Innovative Technologies

by Annmarie Fini

The cost of American healthcare is rising so rapidly that it is predicted to reach $4.2 trillion or 20% of our GDP by 2016, according to the Wellness Council of America. Because of the rising costs of preventable conditions, employers are looking for innovative ways to encourage healthy lifestyle choices. As a broker, you can set yourself apart from the crowd by motivating your clients to use technology to reduce presenteeism and decrease healthcare costs associated with poor health.

To combat high healthcare costs, companies are offering workplace health promotions, daily fitness options, and health incentive programs. Promoting a healthy workplace is crucial to keeping costs down, whether it involves helping an employee manage a condition or prevent health problems. Company initiatives can include offering lunchtime walking programs; sponsoring activity-centered theme months, such as Breast Cancer Awareness or Heart Healthy Month; or simply keeping fresh fruit readily available in the office. Creating a stimulating yet inviting environment for group activities will allow employees to feel more relaxed and eager to participate.

There are innovative technologies to promote wellness including apps that offer personalized alerts as well as steps to prevent predisposed illnesses or conditions. Buck Consultants found that technology-driven programs make up the fastest-growing segment of the wellness market. Also, the use of mobile technology to track employee participation is expected to increase dramatically in the next few years. By using wellness apps and social media outlets, employers can cater to every employee while creating healthy competition through contests and message boards.

Employers that focus on promoting active lifestyles, reducing healthcare costs, and increasing worker productivity will see significantly reduced healthcare costs for the company as well as the employees and their families.

Comprehensive health promotion and work incentive programs are among the top twenty fitness trends for 2012, according a survey published by the American College of Sports Medicine. Many employers have already incorporated these kinds of wellness initiatives into their benefit offerings. Innovative wellness tools can help employees take control of their health through corporate-wide programs or personalized health alerts. The following are some innovative technologies now available in the marketplace:

Social Media Outlets: Keas, an online employee wellness program, combines the best of social media and online games to promote health. Keas is based on the positive peer pressure, accountability, and support that comes with being on a team. Employees earn points that improve team morale and unlock special features when they reach their goals and take part in the interactive games. Members can encourage teammates on message boards or schedule a group run. Employers reap the benefits of more productivity and reduced costs by promoting better health in a fun and interactive atmosphere. Employees who participate in teams have sustained engagement rates six times that of employees who participate alone.

• Genetic Analysis: Navigenics, a leading provider of genetic analysis, helps employees understand their genetic information and develop strategies to reduce their risks and manage their health. After analyzing a simple DNA test, Navigenics shares confidential, personalized genetic information with employees to motivate behavior changes. The confidential online Navigenics portal describes genetic predispositions for specific health conditions and medication sensitivities, with a focus on conditions that employees can take action to prevent. A board-certified genetic expert provides one-on-one counseling to help employees and their doctor make the most of these genetic insights.

• Personalized Health Alerts: Customized health alerts help employees take control of their health and reduce out-of-pocket expenses. Just “InTime” Wellness, available from “SCIOinspire,” sends alerts to notify users when preventive services are recommended or a gap-in-care is identified based on the employee’s healthcare data.

Employees choose to be notified through text messages, email, telephone, or mail. For instance, an employee who has identified a chronic condition may get a reminder to refill a prescription. Additional educational information is offered through related healthcare videos, articles, calculators, and symptom checkers. Employees get important reminders and comprehensive information help them maintain their health.

• Personal Health Assessments: With a personal health assessment, the employee takes an online health survey. They get a confidential health analysis and encouragement to adopt a healthier lifestyle. Biometric screenings, physical exams, and online questionnaires can be incorporated into the personal health assessment. Each employee get a personalized, confidential report called the “Personal Health Profile” based on their answers, biometric screening results, or a combination of both. The profile provides a detailed analysis of the employee’s overall health along with videos and personalized recommendations to improve wellness and lower health risks. Employers can reward employees financially for completing a personal health assessment by offering reduced healthcare premiums or contributing funds to an HSA.

• Engaging Programs that Drive Physical Behavior: Employers often struggle to develop wellness programs that motivate employees to establish long-term behavioral changes. Sonic Boom, a high-tech wellness company, offers innovative programs that drive exceptionally high participation through competition and social interaction. Studies show that the best way to increase activity is to track wellness and add friendly competition. Sonic Boom offers fun and active daily challenges. The unique program includes state-of-the-art accelerometers, social networking, games, as well as competition and proprietary tools to influence behavior change. Sonic Boom measures participant satisfaction, increased physical activity and stress reduction, among other things.

Successful Wellness Programs

Successful wellness programs can return as much as $6 for every $1 spent on healthcare, according to a study by the Harvard Business Review. Wellness programs are effective when employees are engaged, when they feel comfortable participating, and when they use the tools provided on a consistent basis, Many employers also encourage participation by offering reduced health premiums or more robust benefit plans to employees who are active in wellness programs. Keeping in mind the employees’ hobbies and interests is crucial to finding the right incentives. Also, it is vital to demonstrate that every level of management is on board, even by simply allotting a portion of the budget to a wellness program.

By giving employees access to a variety of wellness tools and program options, employers can begin to drive positive behavior change and improve overall employee well being and morale. Everyone will notice the positive changes taking place and the effect will multiply, financially, physically, and emotionally.


Annmarie Fini is senior vice president, Employer Group for Benefitfocus. 

Wellness Plans Get A Major Boost From Health Reform
Help Your Clients Sort Out the Options

by Mark Roberts

Wellness plans have received huge acclaim with companies that are driving down the cost of healthcare and promoting healthy living. Wellness plans are also getting a boost from health reform. Starting Jan. 1, 2014, employers can offer discounts of up to 30% to employees who participate in employer-sponsored wellness programs, an increase from the current 20%. (This reward could increase to 50% at the discretion of the departments of Health and Human Services, Labor or Treasury.) Sixty percent of employers are likely to create wellness programs or expand existing programs as a result of the wellness provision, according to a survey by the Midwest Business Group on Health.

The Patient Protection and Affordable Care Act also allows the Dept. of Health and Human Services to offer wellness grants to small businesses with fewer than 100 employees who work 25 hours or more per week. The grants will be available over five years to businesses that did not have a wellness program in place when the law went into effect on March 23, 2010.

Wellness Plan Options

As you can see from the following list, employers have a wide variety of wellness plans and services from which to choose:

• Ergonomic evaluations and training classes

• Lactation rooms and classes

• Prenatal education

• Quiet rooms for relaxation

• Stress management programs

• Fitness facilities

• Massage therapy

• Nutrition education

• Onsite primary healthcare services

• Child care facility or resources and referral service

• Smoking cessation programs

• Parenting classes

• Elder care resource and referral service

• Cholesterol, blood pressure and glucose screening programs

• Flu vaccination

• Weight loss and weight management programs

• Healthcare consumerism programs

• Employee assistance program

• Lifestyle coaching

• Mobile mammography

• Holistic health education sessions

• Complementary alternative medicine-Yoga, Tai Chi, Diet education, etc

Employers can find these types of offerings in some insurance programs as riders or add-ons to their plan design. Some wellness plans will be voluntary and some will not depending upon the employer. Employees can share in the costs in an opt-in or payroll deduction mechanism. Employers that don’t want to administer a plan through the company can offer employees access wellness services through independent market channels. Whether or not insurance plans help subsidize the costs, companies that invest in employee wellness should see a payoff.

The Costs

If your client’s senior management sincerely embraces this endeavor and maintains open dialogue with employees, you don’t need fancy, branded programs with clever marketing.

Your client can implement low-cost or even zero-cost preventive measures, such as breast cancer awareness seminars to health fairs where routine lab and health checks are given at a reasonable cost. With access to screening, workers have been able to address cholesterol levels, thyroid, and weight issues before they get out of hand. And some \ ergonomic assessments have nearly eliminated on-the-job injury associated with repetitive motion, poor posture, and incorrect use of equipment.

Boosting Participation

According to HR, employers need to personalize wellness and preventive activities to increase participation. Send employees health check up reminders on their birthday or flu shot reminders during flu season. Provide the address and telephone number of a nearby in-network medical office. Tell employees why the appointment is needed and how long it will take. Mail reminders to employees’ home where spouses might see them and put the pressure on to make appointments.

Ask employees which kinds of messages they like best. If nobody’s opening your emails, tinker with the subject line. If your mailers are getting tossed, try adding an incentive offer on the envelope, like “Participation will lower your insurance premiums.”

To make wellness work beyond the workplace offer wellness benefits to dependents. When the family participates as a unit, employees are more likely to become healthier.

Brand the program. Create a look and name for the organization’s program to use on all print and Web communications to build recognition and to reinforce the program’s message. Work with vendors to have the brand placed on all their materials as well.

With wellness, the message needs to be targeted to each person’s health risks and conditions,  and life stage.

Solicit testimonials from employees and their families about participating in wellness plans. Nothing influences change as much as peer experiences. Get a few families who are willing to share their experiences to serve as beta sites.

There always are some employees who don’t want the employer involved in their health in any way. But if key managers support it, it’s fun, and it’s collective, most employees will support the idea that they’re accountable for results. Involve managers and supervisors in the communication process. As credible and accessible spokespeople, managers and supervisors should be included in the communication planning process. They should participate in developing the messages and be trained on how to deliver the message to employees.

Imagine the impact of employees seeing a photo of the CEO having their blood pressure taken at a health screening or the HR leader attending a company-sponsored WeightWatchers meeting.

You can integrate program communications with the National Health Calendar and other health information. Also, create a link on the company’s website. Or create a separate health-and-wellness site to provide easy access to a variety of health-information sites, including those of the organization’s health-insurance carrier.

Monthly newsletters, frequent website updates, e-mail blasts and periodic face-to-face meetings and events can all help keep a wellness program in front of employees and their families. Revealing the results of their collective efforts is key as well.

Get and provide feedback on all of the organization’s programs. Online pulse surveys, testimonials and case studies, utilization numbers, and lower premiums all point to the success of the organization’s programs and create further incentive to continue on the road to good health.


A 2011 survey by PwC reveals that employers offered incentives for employers to participate in a health questionnaire (62%) and Biometric testing (56%). The following results show that these incentives work to drive participation:

• Health Risk Questionnaire: 48% participation with incentives and 28% participation without.

• Biometric testing: 49% participation with incentives and 29% without.

Incentives include cash or gift cards of $50 to $299 and annual premium incentives of $50 to $500. However, employers generally don’t offer gifts or raffles for expensive items as incentives.

Measuring the Results

It can be hard to convince many employers that wellness programs are worth the cost, especially when startup costs exceed measurable savings at the outset.  There’s rarely anything harder than getting someone to change behavior unless there’s a solid answer to the “What’s in it for me?” question. That’s why most employers who launch successful preventive programs have found they need to appeal to employees’ emotions as well as pocketbooks.

According to Aon Hewitt, company-sponsored wellness programs and health incentives often lead to lower healthcare costs.  Moreover, participants with higher engagement in fitness activities also have a 16% decline in hospital admission and treatment costs. Research also suggests that introducing a corporate health and wellness program that motivates people to pursue healthier lifestyles leads to fewer and less costly medical claims. In fact, increasing gym visits by two per week reduced the probability of a hospital admission by 13%. This research provides compelling evidence that well-designed incentive programs can motivate people to change their behaviors, leading to better health outcomes and lower healthcare costs over the long term.

The survey revealed that many companies offer disease management (70%), health and wellness improvement (64%) and behavioral health (60%) as key components to healthcare strategies. Many say that, during the next three to five years, they are looking to implement strategies that focus on total well being to improve physical and mental health (60%), absence management (53%), and integrated safety and health improvement efforts (50%). Companies offer incentives for participation in biometric screenings (33%), health risk assessments (33%), wellness programs (31%) and tobacco cessation programs (27%).

Incentives and Penalties

Employees become more motivated when they face the reality of paying higher premiums for not participating in wellness programs or they get rewards when they do participate. The most successful wellness programs use significant incentives, such as lower health insurance premiums or cash rewards to spur exercising and healthful eating.  Many companies also offer on-site fitness centers and healthy dinners to go, as well as outreach programs to family members.

Over the next three to five years, 73% of employers said they’ll offer a wellness program that uses incentives or penalties to motivate their employees to make healthy choices, according to a 2011 Aon Hewitt survey. Currently, the penalties appear to be getting a stronger foothold because many businesses have found that people are more motivated by the risk of losing money rather than gaining it.

The survey reveals that of employers plan to impose penalties or plan to for smoking (64%) and not making biometric improvements, like lowering blood pressure or losing a set amount of weight (17%). The following reveals the percentage of employers that impose or plan to impose penalties for not taking part in these wellness programs:

• 50% disease management/lifestyle behavior programs.

• 45% biometric screenings.

• 25% consultations with health coaches.

However, employers need to remember two things that to avoid breaking the law:

1. The size of any incentives or penalties in a wellness program can’t exceed 20% of the total cost of health coverage for employees (in 2014 that limit will be bumped up to 30%, thanks to the healthcare reform law).

2. If an employee is unable to earn an incentive or avoid a penalty due to a health condition, the wellness program must create an alternate way for that employee to do so.

HIPAA makes some exceptions for wellness programs, but does not allow employers to tie certain health-related outcomes to their wellness programs. That means that employers are better off asking employees to walk 20 minutes three times a week rather than requiring them to achieve a certain body-mass index.

The options can seem overwhelming, but your clients should start wellness programs as soon as possible, even if their plan is not perfectly mapped out. They can start with simple steps like removing smoking areas, encouraging employees to use the stairs, or starting a weight-loss challenge in which the winner gets a day off.


Mark Roberts is manager of National Accounts for Careington International. Careington operates in all states to provide affordable wellness across a variety of disciplines to help make members whole in all life categories — physical, mental, social, and financial.  Careington has partnered with vendors to offer “Best in Class” offerings to clients.  For more information, call 800-400-8789. 

Transformation to Consumerism–Gone Are The Days Of One Size Fits All Employee Benefits

by Steve Shearer

It’s been estimated that 25% of the more than $2 trillion spent annually nationwide on healthcare is already in the hands of individual consumers — even in the business-to-business market. So we need to gain a better understanding of consumers’ wants and needs. It doesn’t take a deep dive to realize that the healthcare needs of our client’s employees are vastly different. You may have one individual who is an avid cyclist and hiker and another who seems to have one tough medical break after another. Do they gain the same amount of value out of the exact same plan? Of course not.

After reviewing a few years of consumer segmentation data, what we saw in relation to ancillary products surprised us. Two distinct consumer segments, despite their lower utilization rates and a low value placed on insurance, actually reported having higher percentages of ancillary products compared to all other segments. Another market segment, who are very much engaged with their health and wellness, actually has the lowest percentage of ancillary products compared to others. Because this segment places so much value on their health, this could provide a huge up-sell opportunity.

The prospect ancillary and wellness products available to both health plans and insurance brokers are invaluable, particularly in this evolving healthcare landscape. While ancillary products will serve as a tool for traditional health plans to differentiate themselves and maximize their competitive edge, they also present insurance brokers with new revenue streams. Health benefit providers, brokers and employers, should consider ancillary and wellness benefits as a means to allow more consumer choice – so employees can select the coverage they value most. And on the health plan side, we need to be more consumer focused and disciplined in our product development, acknowledging that one size does not fit all.

The next time you sit down with a client, I encourage you to think about the distinct consumer dynamics of that group; have a conversation about leveraging ancillary and wellness products to help your client meet their employees’ needs, while keeping costs down by providing the benefits employees will use. Also take a look at health plan options that have different value adds that may resonate with distinct employee needs. Look at the options and realize that consulting employers to offer a choice of product offerings will only help you maximize your competitive edge and profitability, and ultimately meet the needs of a consumer-driven market in the wake of healthcare reform.


Steve Shearer is a Sales Director at Anthem Blue Cross. Steve is currently partnering with Kevin Timone, VP of Sales for CaliforniaChoice, on an exclusive launch of CaliforniaChoice Healthy Support plans. Anthem Blue Cross developed Healthy Support completely based upon qualitative and quantitative consumer insights – and a vision that the product offering should not be about the benefit summary, but the members’ unique healthcare needs and interaction with their plan.

Targeting Chronic Diseases Can Lead to a Healthier Bottom Line

by Wade Overgaard

Given the busy day-to-day activi-ties in the workplace, it’s easy to overlook the importance of tracking the overall health of your client’s workforce. But chronic condi-tions  including diabetes, asthma and obesity  currently account for more than 75% of health care spending in the United States, which can be an expensive proposition for employers.

How expensive? Studies have shown that chronic conditions can add about $3,600 a year per person to employer health care costs.

Fortunately, many of these chronic conditions can be prevented or more effectively managed by leading healthier lives and employers can play an important role in this effort by tak-ing steps to improve the health of the workforce. Encourage your client’s workers to get routine screenings; promote physical activity in the work-place; and provide healthier options in vending machines and cafeterias.

Well-structured, evidence-based well-ness programs can have a real impact on a company’s bottom line and can help control health care costs for every-one. Focusing on an employee’s total health can lead to a more energetic, productive workforce that can give your client’s company a competitive edge.

There are many resources to help em-ployers find ways to get their workforce healthier. For some businesses, the information that can be easily gener-ated from electronic medical records can help make prevention more of a reality. Electronic medical records can provide aggregated high-level data that gives an overall snapshot of employee health. The businesses must be large enough – 100 employees or more  so that this aggregated data does not reveal personal health infor-mation about individual employees.

Those businesses can ask their health care providers and insurers to determine the share of employees who smoke, have high cholesterol, or have high blood pressure. With this information, ranked to show which problems are most severe in the work-place, employers can offer targeted health programs and activities aimed at preventing chronic conditions.

If the majority of employees are over-weight, it makes sense to offer a well-ness program that promotes healthier eating. If the employer has large num-bers of smokers, an in-house smoking-cessation program would be in order.

Controlling health care costs requires a multi-pronged, integrated effort that goes beyond the medical providers and health insurer trying to prevent chronic diseases, though. Employers also need to stress and consistently reinforce the same healthy lifestyles in the workplace and model good behavior.

You can start small. When eating with employees, managers can order a salad instead of a cheeseburger. With small groups, the employer can hold walking staff meetings. Even better: Your client can start a walk-ing program to encourage all em-ployees to get more physical exercise (see the benefits of regular walking at There’s even a smartphone app to help track those workplace walks.


Wade Overgaard is Kaiser Perma-nente’s senior vice president for Cali-fornia Health Plan Operations. You can learn more about how to turn your client’s workplace into a “well-place” by downloading a free step-by-step guide to customize a wellness program at Click on “Resource Center.”

Taking an Integrated Approach to Disability Management

by Michael Klachefsky

It should come as no surprise to brokers that having absent employees could mean reduced productivity and increased costs for employers. According to one national study, the total costs of incidental and extended disability absences add up to 8.7 percent of payroll. While certain absences are unavoidable, many conditions do not necessarily require an employee to be away from work.

Brokers can help their client companies prevent some absences that result from mental health conditions or chronic physical ailments. One successful integrated approach uses an on-site consultant. With this model, a disability management expert goes to the employer’s workplace to help to employees who are facing challenges that might affect their work productivity, health, and well being.  An on-site consultant stands squarely at the integration point for a successful program that manages absence and disability. The consultant integrates the employer’s various health management programs. Brokers who are educated about the importance of an on-site consultant can provide greater value to the client companies they serve.

Key Factors To Consider

Employers must consider several factors when implementing a program to manage absence and disability:

• Job accommodations.

• Health and productivity management practices.

• Integration of wellness and disability efforts.

An onsite consultant can identify ways to keep employees who are at risk of disability stay on the job. The consultant can also help those who are on disability return to work sooner, which leads to rapid reductions in absence- and disability-related costs.

Job Accommodations

Providing job accommodations is an essential component of a transitional return-to-work program. It is also a key point at which an on-site consultant can help implement an integrated approach. Job accommodations can include ergonomic interventions and other work environment modifications, such as hours of work, work location, and duties. These accommodations are often simple solutions to keep an employee with a medical condition on the job rather than out on a leave of absence.

An on-site consultant can help design and negotiate job accommodations. Consultants, who are often nurses or vocational specialists, can help evaluate an employee’s workspace to determine whether an ergonomic solution or modification is needed. These kinds of interventions can reduce barriers to productivity and help keep an employee on the job and productive.

Health and productivity management practices 

Incorporating highly rated health and productivity management practices can further enhance an integrated program to manage absence and disability. Employers gave positive ratings to the following health and productivity management practices in a 2009 Integrated Benefits Institute survey conducted with 450 employers:

Early disability reporting: Early intervention is more likely to be effective in shortening the duration of an employee’s disability when an employer knows about an absence or disability claim as soon as possible.

• Transitional return-to-work programs: It is a best practice for employers to offer transitional return-to-work for any ill or injured employee. Also referred to as “modified” or “light duties,” a transitional return-to-work program creates temporary job accommodations to help sick or injured employees recover while at work. An on-site consultant can play a pivotal role in working with the employee, the supervisor, and the employee’s treating physician to ensure a safe recovery and enhanced productivity.

• Nurse case management: Employers value having nurses provide case management services in their health and productivity management programs. These nurses, who have experience navigating the healthcare system, are skilled at developing early return-to-work approaches.

• On-site providers: Employers also value health and productivity management that’s provided on-site as opposed to phone services. On-site medical clinics and pharmacies allow to reduce their time away from work. An on-site disability management consultant uses the same on-site provider concept. In addition to their medical and pharmacy services, an employer has access to a disability management expert to help employees return to work; stay at work; and access health management programs.

• Disability duration guidelines: Disability duration guidelines are used to estimate how long an employee with a specific condition will be away from work. Factors include diagnosis, job demands, age, and gender. An on-site can consultant assess the effectiveness of an return-to-work program using a physiological basis for return-to-work expectations as well as expectancy figures for normal recovery from a medical condition, injury, or procedure.

In short, absence and disability can create exorbitant costs for an employer. So, a program that incorporates these health and productivity management practices can be essential in helping reduce sick-day and disability absences; medical and pharmacy costs; and health-related lost productivity that adversely affects a workplace.

Integration Of Wellness And Disability Efforts 

More employers are offering wellness programs in order to improve employee health and productivity. These plans can include nutrition programs; on-site fitness classes and equipment; and smoking cessation programs, among other opportunities.  The on-site consultant is in a unique position to help employees benefit from integrating wellness and absence/disability management programs. The on-site consultant usually works with employees who are struggling with medical conditions at work or are off work due to medical conditions. These employees are the ones who may need wellness programs the most; in other words, they are in a teachable moment.

Putting It All Together

By gaining a better understanding the on-site consultant model, brokers can explain how their clients can improve productivity and reduce costs by integrating factors like job accommodation; health and productivity management; and wellness and disability efforts. In turn, brokers can leverage that success to grow their own businesses.


Michael Klachefsky is national practice leader of The Standard’s Workplace Possibilities program and author of two white papers about The Future of Absence and Disability Management. He has more than 30 years of experience in the absence/disability management and productivity industry. In this role, he works with The Standard’s corporate marketing team to promote and enhance the program, as well as represent the company at conferences, workshops and other events that focus on absence/disability management topics. He can be contacted via email at or by phone at 971-321-2679.

Alternative Medicine Therapies and Their Potential Inclusion Health Plans

by Gregory D. Darnell, M.S/Ph.D. 

Complementary and alternative medicines, also called CAM medicine, are two healthcare systems that have been utilized by increasing numbers of American patients and medical practitioners within the past several decades.  The most recent National Health Survey (2007) found that approximately 38% of adults use some form of CAM procedures or products. Mirroring this percentage is the $36 billion dollars of out-of-pocket and tax-generated funds that are used every year to use, prescribe, and research CAM medical practices and products.

The movement for CAM medicine has been so popular that even a portion of income tax revenue ($130 million) used to generate the U.S. National Institutes of Health’s annual budget is allocated to the National Center for Complementary and Alternative Medicine.  This center’s directive is to fund scientific research and clinical trials across many disciplines that explore, validate, and expand CAM medical procedures within the United States.

Alternative and complementary medicine, according to NCAM, the National Science Foundation (NSF), and the National Institute of Medicine (IOM), are a set of combined practices, systems, and products devoted to promoting wellness and illness remedy via non-Westernized medical or allopathic practices.  In the United States, conventional medicine is performed only by state-certified health professionals that hold M.D. or D.O. degrees and other allied health professionals, such as registered nurses, physical therapists, and psychologists. In contrast, alternative and complementary medical procedures can be practiced by individuals who do not have a specific education or license.

In response to the demand for CAM healthcare, states have begun to institute education, licensing, and registration programs for CAM providers in hopes of regulating these practices. Additionally, professional organizations offer credential programs for members seeking to practice CAM methodologies.  However, because of the lack of federal regulatory bodies for CAM, regulations and guidelines for care vary widely as well as enforcement of malpractice and misuse by providers.

Generally, alternative medicine can be split into five groups.  They are as follows:

I. Biological-based practices: natural product or non-synthetic compound usage

II. Manipulative or body-based practices: body part manipulation or movement to ease pain or illness

III. Energy medicine: using energy fields (quantifiable or putative) to penetrate the body

IV. Mind-body Medicine: holistic approach to using the mind to control body reactions and function

V. Cultural medicine: practices used in non-western cultures to bring health and improvement to the body (i.e. Chinese medicine, Naturopathy, Homeopathy)

Within these five groups, the classification boundaries are often unclear, and usage of multiple groups can be used to help treat one or many illnesses and symptoms, as well as for preventative care.

Some more common procedures or products are listed below:

• Natural vitamins, minerals, or botanicals

• Dietary supplements

• Probiotics (bacteria)

• Meditation

• Yoga

• Acupuncture

• Hypnotherapy

• Tai chi

• Massage therapy

• Spinal manipulation or chiropractic services

• Pilates

• Osteopathy

• Magnet therapy

• Reiki

• Aroma therapy

• Biofeedback

Though CAM medicine has had historical, cultural, and widespread use, scientific and rigorous validation of their health benefit is still lacking and has been so for approximately a decade or more.

Because of this lack of scientific evidence and support, some insurance companies choose to exclude complementary and alternative medical practices in current healthcare policies.  In their business models, if scientific testing and analysis do not support a health benefit of particular procedures or products and credentialed professionals do not endorse these practices, these procedures must not constitute a profitable and worthwhile market in which to conduct business.

Luckily with research being conducted by institutes like NCCAM and published by scientific organizations such as the Journal of Alternative and Complementary Medicine & Biomedical Central Complementary and Alternative Medicine, CAM methodologies, practices, and products have the potential to move into conventional medicine.  This lateral movement has become essential to inclusion of these practices into healthcare/insurance policies though these procedures may still involve paying higher deductibles than other therapies.

Examples of such procedures recently included in many group health insurance plans are cognitive-behavior therapy, mediation, chiropractic care, massage, nutrition counseling, and yoga. Additionally, some insurance companies may provide contracted or discounted procedures that fall under complementary and alternative medical practices, but like many companies this is usually on a per policy or per group plan basis.

CAM Coverage Among California PPOs

The following is from California Broker Magazine’s PPO survey.

Which complementary medical disciplines are covered under the PPO or will be covered under the PPO?
Aetna: Special rates on visits to acupuncturists, chiropractors, massage therapists, and nutritional counselors, which they pay directly to the participating provider. Members can save on over-the-counter vitamins and supplements, aromatherapy, foot care, and natural body-care products.

Anthem Blue Cross: Physical therapy, occupational therapy, chiropractic care, speech therapy, DME, and acupressure/acupuncture.

Blue Shield: Prevention and Wellness Programs, discounts for health improvement products, and a chiropractic Network.

Health Net: Direct referral to chiropractic and acupuncture care. Direct access to chiropractors, acupuncturists, and massage therapists. Members get discounts of up to 50% on a vast selection of vitamins, supplements and other health and wellness-related products.

Kaiser Permanente: The insured can choose to purchase the chiropractic/acupuncture rider. The rider offers a variety of plans with different benefit maximums or visit limits.

UnitedHealthcare: American Chiropractic Network, a business segment of UnitedHealth Group, provides chiropractic benefits as well as discounts for the following complementary alternative medicine services to our enrolled individuals:

• Acupuncture

• Massage therapy

• Nutritional counseling

• Naturopathic medicine services (in states where naturopathic physicians are licensed).

UnitedHealthcare also offers employers an optional acupuncture benefit. Finally, through UnitedHealth Wellness programs as well as discounts on products and services for nutrition, weight-management, fitness, stress management, and other wellness products and services.

Recent CAM Research 

(Compiled by California Broker Magazine)


A study that appeared in the American Journal of Medicine found that smokers who got acupuncture treatments were more than three times as likely to be tobacco-free six months to a year later. Also, smokers had a higher rate of success rate with hypnosis compared to people who had minimal help.


In an article published in the April 23 online edition of Molecular Pain, UNC researchers describe how exploiting the molecular mechanism behind acupuncture resulted in six-day pain relief in animal models. Researchers found that, nucleotides are released when an acupuncture needle is inserted into an acupuncture point and stimulated.  These nucleotides are then converted into adenosine, which can decrease the body’s sensitivity to pain. The release of adenosine offers pain relief, but for most acupuncture patients, that relief typically lasts for a few hours.

Dry Mouth

When given alongside radiation therapy for head and neck cancer, acupuncture has shown to reduce the debilitating side effect of xerostomia, according to new research from The University of Texas

The Top Three Items Brokers Should Keep in Mind When it Comes to Selling Voluntary Benefits to their Clients

Voluntary benefits are easy to sell provided you do the simple things well

by Art Dammers

Eight-three percent of employees think more highly of employers that offer voluntary insurance benefits, according to a recent WellPoint survey. The same may hold true for prospective employees. Nearly 90% said that, when it comes to accepting a new job, it is important that companies offer a full range of health benefits, including voluntary. Fifty-six percent called it very important.

These results are good news for those of us who can offer voluntary benefits to employers. So, here are three important tips to keep in mind when you are preparing to sell voluntary products to your clients:

1. Planning 

Before choosing a carrier, ask to hold a quick roundtable call with them. Discuss your clients’ objectives in adding new employee-paid benefits. This is also a good time to bring up your client’s enrollment needs. An employer with multiple locations, work shifts, and associate languages has unique needs and should be handled accordingly. You should work with a carrier that is big on logistics and short on surprises. A well-executed enrollment plan results in a favorable customer experience for everyone involved.

2. Engagement

You’ve squared away the logistics, but you still need to make sure that employees know that the enrollment meetings are coming up. The right communications will depend on your client’s corporate culture. What is their preferred communication style? Do they prefer posting articles and announcements on their intranet site; sending e-mail attachments; posting customized posters in the lunch areas with meeting dates and times; or doing a combination of the above?

Also remember that an old fashioned letter of endorsement from the management team is still a highly effective tool to encourage employees to attend meetings. Helping your client increase awareness of upcoming benefit enrollment meetings will increase employee interest and boost meeting attendance.

3. Education

Congratulations, the logistics are locked down; and the employees are aware and interested in learning more about the new voluntary products. You should now minimize any administrative activities so that you can spend the time highlighting the voluntary product’s benefits and features. Educating employees about their benefits is important, especially since only 56% of workers say they are knowledgeable about the voluntary insurance products offered at their companies, according to the survey.

Using personalized enrollment forms helps you devote more time to your presentation to employees. These pre-populated forms, which are generated for each employee, include data such as their name, date of birth, and payroll frequency. Employees like these forms because they don’t have to fill them out manually, do the math, or calculate age reductions. Instead, they are able to really listen to the presentation from the insurance representative and ask questions that will help them determine whether the voluntary products meet their needs.

Experience has shown that, by focusing on the planning, engagement and education steps outlined above, everybody wins with voluntary products.


Art Dammers is director of Business Development for WellPoint’s Voluntary Business.

HSAs–Consumer Driven Plans in 2012 and Beyond

In this special update on the Health Savings Account market for this edition of California

Broker, we look at significant market trends that are shaping the future of consumer driven health plans (CDHPs).

by Leila Morris

Consumer Driven Plans Gain Momentum

The momentum for CDHPs slowed while employers dealt with health reform, but it’s back, according to the “17th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care.”

Fifty-nine percent of employers have a CDHP up from 53% last year. Twenty- seven percent of those that don’t have a CDHP (11% of all respondents) are expected to adopt one in 2013.

As CDHPs go mainstream, employers are migrating more of their workforce into these programs. Nearly 12% of employers with a CDHP are total replacement – an increase of more than 50% over the past two years. If employers continue their current health plan strategy, 17% will offer a CDHP as their only plan option in 2013. Twentynine percent say they would offer a CDHP as their default plan option to further increase employee enrollment.

Enrollment numbers are also rising from 15% in 2010 to 27% in 2012. To encourage enrollment, many employers have set significantly lower employee premium contributions for CDHPs compared to their traditional plans. At nearly 60% of companies, employees’ CDHP premiums are at least 20% lower than those for non-CDHP plans. Almost 40% of those employers set contributions at more than 50% less.

Having the employer contribute to the employee’s HSA boosts enrollment and alleviates affordability challenges, according to researchers. More and more employers seem to agree. Thirty-nine percent of employers are contributing to their employees’ HSAs in 2012 and another 11% are planning to do so next year. Nearly twice as many employers have an HSA compared to five years ago. While HSAs are becoming more popular, average HSA enrollment lags considerably behind HRAs. In fact, HSA enrollment is only half that of HRAs in 2012 (16% versus 31%), which is likely because HSAs are a newer savings vehicle.

Nevertheless, researches see significant growth opportunity for HSA enrollment in the years ahead, but employers need to consider affordability issues that could make an HSA less valuable to some employees – notably lower-paid employees. They also need to consider new restrictions on HSAs. For example, over-the-counter medications cannot be paid with HSA dollars without a doctor’s prescription.

An important question is how CDHPs are affecting utilization and health outcomes. For employers that have measured these differences, many say that their CDHPs are outperforming their non-CDHPs in reducing inappropriate care and curbing unnecessary emergency room visits. About 10% say employees and dependents in the CDHP are better at reducing lifestyle risks than those enrolled in non-CDHPs. Researchers say that CDHPS are most effective when employers take a comprehensive approach, which means doing things like increasing employee and provider accountability while helping employees become smarter health care consumers.

These plans also help employees’ financial fitness by paying for current costs while giving them a tax-effective vehicle to accumulate wealth for retirement. Nearly four out of 10 employers consider their HSA as part of their retiree medical strategy and another 20% are planning or considering such a strategy over the next three years

Employers that have at least 50% of employees enrolled in a CDHP have a total cost per employee that is more than $1,000 lower than employers without a CDHP ($10,673 versus $11,714). Nonetheless, even high employee enrollment does not

guarantee long-term success. Employers with more than half of their employees enrolled in a CDHP report a two-year average cost trend of 5.4% nearly identical to the norm of 5.5%.

Plans Could Help Cut The Nation’s Health Care Spending

Consumer driven plans not only help individual employers reduce healthcare costs, but may also reduce the nation’s healthcare costs. If enrollment in consumer-directed health plans grows to account for half of all employer-sponsored insurance in the United States, health costs could drop about 4% ($57 billion annually) of all health care spending among the nonelderly, accord-ing to a new RAND Corporation study.

If consumer-directed health plans en-compassed 25% of the policies selected by those with employer-based insur-ance, cost savings in the nonelderly population would be 1% to 2% of health care spending. At 75% penetration, savings would be from 5% to 9%.

A 50% enrollment level is plau-sible over the coming decade due to continued pressures to cut costs and incentives in the federal Affordable Care Act, according to Amelia M. Haviland, a statistician at Carnegie Mellon University and RAND.  En-rollment in consumer-directed health plans now makes up about 13% of all employer-sponsored health coverage.

But increasing enrollment could reduce the use of preventive care and other high value health care ser-vices, according to findings published in the May edition of the Journal Health Affairs. Haviland said, “Given the limited information available to consumers about costs and quality, we need to carefully examine whether additional up-front patient costs will diminish the quality of health care.”

Haviland said, “Consumer-directed health plans can clearly have a sig-nificant effect on costs, at least in the short term. What we don’t yet know is whether the cutbacks in care they trigger could result in poorer health or health emergencies down the road.”

For families enrolled in consumer-di-rected health plans, about two-thirds of the savings came from fewer encounters with health care providers. The remain-ing third came from lower spending per encounter, suggesting patients made different choices about tests and treat-ments. Families in consumer-directed plans use fewer brand-name drugs, have fewer visits to specialists, and have fewer hospital admissions com-pared to families in traditional plans.

The study found modest first-year reductions in use of highly recom-mended care, such as cancer screen-ings and routine testing to monitor patients with diabetes even though some preventive care was offered at no cost. “There needs to be better educa-tion of enrollees about plan features and how to navigate medical decision-making. The goal is to get patients to think critically about their care, not reduce high-value care that can help keep them healthy,” Haviland said. The study authors are also concerned that increased use of consumer-directed plans could raise premiums for those who remain in traditional health insur-ance plans since healthier people tend to drop traditional coverage in favor of less-costly, high-deductible plans. This could pose a challenge for the health plans offered through the new insur-ance exchanges created by health care reform, she added. However, Roland McDevitt, a study co-author and direc-tor of health care research at Towers Watson said, “The adverse selection we found for traditional plans was not severe and there are mechanisms in the Affordable Care Act that should address t his risk.” For more information, visit

HSA Tax Changes

To keep up with inflation, the IRS has adjusted annual contribution limits for HSAs as well as deduct-ible limits for high-deductible health plans. For calendar year 2013, the annual limitation on deductions is $3,250 for an individual with self-only coverage under a high deductible health plan.

The annual limitation on deductions is $6,450 for an indi-vidual with family coverage under a high deductible health plan. For calendar year 2013, a “high deductible health plan” is defined as a health plan with an annual deductible of at least $1,250 for self-only cover-age or $2,500 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,250 for self-only coverage or $12,500 for family coverage.


Leila Morris is editor of California Broker Magazine. 

Protect Clients and Profitability: Add Life Insurance to your Practice

by Jason Dudum, LUTCF

Whether you are a seasoned or new advisor, there are always opportunities to expand your business. If you are not selling life insurance, there’s no better time than now to add it to your repertoire of products. While adding a new facet to your business may present challenges, you will be tapping into a well of new revenue while giving your clients exceptional planning services.

Insurance is often an afterthought. Many do not have any life insurance or they have an inadequate amount. The issue is not that life insurance is less needed than in the past or consumers have less interest. The root of the problem lies in the lack of education provided to help consumers understand its value. It is the responsibility of advisors to share their wisdom. If you are considering adding life insurance to your practice, there are a few key things to keep in mind to maximize its impact on your business and, more importantly, on your clients.

It’s Not Just a Sale

As advisors, we know that selling life insurance is not glamorous. Clients and prospects are not necessarily eager to work with because of preconceived notions about life insurance salesmen. That’s why it’s important to allow your passion for the product to shine. It took a few meaningful claims to find my own enthusiasm for providing life insurance. The heartbreak associated with a death claim can be difficult to endure, but it reaffirms why it is so important to offer these protections. I believe in these products enough to make it a priority to offer the benefits of life insurance to everyone including my friends.

Knowledge Before Numbers

When consumers do buy life insurance, they often purchase an arbitrary amount. They believe they’ve purchased a protection and the amount is less important than simply having the product. Unfortunately, that is a misconception. In my practice, we work hard, using a more personal touch, to educate our clients and prospects about how much they truly need. Some advisors use calculators and software to generate numbers when selling life insurance. We find that talking to our clients about what the products mean rather than what they’re worth is the first and most important step.

During our first meeting, we explain the purpose and benefits of adding life insurance to their portfolio. If you are meeting with a new prospect, it is critical to help them understand their options. Be sure to explain the difference between term and permanent policies. Clients need to feel comfortable with the subject matter and your approach; if they feel pressured, you will lose the chance to protect their current lifestyle and future financial freedom.

To easily clarify life insurance, I create a simple T-chart. I place a T for term life insurance on one side and P for permanent on the other. I relate term life insurance to renting a house — it’s temporary, there is no equity, and it can be very inexpensive. Permanent life insurance is more like buying a home. It’s long-term; there’s equity; and while it’s more expensive, the client is in control. Once we’ve reviewed the various types of life insurance, I make suggestions about which products make the most sense for the client. Then, I allow the client to do the talking. After hearing their reactions, I assist them in determining which choice works best for them. My main goal is to earn their trust and create an environment allowing for open communication.

After examining their needs, expectations, and goals; and pairing them with product-types suited to their situation, we can move forward with assessing how much coverage they need. When planning with a prospect, I may facilitate a less expensive 10-year term policy, and in time, recommend converting it to something more comprehensive. Being underinsured is as dangerous as being uninsured, but if we open the client’s eyes to the possibility of any coverage, we can set up future meetings to make sure they are properly covered for the long-term.

New Products Create New Opportunities

After explaining different life insurance concepts, we begin the more technical aspects of planning. We identify loans and liabilities and focus on making sure those can be managed through careful planning. If the client is more interested in using life insurance for estate planning, we assess the tax implications and ensure those can be covered. This option is especially important now, with the unique estate tax law. The last six months of this year will be an incredible opportunity to withdraw money from an existing estate to purchase life insurance with minimal taxation. These tax laws will change after the year’s end, so be sure to assess the possibilities with eligible clients as soon as possible.

Today, there are new products that allow a return-of-premium in what are known as “second-to-die” or estate planning policies. These innovative solutions are especially effective when discussing life insurance with prospects on the fence about purchasing the product. They may be concerned it isn’t worth the money or they will incur a loss on the transaction. Such options make it possible for these clients to recoup their money, and therefore, ease their doubts.

Tips for Success

When working with new products, there are some techniques you can implement to alleviate a rocky start. Remember, it is easier to sell to a client than a prospect. Sell as many strategic policies as possible without being too concerned about how much they’re worth. New advisors often get caught up with worrying about profitability when they actually should be more concerned with meeting as many prospects as possible. Once you sell a small-term policy, the purchaser is now a client. It’s likely that you have earned their trust and they value your expertise. To continue cultivating these relationships, become aware of what your clients need to know to feel comfortable before purchasing a product from you.

Don’t shy away from prospects who are not necessarily profitable on paper, such as young couples. Once you build a rapport, they might tell you about their parents who may not have a financial advisor or are in need of a financial plan reevaluation. Such referrals helped my practice earn several large sales. Beyond being a source of referrals, remember that everyone needs protection even if they aren’t considered a large transaction.

As a seven-year member of the Million Dollar Round Table (MDRT), I’ve strengthened my belief this profession is more than dollars and cents. I’ve met many fellow members who value the comfort they bring to clients more than the potential revenue their clients offer. These are often the most successful advisors. By adding life insurance to your product offerings and presenting this solution to your clients, you’re not only helping them diversify their portfolio, but you’re also protecting their legacy. Rise to the challenge; if you don’t, someone else will.


Jason J. Dudum, LUTCF is chief executive officer of Dudum Financial. He has more than 10 years of experience in advanced estate planning and asset management. He is a seven-time qualifier for the Million Dollar Round Table’s (MDRT) distinguished Top of the Table and serves as a Top of the Table Board Advisory Board member. He is also a member of NAILBA and frequent speaker at local NAIFA meetings and carrier conferences. 

Getting More From a BGA

by Kenneth A. Shapiro

Some of the most valuable insights often come from unusual and unexpected encounters. In her chairman’s remarks at NAILBA’s 2011 annual meeting, Christi M. Daughenbaugh told of talking to her hairdresser, a 24-year-old mother-to-be, about life insurance.

The young woman made it clear that she had no interest in buying something that came with a death requirement. That changed, however, when Christi focused on the need to protect her lifestyle. That’s when this young woman asked, almost jokingly, “Will you be my financial coach?”

In a few words, that remark captures what we all need, whether we’re consumers committed to building our financial security or advisors growing a business. We need someone in our corner – someone we trust – to help us maximize our talents, skills and resources.

And just as many producers are moving away from a transaction-based model to becoming financial coaches for their clients, so the brokerage general agency (BGA) is moving away from serving as simply “a wholesaler of product” to training and coaching producers – a resource for helping them succeed.

Since NAILBA held its first annual meeting 30 years ago, not only has the number of BGAs increased, but also many have moved from essentially having a local orientation to serving producers regionally and nationally. This is good news for advisors because, today, they have more choices in BGAs than ever before.

So, what should advisors expect from a BGA? While every BGA has its own answers to this question, here are guidelines that may be helpful:

1. Asking the Right Questions

You may want to be cautious if someone on the sales side of a brokerage firm starts off by telling you what a great deal you’ll get by working with their organization. While compensation is critical, there should be far more to a BGA relationship.

This begins with gaining an understanding of your market. “Tell me about your clients and the types of work you do for them.” It also includes expressing genuine interest in your business by asking how you conduct your practice, as well as your objectives, your special interests and what you expect from a BGA.

Advisors should expect a BGA to invest time, interest, and knowledge in an advisor’s work. You’ve learned that information helps build relationships. This is what you do with your clients and it should be no different in working with a brokerage firm

2. Continuing Communication

“Do you have any cases we can quote on?” It’s unfortunate that this is the question too many advisors hear from a BGA representative, who then signs off by asking, “Be sure to call us when you have a hot one.”

Such an approach is still far too common and helps explain why some independent advisors view BGAs as doing little more than placing cases – a far less than helpful reputation.

Advisors should expect a BGA’s salesperson to stay in touch regularly, bringing helpful ideas and sales strategies. They should perceive this person as one who clearly possesses the experience to offer reliable, workable solutions and follows up quickly with additional information. Every advisor needs a reliable sounding board, someone whose goal is listening, not just fishing for a case to quote.

3. A Resource For Your Practice

When advisors hand off a quote request or a case for a BGA to work on, they should be confident that it will receive a level of attention that results in thoughtful, creative options for consideration by their clients — any of which can meet a client’s expectations and objectives and, at the same time, give the advisor a competitive edge.

This is where the combined knowledge and experience of a BGA’s internal sales staff can play a key role. They should know the carriers that are a good fit for a particular case. Their knowledge base needs to be both extensive and current so they can reach out broadly, if necessary, to leave no stone unturned.

Producers who view a BGA as nothing more than a policy transaction mechanism shortchange themselves. Well-staffed BGA’s are a unique knowledge resource, combining street smarts with technical insurance expertise.

4. Technology Leadership

While it’s true that the life insurers were slow to adopt technology, they were not alone. BGAs were also behind the curve; many still are. Since many worked with older advisors who were often uncomfortable with technology, the pace was even slower. That’s history. The tipping point came when a combination of cost savings and timely customer service became the drivers. To be competitive, a paperless process has become a business necessity.

Clients expect responsiveness; they don’t expect to wait for information. They want it now and they will go where they can get it. Today’s BGA should be giving advisors an extra edge by responding quickly. There’s no reason why a BGA today can’t deliver clear, thoughtful and impressive presentations with a high customer appeal and in a timely way.

A critical component of technology leadership is producer training. Without it, even the best tools are useless. In today’s highly competitive environment, it takes technological know-how to work efficiently, manage a practice effectively, and provide clients with information instantly. Advisors should expect a BGA to recognize these producer challenges and offer necessary training.

5. A Value-Based Relationship

For some producers, a transaction-type relationship with one or more BGAs is to their liking. From their perspective, they may see it as the way to get the best deal. Even so, they may also be doing a disservice to themselves and their clients.

If we believe that life insurance is a relationship business, one in which an advisor can best serve clients by understanding their needs and objectives, the concept also has validity in the advisor/BGA relationship.

Developing a close working relationship with a BGA is in an advisor’s best interest since the better they know each and how to work together, the more productive they can become. With an ever increasing number of products designed to fit narrow niches and meet particular needs, a clear understanding of the client’s situation and an astute evaluation of the products is key to getting the best, most cost effective solution.

It takes time for an advisor to understand and to make use of a BGA’s resources and capabilities. In the same way, a BGA needs an opportunity to develop a feel for how each advisor operates, including expectations and what to do and what to avoid. Working together, advisor and BGA are yet another indication that hitting a home run requires a value-based relationship. It’s the difference between a base hit and a home run.

We’re keenly aware that the life insurance business environment is becoming more challenging and demanding. New products, which appear with greater frequency, are often complex and confusing while older ones change or disappear. Then, there are far-reaching taxation issues and monumental governmental regulations. If all this isn’t enough, consumers are so baffled, doubtful, and uncertain, they are often unable to make buying decisions.

Independent agents can certainly benefit from working with a BGA that can bring reliable information, real-world experience, new ideas, successful strategies, and solid support to their practice.

It’s then that producers should want to ask, “How can you help me grow my business?”


Kenneth A. Shapiro is president of First American Insurance Underwriters. A Northeastern University graduate, he has been with First American since 1998. He began his career with Northwestern Mutual Life and later moved The Guardian Life Insurance Company. First American is a Needham, MA-based national life brokerage firm specializing in serving high-end producers and working on complex cases. He can be contacted at 800-444-8715 or