Finding the Perfect PPO Prescription–Welcome to Our 12th Annual PPO Survey
Seven PPOs in California diligently answered direct questions about their plans. Our readers, who are savvy health brokers, suggested many of the questions. We hope this information will help the professional agent or broker better serve sophisticated healthcare clients.
Consumer Directed Healthcare: Can it Survive in the Era of Healthcare Reform?
by Mark Reynolds, RHU
Will CDHPs have a life after 2014? The self-serving answer is yes for all of us who make a living in this business. But the realistic answer is also yes if we all – that is broker, carrier, and TPA – want to make a positive impact on cost and benefits for employers and employees.
Retooling Your Business for Growth–How to Adapt Business Strategies and Products to Meet Market Changes
by Scott Hankins and Eric TupperSeven guidelines to help you retool your business by introducing new products, repackaging services, and revamping operations.
Voluntary BenefitsIncrease Your Visibility and Value by Championing Year-Round Benefit Communications
by Allison Farris WendelbergerIt can be difficult to make sense of the constantly changing healthcare environment and understand how the changes affect consumers and their benefit options. It takes a year-round commitment to communicate effectively with all involved.
 The Top Three Items Brokers Should Keep in Mind When it Comes to Selling Voluntary Benefits to their Clients
by Art DammersExperience has shown that by focusing on effective planning, engagement, and educational steps, everybody wins with voluntary products.
Making Eye Contact With Vision Plans–The 2012 Transitions Academy
by Leila Morris More than 150 vision-plan providers and insurance brokers attended the 16th annual Transitions Acad-emy last month in Orlando. The focus of this year’s managed care track was eye health and the aging U.S. workforce.
Wellness PlansHelp Your Clients Sort Out the Options Wellness Plans
by Mark Roberts • Wellness plans are receiving acclaim for driving down the cost of healthcare and promoting healthy living while getting a boost from health reform.
Disability–Resurrection of a Disability Claim
by Art FriesThis article will emphasize the importance of seeking advice of one with expertise on disability coverage.
Medicare Advantage Plans Are Over-Paid While Premiums Are Down and Enrollment is Up
by Leila MorrisThese articles take a closer look at what developments are happening in the industry today.
The Magic of Life Insurance
Mary Amen, LUTCF, CLUIn the financial business, we often hear from widows about the magic of life insurance.  Who would have known my first death claim would be my husband?

Finding the Perfect PPO Prescription–Welcome to Our 12th Annual PPO Survey

Welcome to Part I of our 12th annual PPO survey. For this survey, seven PPOs in California diligently answered direct questions about their plans. Our readers, who are savvy health brokers, suggested many of the questions.

We hope this information will help the professional agent or broker better serve sophisticated healthcare clients. Look for Part II in our April issue. We will be posting the survey on our Website at

1. Is an Approval Procedure required for Getting a Specialist Referral or a Diagnostic Test or Treatment In-Network or Out-of-Network?

Aetna: There is a high tech radiology pre-certification requirement for some customers.

Anthem Blue Cross: It is not required for PPO plans, but the member ends up paying more if they go out-of-network without getting an out-of-network approval.

Blue Shield: No, PPO plan members can generally self-refer to any doctor for care. They can choose to use in-network or out-of-network providers with claims reimbursement based on their benefit plan. Out-of-network services are usually subject to a higher deductible and co-payment amount.

Cigna: No referrals or approvals are required since the PPO benefit plan is an open-access program. Members are covered whether or not they get care from PPO network providers. Members who use services from an in-network provider may have reduced co-payments and lower out-of-pocket costs.

Health Net: There are no approval procedure requirements for visits to in-network or out-of-network specialists. A prior authorization list for diagnostic tests or treatments is included in the member’s evidence of coverage (EOC).

Kaiser Permanente: No, the PPO plan does not require a referral to see a Specialist. Diagnostic tests are covered provided they are ordered by an insured’s doctor, are a covered benefit, and are deemed medically necessary. If a test or treatment is on the pre-certification list (e.g, MRIs and CT scans), it requires pre-certification.

UnitedHealthcare: To strengthen the patient-physician relationship, primary physicians are not required to request an authorization when they refer a patient to a network specialist for an office visit. Primary physicians are very effective at ensuring that our enrolled individuals receive medically appropriate and necessary specialty care. In fact, practice pattern analysis shows that primary physician referrals to network specialists have been almost 100 percent effective and medically appropriate.

2. Are there any restrictions on getting second opinions from an in-network provider or an out-of-network provider?

Aetna: A member, who has the option of an out-of-network benefit, may arrange their own second surgical opinion with a non-participating provider.

Anthem Blue Cross: No, not for the PPO.

Blue Shield: No, a member may get a second opinion from any in network or out-of-network provider. When an out-of-network provider is used, the member is responsible for any difference between Blue Shield’s payment and the billed amount.

Cigna: There are no restrictions. The PPO is an open access plan, allowing members to seek care in-network and out-of-network at any time. When accessing medical services, members may decide whether to use a network provider. By using a network provider, members have a lower out-of-pocket cost for each service.

Kaiser Permanente: Second medical opinions are covered. Coverage is limited to charges for physician consultation and any additional X-rays, laboratory tests, and other diagnostic studies. Benefits will not be payable for X-ray, laboratory tests, or diagnostic studies that are repetitive of those obtained as part of the original medical opinion and/or for which Kaiser Permanente Insurance Company (KPIC) has paid benefits. For benefits to be payable, the second medical opinion must be rendered by a physician who agrees not to treat the covered person’s diagnosed condition. The physician offering the second medical opinion may not be affiliated with the physician offering the original medical opinion.

Health Net: Health Net members may see any in-network or out-of-network provider for a second opinion without getting a referral. Members are encouraged to call the Customer Contact Center with any questions about their benefits.

Kaiser Permanente: Second medical opinions are covered. Coverage is limited to charges for physician consultation and any additional X-rays, laboratory tests, and other diagnostic studies. Benefits will not be payable for X-ray, laboratory tests, or diagnostic studies that are repetitive of those obtained as part of the original medical opinion and/or for which Kaiser Permanente Insurance Company (KPIC) has paid benefits. For benefits to be payable, the second medical opinion must be rendered by a physician who agrees not to treat the covered person’s diagnosed condition. The physician offering the second medical opinion may not be affiliated with the physician offering the original medical opinion.

UnitedHealthcare: A second opinion is not mandatory under our plans. Our UnitedHealthcare Options PPO product is open access. Members may seek second opinions from any participating or non-participating physician. The member’s benefit level will vary depending on the physician’s participation status.

3. Where are decisions made about specialist referrals, testing, treatment, surgery, and hospitalization?

Aetna: Our patient-management staff is regionally located. The region is determined by the location of the customer.

Anthem Blue Cross: Members may see specialists without referrals. Our Medical Management Department handles the review and approval for services that require pre-authorization.

Blue Shield: Treatment decisions such as these are made between the patients and their doctors. In the case of surgery, hospitalization, or major diagnostic tests, Blue Shield’s prior authorization process is used to review the proposed treatment for medical necessity.

Cigna: These decisions are made with a member’s physician in partnership with the member and the CIGNA nurse and physicians.

Health Net: Decisions about specialty referrals for testing, treatment, surgery, or hospitalization are made with the member, the member’s physician, Health Net’s Care Management team and, if the member chooses, Health Net’s Decision Power Health Coaches, who will provide additional information to help the member through the decision-making process.

Kaiser Permanente: In most cases, the insured does not need a referral to see a specialist. Decisions regarding testing, treatment, surgery, and hospitalization are made by the insured and his or her physician. The insured is required to obtain pre-certification for any hospitalization or certain special procedures as defined in the insured’s Certificate of Insurance. Pre-certification to verify the medical necessity of a particular service or procedure ordered by a physician for an insured is performed by Permanente Advantage.

UnitedHealthcare: The treating healthcare professional and the patient make decisions about providing specialist referrals, testing, treatment, surgery, and hospitalization. We determine whether such services are covered by referencing the member’s summary plan description.

4. Which complementary medical disciplines are covered under the PPO or will be covered under the PPO?

Aetna: Members can get special rates on visits to acupuncturists, chiropractors, massage therapists, and nutritional counselors, which they pay directly to the participating provider. Participating providers and vendors in the alternative healthcare programs are solely responsible for their products and services. We have not credentialed or reviewed them. 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: We offer the following:

• All members in our fully insured PPO groups are covered by our disease and case management programs.

• LifeMAP and Guided Imagery Program.

• Our Wellness Assessment customizes referrals to lifestyle management programs. There are cash incentives to reward participation — available as a buy-up option.

• CareTips for Physicians: This clinical messaging program sends patient-specific messages highlighting gaps in care to the member’s primary care physician.

• LifeReferrals 24/7 to experts in financial planning, education, and law, along with personal consultations. It is included with all fully insured PPO plans and is available as a buy-up option for self-insured plans.

• Self-funded groups may now purchase the Managed Behavioral Health buy-up package. This program is included with all fully insured PPO plans and is available as a buy-up option for self-insured plans.

• All members can search our Health Library; sign up for Blue Shield condition management and wellness programs; and subscribe to the Health Update eNewsletter. Online decision Making Tools allow members to compare hospitals, explore treatment options for their condition, and learn more about prescription drugs.

• Members can get 25% off or more from published fees for acupuncture, chiropractic, and massage therapy. Members can also get up to 40% off of selected vitamins, herbal supplements, homeopathic remedies, diet and sports nutrition, yoga and fitness equipment, personal body care, and health and wellness books, audio, and DVD products. (free shipping in most cases.)

• Wellness Discount Programs on Weight Watchers, 24-Hour Fitness,, and LASIK.

A Discount Vision Program.

• Chiropractic Network: Blue Shield has a directly contracted statewide network with more than 5,000 licensed chiropractors.

• Blue Shield Centers of Expertise and Blue Distinction Centers: Members can find facilities and doctors that meet high-quality standards for transplant, cardiac, and bariatric surgeries within California.

Cigna: It depends on the plan selected by the employer.

Health Net: Complementary medical disciplines vary by each employer contract. If an employer chooses to offer complementary medicine, Health Net’s program offers direct referral to chiropractic and acupuncture care. The decision Power Healthy Discounts program is available at It provides discounts to members when they receive selected complementary health care services from American Specialty Health Plans (ASHP) providers. It offers direct access to chiropractors, acupuncturists, and massage therapists. Members may find ASHP providers via or by calling 877-335-2746. The member assumes liability for claims and is responsible to pay the provider directly on a cash-pay basis at a pre-negotiated fee schedule. Members get discounts of up to 50% on a vast selection of vitamins, supplements and other health and wellness-related products. Healthy Discounts offers discount savings on these products through ASHP via Members have direct access to products through for vitamins and minerals, herbal supplements, yoga, relaxation products, books and videos. The website also provides educational information on a wide range of complementary health care topics.

Kaiser Permanente: The PPO plan does not currently offer coverage for any complementary and alternative medicine (CAM) services. The insured can, however, choose to purchase the chiropractic/acupuncture rider. The rider offers a variety of plans with different benefit maximums or visit limit.

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, we provide discounts on products and services for nutrition, weight-management, fitness, stress management, and other wellness products and services.

5. Describe your coverage for mammograms.

Aetna: Aetna considers annual mammography screening a medically necessary preventive service for women aged 40 and older. Annual screening is also considered medically necessary for younger women who are judged to be at high- risk by their primary care physician.

Anthem Blue Cross: Once a year routine mammograms when ordered by a physician. No limit in frequency, meaning as medically necessary when ordered by a physician.

Blue Shield: One annual mammography test is covered for screening and diagnostic purposes without illness or injury being present.

Cigna: Mammograms are covered annually for women age 40 and over or more frequently and at younger ages when medically indicated.

Health Net: The US Preventive Services Task Force guidance announcement in November 2009 is to help practicing physicians take care of their patients. Health Net does not see this impacting any aspect of the way we offer products or manage our programs. Health Net’s PPO coverage for mammograms remains as follows: One baseline mammogram between the ages of 35 and 39; one mammogram every one to two calendar years for women between the ages of 40 and 49 and one mammogram every calendar year for women age 50 and older.

Kaiser Permanente: Mammograms are covered as part of the adult preventive screenings benefits as follows:

• For women age 35 to 39, one baseline mammogram.

• For women age 40 to 49, one mammogram every two years, or more frequently upon recommendation of a physician.

For women age 50 and older, one yearly mammogram.

UnitedHealthcare: Options PPO provides coverage for mammograms as part of our standard outpatient surgery, diagnostic, and therapeutic services benefit. It is covered both as a preventive and diagnostic service.

6. Do you cover PSA tests for non-symptomatic men? If so, at what age?

Aetna: Yes. If a state has specific legislation, we will pay it in accordance with the law. There is no age limit unless it’s being paid under a specific benefit (like the Trust benefit), which has a contractual limit.

Anthem Blue Cross: Yes, at age 50 or when ordered by a physician.

Blue Shield: Coverage includes, but is not limited to, prostate-specific antigen testing and digital rectal examinations, when medically necessary and consistent with good professional practice. There is no age limit for PSA testing when billed with a preventive-care diagnosis.

Cigna: It is covered based on the treating physician’s determination.

Health Net: Preventive care and diagnostic procedures for adults (age 17 and older) are covered at a physician’s direction. When medically indicated for men age 50 and above, tests and procedures, including, but not limited to, prostate-specific antigen testing (PSA) and digital rectal examinations are covered.

Kaiser Permanente: The following prostate-specific antigen (PSA) tests are covered as part of the adult preventive screenings benefits, which are available at age 18: screening and diagnosis of prostate cancer, including but not limited to PSA testing and digital rectal examination when medically necessary and consistent with good professional practice. This coverage does not cover the surgical and other procedures known as radical prostatectomy, external beam radiation therapy, radiation seed implants, or combined hormonal therapy.

UnitedHealthcare: Network physicians are encouraged to follow the Guide to Clinical Preventive Services of the United States Preventive Services Task Force (USPSTF) as the basis for preventive care. We cover PSA tests regardless of age even though the USPSTF indicates this screening lacks clinical value.

7. Describe your drug formulary. (Three tier etc.) If it’s a closed formulary, what happens if a non-formulary drug is needed?

Aetna: The formulary may be open or closed, depending on the benefit plan. In plans with an open formulary, both formulary and non-formulary drugs are generally covered subject to applicable limitations and conditions. With a closed formulary, formulary and non-formulary drugs are generally covered, except for drugs on the formulary exclusions list. Formulary exclusions provide less overall value than therapeutically equivalent formulary drugs. The member’s physician can request approval for coverage for a formulary exclusion.

Anthem Blue Cross: We offer both open formulary and closed formulary options. Non-formulary or non-preferred drugs that have a formulary or non-prescription equivalent are not covered unless the prescribing doctor indicates that the drug should be dispensed as written on the prescription. We also have a closed formulary where non-formulary drugs are not covered but can be got at the negotiated fee rate.

Blue Shield: The Blue Shield Drug Formulary is a list of preferred generic and brand name drugs that have been reviewed for safety, efficacy, and bio-equivalency, and are approved by the Federal Food and Drug Administration (FDA). This formulary is developed and maintained by the Blue Shield Pharmacy and Therapeutics (P&T) Committee, which meets on a quarterly basis. The P&T Committee consists of independently licensed physicians and pharmacists in community practice and who are not employed by Blue Shield. A drug prior authorization program is available for selected drugs on the formulary as well as for non-formulary drugs to promote appropriate first-line therapy or to reserve use of certain medications with specialized uses or significant potential for misuse or overuse.

Blue Shield offers these types of outpatient prescription drug benefits:

• A closed formulary plan provides coverage for generic drugs, formulary brand-name drugs, and specialty drugs. Non-formulary drugs and most specialty drugs are covered only when prior authorization is approved.

• An incentive formulary plan provides coverage for generic drugs, formulary brand-name drugs, and specialty drugs. Non-formulary drugs are also covered for a higher copayment. Prior authorization may be required to cover some specialty and certain non-formulary drugs. If coverage for a non-formulary drug requiring prior authorization is approved, the member is responsible for the non-formulary copayment.

Cigna: We offer several kinds of formulary including open, closed, and tiered.

Health Net: The most common pharmacy-benefit structure is a three-tier plan, although a small number of employers have selected a closed formulary. When members with access to a closed formulary get a prescription for a non-formulary drug, coverage for the drug is not typically available unless it meets medical necessity guidelines.

Kaiser Permanente: The PPO plan has an open formulary, which means most FDA-approved drugs, with the exception of those listed in the Optional Prescription Drug Exclusions and Limitations are covered for the insured.

The insured pays a copay based on whether the drug is generic or brand. Self-Injectable drugs are also covered at a coinsurance.

UnitedHealthcare: Unlike a formulary, the prescription drug list does not imply any drug therapy recommendations. Rather, we assign prescription medications a co-payment tier based on an evaluation of clinical, economic, and pharmacoeconomic evidence. Unlike our competitors, some brand drugs are placed in Tier 1 and some generic drugs are placed in Tier 2 or Tier 3 based on the overall value (for example, the lowest net cost that they offer our clients). UnitedHealth Pharmaceutical Solutions (UHPS) offers a three-tier plan and an open benefit design. Tier 1 drugs represent the lowest co-payment option and include many generic drugs. Tier 2 drugs represent a middle co-payment option and include many brand name drugs. Tier 3 drugs represent the most costly drugs, often with Tier 1 or Tier 2 alternatives and have the highest co-pay option. A drug’s tier placement is subject to change when its value changes as a result of a patent expiration, new product introduction, or other important clinical, safety, or economic information. When a generic drug is more costly than the brand drug during six-month exclusivity arrangement for this period, UHPS may place the generic in Tier 2 and move the generic to Tier 1 once the price decreases.


Look for Part II of Our 12th Annual PPO Survey in the April Edition of California Broker Magazine

HSAs–Consumer Directed Healthcare
Can it Survive in the Era of Healthcare Reform?

by Mark Reynolds, RHU

Isn’t it amazing how fast time passes? It has already been five years since CDHPs (in the form of HSAs) began to capture the market with HSA products coming from every major carrier in the state. Nearly every broker was moving large numbers of clients to HSA compatible plans.

Brokers took huge reductions in their compensation to support the HSA model, but their clients and their employees did benefit from these actions. Had those HSA compatible plans been priced and underwritten a bit differently, employer’s plan costs would be in a much better position than they are today in 2012.

So the question that has been passing around is whether consumer driven plans will survive healthcare reform. January 2014 is just 22 months away and, by some expert’s forecasts, the landscape of healthcare financing will be forever changed. Many predict that what we know and practice now in March of 2012 will be obsolete in 2014.

So, just as music CDs are giving way to digital downloads and faxes are being abandoned for imaging and e-mails, many believe that consumer driven plans will not have room in the narrow track of healthcare reform and the essential benefit packages. In the next few paragraphs, you will read why that is not true. In fact, you will read that CDHPs can actually be the engine that helps redirect the path of healthcare costs and puts employers in the driver’s seat to control both benefits and cost.

First let’s frame the discussion: consumer driven or consumer directed can be defined as putting the decision of whether to purchase healthcare and what healthcare to purchase in the member’s hands. This definition is consistent with the premise that HSAs, with proper plan pricing, can be effective in giving members the power to do what is best for themselves and their families.

However, many define the consumer in CDHPs as the employer. After all, the employer typically decides who the broker will be, what the benefit plan will be, who is eligible and when, and what the member’s contributions will be to join the plan. This definition will meet the test of time as well as healthcare reform; thus allowing employers to still have a say in what they provide their employees. So, employer driven may the future of health plan decisions. Regardless of which definition you use, employees and employers will still have choices and control in the benefit plans under which they are covered.

The Carriers’ Position On CDHPs

Recently, I participated in a meeting with the California Department of Insurance along with a representative from each of the major carriers in which the question was addressed – Will 2014 make CDHPs and wrapping go away?

It is our belief that most carriers want the concept of CDHPs to survive and will be including the concept in their benefit plans and preparation for 2014. Here are a couple reasons why the carriers may want CDHPs to survive.

First of all it’s choice. Most carriers want to give employers alternatives in benefit design to fit the different needs of Californians. Carriers will try to encompass as many different price points as possible to allow employers and employees to choose what best fits their budget.

Most experts agree that the PPACA rating guidelines of 2014 healthcare reform will increase rates for the younger ages by as much as 40% to 50%. As far-fetched as that sounds, it is a real probability. Do not underestimate that potential.

However, competition will not go away in 2014. Carrier executives will need to build plans that compete and that give their carrier an advantage while complying with the Essential Benefit mandate. To survive, carriers must compete; offering choice will be a big part of that competition.

It is true that fully insured carrier plans will be limited a bit by PPACA’s limitations for HDHPs.  But, within those limits, you should see carriers build in choice through alternatives that allow employers and members to direct their own care.


CDHPs have the most opportunity for evolution and growth in ERISA based or as we call it the “E-based” health plans. There are already a good number of plans available in California that give employers the ability to design benefits as desired while controlling the cost of the plan. We will see more of these E-based plans being introduced during 2012 and even more in 2013.

How can E-based plans provide consumer directed benefits and still comply with PPACA? The short answer is that they do it easily, but let’s look closer.

E-based plans are regulated under IRS code by the Dept. of Labor. E-based plans will comply with PPACA’s more popular regs, such as wellness, unlimited lifetime maximums, and coverage for adult kids to age 26, but they are not required to comply with all of PPACA’s limits nor do they have to comply with all of a state’s fully insured regulations. The following are possibly the two biggest advantages of E-based plans:

1. They are exempt from the MLR limitations. This means that E-based plans can build in broker compensation that is fair while creating a benefit plan that is cost effective.

2. They allow employers to provide their members benefits that can be even richer than any Essential Benefit Package mandate while allowing the employer to provide these benefits in a self-funded environment. That means that employers will not be wasting premiums on fully insured plans for benefits their employees never use.

E-based plans, under PPACA, will allow employers to create consumer directed benefit designs that encourage members to use wellness, make better choices, get needed care when it is needed, and most of all provide better benefits at a lower cost. E-based plans will not replace the carrier’s fully insured plans completely. We expect that

E-based plans will typically be available for employers with as few as 10 employees.

One Hopeful Idea for CDHP in Healthcare Reform

Whatever you call them, both employer driven and consumer directed plans are needed because they may present the last hope to change the direction in which our lifestyles and healthcare costs are going. It is no secret that smoking, obesity, sedentary lifestyles, and apathy are causing the greatest stress on our nation’s healthcare system and on the financing of healthcare.

CDHPs provide the best means in which employers, carriers, brokers, and TPAs can work in partnership to introduce real lifestyle-changing processes into our healthcare system. No government-paid or traditional employer-paid model can influence the plan design and plan behavior more effectively than can a well-designed outcome-based CDHP.

So, will CDHPs have a life after 2014? The self-serving answer is yes for all of us who make a living in this business. But, the realistic answer is also yes if we all – that is broker, carrier, and TPA – want to make a positive impact on cost and benefits for employers and employees.

We’d better get started right now. Contact people you know who are innovators in CDHPs and who understand ERISA based plans. We need to root for the carriers to get on board with CDHP and educate employer clients so that they know what we are doing for them. Consumer directed and employer driven will be the industries’ and the broker’s best hope to make a difference throughout the era of healthcare reform.


Mark Reynolds, RHU is a member of the Team at BEN-E-LECT. BEN-E-LECT’s trademarked Employer Driven® Health Plan model provides MERPs, HRAs, and Self-funded plans to thousands of employers throughout California and the Southwest United States. BEN-E-LECT’s ERISA or E-based health plans help employers from 2-200 lower and control the cost of their group health plans. BEN-E-LECT’s Employer Driven® Health Plan model has been lowering employer cost since 1996. BEN-E-LECT’s corporate office is located in Visalia, Calif. Mark can be reached directly at 559-250-2000 or

Dental Insurance–How to Adapt Business Strategies and Products to Meet Market Changes
Retooling Your Business for Growth

by Scott Hankins and Eric Tupper

Businesses have been riding a wild roller coaster complete with hairpin turns in market conditions and dips in an uncertain economy. Many have struggled to respond positively to the changes.

Producers can relate, thanks to continual changes in the insurance industry caused by healthcare reform. Striving for survival, many have retooled their businesses with alternative ideas. Responding to challenges is not easy. Consider the following seven guidelines to retool your business by introducing new products, repackaging services, and revamping operations:

1. Fine-tune your response to requests for proposals (RFPs). Many employers are distributing a different type of RFP to producer groups. Instead of focusing just on premium costs for dental and other benefits, employers want producers to identify the services and value they offer. They want specific information on what producers will do for them and the value-added benefit options and programs they will provide. And they are looking for producers who will do the following:

• Simplify the insurance benefit process.

• Recommend high-quality dental plans that are a good value.

• Quickly resolve problems and complaints.

• Offer innovative ideas to improve the quality of their employee benefit programs

• Partner with them to design successful benefits programs

2. Assess your business operations. Categorize all of the products and services used by your customers and determine the percentage of your total business each category represents. Ask these questions:

• Is your business balanced across several benefit types or limited to just one or two products?

• What percent of customers are enrolled in all or most of the services and products you offer?

• What is the amount dedicated to medical insurance account business compared to other products?

• Are there products or services customers frequently request that you easily could offer?

• Can you modify your office structure to handle extra work?

Why are your answers to these questions important? The Patient Protection and Affordable Care Act has affected the viability of the medical insurance business for producers. Although many regulations still are being finalized, producers should develop a list of menu options that would help them diversify their product offerings to reduce any potential negative impact from the new healthcare reform structure.

3. Anticipate demand with diverse product options. Stay ahead of industry changes by anticipating demands for new products and services. Analyze the market, listen to employers’ ideas and needs, and identify new options that will meet these often-unvoiced expectations.

Supplement voluntary dental plans. It’s no surprise that voluntary insurance products remain popular benefits with employers and employees, especially dental, vision, and life insurance options. Consider how you can supplement individual products with a menu of voluntary plan options. Employees want a variety of benefit choices, especially when they are paying a portion or all of the premium cost.

Evaluate other ways to diversify your insurance products, such as offering insurance for disability, critical illness, cancer, long-term care, accident, or whole-life products. Position these options as a menu of voluntary dental plan options from which employees can select, based on their individual or family needs. These expanded choices will increase the ratio of your business in proportion to medical plans.

4. Make service a priority. Take a few steps back and assess the quality of customer service you provide:

• How do customers evaluate your level of service?

• On average, how long does it take to answer calls, respond to phone and Internet requests for benefit information or resolve questions and concerns?

• When you send requested information by email or mail, how quickly does it arrive?

• Do you have one point of contact for callers in an effort to personalize their experience and simplify the process for obtaining information or resolving problems?

• What type of electronic enrollment and benefit services do you offer? (Employers and employees appreciate the convenience of enrolling and maintaining benefit information online.)

Gather the statistics and determine whether there is room for improvement. The goal should be to surpass expectations by promptly providing requested information or resources.

5. Educate businesses. Employers are reading information on insurance reform legislation, so they are current on the newest discussions. Producers who do not educate themselves on the latest issues and decisions will not be prepared to advise employers and respond to their questions. It will be apparent if they are not maintaining their knowledge about the healthcare issues that are on the minds of employers and employees. Employers may question whether the producer has the expertise needed to be a trusted partner for their employee health benefits.

To provide a high level of service to employers, producers should invest several hours each week in reviewing reports from reliable sources of information, such as the National Association of Dental Plans or specific benefit associations.

6. Balance growth. Throughout history, businesses have struggled to balance the need to grow their operations and have the right number of employees ready to handle the work. And producers are facing this same challenge. Producers must have the right business structure in place to respond promptly to the demands of employers and employees. Unfortunately, too many wait until they have expanded their business before adding and reorganizing their staff to meet the demand. Customers want help when they call and they are not willing to wait until employees are trained and ready to manage their requests.

Producers may be reluctant to develop a middle-management layer in their business and empower these individuals to make appropriate decisions, preferring, instead, to continue to be involved in daily decisions. But if the business is growing, producers must focus on future directions and ensure that employees are trained to provide the expected level of service.

The secret is to create an outstanding service model, a solid business structure, and an excellent menu of products to initiate and maintain consistent growth.

7. Provide the wellness difference. Spiraling healthcare costs have spurred interest in the savings available with structured wellness programs, including health benefit programs that focus on preventive care, such as dental and vision. Health research has reinforced the value of regular dental and vision exams to identify potential problems in their early stages. Controlling costs often requires a dramatic change in the lifestyle habits of employees and families. But statistics show that employers with a comprehensive plan for individuals with health-risk factors have enjoyed a 10% to 15% decrease in healthcare costs in the first 12 months of the program (U.S. Department of Health and Human Services).

The demand for wellness education programs reinforces the viability of producers developing wellness service options as well as adding a dedicated staff member to support and assist employers in their efforts to reduce healthcare costs.

Retool Your Business with Confidence

Producers are riding a challenging roller coaster as they work to remain a relevant partner by offering the right mix of valuable benefits and services to meet the needs of employers and employees. Many producers have realized the importance of investing time and capital in their business operations, monitoring changes in government regulations and the healthcare and insurance industries, and expanding their products and services. Some are working with other producers or professional services, while others are joining larger producer groups in order to succeed as benefit partners that employers and employees value and trust.


W. Scott Hankins is president and chief executive officer of ShawHankins, Inc., in Cartersville, Ga. After serving with SunTrust Bank in Atlanta, Ga., Hankins joined the firm in 1988 and specializes in employee benefit plan consulting, including medical, dental, life, disability income and vision plans. He works closely with customers to develop Web-based solutions for increased efficiencies and improved communications in their health and welfare plans. Hankins is a member of the NFP Benefits Partners Advisory Council and serves on the Georgia Chamber of Commerce Board of Directors. Contact Scott at


Eric Tupper, LUTCF, is a regional group manager with Ameritas Group, a division of Ameritas Life Insurance Corp. (a UNIFI Company), with headquarters in Lincoln, Neb. Tupper joined Ameritas in 1992 in the Omaha, Neb., life insurance sales office. In 1999 he moved to Atlanta with Ameritas Group where he fosters relationships with employee benefit agents and consultants. Tupper has won numerous awards during his tenure with Ameritas. Ameritas Group is a leading provider of dental and vision products and added hearing care to its product portfolio in 2008. Contact Eric at

Voluntary Benefits–Increase Your Visibility and Value by Championing Year-Round Benefit Communications

by Allison Farris Wendelberger 

It can be difficult to make sense of the constantly changing healthcare environment and understand how the changes affect consumers and their benefit options. It takes a year-round commitment to communicate effectively with all involved.

A mere 8% of workers say they are fully engaged when making benefit decisions, according to the 2011 Aflac WorkForces Report. The online survey of more than 2,000 benefit decision-makers and more than 4,000 U.S. workers, was a two-part survey conducted in September 2010 and February 2011. The study found that 63% of companies say workers need to be more engaged while just half say their employees take full advantage of the available benefits.

Many decision-makers are struggling to keep up as health insurance, in the employer market, grows more complex by the day. Only 23% of employers say that they understand healthcare reform legislation extremely well or very well. If employers have a limited understanding of health reform, imagine how difficult it is for workers to choose among the array of insurance options that are touted, but not often understood.

Being neither fully engaged in benefit decisions nor informed of changes in the industry can make employees unprepared and under-protected against life events, such as accidents or illness. The financial implications for both employees and their employers can be significant through reduced productivity resulting from employees missing work and being distracted at work. This makes the role of agents and brokers even more critical in the workplace. They need to be an integral part of educating clients on how to communicate benefit options.

Promoting Benefit Communications’ Business Value

The need for improved communication is affirmed by the study showing that 43% of workers say they would be less likely to leave their jobs if they were well informed about their benefits (42% of workers at medium-sized companies and 39% of workers at small companies).

Presenting benefit options with unfamiliar terms and abundant information can be confusing and overwhelming to employees. Also, it’s unrealistic to expect employees to understand and retain large amounts of benefit information all at once. And it often creates uninformed benefit decision-making during new employee orientation and the open enrollment period.

Without fully understanding changes in policies or benefit options, employees often elect the same benefit options year after year. Fifty-nine percent of workers who choose the same benefit options year after year say they only sometimes, rarely, or never have a full understanding of the changes in insurance policies each year according to the Open Enrollment Survey, an online survey of 2,220 U.S. adults, ages 18 and older, conducted in August 2011 as part of the Aflac WorkForces Report. A preventative solution is to start education early and revisit it often.

Year-round communications can help your clients eliminate common mistakes; track year-round health costs; ensure that benefits such as annual checkups are used; and anticipate health needs in order to determine necessary changes in benefit coverage for the year ahead.

Brokers can offer helpful tips to help maximize communication efforts, including the following:

1. Promoting the Use of Surveys

Some clients don’t take advantage e-communications. This increasingly valuable tool allows for employee communication through worker surveys that come at a minimal cost to employers. Fifty-two percent of employers conduct surveys that increase their understanding of how satisfied employees are with the benefit offerings. By understanding workers’ needs and preferences, employers can increase their employees’ satisfaction with the benefit package and their confidence that they have adequate protection. Employers can also use the surveys to identify health insurance needs that have not been addressed, enabling HR decision-makers to better address benefit communications throughout the year.

Brokers should recommend that employers conduct surveys at least twice a year so they will have to time to identify their employees’ information needs and communications preferences; gauge progress on focus areas; adjust communications; and add new ones based on employee feedback.

2. Make Knowledge More Accessible

Employers and employees often turn to less-than-reliable sources when they are confused about their benefit options. This often leads to having inadequate protection of workers’ incomes as well as leaving them underinsured and vulnerable to the financial ramifications of an unexpected health event. Brokers can be an informed resource for employees. They can also suggest that employers offer in-house resources and benefit hotlines.

3. Help Prevent Common Mistakes

Every year, employees make preventable mistakes during the open enrollment period. Seventy-seven percent of workers say they have made mistakes in choosing benefit coverage during open enrollment. These mistakes include not choosing the right deductibles; not contributing enough to flexible spending accounts; and not electing available benefit coverage, such as vision, dental, or voluntary insurance. After making these mistakes, employees often report being stressed, confused, or regretful about the enrollment process.

These mistakes can create financial burdens for employees who end up paying unexpected out-of-pocket medical costs. Brokers can recommend solutions through diverse communications including print, Intranet, e-mails, and multiple face-to-face meetings hosted throughout the year with external benefit representatives and employees’ spouses.

Brokers can be the driving force in providing year-round communications of benefit offerings. The challenge is to help clients make the information readily available and easy for employees to understand so that they will not only make better choices for their families, but they will also have greater appreciation for the total compensation package. A comprehensive benefit package can be influential in an employee’s loyalty (86%), work productivity (81%), job satisfaction (89%) and retention (77%). With all that is at stake, implementing an effective communication and education plan is simply smart business.


Allison Farris-Wendelberger is the California-Bay Area state sales coordinator for Aflac. She is responsible for developing and implementing the Bay Area’s strategic market development plan, including the development of the broker channel for Aflac. For more information about Aflac, visit or send an e-mail at


Voluntary Benefits–The Top Three Items to Keep in Mind Selling Voluntary Benefits to Clients

by Art Dammers

You have probably seen or heard some of the research suggesting that most employees (83%) think more highly of employers that offer voluntary insurance benefits. And the same may hold true for prospective employees. Nearly 90% of those who participated in the WellPoint survey said that when it comes to accepting a new job it is important that companies offer a full range of health benefits, including voluntary. More than half (56%) called it “very important.”

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

1. Planning

Before selecting 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 any unique client 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

Although you’ve squared away the logistics, you still need to make sure their employees know that the enrollment meetings are coming up. The right pre-communications combination will depend on your client’s corporate culture. Make sure you know the answers to the following questions:

What is their preferred communication style? Do they prefer posting articles and announcements on their intranet site; sending e-mail attachments; and posting customized posters in the lunch areas with meeting dates and times or would they like to do a combination of all of the above?

Also remember that an old fashioned letter of endorsement from the management team is still a highly effective tool to use to engage employees to attend meetings. Helping your client increase awareness among their employees that the enrollment meetings for their health benefits are coming 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 now want to minimize any administrative activities so you can spend the time highlighting your voluntary products’ benefits and features. Educating employees about their benefits is important. The results from the survey mentioned earlier showed that only 56% of workers say they are knowledgeable about the voluntary insurance products offered at their companies.

We have found that using personalized enrollment forms helps brokers devote more time to their presentation to employees. These pre-populated forms are generated for each employee and incorporate their unique data including name, date of birth, and payroll frequency. Employees also like these forms because they no longer have to fill out the forms manually, do the math, or calculate age reductions. Instead they can actively listen to the presentation from the insurance representative and ask questions that will help them determine if 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.


Making Eye Contact with Vision Plans–The Transitions Academy 2012 Vision Conference

by Leila Morris

More than 150 vision-plan providers and insurance brokers attended the 16th annual Transitions Academy last month in Orlando. The focus of this year’s managed care track was eye health and the aging U.S. workforce. According to a new Transitions study presented at the conference, Baby Boomers are missing out on critical preventive care despite their risk for age-related visaion problems, eye diseases, and chronic conditions. In October, Synovate (Ipsos) conducted the online survey of more than 2,000 full-time, adult U.S. employees whose employers offer vision benefits.

Baby Boomers face vision problems that run the gamut from eyestrain and headaches that reduce productivity to devastating diseases, like macular degeneration, that lead to permanent disability. But, despite the risks, Baby Boomers (age 45 to 64) are only slightly more likely than are younger employees to enroll in their vision benefit (79% versus 75%). Among those who do enroll, too many don’t get the comprehensive eye exam that’s covered under their plan (34% of Baby Boomers and 23% of those age 65 and over.)

Pat Huot, director, Managed Vision Care, Transitions Optical explained that vision benefits are especially important for older workers because they have a higher risk of developing costly eye diseases and whole body conditions, such as diabetes and hypertension. These conditions can be detected through comprehensive eye care and can be addressed with the right eyewear to correct, enhance, and protect vision. “Our survey findings have flagged a serious lost opportunity to help lower potential healthcare expenditures,” he said.

Ninety-four percent of Baby Boomers expect vision benefits to become more important as they get older. But, surprisingly, many are not aware of the vision changes that may be down the road for them. For example, half are not aware that, as they grow older, they may have more trouble seeing far away or seeing well in dim lighting. Three in 10 are not aware of their increased risk of eye diseases such as cataracts, glaucoma, and macular degeneration.

Employees age 65 and older are slightly more aware of most age-related vision changes, although overall awareness is still limited. For instance, 32% are not aware that light sensitivity increases with age and 81% are not aware that colors can seem less bright.

Interestingly, employees in the 18 to 44 age group are most likely to say they need to take breaks at work because their eyes hurt or feel tried (33%), reinforcing the fact that that younger employees also have vision needs that can be addressed with a quality vision benefit.

Despite the general lack of attention to eye health, many healthy older workers face significant challenges. Dr. Young, chairman of the Division of Opthamalology, Albert Einstein Medical Center cited CDC research, which reveals that 34% of people 40 and over have trouble seeing up-close, even while using eyewear. He noted that many common medications can also affect vision. For example, many older adults are taking anti-depressants, but few are aware that these medications put them at higher risk for cataracts.

While 90% of Americans age 55 and over are aware that extended sun exposure can cause skin cancer, only 8% know that it can also cause eye damage, according to a 2009 Transitions Optical Survey. Fortunately, there are non-invasive and relatively inexpensive ways to prevent sun-related eye damage. Photochromics or sunglasses can block damaging UV rays and help prevent cataracts, macular degeneration, and skin cancer around eyes, Dr. Young noted.

Other conditions that increase with age are eyestrain and trouble seeing at night. Anti-reflective coatings on glasses can work to reduce reflections and enhance night driving. Photochromics can minimize the glare that leads to eyestrain by adapting the level of darkness to let in just right amount of light. In addition to reducing light sensitivity, they can also prevent the headaches that go along with eyestrain and help with color recognition.

Employees Need Better Education About Vision Benefits

The most common reason people give for not enrolling in their vision plan is that they don’t have any vision or eye health problems, which shows that many don’t understand the importance of preventative eye care, said Huot.  Part of the problem is that too many employers are not educating workers about the value of their vision benefits. Nearly 60% of employers only provide basic vision plan information during open enrollment; just 13% also include information on the importance of eye health; and only 11% provide vision plan information regularly throughout the year. Only 58% give employees clear written materials about the costs and benefits of their vision plan and only 34% include a presentation on what the plan covers.

Several effective employee education methods are largely underused, such as having one-on-one employee benefit discussions, bringing in a benefit broker or health professional, and educating employees on vision benefits at times other than open enrollment, such as during a health fair.

The survey also includes the following key findings about employees and their vision benefits:

•  One in five say their company fully pays for their vision plan.

•  Six in 10 say that their company contributes to the cost and they pay the rest.

•  More than one in 10 say they fully pay for their vision benefit.

• Three in 10 are paying more for their vision plan than they have in the past.

•  Employees are less likely to enroll in a voluntary plan than in an employer-paid plan.

• Employees age 45 and over are only slightly more likely to enroll in a vision plan.

•  Compared to the previous survey, fewer respondents did not enroll because they could not afford it or because their employer does not pay for the benefit in full (15% versus 25%.)

New Eyewear Technology Makes Vision Benefits More Attractive

Nearly 90% of employees say that it’s important for their vision benefit to cover new lens technologies, with employees age 45 and over most likely to agree. Additionally, nearly three in four respondents say they would be more likely to keep using or enroll in their vision benefit if it covered premium lens options, such as lenses that adapt to changing light outdoors and provide UV protection. Those in the 44 to 64 age group are most likely to agree.

Huot says, “We know that the right vision correction can reduce productivity loss by 20% and that employees value a comprehensive benefit that gives them options in lenses and frames. This interest in new lens technologies can serve as a great angle to help employers pique employee interest in vision coverage and encourage them to visit their eye care professional.”

Vision plans can offer benefits that allow members to be first on the block with the latest technology. Photochromic lenses that automatically darken and lighten in ultraviolet light have been around for some time, but Transitions is now introducing another adaptive eyewear technology, Transitions Vantage lenses, which will be available in May.

These lenses offer sharper vision by not only adapting to changing light, but also increasing polarization as they darken, optimizing the angle at which light reaches the eye. When you wear them outdoors, reflections off surfaces such as glass and water are minimized, making them look more transparent, and glare is reduced even in the brightest sunlight. Huot said that the lenses will cost more than original Transitionslenses, but some vision plans may soon offer discounts to members. To coincide with open enrollment, Transitions is launching ads on TV, magazines, and the Internet to promote the new technology to people in the 30-something to 50-something age group. “New technology may be especially attractive to Baby Boomers who are more active and youthful than their parents were. Dr. Larry Lampert, who is a board-certified optometrist in Boca Raton, Fla., notes that many Baby Boomers are active in sports and they are reporting sports-related injuries. Also, vision is a key factor in how well an athlete performs, said Lampert, who has worked with professional baseball players, golfers, and basketball players to help them get the optimal visual performance to improve their game.

Top Brokers Share Their Sales Secrets

The conference also featured sales tips from veteran benefit brokers. Patsy Akridge, president of Akridge Financial Services in Martinsville, Va. said that she has shifted her sales approach to tying vision care in with medical care. Akridge, who won the 2010 Transitions Vision Benefits Broker of the Year Award, said that when she talks to clients about vision benefits, she makes her presentation more engaging by discussing the aesthetics of vision products.

This year’s award winner, Patrick Tibbs of Everence Financial Advisors said that, with healthcare reform, now is the perfect time to talk with clients about how to help employees with the cost and control of chronic diseases. “Employees get excited when they buy their eyewear under the health plan. They tell their friends. That is how I have gotten some referrals.”

Finalist Anya Simpson, president, Benefit Plans Inc. said, “You need to emphasize that employees’ vision needs to be protected to reduce medical costs and absenteeism because employers overlook that issue.” Simpson said she used to place less emphasis on selling vision benefits because she did not understand the value of the coverage.

Finalist Steve Farmer, executive vice president, Wallace, Welch and Willingham, said, “So far, with health reform, I have seen health insurance premiums rise faster. Also, we are dealing with a bad economy in Florida, so clients are very price sensitive. I have had great success using the website ( to show how vision benefits can reduce healthcare costs. The biggest hurdle is convincing the HR director about offering a vision plan. But once they put the plan in place, they are surprised at how many employees sign up.”

Reports from the Trenches

The following are some highlights from brokers who were asked, during a workshop, to share their tips in selling vision plans:

• Use personal stories to explain how vision benefits have helped you or someone you know.

• Bring relevance to the sale based on the unique aspects of your client’s employee group. For example, people in different occupations have different vision challenges.

• Read the client’s annual report and visit their Website to understand their challenges and goals before you make a presentation.

• The benefit should deliver better than expected results. It should not create headaches for H.R.

• Ask clients what they like or don’t like about their existing benefits.

• Employees might love a particular benefit, but if the H.R. director is not behind it, you won’t be selling it.

• Some employers are actually boosting their benefit offerings to reduce the temptation for employees to join unions.

• Older workers are more likely to enroll in a vision plan to prevent and diagnose diseases. So you should focus on how vision benefits can boost prevention.

• Emphasize coverage of premium vision wear because older workers are interested in plans that cover the latest technologies.

• Include vision plan reminders along with 401K mailings and e-mails.

Benefit Sales from the HR Director’s Perspective

The conference also featured views from the other side of the sales table – H.R. directors.

 • Maurice Evans Jr., director of Human Resources for The Integral Group, in Atlanta

We interviewed nine benefit brokers before choosing one. We chose the broker who understood our needs. That person understood what products would be the best for our workforce. They presented options in a manner that our CFO would understand. They are available 24/7 to answers questions. Our number one pressure is cost containment. We got hit with a 30% increase in healthcare premiums. We have many African American employees, so we find it very helpful to use tools that link eye diseases with demographics. Men tend to be reluctant to visit the doctor even more so for African American men. So we need tools to get through to employees. Without working with employees – hands on, you are not going to get the enrollment numbers. When I worked for a previous employer, we did mainly online self-enrollment. In my new company, I am much more involved in communicating with employees about their benefits and our enrollment numbers are higher. In addition to open enrollment, each month we focus educational efforts on a different benefit offering.

• Kim Wetherington, manager, Total Rewards for PSCU Financial Services in St. Petersburg, Fla. 

We are doing more with fewer people. Employees don’t often have time for lunch and learn events, so our Website helps them access benefit information. We have also done onsite activities, such as wellness fairs. One employee got an eye exam using the vision plan and discovered that he had diabetes.”

• Jane Daily, benefits administrator, Barnes & Thornburg, LLP in Indianapolis

“Since we have a self-insured health plan, cost containment is very important to us. We appreciate a benefit broker who is involved all year long not just for the sale. Our broker understood what we were missing with our benefits. Employees need to understand the value of the vision plan versus purchasing lenses at Wal Mart.”

• Mark Weinstein, president and CEO, Independent Colleges and Universities Benefits Association, Inc., in Orlando, Fla. 

Vision plans can offer small employers the same level of coverage as they offer larger employers. Employers need to understand that the vision benefit means more than getting an eye exam. We have one Web portal for all benefit information so that employees don’t have to go to different sites for their information.

The takeaway from this event is the importance of education for benefit brokers and their clients. To get a variety of sales and educational tools, brokers can visit Also, getting nominated as Broker of the Year can be a great marketing tool. Brokers are nominated by their vision plans or they can nominate themselves.  Akridge said that winning the award has been the biggest door opener she’s had in 30 years. She touts the award prominently on the sign outside her agency’s building. “This award adds another level of extraordinary performance to my client portfolio, she said.”


Leila Morris is editor of California Broker Magazine and Insurance Insider News with over 16 years in the industry. Before coming to California Broker, she produced newsletters for life insurance agents and provided insurance industry Website content and was a managing editor of a telecommunications magazine. She also has extensive experience covering Capitol Hills as well as the Defense Dept. and other federal agencies. She has a B.A. in Political Science from St. Mary’s College of Md.

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

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 to 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 or 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 employers do or plan to impose penalties 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 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. 

Disability–Resurrection  of a Disability Claim

by Art Fries

This article will emphasize the importance of seeking advice of one with expertise on the subject at hand. Many years ago, a fuse needed to be replaced in my house. This was long before circuit breakers were used and a fuse box ruled the house. I attempted to remove the fuse, but it was stuck so I tried getting it out with a screwdriver and broke the fuse and it became stuck. I then attempted to take out the fuse base with pliers and my efforts were rewarded by an electrical shock that tossed me some 10 feet across the room. My ignorance was at an all time high as a result of my not turning off the master electrical switch. Having my hands shake for an hour after the incident added insult to injury and a good lesson was to be learned. When you don’t know what you are doing, call in the expert. In this case added knowledge or an electrician would have saved the day.

The above leads to my story about a dentist client who submitted a disability claim without giving any thought to his answers or his actions and, as a result, made many mistakes. I received an e-mail from him for the first time in which he indicated the following, “I submitted a disability claim, but it is not proceeding as smoothly as I’d hoped.” I called twice and my phone calls were not returned. Five months later I received another e-mail stating, “The claims process is not going as well as expected and perhaps it is time we talked on the phone.”

I again responded with an e-mail. We spoke on the telephone and, within several weeks, I was hired in a consult capacity. It was now eight months since the initial paperwork was submitted on the claim and the insurance company was indicating various reasons why they didn’t see a basis for paying the claim. It was now my job to resurrect the claim from the ashes and do my best to get the claim paid.

Clearly, my client had medical symptoms that would be the basis of either a partial or total disability claim. However, not understanding the policy language and not having in his possession his second disability policy was a mistake. The most serious mistake was not having control of the claim.

Following are the mistakes I encountered:

1) Indicating on the claimant’s portion of the claim form that he was totally disabled (at the time of claim submission) when, in fact, he was partially disabled.

2) Having a relative physician (in this case his father) complete the attending physician statement (APS) in spite of the fact that the contract said this was not permissible.

3) Having another physician complete the APS without any guidance provided so that the completed form indicated no disability.

4) Having a physical therapist complete yet another APS who did not indicate any disability (either partial or total) and did not have any basis of authority with the insurance company.

5) Not reducing his hours to be eligible for partial disability (as required by one of his contracts).

6) Not reducing his earnings enough to qualify for a partial disability claim.

7) Indicating on the claim form that he supervised nine people when in fact he supervised nobody!

8)  Not being clear as to when his disability began (on the initial claim forms as well as in communication with his attending physicians).

9)  Not seeing the appropriate doctors or receiving appropriate care as required by policy language.

10) Not keeping a copy of the claim forms or the attending physician statement that was submitted to the insurance company.

11) Providing procedure code records to the insurance company that were in excess of those required.

12) Permitting his relative doctor to talk to the insurance company when there is no legal or contractual obligation for him to do so.

13) Submitting continuation claim forms and APS’ that were not clear and in conflict with each other.

14) Failing to understand claim department procedures.

15) Not securing enough objective evidence of the multiple medical symptoms claimed.

16) Not following up properly with his health care providers so that the insurance company could receive medical records in a timely fashion.

17) Having no understanding of the various weapons available to an insurance company and how they affect a claim (video-surveillance, field investigation, independent medical exam, functional capacity evaluation)’

18) Using a method to communicate with the claim department that put him at a disadvantage.

19) Sending documents to the insurance company that encouraged loss or not receiving the documents.

20) Acting in a cavalier fashion as one would do purchasing a container of milk at the supermarket when potential benefits involved some $2.5 million potential dollars.

The normal process time from the initial submission date until the claim department provides an answer should be anywhere from two to five months with three and a half to four months being the average. In this case with my additional help it took an additional four months or almost one year from the date of initial submission to receive a favorable answer. In addition, the claim beginning date was moved forward in order to meet the contractual provisions of the policies. A few battles were lost, but there was a successful outcome in terms of winning the war. The client lost valuable time trying to go it alone. There are many variables related to a disability claim. Don’t make the mistake of trying to be your own expert.


Arthur L. Fries is a disability claim consultant providing advice on a national basis. He is located in Nipomo, California. He can be reached at 800-567-1911,, or


Medicare Advantage Update
GAO Finds That Medicare Advantage Plans Are Over-Paid

by Leila Morris

The Centers for Medicare & Medicaid Services (CMS) is overpaying Medicare Advantage plans, according to a report by the Government Accountability Office (GAO). CMS pays Medicare Advantage plans per beneficiary based on their health status. To make this determination, CMS calculates the beneficiary’s risk of expected healthcare costs.

GAO says that diagnostic coding patterns must be similar between Medicare Advantage plans and Medicare fee-for-service. Otherwise, CMS would pay Medicare Advantage plans more to provide healthcare.

“Documented evidence shows that Medicare Advantage plans tend to report higher patient severity than is actually supported by medical records,” according to a statement issued by Rep. Sander Levin (D-MI), Rep. Pete Stark (D-CA), Rep. Henry A. Waxman (D-CA), and Rep. Frank Pallone (D-NJ).

GAO estimated that the 2010 health risk scores in Medicare Advantage plans were 4.8%, to 7.1% higher than they would have been if the same beneficiaries had been in fee-for-service Medicare. The higher risk scores amounted to $3.9 billion to $5.8 billion in payments to Medicare Advantage plans. The effect of coding differences increased over time, which means it would be larger in 2011 and 2012 than in 2010.

CMS has made efforts to adjust payments to more accurately reflect the health status of beneficiaries. CMS reduced the risk scores by 3.41% for 2010 and will apply the same reduction for 2011 and 2012. CMS’ adjustment avoided $2.7 billion in excess payments to Medicare Advantage plans. However, GAO says that the adjustment for 2010 was still to low, resulting in $1.2 billion to $3.1 billion in payments to Medicare Advantage plans for coding differences. By not updating its methodology in 2011 or in 2012, CMS is likely to underestimate the effect of coding differences to a greater extent, resulting in excess payments to Medicare Advantage plans.

CMS did not update its adjustment in 2011 and 2012 to include the following factors:

• More current data.
• The trend of the impact of coding differences over time.
• Beneficiary characteristics other than age and mortality, such as sex, health status, Medicaid enrollment status, beneficiary residential location, and whether the original reason for Medicare entitlement was disability.

Rep. Waxman said,  “We cannot afford to over-pay health plans in Medicare any more than working families and businesses can. The ACA will eliminate many of the overpayments in Medicare Advantage plans over time, but as this report shows, there is more to be done.”

Medicare Advantage Premiums Are Down and Enrollment is Up

Medicare Advantage premiums have fallen an average of 7% and enrollment has risen by about 10% since this time last year, according to HHS Secretary Kathleen Sebelius.

Average premiums have fallen from $33.97 in 2011, to $31.54 in 2012 while enrollment has risen from 11.7 million in 2011 to 12.8 million in 2012.

Sebelius said that the Medicare Advantage program remains strong based on the following:
• On average, there are 26 Medicare Advantage plans to choose from in nearly every county across the country;
• 99.7% of Medicare beneficiaries have access to a Medicare Advantage plan; and
• Since 2010, when the Affordable Care Act was passed, Medicare Advantage premiums have fallen by 16% and enrollment has climbed by 17%.

“Not only are average premiums lower, but plans are better, with more beneficiaries enrolled in 4-star and 5-star plans. The Affordable Care Act has strengthened Medicare Advantage by motivating plans to improve the quality of their coverage,” said CMS Acting Administrator Marilyn Tavenner

In 2012, Medicare Advantage plans will start receiving incentives to achieve high quality scores through the use of quality bonus payments. CMS is allowing five-star Medicare Advantage and Part D plans to market and enroll beneficiaries continuously throughout the year. To find the most recent publicly available Medicare Advantage and Part D contract and enrollment data, visit:

On a Heritage Foundation blog post, Kathryn Nix and Alyene Senger claim that the good news won’t last:

Those in the White House use this year’s lower premiums to discount…warnings that …cuts to Medicare Advantage would threaten the program…The catch is, these cuts haven’t kicked in yet. Obviously, you cannot cut a program by $145 billion and expect there to be no consequences. Medicare’s own chief actuary estimated that by 2017, Medicare Advantage enrollment will decline by 50% as a result…Once the Obamacare cuts to Medicare Advantage are actually implemented and fully phased in by 2017, their damaging effects will be obvious. For now, the Administration’s claims that it somehow saved or strengthened Medicare Advantage are laughable…Medicare Advantage was offering higher-quality care and better outcomes than traditional fee-for-service Medicare well before Obamacare became law. The advantages of Medicare Advantage stem from the competition it allows among private health plans. Private plans are able to produce more efficient, better quality healthcare for beneficiaries.

The Magic of Life Insurance

Mary Amen, LUTCF, CLU

In the financial business we often hear from widows about the magic of life insurance. As advisors we don’t typically have firsthand experience or appreciate what we do until we have paid our first death claim. Who would have known my first death claim would be my husband?

My husband Oscar was 50 years  old and the all-around picture of good health. He had just passed his insurance physical, and was issued a preferred plus policy, when out of the blue, he came down with a case of the flu. When he started rapidly losing energy our neighbor mentioned it could possibly be walking pneumonia, so we made an appointment to see our doctor. Since my husband was anemic, the doctor speculated it may be a bleeding ulcer, and it was best to run some tests. While Oscar was still asleep the surgeon came in the room to discuss the results of his endoscopy. A softball-size tumor where the stomach meets the esophagus was found. It was a malignant tumor that had already metastasized to his liver. We went from the flu, to walking pneumonia, to a bleeding ulcer, and finally to a malignant tumor within 24 hours.

The hardest part was not only telling my husband what they had found, but telling our children. Despite what we imagine we would do, Oscar took out a legal pad and made a list. His list did not include things like, “pull kids out of school and travel around the world,” or “spend every waking minute with my wife.” Oscar wrote things like, “show Mary the accounting system, be home from the hospital in time for Michael’s fifth birthday, write letters to my children, go see our eight-year-old play baseball and make arrangements to pay off the house.” His list was personal, not material. It wasn’t about doing less without him; it was about doing everything we planned for our lives. That’s what he wanted for our family and thanks to life insurance, that’s what he was able to give us.

Since we planned and had the right amount of life insurance, Oscar had the peace of mind to do everything on his list. He wrote those letters to our family, told our children he loved them and he had provided for their education. He also witnessed our son Danny “hitting the cycle” with two singles, two doubles, a triple and a home run, and spent his energy on the quality of time with our family. He was able to even plan ahead for special occasions such as pre-ordering flowers for our wedding anniversary, which happened to be the day we buried him, and for Mother’s Day, which was a couple of days after he had passed away. If Oscar had financial worries in those final days all of those personal thoughts would have gone by the wayside.

Before my husband died, he said to me, “Hunny Bunny, you’re going to have a story to tell.” Of course I didn’t want the story, I wanted all nine months they said he had instead of the three we ended up getting. I didn’t want to be a widow at the age of 35 with four children ages three, five, eight and 10. However, in his wisdom and his peace of mind, he was able to see the positive that could come from his death and the importance of sharing the value life insurance brings. His legacy was one of love and consideration.

Now, I’m building a real lasting legacy through two of my four children who have wanted to follow in my husband’s and my footsteps by joining me in my practice in Huntington Harbour, Calif. My son Danny has been working with me for eight months, has his insurance license and has made his first couple of sales. My daughter Celina, who is 28, has been with me five years and runs my employee benefits division, which she has taken from about 25 groups to almost 80 in five years. When people ask my children why they wanted to go into the life insurance business they answer by telling how, because of life insurance, their siblings didn’t have to leave their school and we didn’t have to move out of our neighborhood.  And because of my career, I never missed a school activity or ball game. Whether my children join me in my practice or not, they know how my husband planned and provided for them with life insurance.

Mentoring my own daughter and son has given me a fresh perspective and brought me back to the basics. I’m reminded of the excitement of what it’s like to make a sale and not have it be about commission. I’ve also learned to embrace the Million Dollar Round Table (MDRT) Whole Person concept, addressing the importance of balancing business, health, family and community. Being an MDRT member and practicing this approach taught me how to share my story and help others change their lives by giving them the strength to grow.

People tend to get hung up on the name life insurance and think someone has to pass away. What most people don’t realize is the magic it does for those who are living and those who are about to die and the peace of mind that goes with it. Being able to pass on a legacy both personally and in terms of the business has meant so much to me and it’s all because of the magic of life insurance. I believe what I went through and overcame makes me who I am today. You never know when tragedy is going to happen, but being prepared for it gives those who survive, as well as those who are ill, the ability to enjoy the time they know they have left. You have to live every day as if it were your last, because someday you’ll be right.


Mary Amen, LUTCF, CLU, has more than 32 years of financial services experience and is a 30-year member of the Million Dollar Round Table (MDRT) with five Court of the Table qualifications. Among other accomplishments, Ms. Amen is a past president of the Long Beach Association of Insurance and Financial Advisors and a recipient of the National Sales Achievement award.