Editor’s Column–Product Roulette
by Kate Kinkade

The landscape of life products continues to change as carriers re-price or withdraw their guaranteed life insurance products and develop new alternatives.

Leave COBRA to the Pros
by Kristin Komen
The tide has turned for brokers considering whether to recommend that their clients seek outside expertise in managing benefit continuation laws.

Annuities–Treasury and DOL Research on Lifetime Income Options:
A Step in the Right Direction

by Frank Keating
Annuities as a distribution option in employer-sponsored plans should be explored.

Voluntary Benefits–Voluntary Gains Ground in the New Benefits World
by Jim Barone
A well-known maxim best describes the current benefits marketplace: “Sometimes the more things change, the more they remain the same.” Agreed, but those professional brokers digging a little deeper into the benefits marketplace will find a brave new world of revenue possibilities in the offerings of voluntary products.

Voluntary Benefits Can Help Small Businesses Achieve Business Objectives
by Scott Beck
Brokers have to make sure that their clients offer competitive benefit programs to help attract and retain talented workers and establish a strong foundation to emerge from the recession.

Dental Survey Part III
Be Better Informed Than the Tooth Fairy…

Read Part III of Our Annual Dental Survey

by Leila Morris
Welcome to Part III of California Broker’s 2010 Dental Survey. We’ve asked the top dental providers in California to answer 28 crucial questions to help you, the agent, better understand their benefits, features, and services. Read the responses and sell accordingly.

How to Evaluate Dental Benefits for Your Clients
by Stanley Ayers, DDS
It’s the dental plan’s responsibility to develop a network of dentists who render plan benefits professionally and consistently.

Waiting to Exhale: Why Health Exchanges Have Brokers Holding Their Breath Like No Other Time in Recent History, Health Brokers Are About to be Tested for their Resiliency and Adaptability
by Ron Goldstein, CLU
More than at any time in recent memory, health insurance brokers will be tested for their resiliency and their ability to adapt to marketplace changes. The best way to do this is by acquiring knowledge. Health insurance exchanges are coming and 2014 isn’t that far away.

Interesting Times Demand Greater Fiduciary Support
by E. Thomas Foster Jr., Esq
As the regulatory landscape continues to evolve, work with your plan provider to offer the best fiduciary services to your plan sponsors. You may wind up looking wiser and more revered than Confucius himself.

Integrated Pain Management and Wellness Solutions
by George DeVries
Brokers should work with insurers and wellness plans to develop cost-effective and budget-minded strategies that integrate with their other wellness and health management programs to help employers minimize the financial and physical toll of chronic pain in the workplace.

Five Healthcare Innovations to Watch in 2010
by Brent Hitchings

With all the uncertainty generated by federal heath reform these days, it’s important for brokers not to get paralyzed by the change, but to look for new ways to provide even more value to clients. Producers can build better relationships by staying ahead of new trends that will affect employers in this new era of healthcare.

Product Roulette

by kate Kinkade

The landscape of life products continues to change as carriers re-price or withdraw their guaranteed life insurance products and develop new alternatives. It is possible that the life insurance market will be in a unique position for a while with no one product leading – an environment of true choice. This market will demand the service of an actual insurance professional to help consumers understand and choose products that meet their needs.

Guaranteed life products have dominated the market for years, essentially commoditizing life insurance. These products can be compared easily on a spreadsheet so that the least expensive or the best underwriting offer wins the day. Over a year ago, carriers started to increase pricing on products when new reserving rules went into effect, but many held on to competitive pricing in the face of reserve challenges and only started to re-price this year.

Recently, one major carrier, Sun Life, withdrew its guaranteed product with no notice; it was pulled off the market in one day. Axa took similar measures last year. It is interesting that some carriers still maintain low guaranteed pricing while others have decided that they can’t afford to take one more application. Low fixed investment returns have increased pressure on this pricing, which makes the remaining competitive products all the more attractive or concerning.

With higher prices for guarantees, agents are looking at other products to fill long term life insurance needs. Carriers are looking for new product designs to attract today’s buyers.

Before no-lapse products came out, current assumption products were the most popular. Carriers are revisiting those products aggressively, but finding several challenges. First, the low interest rate environment makes the projected premium high. Add to that the need to endow the policy at maturity in order to retain the full death benefit and now the policy has to be funded to build cash value, not just maintain the cost of insurance. The alternative is to have the death benefit extended at maturity instead of the cash value, allowing the policy to be funded to remain in force, not to endow. The cost of the death benefit extension will increase the cost of insurance, but not as much as endowing the policy. Agents must understand the choices that the carriers are making and clients will be deciding among the products.

In many cases, variable products look better than current assumption products, and carriers are offering various choices in guarantees to get clients over their short-term concerns about the market. Long term care riders on life insurance have been available for some time and are attracting more buyers. Indexed products have been gaining popularity for some time and more are coming on the market. Indexed products defy simple comparison; the structure demands a real comparison of features rather than simple comparison of pricing.

To add another level of complexity, many carriers offer an accumulation version and a death benefit version of these products. And there are still 20-year and 30-year term products for a shorter-term “permanent” need.

Carriers are trying to figure out which products will be the most popular in the future and where the pricing tolerance lies. Does a LTC rider provide enough value to allow more profitable pricing on the underlying life product? Does the upside of variable allow for more profitable pricing on the secondary guarantee? Is there a way to price current assumption products competitively in this market? Is there a new bell or whistle out there? Is indexed the product of the future?

While carriers are playing product roulette, agents are selling life insurance. Some continue to focus on the remaining competitive no-lapse products and haven’t started looking at the broader choices. I would submit that is a mistake. We are entering a market where our skills are extremely valuable. Clients need our planning expertise to help them understand their risks and how to offset them. They also need our product expertise to find the products that fit their profile. They need someone to help them analyze choices. Is there a risk in purchasing a low cost guaranteed product that puts reserving pressure on the carrier? Will the client need flexibility in the future and therefore need cash values? Can the client offset their long-term care risk with their life insurance policy? Are they interested in market returns but not volatility?
I would submit that the agent who asks these questions and discusses related product choices brings much more value to the consumer than the agent who puts four guaranteed products on a spreadsheet to show the cheapest premium. These questions are only one part of understanding the client’s financial and family situation; the agent who is concerned about the client has no competition. Today, that concern can be reflected in product choice as well as how the client plan is structured. It’s a good time for a good agent

Leave COBRA to the Pros

by Kristin Komen
One mid-sized employer, a building services company in southern California, discovered a problem shortly after switching medical plans. The human resources department had forgotten to notify six ex-employees who were receiving group health coverage under COBRA. As a result, the company had to keep its initial insurance plan in force, at its own expense, to maintain coverage for those former employees.

This true story highlights the consequences of failing to comply with the highly complex law (formally known as the Consolidated Omnibus Budget Reconciliation Act) and underscores the challenges that employers face in trying to administer the benefit on their own.

Chris Patton, market director for Benefit Mall, offers his clients some blunt advice about COBRA, “We really emphasize to our customers not to mess around with COBRA. Don’t make recommendations. Don’t get involved. Don’t do anything but make sure your client turns to a really competent third-party administrator (TPA) to run COBRA,” says Patton, who oversees sales executives who work with brokers and consultants from his base in Woodland Hills, Calif.

Patton and other California benefit advisors invest time in finding the right TPA to team up with and recommend to clients. Some even pay for all or part of the service because they are adamant that COBRA administration belongs in the hands of professionals who specialize in this multifaceted benefit law.

COBRA at Two Levels In California

Managing COBRA and its California cousin, “Cal-COBRA” has become increasingly difficult and time-consuming, which keeps human resources professionals from taking care of other responsibilities.

Under COBRA, employers with 20 or more employees that provide group health coverage are generally required to offer that coverage upon the occurrence of certain events to current, former, and retired employees and their spouses and dependent children.

In the most common scenario, the law enables employees who are terminated or whose hours are reduced to a level below that required for benefit eligibility, to continue receiving health coverage at group rates for up to 18 months. Plan sponsors are allowed to charge the terminated employee up to 102% of the cost of coverage. The coverage must also be offered to the covered spouse and dependent children of the terminated employee. Other events, such as death or divorce, may entitle an employee’s spouse and dependent children to coverage under COBRA for up to 36 months.

Cal-COBRA generally applies to insured plans offered by California employers with two to 19 employees. Thus, a 17-employee California business that offers insured group health coverage is subject to Cal-COBRA. Hiring three additional employees may trigger application of federal COBRA rules; the timing of when the federal rules apply will depend on when the employees are hired.

Cal-COBRA differs from the federal law in other ways. Cal-COBRA allows eligible participants to keep their health insurance for up to 36 months for most qualified events. When the federal COBRA coverage expires after 18 months, coverage may be extended, in some instances, for an additional 18 months.

Layers of Complexity

COBRA has never been easy to administer, Congress recently added several layers of complexity. The American Recovery and Reinvestment Act of 2009 temporarily reduced the premium for COBRA or comparable state continuation coverage for eligible individuals. Under the law, eligible individuals pay only 35% of the premium for COBRA coverage under their plans for up to 15 months. The remaining 65% is reimbursed to the coverage provider or employer through a tax credit. This is commonly known as the premium “subsidy.”

Several subsequent laws have been extended and modified temporary subsidy provisions. For example, the Department of Defense Appropriations Act, enacted on December 19, 2009, changed the length of the subsidy period from nine to 15 months.
Many brokers and employers spent hours poring over the new rules trying to determine which qualified beneficiaries could re-enroll in COBRA and pay the applicable premiums. They also had to figure out who needed to be notified of the various extensions and by what date.

As Congress continues to look for ways to provide relief to the unemployed, there is a possibility that it will extend the COBRA subsidy period again or make other changes. In addition, several states are enacting laws that provide continuation of coverage extensions after COBRA benefits expire. These changes will likely add to the growing maze of rules.

Game Changer

“The subsidy changed the game completely for brokers and employers,” notes San Diego-based insurance agent Bill Hammett. “The typical HR professional, who has to know a little about a lot of subjects, now has to know a lot about COBRA specifically. They just can’t operate efficiently any longer,” Hammett maintains.

Hammett, who is the president of the San Diego Association of Health Underwriters, has had many discussions with clients in the past year about the value of handing over COBRA administration to an outside expert. “Clients will tell me, ‘Oh, our turnover isn’t extreme and we have enough talent in house to handle COBRA ourselves.’ But, if you fail to send out a notice on time to a former employee with cancer and become liable for his costly treatment, “you might be permanently shutting your doors.”

Rudy Mommens, new business marketing manager for brokerage firm Andreini & Company says, “It seems like the law is changing practically every month. We have clients who try to manage COBRA on their own. But they are mostly unsuccessful because they aren’t aware of the latest regulations or when to send out notices.”
Mommens, who is based in San Mateo, Calif., encourages fellow brokers not to take on the task, either. “We, as brokers, are well-versed in COBRA, but we are not set up to administer it for a client,” he says.

The message seems to be sinking in. Almost all of Hammett’s group clients who are subject to federal COBRA (mostly firms of 30 to 50 employees) are now using a third-party administrator.

Sweetening the Pot

Some benefit advisors are so convinced that their clients will benefit from outsourcing COBRA administration to a third party that they help subsidize the cost. “We feel so strongly about it that we are willing to pay for the first year of COBRA administration to show clients how it should be done,” asserts Patton.

Hammett believes in financial incentives, too. “I start by telling clients that they should let a professional third party handle COBRA and what it will cost. If I get any pushback, I generally offer to split or pay in full the set-up fee charged by the third party administrator. Even though it’s a legitimate business expense that businesses ought to pay themselves, it sends a message that we are in this together. I don’t want clients to think this is just another product for which I’m getting paid a commission,” he says.

Hammett will generally assume that liability as well when taking over a COBRA account from a previous broker who paid ongoing monthly COBRA administration fees. “It’s an opportunity for me as a broker to gain more equity in the relationship,” he adds.

Mommens explains paying for his clients’ COBRA administration service fees this way, “We know that managing benefit continuation is a big burden, which isn’t fair to the HR staff, which is already stretched thin.”

Finding the Right TPA

Mommens stresses that brokers have to be very diligent when recommending a TPA to a client. “It can be hard to distinguish one from another since they all tend to look the same on the outside. But, obviously, there are differences.” Mommens says the following steps will help you discern the differences among TPAs:

Check out the reports the TPA offers. You should be able to find out quickly who is on COBRA, whether payments have been posted, and who is late with their payments.
Find out what other services the TPA offers besides COBRA administration. Some TPAs don’t handle all benefits. So if your client also needs expertise in managing its health savings account or flexible spending account programs, for example, it may make sense to select a provider with the ability to manage those as well.
Focus on service. If a client asks me a COBRA question instead of the TPA, I will ask the TPA for help if I can’t answer it. But I can’t help my client if the TPA doesn’t return my call quickly.
The tide has turned for brokers who are considering whether to recommend that their clients seek outside expertise in managing benefit continuation laws. Here’s how Hammett puts it, “A year ago, my advice wasn’t necessarily to outsource COBRA. Now, I insist on it. I don’t want my staff bogged down by wading through government web sites to find the latest forms. I also don’t want my client’s HR departments fumbling through the new regulations and potentially making mistakes.”
With those sentiments in mind, it seems clear that brokers who recommend outsourcing COBRA administration can serve their clients well and advance their own role as strategic consultants.
Kristin Komen is the regional sales director in California for OptumHealth Financial Services. She can be reached by email at kristin.komen@optumhealthfinancial.com or by phone at 949-251-9540.

Annuities–Treasury and DOL Research on Lifetime Income Options: A Step in the Right Direction

by Frank Keating
Treasury and DOL Research on Lifetime Income Options: A Step in the Right Direction
In the past, when you mentioned retirement security, the classic image of the three-legged stool usually came to mind. One leg represented pensions; the second represented personal savings; and the third leg represented Social Security. Taken as a whole, these three assets were supposed to provide a secure financial base for retirement.
If you redraw that same stool for workers today, you’ll find the pension leg missing and the savings leg providing a wobbly support, if much at all.

The reason for this imbalance relates to changes in employer-based retirement plans. The number of pensions that provide a steady income in retirement is in rapid decline. In their place are 401(k)s and similar plans that do a good job of building savings, but generally don’t guarantee income in retirement.

This emphasis on the savings aspect of retirement security has created a dilemma for workers who want to make those savings last a lifetime.

This dilemma is nothing new to the life insurance industry. Agents, brokers, and companies have been helping Americans to manage risks for generations. Longevity risk (the possibility of living beyond your assets) is emerging as a major national retirement security challenge. But, public policy has changed little to match this new reality.
That could change after 2010. Earlier this year, the departments of Labor and Treasury issued a request for information (RFI) seeking suggestions on ways to provide Americans with options to secure a lifetime stream of income after retirement. The RFI represents the beginning of what is expected to be a long process and is a significant step toward addressing a growing concern among retirees.

Indeed, the RFI and new public research reveals a change in people’s perceptions about retirement. It shows that policymakers and consumers recognize that they need to change their view of retirement savings and lifetime income.

The RFI, a Long Time Coming

When Treasury and DOL issued the RFI, it elicited praise, but also drew some criticism. Erroneous reports began circulating that the aim of the initiative was to mandate annuitization of retirement savings plans. That is, a requirement that retirement plan participants place all their tax-qualified savings into lifetime annuities. Some political blogs characterized the RFI as a government takeover of retirement savings.

In truth, the 39 questions comprising the RFI did not suggest that Treasury and Labor seek a mandate of any kind. The questions posed by Treasury and DOL explored the benefits of generating lifetime income, the reasons why people do and do not annuitize, and the barriers to offering lifetime income options within retirement plans, among other issues.

Perhaps, the only criticism that can legitimately be raised about the RFI is that the effort is long overdue from a public policy perspective. For years, research has shown that the retirement landscape has changed. This change is noted in the RFI:

“Department of Labor data…show a trend away from sponsorship of defined-benefit plans, toward sponsorship of defined contribution plans. The number of active participants in defined benefit plans fell from about 27 million in 1975 to approximately 20 million in 2006, whereas the number of active participants in defined contribution plans increased from about 11 million in 1975 to 66 million in 2006.”

This move to defined contribution plans has exposed retirees to greater risks. Retirees who receive a lump sum in retirement face several risks when drawing down their savings, according to a 2009 report from the Government Accountability Office. Retirees can outlive their money, withdraw it too quickly, experience declines in investment value, and have the purchasing power of their savings deflated by inflation.

The life insurance industry knows something about helping people manage risk through the workplace. The lifetime stream of income from annuities protects retirees from the risk of outliving their savings. The use of annuities as a distribution option in employer-sponsored plans should be explored.

Open to Income Options

New research shows that Americans are ready for new ideas to help them prepare for their retirement security. Ninety-one percent of Americans would like their employer to illustrate how much their savings would create per month for life, according to a study by Matthew Greenwald and Associates, commissioned by ACLI as part of its RFI comments.
The study also reveals how this illustration would affect savings. Sixty-one percent said they would save more for retirement if the illustration from the employer showed that the amount of monthly income would not be enough. As for taking some of their savings as a lifetime stream of income, 90% said they would favor their employer offering such an option.

The results of this survey are heartening. They show that participants in defined contribution plans understand the challenges they face in retirement and they’re looking for help to meet those challenges. ACLI’s May 3 response to the RFI included regulatory and legislative proposals that would address this need.

ACLI Proposals

One ACLI proposal would ease the administrative burdens that may prevent employers from offering annuities, especially small to mid-size companies. Employers take on a number of duties in administering a retirement plan. One duty associated with annuities is managing the joint and survivor annuity rules, which relate to the transfer of annuity payouts to a beneficiary. ACLI’s proposal calls for modifications to Department of Labor retirement plan regulations to allow employers, who choose to do so, to transfer the administrative duties associated with joint and survivor rules to an annuity administrator.

ACLI also supports efforts to clarify that retirees can generate lifetime income by putting a portion of their savings into an annuity through employer plans or individual annuity savings. Current regulations do not prohibit such arrangements, but they do not explicitly permit them either. As a result, they are not widely offered as an alternative for retirees.

A third ACLI proposal relates to the use of longevity insurance. Under a longevity policy, retirees receive annuity payouts later in retirement — beginning at age 85, for example. ACLI supports legislation, offered by U.S. Rep. Early Pomeroy (D-ND), that would enable longevity insurance to be included in employer-based retirement plans, providing Americans with another option for their retirement security.

These proposals would raise awareness among employers and workers of how the guaranteed stream of lifetime income from annuities can fill a critical gap in retirement security plans.

Next Steps

Treasury and DOL will be sorting through more than 700 responses to the RFI, which is expected to take several months. While the final recommendations are uncertain, the direction of the departments’ effort is clear: to gather ideas on how to give retirees the tools and knowledge to fill the void left by the decline of defined benefit plans.

Too often, retirees look at their savings and see a lump sum instead of a source of income that needs to last 30 years or more. This mindset can expose retirees to serious risks that threaten their financial and retirement security.

Without the proper understanding and the right tools, many retirees will likely exhaust their savings and have to rely on already stressed government programs for assistance. Unfortunately, the vast majority of Americans are missing a critical piece of their financial and retirement security — a steady stream of income from a defined benefit plan.

As part of a comprehensive retirement plan, a guaranteed stream of income from an annuity is the only way to address this need. But just as important will be the renewed outlook on retirement savings and income. The research by Matthew Greenwald clearly shows that illustrating accumulated savings, as a stream of income, would benefit workers through increased savings and a stronger understanding of retirement planning.

While public policy can ease the delivery of tools and information that Americans want and need, it is the broker on the ground, meeting with clients and educating them on their retirement needs, who will truly change people’s understanding of retirement.

A vital part of Americans’ retirement security, for years to come, will be educating Americans on the need not only to save, but also to make those savings last a lifetime. It is ACLI’s hope that, because of the RFI, retirees’ three-legged stool will provide a much steadier retirement security platform than today.
Frank Keating is president and CEO of the American Council of Life Insurers.

Voluntary Benefits–Voluntary Gains Ground in the New Benefits World

by Jim Barone
A well-known maxim best describes the current benefit marketplace: “Sometimes the more things change, the more they remain the same.” Agreed, but professional brokers who dig a little deeper into the benefits marketplace will find a brave new world of revenue possibilities in voluntary products offerings.

In the new benefits world, employers are concerned about retaining high-performing talent, managing productivity, and offering benefits that may improve employee morale while still doing more with less in today’s economy. They still believe quality employee benefits attract, retain, and reward good employees – the organization’s most valuable resource. They still see the value of offering benefits that help employees remain healthy, productive, and focused on their jobs. Most importantly, they understand the inextricable link between employee financial security and productivity in the workplace.

As the recent economic storm required employers to reduce or eliminate some employer-paid benefits, many moved away from pure employer-paid options, offering a wider array of voluntary products. Some employers may not reverse cost-shifting measures in the near term while other employers may be receptive to taking a fresh look at the benefits strategy. In either case, it is the right time and the right situation for brokers to help their clients achieve their business and benefit goals.

Voluntary Goes Mainstream

A significant trend in the new benefits world is the continued expansion of voluntary product offerings to control costs, provide choice, fill potential gaps in coverage, and serve the life-stage and life style needs of a multi-generational workforce. Many of today’s high quality voluntary products are making a strong statement that voluntary is not a niche with limited appeal and purpose. Voluntary is going mainstream.

One of the most popular voluntary products is group legal, which gives employees affordable, easy access to professional legal services, tools, and resources to deal with personal matters that can lead to higher stress, disengagement, and lower productivity. According to an ARAG-Russell Research study, nine out of 10 people were concerned about family, financial, home, vehicle, or other legal-related matters, and seven out of 10 people experienced one or more legal events during the year.

Industry studies show growing employee interest in access to voluntary products, such as life, disability, critical illness or long term insurance to meet basic needs and provide a more secure future. A Colonial Life study showed that eight out of 10 employees were interested in voluntary benefits to supplement current benefits. Not surprisingly, many employers have been listening to the voice of the customer – their employees. LIMRA reports that more than 650,000 companies sponsor at least one voluntary benefit. This enables more than 80 million American workers to have convenient access to these key benefits in the workplace.

Employers recognize and research confirms that employees are stressed-out about personal matters, such as finances, benefits, careers and how to survive a personal financial crisis. Astute employers easily recognize these concerns as risk factors for lower employee engagement, attendance, productivity, and job performance. As professional benefit counselors, brokers are well served in educating employees on what innovative employers are doing to ensure employee engagement. The hard and soft costs for employee disengagement are significant.

What some employers may not know is the high price tag that accompanies stress. Employee stress costs employers an estimated $300 billion per year in absenteeism, lower productivity, employee turnover, and direct medical and mental health expenses and other insurance costs, according to data from the American Institute of Stress. Stress could easily be called Public Enemy #1 of a highly productive workforce.

Don’t Wait to be Drafted, Volunteer

In the new benefits world, it is increasingly important to learn all you can about the client’s business operations, challenges, and opportunities. Develop a clear understanding of the client’s business and benefit program goals. Become a subject matter expert for the voluntary and core products and the quality carriers you represent. Provide sound counsel. Be preemptive when you see benefit needs that the client should address. Respond quickly to changes in client objectives, the competitive landscape, products, and services.

What Voluntary Can Do for You

With the ongoing dilemma of healthcare reform, mental health parity, and many other issues that keep brokers awake at night, voluntary could be your solution. Voluntary benefits continue to be one of the fastest growing market segments. Voluntary can give you a new or additional revenue source to offset declining commissions on major medical. Employers have a growing awareness of voluntary products, courtesy of high-flying advertising. Decidedly time-efficient and cost effective, cross selling to clients is less expensive than developing new business all the time. There is also the competitive thing. If you do not try to sell voluntary to your clients, another broker will.

Voluntary Takes on Bigger Role

A broad portfolio of voluntary products has become a featured attraction of many benefit plans. Popular choices include voluntary dental and vision plans to supplement healthcare coverage, disability, and critical illness insurance to guard against lost income, and life insurance, which has become the top-selling voluntary benefit as people get back to the basics of protection against the loss of the breadwinner. Meanwhile, legal plans are helping employees achieve legal wellness.

The breadth of today’s voluntary products provides greater access to benefits that serve the diverse needs of employees. To help manage rising healthcare costs, employers are implementing wellness programs with resources, such as health-risk assessments, screenings, and educational programs to promote physical activity and healthy living. Long-term care continues to gain traction among the 78 million Baby Boomers, many of whom have returned or remained in the workforce due to economic circumstances. Some employees find themselves sandwiched between their careers, still having children at home and providing care for aging parents or grandparents. Generation Y workers have their own unique concerns and interests. Across the generations, voluntary has something to offer.

It’s Time to Broaden Your Voluntary Benefits Portfolio

I can’t think of a reason not to fully engage voluntary products with your current and future clients. As health reform takes shape, we may find ourselves facing a world where benefit decisions are truly driven at the individual level. If that happens, being fully conversant in the various voluntary plans will take on greater importance. Whether the voluntary program is legal, LTC, disability, dental or another voluntary product, one thing is for sure – now more than ever, brokers and are well-served by understanding and recommending less traditional products to their clients and clients are well served by getting these recommendations. It truly is a brave new benefits world, ripe with opportunity for brokers who see the inevitable trend toward more individualized purchase of products at the worksite.
Jim Barone is the Senior VP and Chief Sales Officer for ARAG. Before joining ARAG, Jim was National VP of Sales and Marketing for EyeMed Vision Care and Vice President of Sales and Marketing for Anthem Blue Cross and Blue Shield. He was  also responsible for the oversight and administration of regional government programs administered by Anthem. Jim received his Juris Doctorate from the University of Toledo and a Bachelor of Arts in Philosophy from the University of Cincinnati. He’s a member of the Ohio State Bar Association and a national speaker on the topic of U.S. and Canadian health care reform. He served as United Way National Campaign Chairperson for Luxottica Retail and AnthemBlue Cross and Blue Shield and is a former Board Member of Colorado and Cincinnati Symphony Orchestras.

Voluntary Benefits Can Help Small Businesses Achieve Business Objectives

by Scott Beck
Benefit brokers with small business clients face a conundrum. Their clients have tight budgets and they need to keep expenses low including employee benefit costs. Yet, brokers have to make sure that their clients offer competitive benefit programs to help attract and retain talented workers and establish a strong foundation to emerge from the recession.

The top benefit objective for employers in California is controlling health and welfare benefit costs, followed closely by improving job satisfaction, and retaining employees, according to MetLife’s 8th Annual Study of Employee Benefits Trends. The study also revealed a strong correlation between benefit satisfaction and job satisfaction, which are both key in the competition for talent. One way to engage in dialogue with your small business clients is to demonstrate how important non-medical benefits, including voluntary benefits, can help them build a competitive benefit program and still manage the bottom line.

Why is it important for brokers to discuss non-medical benefit offerings? Under the new healthcare reform law (the Patient Protection and Affordable Care Act), healthcare coverage may become more of a commodity and less of a differentiator in attracting and retaining workers. Therefore, offering non-medical coverage is likely to become a more important way to compete for talent and increase benefit satisfaction and employee engagement.

Access to dental, disability and life insurance drive employee loyalty. Employees appreciate having access, through the workplace, to some amount of protection with these core benefits even if the benefits are employee paid.

When asked about the advantages of voluntary benefits, 59% of employees cite the convenience of payroll deduction and 42% cite the convenience being able to get benefits through the workplace instead of shopping for them on their own.

However, when it comes to employee benefits, there is a perception gap between small business employers and employees (less than 500 employees). Fifty-nine percent of the employees say benefits, such as life, dental, and disability, drive loyalty to their employer, compared to only 34% of small business employers who say the same thing.
You can help your clients address this perception gap by offering ideas on maintaining, supplementing, and enhancing their benefit programs with non-medical benefits. One out of every two full-time employees in California is very interested in having their employer provide a wider array of voluntary benefits. One out of every two is also willing to bear more of the costs of their benefits rather than lose them. This presents an opportunity for brokers to develop customized programs for their clients.

Only about one-third of small business workers say they are very satisfied with their benefit offerings. It is important for small businesses not only to understand the benefits that their employees need and value, but also to know which benefit programs similar companies are offering. Small businesses compete for talent with other small and large companies as well as other companies in their industry and geographic area. Knowing what the benefit landscape looks like and how benefit programs compare is key to helping clients strengthen their benefit offerings.

Compared to larger companies, small businesses that offer dental benefits are twice as likely to pay the full cost. Because dental benefits are popular with employees, helping clients learn how to offer them through contributory, voluntary, and dual-option programs can be a win-win.

Help Increase Employee Loyalty Through Voluntary Benefits

Only 22% of small companies offer wellness programs compared to 61% of their larger counterparts. Interestingly though, 67% of small business employers say that wellness programs are effective at reducing medical costs.

While economies of scale hold true for certain wellness programs, there are low-cost ways to create a healthy workplace and control long-term costs. Eighty-five percent of employees who participated in a weight loss wellness program say it was successful. Having a wellness program can be as simple as establishing a lunchtime fitness circuit or offering fruit and low-fat snacks in the vending machine. Also, under the health reform law, small businesses, with up to 100 employees, may qualify for tax credits to establish wellness programs.

Help Employees Become Financially Secure and Support Productivity

Sixty-four percent of small business employees say they have experienced one or more of the following over the past 12 months: the quality of their work has declined; their feelings of job insecurity have increased; their workload has increased; or financial worries have made them more distracted at work. Nineteen percent say they have taken unexpected time off to deal with a financial problem or spent more time at work on personal financial issues than they should have.

Small business owners can help reduce distractions by providing access to advice and guidance. For example, employee assistance programs (EAPs) help employees deal with personal problems that might affect their work performance. For brokers, this is an area with significant opportunity for growth since only 20% of small businesses have an EAP. Other voluntary programs, such as group legal plans and access to financial planners, can help employees manage their finances.

Make Benefit Communications More Effective

Employers fail to achieve the desired return on their benefit investment when their employees do not know about a benefit program or don’t understand it. The good news is that the West leads other regions in effective benefit communications. However, there is still much room for improvement because 60% of employees still see shortcomings in benefit communications. Higher benefit satisfaction often comes with improved benefit communications, which often leads to higher job satisfaction. Eighty-one percent of employees who say they are highly satisfied with their benefits are also satisfied with their jobs. Conversely, only 23% of employees who say they are not satisfied with their benefits are satisfied with their jobs.

The following are some best practices for an effective benefit communications program:
Ensure that employee benefit materials are written in plain language with no technical jargon. Test enrollment materials with a few employees to get honest feedback on reader friendliness.
Explore multiple channels to deliver and promote benefit communications including social media.
Communicate often. Remind employees of their benefit options after a life event, such as marriage or the birth of a child.
Small businesses are seen as a key driver in the country’s emergence from the recession. More satisfied and productive employees should help contribute to business growth, which is a strong point to reinforce when you discuss how your small business owners can take advantage of the administrative tools, services, and advice that carriers and brokers provide.
Scott Beck is vice president, Broker and Consultant Strategies Group, MetLife. He can be reached at sbeck@metlife.com. For more detailed study insights, download Building A Better Benefits Program Without Breaking The Budget: Five Practical Steps Every Small Business Should Consider at metlife.com/sbtrends2010. MetLife’s free online Benefits Benchmarking Tool (metlife.com/benefitsbenchmark) allows brokers to analyze benefit data among 90 dimensions to customize insights for clients.

Dental Survey Part III
Be Better Informed Than the Tooth Fairy…

Read Part III of Our Annual Dental Survey

by Leila Morris

Welcome to Part III of California Broker’s 2010 Dental Survey. We’ve asked the top dental providers in California to answer 28 crucial questions to help you, the agent, better understand their benefits, features, and services. Read the responses and sell accordingly.

 If covered, explain the process that allows the general dentist to refer to the specialist.

Aetna: For DMO plans, general practitioners can refer to a participating specialist directly based on published guidelines. DMO members have direct access to participating orthodontists and do not need a specialty referral. Indemnity and PPO plans have direct access for specialty services.

Aflac: We do not require referrals.

BEN-E-LECT: Referral is not necessary for any of our plans. The member may select a specialist and schedule an appointment upon making a phone call or personal visit.

BEST Life: No referral is necessary. Insureds can visit a specialist at any time.

CIGNA: DPPO plans don’t require referrals and general dentists aren’t required to act as gatekeepers. For DHMO plans, general dentists act as coordinators for all specialty services except pediatrics up to age seven (on most plans) and orthodontic network dentists. Referrals are not needed for orthodontia or for children under age seven to visit a network pediatric dentist. General dentists refer individuals to network specialists as deemed necessary. CIGNA works directly with the specialists for preauthorization and direct payment when appropriate.

Dearborn National: For our DHMO program, general dentists can refer members to an in-network dentist by calling our customer service or the member can call our customer service department directly for a list of specialists in the network.

Delta Dental: Fee-for-service enrollees can self-refer; referral by the general dentist isn’t required. For DHMO enrollees, the primary care dentist is responsible for submitting the predetermination request and directing the enrollee to the appropriate specialist once authorization is received.

Dental Health Services: The general dental office sends Dental Health Services a specialist referral authorization. Upon approval, the authorization is sent back to the general dentist who informs the patient that they are now eligible to get appropriate care from a specialist.

Golden West: Using our direct referral process, the participating general dentist can refer a patient to a specialist without prior authorization. For PPO plans, member would self refer.

Guardian: For the DHMO plan, any complex treatment requiring the skills of a dental specialist may be referred to a participating specialist dentist. Our DHMO plans offer direct referral in which the member may be referred directly by their primary care dentist to a participating specialist without pre-authorization.
Health Net Dental: For DHMO plans that require pre-authorization, the contracting primary care dentist completes a specialty referral form and submits to Health Net Dental. Approvals are returned to the primary care dentist, member and specialist. Upon receiving the approval, the member contacts the specialty office to schedule an appointment for completion of treatment. Our PPO dental plans allow self-referrals to participating or non-participating specialists as needed.

HumanaDental: General dentists are encouraged to refer members to participating specialists to provide the highest level of benefit to the member. The general dentist can refer out-of-network if there are no specialists within a reasonable distance

MetLife: Our Dental PPO product does not require referrals for specialist care. For Dental HMO, the SafeGuard SGX series of dental benefit plans give participating general dentists the flexibility to refer members to participating specialists without prior approval from SafeGuard — except for orthodontic and pedodontic specialty services in Calif. where the member’s selected general dentists will contact SafeGuard for pre-approval.

Principal Financial Group: Patients can choose any provider in the network; referrals are not required.

Securian Dental: No referral is required.

United Concordia Dental: Although DHMO plan members must coordinate all care through their primary dental office, including referrals to specialists, no preauthorization or referral review is required, allowing the referral process for all specialty services to be completed immediately.

Western Dental: Once the general dentist determines that the necessary procedure is out of his or her scope of practice, the office will submit a written referral request to our plan. Western Dental’s dental director then determines whether the referral is medically necessary and whether the procedure is covered under the benefit plan.

Are any of your specialists board eligible/certified?

Aetna: Yes

Aflac: For benefits to be payable, the specialist must be licensed by his or her state to perform the required treatment.

BEN-E-LECT: Yes, all of our specialists are board certified as a requirement.

BEST Life: All of our specialists are certified and must meet a rigorous credentialing process to be included in our network. Before a specialist can join our network, we require a license to practice, DEA/CDS certificates, education/training including board certification, work history, malpractice insurance, malpractice claims history, hospital privileges, sanctions against their license, Medicare/Medicaid sanctions, and perform ongoing monitoring of sanctions or regulatory actions. All providers must go through the credentialing process every three years.

CIGNA: Yes, all network dentists contracted to provide specialty care have completed post-graduate dental specialty programs in their fields. CIGNA’s dental networks include specialists in periodontics, orthodontics, endodontics, pediatric dentistry and oral surgery. It is important to note that, in dentistry, board certification is not the norm. As a result, we do not require this item for credentialing. We accept dentists who are recognized specialists, including those who are board certified or board eligible.

Dearborn National: All specialists in our network must be board eligible to be accepted into our network. However, specialists are not required to be board certified.

Delta Dental: Delta Dental requires board certification where it is required by state law. Under the fee-for-service plans, Delta Dental credentials all of its participating specialists in the same manner, whether they are board eligible or board-certified. Under the DHMO plans, Delta Dental requires all DeltaCare USA network specialists to be board qualified.

Dental Health Services: The majority of our dental specialists are board certified.

Golden West: Yes, all contracted specialists must be board-eligible certified.

Guardian: Many of our PPO specialists are board certified or eligible and all of the DHMO specialists are board eligible.

Health Net Dental: Yes.

HumanaDental: All participating specialists must provide copies of their specialty licenses or residency certificates.

MetLife: In order to participate with the dental PPO or HMO, speciaists must submit and keep current any certifications and/or other factors necessary to maintain their specialty.

Principal Financial Group: Yes, all specialists are required to be board eligible, board certified or be a designated specialist by the ADA.

Securian Dental: 100% of the specialists in our network are board certified or board eligible.

United Concordia Dental: Yes, as part of our credentialing process, we verify each dentist’s education, license and certifications.

Western Dental: All contracted specialists are board eligible/certified.

21. How do you fund your specialty care?

Aetna: Specialty services are paid on a fee–for-service basis.

Aflac: Aflac dental is a simple plan that pays a set amount per procedure based on a table of allowances. Additionally, policyholders have the freedom to choose their own provider without pre-certification.

BEST Life: Specialty care is built into the premium. Specialty care received by a network provider is reimbursed at a discounted fixed fee schedule. Specialty care received by a non-network provider is reimbursed on what is usual and customary for that area, procedure and specialty.

CIGNA: DHMO and DPPO specialists are compensated similarly through discounted fee-for-service, which is paid from a portion of the overall collected premiums.

Delta Dental: Specialty care is built into the premium. Under the fee-for-service plans, specialists are reimbursed by a combination of maximum plan allowances by procedure (contracted fees between Delta Dental and dentists) and coinsurance paid by the covered enrollee. Under the DHMO plan, network specialists are reimbursed on a per claim basis according to contracted fee schedule and co-payment paid by the enrollee.

Dental Health Services: Specialty care and treatment is paid for on a contracted basis and payment varies by procedure. These costs are built into each plan’s monthly premium rate.

Golden West: A percentage of sold premium is allocated for specialty care.

Guardian: Our PPO specialists are paid on a fee-for-service basis.
For our DHMO plans, specialty care is funded through a portion of premium.

Health Net Dental: For both our DHMO and DPPO plans, we under-write and rate dental plans based on an assumed specialty care claims liability and build an allowance into our dental premiums.

HumanaDental: Specialists are paid on a fee-for-service basis according to a contracted fee-schedule amount or by reimbursement limit.

MetLife: For Dental HMO, specialists are reimbursed based on a predetermined fixed fee schedule. The SafeGuard SGX series of dental plans have co-payments for specialty services — listed on the Schedule of Benefits for the plan. These plans also provide a 25% fee reduction off the participating dentist’s usual and customary fee for non-listed services, unless specifically excluded from coverage.

Principal Financial Group: Through normal plan provisions.

Securian Dental: Network dentists (general and specialty dentists) are reimbursed on the basis of a discounted fixed fee schedule. Network dentists agree to accept the fee schedule amount as full consideration, less applicable deductibles, coinsurance and amounts exceeding the benefit maximums and will not balance bill the member.

Western Dental: We incorporate into our premiums what we expect specialty care claims to be. We then pay the claims based on dental necessity and plan guidelines.

Does the member have to be referred by the primary dentist to the orthodontist or can he or she self-refer?

Aetna: Member can self-refer.

Aflac: We do not require referrals. Our policyholders may self-refer.

BEN-E-LECT: Member may self-refer to any orthodontist they prefer.
In network versus out of network and plan selection will determine coverage provided.

BEST Life: No referral is necessary on our PPO or Indemnity plans.

CIGNA: None of our plans require a referral for orthodontic care.

Dearborn National: Our DPPO program does not require members to select a primary dentist or an orthodontist. The member has the freedom to choose which network provider they want to frequent and may switch their provider at any time. This includes member visits to orthodontists. Our DHMO program does require a referral, but it is an automatic approval and the process allows us to provide a better oversight of our orthodontists.

Delta Dental: Under the fee-for-service plans, enrollees can self refer. For DHMO plans, the assigned network dentist submits a referral request for orthodontic treatment to Delta Dental. The network dentist is notified upon approval and is responsible for advising the DeltaCare USA enrollee who then contacts the assigned network orthodontist for an appointment.

Dental Health Services: Members must get a referral from one of our network dentists before visiting a participating orthodontist.

Golden West: The member can self refer to the panel orthodontist office.

Guardian: PPO members can self-refer to all types of specialty care, including orthodontia. General dentists in our DHMO network will refer the member to a Participating Orthodontist. The referral does not require plan authorization.

Health Net Dental: Our DPPO product does not require referrals for specialty or orthodontic care, so participants may self-refer. For DHMO, there are three types of specialty referral processes based on the member’s schedule of benefits. For plans that require pre-authorization, a specialty referral form must be submitted by the primary care dentist. For plans that have direct referral, the primary care dentist may directly refer the member to a participating orthodontist by visiting our website or by contacting our customer service. For plans that allow self-referral, the member may go directly to a contracted specialist by visiting our website or by contacting our customer service.

HumanaDental: In our PPO, the member can self-refer to an orthodontist.

MetLife: Our dental PPO product does not require referrals for specialty or orthodontic care, so participants can self-refer. For the dental HMO in Calif., orthodontic specialty services require pre-approval. The member’s general dentist will contact SafeGuard for pre-approval, and once approved will contact the member with the name of a participating orthodontist.

Principal Financial Group: A member can choose to seek services from any provider.

Securian Dental: The member can self-refer.

United Concordia Dental: Our PPO plans allow members to self-refer. Under our DHMO plans, the primary dentist determines if a specialty referral is required, regardless of the specialty.

Western Dental: The member has to be referred by the primary dentist to the orthodontist for our IPA Dental Plan. Our Western Centers-only plan allows the member to self-refer.

What is the time frame for processing a referral in terms of member notification and payment to the specialist?

Aetna: DMO general practioners usually provide a member with an
immediate referral. Specialty payments are made on receipt and adjudication of the claim.

Aflac: Aflac dental doesn’t require referrals because policyholders
have the freedom to choose their own dentist without restriction.

BEN-E-LECT: Referral is not necessary with our plans. Members may call and schedule the appointment as desired.

BEST Life: No referrals are required on our dental PPO/Indemnity
plans. Members may self-refer to any specialist they choose.

CIGNA: For the DHMO, typical turnaround time for specialty referrals
is five days for pre-authorization and five days for payments.

Dearborn National: For our PPO program, referrals are not required. For our DHMO program, referrals are approved in no more than five working days. Claims are paid within 15 days of receipt. The time for treatment is at the discretion of the patient and provider.

Delta Dental: For fee-for-service patients, specialty care referrals are not required and payments to specialists are processed the same as for general dentists. In 2009, the average time for processing predeterminations was eight days. For DHMO enrollees, specialists were paid for preauthorized specialty care within an average of six business days of claim submission.

Dental Health Services: Emergency referrals are processed immediately. In a non-emergency situation, referrals are processed within one to two weeks. Claims are paid within two to three weeks.

Golden West: The general dentist provides a real-time referral to the specialist. Plan approval is not required.

Guardian: Referrals are not required under our PPO plans. For our DHMO plans, payment to the specialist is within 30 days of receipt of the claim.

Health Net Dental: The average turnaround time in processing a non-emergency referral is 48 hours and then seven to 10 business days for the EOB to be received by the member. Once the claim is submitted by the specialist, our average turnaround time in processing is 10 business days of receipt and then seven to 10 business days for specialists to receive payment in the mail. If claim was sent electronically, it will be sooner.

HumanaDental: Most HumanaDental plans do not require a referral from a general dentist to a specialist. The member gets a higher benefit when seeing a participating dentist and specialist. In 2008, 85% of claims and 97.4% referrals were processed within 14 calendar days.

MetLife: For Dental HMO, standard referrals are processed in an
average of five business days for member notification and 14 business days for payment to the provider.

Securian Dental: No referral is required.

United Concordia Dental: All referrals are immediately effective. The member is instructed to provide the referral to the specialist at the time of service and the specialist files the referral with the claim. All claims, including specialist claims, mailed to United Concordia Dental are usually processed within 14 days. Claims filed electronically through Speed eClaim are processed for payment immediately unless a review of an x-ray or other documentation is required.

Western Dental: Emergency referrals are handled within 24-hours.
The turnaround for non-emergency referrals is three business days. Specialists can expect payment in 10 business days for clean claims.

If you limit services with an annual or lifetime maximum, what does the maximum dollar amount allowed refer to?

Aetna: The total amount Aetna will pay for covered benefits.

Aflac: The annual maximum refers to the maximum amount of benefits that may be received within a policy year per covered person. Annual maximums do not apply to wellness and X-ray benefits.

BEN-E-LECT: The maximum dollar and lifetime maximum refers to all
services and procedures unless specified otherwise by benefit.

BEST Life: Lifetime maximum applies to orthodontia benefits. BEST
Life offers multiple choices of calendar year maximums for preventive, basic and major procedures.

CIGNA: For the DHMO: There is no annual or lifetime maximum. For
the DPPO/DEPO/Dental indemnity: The maximum dollar amount refers to the maximum amount payable by CIGNA for covered services rendered.

Dearborn National: As a general rule, lifetime maximums usually only apply to orthodontic services. For our PPO program, annual maximums are applied each year, which includes every service outside of orthodontia. For our DHMO program, annual limits apply only to treatment by a dental specialist.

Delta Dental: Under the fee-for-service plans, the maximum dollar amount refers to the maximum dollar amount paid by the plan. Our DHMO plans do not have annual or lifetime maximums.

Dental Health Services: The majority of our prepaid plan offerings have no annual dollar maximums, although this option is available by client request. PPO plan annual maximums range from $500 to $2,000.

Golden West: The maximum dollar amount is the total amount paid by the plan.

Guardian: The maximum refers to the total of benefit dollars actually paid for covered services incurred within the annual period, or the member’s lifetime in the case of orthodontia. With Preventive Advantage, only basic and major services count toward the annual maximum. We also offer an option to cover cleaning after the maximum is reached.

Health Net Dental: The maximum dollar amount is the total amount the plan will pay for covered benefits.

Humana Dental: Annual maximum refers to the maximum amount
paid annually for services, excluding orthodontia. Orthodontic treatment has a lifetime maximum.

MetLife: For the dental PPO, maximums affect only the total annual
reimbursement amount available under a plan to an individual or family. It does not limit access to our negotiated fees for services after the maximum is exceeded.* For the Dental HMO, there are no calendar or lifetime maximums.

Principal Financial Group: The maximum dollar amount refers to benefits paid.

Securian Dental: The annual and lifetime maximum refer to the
maximum dollar amounts we will pay for covered services in a calendar year (annual maximum) or over the coverage lifetime (lifetime maximum). Our plans generally include an annual maximum for non-orthodontic covered services and a separate lifetime maximum for orthodontia.

United Concordia Dental: DHMO plans do not have annual or lifetime maximums. PPO plan annual and lifetime maximums vary by benefit plan and refer to the total amount paid in benefits byUnited Concordia Dental annually or over the member’s lifetime.

Western Dental: The Series 7 DMO plans do not have an annual or
lifetime maximum.

How and when do you provide eligibility information to your dental offices? How can you ensure that your offices will provide services to a member if they are not on the eligibility listing and it is after regular plan hours?

Aetna: Eligibility is available to our providers 24/7 by calling our automated telephone inquiry system or by accessing the online eligibility roster. DMO providers receive eligibility rosters the first week of each month.

Aflac: Providers may verify eligibility online or by calling our Customer Service Center. We do not require pre-qualification for treatment.

BEN-E-LECT: Our Interactive Voice Response (IVR) system will provide eligibility 24/7. Our pre-paid product will provide services upon collecting information from the member. This information will be transferred to our system electronically.

Best Life: Providers can use BEST Life’s fax back eligibility system to determine if a member is eligible, outside of normal business hours. Offices routinely check eligibility prior to appointments and have a process in place for dealing with emergency situations.

CIGNA: Dentists can view eligibility information in real time by visiting our secure website for health care professionals (24/7). In addition, we send eligibility information to our DHMO general dentists on a monthly basis. The general dentist can also call the plan for automated verification for an individual who is assigned to a particular office but is not on the eligibility list. This automated system will fax the dentist a written confirmation of eligibility. There is no eligibility listing given to DPPO dentists as people can seek treatment from any DPPO network dentist at any time. If a DPPO dentist wants to verify an individual’s participation in the plan, they can check the secure website or call our toll-free number.

Dearborn National: For our PPO program, providers can use our 24 hour, seven day a week IVR phone response system or call Customer Service during regular business hours. For our DHMO program, providers can access member eligibility online at anytime.

Delta Dental: Dental offices can verify eligibility by contacting Delta Dental via our website, calling our automated information line or speaking with a customer services representative. Under the fee-for-service plans, a patient who is not shown as eligible may be asked to pay the bill up front. The dental office would be responsible for refunding the patient their overpayment after receiving Delta Dental payment. Under the DHMO plans, in addition to verifying eligibility as listed above, network dentists also receive eligibility lists at the beginning of each month. If an enrollee is not contained in Delta Dental’s eligibility database and claims to be eligible for benefits, Delta Dental contacts the client or the client’s benefit administrator to verify eligibility. If the eligibility verification is for an enrollee who has urgent or emergency needs, our customer service representatives will extend an urgent care authorization.

Dental Health Services: Participating dental offices get eligibility rosters twice a month. If immediate eligibility is needed at any time, the dental office can call our 24-hour automated eligibility verification system or check eligibility online through our website.

Golden West: Eligibility is provided on the first week of the month to
the DHMO providers. Eligibility lists are available in electronic format if the dental office selects this method of notification. A customer service representative can also phone, email or fax in member eligibility. The plan maintains a 24/7 emergency phone number for after-hour emergencies.

Guardian: We do not provide eligibility lists for the PPO plan. Dentists can use our online self-service website, GuardianAnytime.com or call our toll-free line and receive a faxed verification of benefits from 3:00 a.m. to 8:00 p.m., Monday through Friday and from 3:00 a.m. to 1:00 p.m. on Saturday, Pacific Time. Eligibility rosters for the DHMO plan are provided to the offices twice a month, at the first of the month and the 10th of the month. Dental offices may also call our Member Services Department from 8:00 am to 5:00 pm Monday through Friday.

Health Net Dental: Our DHMO dentists receive a monthly updated eligibility list that includes member name, member status (active, dropped, suspended or transferred), member ID number, dependent names and eligibility status, fee schedule code, group number and capitation amount, if applicable.  DPPO dentists do not receive an eligibility roster since members are not required to select a primary care general dentist. Members would simply choose any network dentist (or non-participating dentist, if they desire) and schedule an appointment.  DPPO and DHMO dentists can verify eligibility information via our interactive voice response system and Website, which are both accessible 24-hours a day, seven days a week. Because the IVR and Web site are available 24/7 eligibility can be verified anytime of the day regardless of whether the need occurs during business hours.

HumanaDental: Participating offices are encouraged to check eligibility before providing treatment. They can verify members and benefits by calling our toll-free customer service line or through our automated information line to get 24 hour-a-day, seven-day-a week eligibility verification.

MetLife: For Dental PPO and Dental HMO, MetLife has developed a multi-channel technology platform for customer service inquiries including Web, fax, or phone. Through dedicated, real-time* channels, dentists have access to the same plan information provided to employees at the time of service. Dental offices do have access to dedicated online and automated phone system benefit information services to verify eligibility and plan details at any time. Additionally, Dental HMO, eligibility data is forwarded once a month to each participating dentist.
* Transactions are processed in “real-time” except when the systems are undergoing scheduled or unscheduled maintenance or interruption.

Securian Dental: Dental offices can use a toll-free number to call customer service to verify eligibility and benefits. Dental offices can also access www.securiandental.com to verify eligibility.

United Concordia: Dentists can access member eligibility and benefit information online, or toll-free using United Concordia Dental’s IVR system. DHMO providers also receive printed eligibility rosters once per month.

Western Dental: Western Dental provides eligibility listings to our Staff Model Offices electronically and printed eligibility listings to our IPA Providers. This information is updated on the 1st and 15th of each month. For members who are not on the eligibility listing, we offer guaranteed capitation to our network of providers.

How do you handle early termination of coverage when a member is still in the middle of orthodontic treatment?

Aetna: Quarterly claim payments cease upon the member termination.

Aflac: Benefits will cease upon termination of coverage.

BEN-E-LECT: Payment for benefits will cease at the end of the month for which the termination became effective.

BEST Life: Coverage terminates at the end of the month in which a member is no longer eligible.

CIGNA: Individuals whose plans are ending are covered for services through the end of the month of their termination.

Dearborn National: An eligible expense is incurred when an episode of treatment is initiated prior to the termination of the plan. Covered services would be consistent with the benefit plan and could include such services as root canals, crowns and dentures. The amount of benefit for these services mentioned would be covered if the member leaves the plan. Actual coverage would be consistent with the benefit percentages and allowable charges that were in effect prior to termination. Orthodontia treatment in progress is handled differently, as the case is completed according to the number of months of treatment remaining.

Delta Dental: Delta Dental’s obligation to pay toward orthodontic treatment terminates following the date the enrollee loses eligibility or upon termination of the client’s contract.

Dental Health Services: If a member’s coverage is terminated in the middle of orthodontic treatment, we encourage the member to participate in a COBRA individual plan that will allow the member to retain orthodontic benefits. If the member chooses not to maintain their coverage, the dental office can prorate any additional treatment fees. The member would then only be responsible for the prorated amount of the full treatment cost.

Golden West: Coverage terminates at the end of the month in which a member is no longer eligible unless the member chooses to continue or maintain coverage.

Guardian: When an orthodontic appliance is inserted prior to the PPO member’s effective date, we will cover a portion of treatment. Based on the original treatment plan, we determine the portion of charges incurred by the member prior to being covered by our plan and deduct them from the total charges. Our payment is based on the remaining charges. We limit what we consider of the proposed treatment plan to the shorter of the proposed length of treatment or two years from the date the orthodontic treatment started. Also, we enforce the plan’s orthodontic benefit maximum by reducing the total benefit that Guardian would pay by the amount paid by the prior carrier, if applicable.
If a member is undergoing orthodontic treatment and his or her Guardian coverage terminates, we pro-rate the benefit to cover only the time period during which coverage was in force. We do not extend benefits.
Our DHMO agreement provides for the contracted orthodontist to complete treatment at the contracted patient charge on a number of our plans. As an additional contract rider we can allow for supplemental transfer coverage for Orthodontia under our DHMO if the member chooses to continue or maintain coverage.

Health Net Dental: Upon termination of coverage, we will pay for orthodontic cases in progress on a prorated basis up to the last effective date of coverage. Benefits are no longer payable after the member terminates and are the responsibility of the member and/or the new dental carrier.

HumanaDental: HumanaDental will prorate to provide the appropriate amount given during the time the member was in the plan.

MetLife: Benefit consideration for orthodontic treatment will cease
within the month that coverage terminates unless the participant obtains continuation of coverage, in which case benefits would continue as long as coverage remains in effect.

Principal Financial Group: On individual terminations, some of our plans allow for extended benefits that provide one month of additional coverage.

Securian Dental: Benefits are paid based on the services received while the member was covered by Securian Dental.

United Concordia Dental: The extension of orthodontic coverage for DHMO and PPO plans is 60 days if payments are being made monthly. However, if payments are being made on a quarterly basis, coverage will be extended to the end of the quarter in progress or 60 days, whichever is later.

Western Dental: Western Dental has designed a termination clause to protect the member. The member does not incur any additional fees for the early termination of a provider.

How do you handle the additional cost of OSHA required infection control in your participating offices?

Aetna: We consider these costs to be part of doing business.

Aflac: Since Aflac dental doesn’t have network requirements; policy holders can choose any dentist without restriction. It is the responsibility of the each individual dentist to meet OSHA requirements.

CIGNA: Typically, dentists include these costs into their overhead and we do not allow dentists to charge for this separately. For our DHMO plans, we pay an encounter fee to the dentist to help offset their added cost for OSHA-required infection control.

Dearborn National: Network providers are responsible for the additional costs of OSHA required infection control, with no cost being passed on to our members.

Delta Dental: The cost is included in regular dental office overhead. Network dentists are not contractually allowed to charge Delta Dental or its enrollees a sterilization/infection control fee.

Dental Health Services: The combination of member co-payments, supplemental co-payments, and capitation is designed to help cover costs associated with operating a dental office including necessary additional costs such as OSHA required infection control measures.

Golden West: OSHA costs are the responsibility of the provider.

Guardian: Most dentists have incorporated the cost of OSHA requirements into the fees for services and do not charge separately. If it is the office policy to charge separately for OSHA, we do not restrict or limit the fee as long as all patients, not just the PPO patients, are charged. Since there is no CDT/ADA code for OSHA, Guardian plans do not cover such charges. Also, we do not allow participating DHMO dental offices to charge additional fees for this.

Health Net Dental: OSHA-required infection control procedures are not eligible for payment. It is industry standard to implement OSHA compliant infection control standards for all equipment, facilities and staff without a standalone fee and/or reimbursement. For those dentists who do charge a separate fee, payment is the responsibility of the patient, although a Maximum Allowable Charge (MAC) is established.

HumanaDental: Most offices have incorporated the cost of OSHA required infection control in their overall service charges. These costs would be reflected in the data used to compile fee schedules. It’s not usually a separate billable expense.

MetLife: Most dentists include these charges as part of their general overhead expenses, which, in turn, are part of the fees submitted to MetLife and SafeGuard. MetLife and SafeGuard use these fees as the basis for reasonable and customary data and/or for determining Dental PPO or dental HMO provider fee schedules, as appropriate.

Securian Dental: The dentist must be in compliance with OSHA required standards including:
Meeting OSHA guidelines for hazardous material disposal including sharps.
Meeting all state and local requirements for safety and health. The participating office would absorb any costs associated with fulfilling this requirement.
United Concordia Dental: Participating dental offices include steril-
ization costs in their service fees. In turn, United Concordia uses
these fees to determine our maximum allowable charge (MAC) and fee schedules. Through a partnership with an outside vendor, we offer participating dental offices access to discounted sterilization monitoring services.
Western Dental: Western Dental handles
the additional cost of infec-
tion control in its rates and does not charge a co-payment.

28. Do you provide utilization data to your clients and brokers?

Aetna: Yes.

Aflac: Since our products are individually issued, this is not applicable.

BEN-E-LECT: Yes, all data is provided at plan renewal and may be provided throughout the year by request.

CIGNA: Yes, we can report group utilization data to our clients on an annual basis at no charge. For more frequent reporting, additional charges may apply.

Dearborn National: On large self-funded groups, utilization reports can be generated, pending what is requested and HIPAA compliance rules. For DHMO, claims experience and utilization information is not always reported back to Dearborn National, since a claims submission is not required for the providers monthly capitation payment.

Delta Dental: Delta Dental provides standard utilization reports to clients and brokers on an annual basis upon request.

Dental Health Services: We provide a wide range of utilization reporting, including treatment access, specialty claims activity, and member service call activity on client or broker request.

Golden West: Yes, utilization data is available to groups and brokers upon request.

Guardian: Our standard reports are available monthly, quarterly or annually, and include the following detail: (1) dental plan summary, (2) monthly claims review, (3) cost management, (4) top 25 CDT codes by paid amount, (5) top 25 CDT codes by frequency, (6) benefits category claims comparison, (7) network overview, (8) out-of-network submitted charge comparison, and (9) claims by membership type.

Health Net Dental: Yes, we will provide utilization data upon request for large groups.

HumanaDental: Yes, on request and within the boundaries permitted by HIPAA.

MetLife: Brokers are provided utilization data, if requested, as part of a proposal situation. Clients have online access to their utilization data or can be provided upon request. (Additional note: International dental Travel Assistance services are administered by AXA Assistance USA, Inc. AXA Assistance is not affiliated with MetLife, and the services they provide are separate and apart from the benefits provided by MetLife. Referrals are not available in all areas.)

Principal Financial Group: Yes, based upon the request of the client and/or broker.

Securian Dental: Yes, we can provide this information to individually rated employer groups upon request.

United Concordia Dental: Yes, appropriate
utilization reporting is available to clients and brokers.
Western Dental: Yes, utilization data can be
provided on request to clients and brokers for large accounts.

Please provide contact infor-mation for your company:

Aflac: Visit aflacforbrokers.com,
call 888-861-0251 or
send an e-mail to
brokerrelations@aflac.com to
learn more about Aflac.

BEST Life: 800-210-BEST
fax 949.553.0883

Dental Health Services:
3833 Atlantic Avenue
Long Beach, CA 90807

Guardian Life Insurance Company:
Joe Stefano, director, All of Southern/
Central California & Phoenix
direct line: 949-885-1720,
fax 949-453-9919
Arthur Stern, regional manager,  Los Angeles District Office
direct line 310-765-2201,
fax 310-312-3371
Gregg Holdgrafer, regional manager,
San Diego District Office
gholdgra@glic.com, 800-769-6759,
direct line 619-881-3502, fax 619-296-3912
James Hill, regional manager, San Francisco District Office
jhill@glic.com, 800-832-9555, direct line 415-490-4413, fax 415.788.4412
Chris Anderson, regional manager, Sacramento District Office

MetLife: David Heil
regional director, Northern California
1333 North California Blvd, Suite 170
Walnut Creek, CA 94596
Jason Ackermann
Regional Director, Southern California
1 Park Plaza, Suite 1100
Irvine, CA 92614
The Principal Financial Group: Theresa McConeghey
dental product director
711 High Street
Des Moines, IA 50392

Dental–How to Evaluate Dental Benefits for Your Clients

by Stanley Ayers, DDS
It’s the dental plan’s responsibility to develop a network of dentists who render plan benefits professionally and consistently. While most dental offices fall into this category, there are occasional disputes over costs, benefit provisions, and treatment plans.

It is of great importance to educate members on the coverage that matches their needs and budget and to ensure that your clients understand the risks, benefits, and costs of each procedure. It is imperative that your clients know the specifics of their coverage since some dental procedures are elective, such as a cosmetic procedure, for example.
A good dental plan monitors the quality of care and service provided to members. A dental plan’s top goal should be to ensure the best member experience and treatment — from individual office audits to member surveys and a commitment to helpful customer service.

This is why it is important to look beyond a basic comparison of costs, benefits, and the size of the dental network. Cost is one thing, but with qualitative assessments, you can identify the most value when helping your clients choose dental benefits.

Brokers need to feel confident in the quality of the dental plan they recommend and they need to know that any questions they have about appropriate treatment, quality of care or quality of service will be addressed even before these issues arise. Knowing how a dental plan will prevent issues from arising and manage issues when they occur is essential when recommending dental coverage. It is vitally important that your dental plan is committed to these things.

Understanding Dental Coverage and Networks

One of the more common issues is a misunderstanding of what a dental plan covers. This is where the broker can help educate the client on the basics their coverage. Whether your clients have a PPO, discount plan, or prepaid plan, they should know what they should expect to pay for common procedures, what procedures are covered, and the reimbursement levels for different types of procedures.
It should be a top priority to help your client understand their dental network, benefit coverage, and any plan maximums, deductibles, limitations, exclusions and exceptions. This will help prevent any surprises when your client is receiving dental care.

Common Issues Between Patients And Dentists

We have identified some common issues that patients and dental plans may encounter in their dental treatment.


Up-selling is the practice of selling additional or cosmetic services to a patient when it’s not what they necessarily need or want. At times, a particular procedure may be what the member requests, but if it is presented as the only option, your client could be getting implants when they would have been fine with a bridge. Every dentist’s goal should be to present all treatment options, including no treatment at all. A cause for concern is when the more extravagant procedure is presented as the only option. The dental health plan should respond to any inquiries about potential up selling.

Reluctance to Provide Plan Benefits Graciously

The dental health plan needs to know if a participating dental office does not understand plan benefits or does not present them appropriately, so that immediate action will occur to counsel the office. If your client is well educated on their benefits, they will be better prepared to identify this type of issue and inform the dental plan of their experience.

Lack of Respect For the Patient (Perceived Rudeness)

It is vitally important to create a good doctor-patient relationship, which can have a lot to do with personality. At times, an office manager, dental assistant, or dentist may not realize that they are being perceived as rude. It will not be a good fit for some patients if the dentist or office employee has a more brash personality. That said, a dental plan should respond actively to reports of rudeness or disrespect since it is responsible for ensuring the satisfaction of it members.

Appropriateness of Treatment (Over or Under Treatment)

Most dentists provide proper care. But, occasionally, some dentists want to treat more aggressively while others want to hold off until treatment is mandatory. The difference can be due to the dentist’s training or philosophy.
Your client should keep a few questions in mind when considering which treatment to have. Ask about alternatives, the potential pluses and minuses of a particular treatment, and what the dentist would choose if they were you. Find out if your dental plan supports you seeking a second opinion.

Delayed Access (Long Appointment Delays)

Delayed access is a question for the dental plan. If a decision on coverage is yet to be made, consider calling a few of the network offices in your area and ask how long it would take to get an appointment. Dental health plans should have guidelines and expectations and they should monitor accessibility (how far away are network dentists from clients), and availability (how far in advance must appointments be made).

Delays or Non-Response to Questions or Complaints

Ask if there are guidelines for when a dentist should return a call or respond to an inquiry. Additionally, the broker should ask about company guidelines for responding to requests, average length of hold time, where customer service staff is located, and what type of training or experience is required of customer service staff. A dental plan will have a grievance procedure in place; ask how grievances are received, the frequency of grievances, and how grievances are resolved.

How to Evaluate a Dental Plan For Quality

Evaluating a dental plan for your clients is much more than comparing premiums, dental benefits, and networks. There are other important things to consider in order to ensure quality, appropriate care, and timely treatment.

Quality Assurance

Ask the dental plan about its procedure to the quality of dental services. What training does the plan provide to a dental office that is administering dental benefits? How does the plan qualify dentists for its network? Are dentists monitored regularly for quality compliance? Are there measures in place to detect fraud?
Dental plans should assess patient utilization regularly to identify offices that lie far outside the norm for treatments. For example, if one dental office is delivering three times the number of crowns than all of the other offices in the area, that’s cause for investigation. By doing this evaluation, the dental plan can help monitor and detect fraud and improper billing.

Plan Design Balance

As mentioned previously, the vast majority of dentists treat patients properly and wisely. However, the dental plan can and should provide additional incentives through its payment structure and should provide adequate compensation to the dentist without offering enticement to treat outside of the norm. A dental plan that provides too much incentive for aggressive treatment only encourages over treatment of its members. On the other hand, a dental plan that gives the dentist an incentive not to treat will delay treatment and encourage under treatment of its members.

Commitment to Preventive Care and the Connection Between Oral and Systemic Health

Another important issue is the dental plan’s commitment to emphasizing preventive care and building awareness about the link between oral and systemic health. It’s important for a dental plan to emphasize completed treatment plans and preventive care. This helps enrollees get healthy and stay that way. It also helps the plan save money in the long run, which it can pass on to its members.
Oral cancer can often be caught earlier by a dentist than by a doctor. Many dental offices are beginning to offer oral cancer screenings by using a laser to identify oral abnormalities.

Research has revealed connections between periodontal disease and conditions including diabetes, premature birth, and low birth weight. Also, the mouth can display signs of eating disorders, HIV, and osteoporosis. Make sure that the dental health plan that you are considering is active in educating its members about the potential connections between a healthy mouth and a healthy body.

In Conclusion

The dental plan’s ultimate responsibility is to its enrollees. A member should view their dental plan as their advocate and should contact the plan with any concerns or questions about how their dental benefits are applied and the treatment that is recommended to them.
Stanley Ayers, DDS, is director of Dental Services and Compliance for Dental Health Service. Dr. Ayers is responsible for ensuring quality, timely, and appropriate application of Dental Health Services plan benefits and overseeing the development of systems to proactively prevent issues from arising.
He carries a wide-reaching background in compliance. He was a private practice dentist in Switzerland and San Francisco before moving into regulatory and quality assurance with Pacific Dental Benefits. As a team survey with Managed Health Care Unlimited, he assisted with dental plan surveys for the California Department of Managed Health Care.
As a dental benefits company founded by Godfrey Pernell, DDS, 36 years ago, Dental Health Services carries a long-standing and wide ranging experience in delivering quality dental benefits by managing plan design, holding to rigorous quality assurance standards for dentists, and providing incentives to encourage preventive care and holistic coverage.

Waiting to Exhale–Why Health Exchanges Have Brokers Holding Their Breath

Like No Other Time in Recent History, Health Brokers Are About to be Tested for their Resiliency and Adaptability

by Ron Goldstein, CLU
Healthcare reform is changing everything from the way health insurance will be sold and bought to what purchasers in the individual and small group markets will be looking for when making their buying decisions. In a curious way, part of the good news for brokers is that buying insurance is still going to be complex. With the rules of the game changing, individuals and local employers will be turning to brokers, more than ever, to help them understand how the realities of this new world effect them and what new options might be available from which to choose.

Perhaps one of the biggest changes that will come about as a result of healthcare reform is the mandate that every state establish a health insurance exchange by January 1, 2014. While this part of the Patient Protection and Affordable Care Act has garnered relatively little media attention, industry observers agree that it will alter the small group and individual market significantly. It also opens up a world of tremendous possibilities for brokers who are savvy enough to learn what this is all about and position themselves as the health insurance exchange expert with their clients.

In a nutshell, health insurance exchanges promote choice and make health insurance more affordable by allowing an individual or small business to compare the costs and benefits of various health plans while getting various subsidies and tax credits. With such information and support in hand, purchasers should be able to do a better job of selecting a health plan that best fits their needs and budget. If done properly, exchanges could help us move to a more rational method of purchasing health coverage while bringing society closer to achieving the noble goal of universal coverage for all its citizens.

Here in California, this is particularly significant because business owners are in desperate need of some clear path to value-based purchasing. After all, they have seen health insurance premiums increase 7.5% in 2009 compared to a 0.6% decrease in overall consumer prices. Since 2002, premiums have skyrocketed by 117.5%, more than four times the 23.1% increase in California’s overall inflation rate. Straddled with this unsustainable shellacking, is it any wonder that they are queasy and are looking for any rational alternative to provide them relief?

Part of the challenge is that we still don’t know what a health insurance exchange will look like in California. Our state’s regulators have a choice in complying with the new federal law. One option is for them to approach health insurance exchanges as they would any private sector enterprise and, with that mindset, seek to eliminate all competition. The problem with that approach is that it risks failure at a time when the stakes are so high. It would also likely be disruptive to both the employer community and consumers who would be forced to change insurance arrangements needlessly.
Equally important is that it raises the question of whether it is an appropriate venture for government to run a retail insurance store for millions of Californians, which is what the state exchange would become in that case. After all, this is not exactly an area where there is a track record of government success given the well-documented failures of HIPC and PacAdvantage.

A much better recipe would to create a bold new public-private partnership that harnesses the talents and experience of brokers and insurance agents who already touch millions of citizens every month. Establishing the exchange in this way would be the least disruptive option. It would also best serve the needs of the millions of consumers and businesses who will qualify for subsidies or tax credits. They deserve the same dignity and freedom to shop as what will be available to commercial insurance shoppers.

Regardless of this uncertainly, there is much we do know already. And one of those truths is that the clock is already ticking. Beginning on January 1, 2014 (if not before), exchanges will be available for individual and family plans (IFP) and small groups with possibly up to 100 employees. Beginning in 2017, the states may allow businesses with more than 100 employees to purchase coverage in the exchange as well. In many ways, the exchange will be like a giant online health shopping mall filled with an assortment of carriers offering their products at various price points and benefits. And with these new options will come questions and the need for information, explanations and handholding. Employers will be asking, “Is this right for me?” The person who should be answering that question is their trusted, licensed broker.

The health reform legislation clearly states that state exchanges can use brokers. But, in all likelihood, exchanges will also be selling direct and using a still relatively undefined network of “navigators.” Brokers who want to stay competitive in the health insurance business after 2014 need to ask themselves, “Why would a client use me to purchase exchange coverage when they could go straight to the exchange or to an unlicensed navigator?” The answer is the same as to why an employer would use a broker today when they could go directly to the carrier. It’s because the broker, more than anyone, can provide the information and unbiased recommendations they need to make intelligent, well-informed decisions. And it is the broker who provides unbiased service for mundane issues as well as serious policy interpretation issues.

In order to serve their clients in this way, brokers need to become well versed in what exchanges are all about and then smartly position themselves as health insurance exchange gurus in the minds of their clients. Here are five ways to start:

Learn all you can about health insurance exchanges and keep learning. Knowledge is the key. Those brokers who are armed with the knowledge first will have a decided competitive advantage. After all, most clients would not prefer to rely on service from the state. They will learn about the new exchange from you, another broker, or a state employee. So why shouldn’t it be you?

Continue to sell what you think is appropriate for your clients, but expand your discussion to include a health insurance exchange in every renewal or new business presentation. Start doing that now. Show your clients how an exchange works (using examples like the nation’s most mature and successful health insurance exchange or the nation’s only ancillary exchange). In these early days, keep the discussion simple and focused on the five key elements of an exchange: They promote choice; they allow an individual or small business to compare the costs and benefits of various health plans and thus select a health plan that best fits their needs and budget; they allow the purchaser to access various subsidies and tax credits; they move us toward a more rational method of purchasing health coverage; and they encourage value-based purchasing.

Speak knowledgeably with your clients and prospects about what health plan benefits will look like in an exchange. Here again, stick to the basics. Explain that each of the health plans offered in an exchange will include an essential set of benefits that provide comprehensive healthcare services with different levels of cost sharing. Annual out-of-pocket expenses for individuals will be limited to an amount equal to the health savings account current law limit. There will be multiple benefit categories so purchasers can choose the one that best meets their needs and pocketbook. Individuals who cannot afford to purchase a plan in an exchange may be eligible for a subsidy from the government based on income and family size. By showing them that you understand how an exchange works, you will inspire their confidence and position yourself as the go-to person just as discussions about exchanges become more and more prevalent.

Make sure that you have the information technology support you need to efficiently sell an exchange. That means having top-notch online quoting engines that allow you to compare multiple plans, benefits, and prices instantly to find the plan that best meets your client’s needs. (Be sure that your online quoting engine meets or exceeds the industry standard in quoting accuracy and carrier partnerships). It means having a robust Website that your clients can access. It means knowing how to intelligently leverage select social media tools to share important information on a timely basis. And it means learning to sell IFP online if you’re not already doing so.

Find an exchange partner that can help you sell and administer the health insurance exchange product. Look for one that supports group coverage, individual, and family plan coverage, and Medicare choices while helping qualified applicants link to appropriate subsidized programs. Look for one that offers a broad selection of competing health plans and provider networks. It should offer a robust menu of integrated dental, vision, chiropractic, and related ancillary benefit options to address the fullest range of consumers’ and businesses’ ever-changing needs.

Look for one that offers online and multi-lingual print versions of enrollment and consumer decision support tools to empower truly informed consumer choices. And look for one that has experience in this market. With the stakes so high, there is no time for a long learning curve.

More than at any time in recent memory, health insurance brokers will be tested for their resiliency and their ability to adapt to marketplace changes, deliver what their clients want, and remain relevant. The best way to do this is by acquiring the knowledge that’s in demand and positioning yourself as an indispensable, trusted source. Health insurance exchanges are coming and 2014 isn’t that far away. Now is the time to start getting ready for these dramatic changes.
Ron Goldstein is president of CHOICE Administrators Exchanges, a leader in developing and administering health insurance exchanges. Currently serving more than 10,500 employers and more than 180,000 members, CHOICE Administrators is a member of The Word & Brown Companies, the nation’s leading developer and administrator of consumer choice exchange models. Among the programs operated by CHOICE Administrators are the CaliforniaChoice small group (2-50 employees) and mid-market (51+) private exchanges and Quotit, one of the nation’s largest individual/family proposal and online enrollment systems that generated 2.5 million individual health quotes in 2009 through more than 25,000 brokers across the country. Further information may be obtained at www.choiceadmin.com.

401(k)–Interesting Times
Demand Greater Fiduciary Support

by E. Thomas Foster Jr., Esq.

The Chinese philosopher and educator Confucius is reputed to have uttered the infamous curse, “May you live in interesting times.” Confucius lived 2,500 years ago, but his words describe today’s retirement plan marketplace perfectly.

The Obama Administration and Congress have been taking steps to address retirement security. Legislative activity on healthcare and financial services regulatory reform has dominated headlines. Efforts are underway to make retirement savings plans available to more Americans, encourage the use of guaranteed lifetime income, and strengthen the protections for retirement plan participants. These are admirable objectives and policymakers should be applauded for pursuing them.

Of course, changes to long-established regulations could bring new challenges for retirement plan providers and plan sponsors. The most significant concerns for a plan sponsor relates to their status as a fiduciary to the plan. Few things make employers more nervous than becoming a fiduciary. Plan sponsors are expected to act solely in the interest of plan participants and their beneficiaries or face the possibility of civil or even criminal sanctions.

Confucius, no doubt, was aware of these potential pitfalls as he uttered his second curse, “May you come to the attention of those in authority.” Fortunately, though, plan sponsors can work with their plan provider to get the assistance and tools to help manage their fiduciary responsibilities and liabilities. These tools are built upon a foundation laid by the Employee Retirement Income Security Act of 1974 (ERISA), which spells out the fiduciary obligations of plan sponsors and steps that plan sponsors can take to limit their potential exposure.

Fiduciary Protections

ERISA Section 404(c) offers plan fiduciaries limited protection when they adopt specific behaviors:
Diversifying plan investments to help protect against large losses by offering a broad range of investment options (at least three diversified core investment categories with different risk-reward characteristics).
Offering participants the ability to personally select among the plan’s investment options.
Allowing participants the opportunity to transfer their assets among investment options at least quarterly.
Providing certain information and disclosures automatically and upon request.
• Avoiding conflicts of interest.
Most Fortune 500 employers have decades of experience serving as fiduciaries and have the resources and expertise to handle these duties with little or no outside help. But small- and medium-sized plan sponsors (with retirement plan assets under management of less than $50 million) have more modest staffs and limited expertise when it comes to performing fiduciary duties. They need the support available from a fiduciary service to help meet their responsibilities, which is typically available through their plan provider.

True Fiduciary Services

Best-in-class plan providers make true co-fiduciary services from an independent, acknowledged fiduciary offering contractual investment selection and monitoring, often at no additional cost. Lesser services merely provide a certificate of promise to share fiduciary responsibilities.

A true, high-quality fiduciary assurance service provides investment research, selection, and monitoring to help with the responsibility and liability of selecting investment options offered through an employer’s defined contribution retirement plan. The selection process should include unbiased guidance from an independent third party. As a financial advisor, you should only work with plan providers that can help plan sponsors manage their fiduciary duties by providing the following:
• Co-fiduciary responsibility.
• Investment option recommendations.
• Sample investment policy statement.
Quarterly monitoring of investment options.
Quarterly market commentary and reporting.
An acknowledged fiduciary investment advisor to share fiduciary liability relating to investment option selection.

Quarterly Reports

Fiduciary responsibility typically begins with offering appropriate investments for plan participants. However, investment markets are dynamic, which means plan sponsors need to tightly monitor changes in investment options within their plans. The best fiduciary services keep plan sponsors apprised of changes by delivering quarterly reports that include the following:
Recommendations for investment options, including reports of changes to recommendations from the previous quarter.
• Market commentaries.
• Performance summaries.
Individual fund statistics and information on select holdings.
Qualitative and quantitative reports on performance issues, organizational changes (managers, fund mergers and closures), legal issues related to litigation or regulatory investigations, investment policy changes, consistency issues related to investment style or strategy, and expenses that are out of line with peer investments.
Your plan provider should provide a sample investment policy statement reflecting the retirement plan’s goals and objectives. This serves as an important legal and regulatory tool to demonstrate that the plan is monitored objectively.

Investment Recommendations

In evaluating a fiduciary service, take the time to review the process used to make investment recommendations. A quality fiduciary service will have a disciplined, well-thought-out process that includes the following:
Classification of funds into peer groups with a consistent style and the objective of adding excess return while mitigating excess risk.
Use of quantitative and qualitative measures to narrow the investment universe available to plan participants, considering style consistency, performance, regulatory issues and manager turnover.
Monitoring of investment options on a quarterly basis and communicating any changes.
Reviewing the entire investment lineup on an annual basis.

On the Horizon

Plan sponsors have found tremendous value in securing the right fiduciary service. Fiduciary services will need to keep pace as the responsibilities accelerate.
This brings us to the third and -final curse uttered by Confucius, “May you find what you are looking for.” Federal officials have discussed tightening fiduciary standards, but the exact outcome may not be what regulators expect, at least initially.

Most big companies will manage their new fiduciary responsibilities without a hitch. But many smaller- and even middle-sized firms may need assistance to keep their retirement plan in compliance with the new regulations. It’s a safe bet that the new rules will, at first, create considerable angst and confusion in the market. That’s where you come in as a trusted financial advisor. You can provide tremendous value by helping plan sponsors sort through these issues and get the right assistance.

Retirement plan providers are already kicking the tires on new levels of service that will raise the bar on plan sponsors’ expectations. A new service model has yet to emerge. But, some providers may eventually remove more of the burden from plan sponsors by taking over administrative, trustee, and fiduciary duties. Sorting out the winners and losers among retirement plan providers may rest on who can introduce the best fiduciary services to the market in the shortest time.

Don’t let plan sponsors go it alone. As the regulatory landscape continues to evolve, work with your plan provider to offer the best fiduciary services to your plan sponsors. You may wind up looking wiser and more revered than Confucius himself.
E. Thomas Foster Jr., Esq., is the Hartford’s national spokesperson for qualified retirement plans. Foster works directly with broker/dealer firms
and advisers to help them build their qualified retirement plan business and educate them about industry issues.

Wellness–Integrated Pain Management and Wellness Solutions

by George DeVries
“Oh, my aching _____.” Drop in the words “back,” “neck,” “hip,” “head,” “knees,” “jaw” or most any other body part, and you’ll understand the scope of the chronic pain problem among today’s employees and employers.

Conditions such as migraines, musculoskeletal injuries, neurodegenerative diseases, arthritis and psychological pain are costing employers as much as $100 billion a year in medical expenses, lost workdays, reduced productivity, compensation payments and legal charges, according to estimates from the National Institutes of Health (NIH). With pain affecting more than 70 million Americans, it’s fair to say that it has reached epidemic proportions in the U.S.

What is being done to help employers address chronic pain issues at work? Unfortunately, no magic bullet solves the complex problem of pain management. The types of pain and the variety of ways people experience pain prevent the development of a one-size-fits-all treatment. Health plans, wellness companies, physicians and employers must broaden their thinking about pain management and strive to develop a broad range of treatment options that can achieve the following goals in an integrated manner:

Reduce employee pain.
Increase employee coping abilities and functional capacity.
Decrease employee absenteeism and permanent disability.
Better manage costs associated with chronic employee pain.
• Enhance productivity.
Fortunately, some recent studies shine a light on new approaches to managing pain and its associated costs through affordable, integrated health and wellness strategies. Below we examine a few of these studies.

Study 1: Using Integrative Therapies to Reduce Pain Medication Use and Costs

Back pain is one of the leading causes of job-related disability among U.S. workers, contributing to lost productivity and high medical and pharmaceutical costs for employers. A recent back pain management study of assembly workers at the Ford Motor Company in Louisville, Ky. revealed the effectiveness of using integrative medicine, including acupuncture and mind/body therapies, with conventional medicine. This approach reduced the use of pain medications among participants by a whopping 58%. These very promising results were published in the Journal of Occupational and Environmental Medicine.

The Ford Motor study included a group of assembly line employees diagnosed with low back pain. This group was divided into two subgroups, both of which received care at the onsite Ford clinic over a six-week period with a 12-week follow-up. One group received conventional pain management therapies including pain medications. The other group received integrative therapies to manage stress and pain including acupuncture and relaxation/meditation CDs provided by a wellness organization.

The sample size wasn’t large enough to estimate how integrative medicine affects disability or absenteeism, but the study did reveal extremely positive implications for employers looking to manage pharmacy costs associated with low back pain. Employees using integrative therapies took fewer prescription pain medications. Prescription pain medications, such as narcotics and NSAIDs, are known to have adverse side effects. So, improved health and safety among employees is another benefit to reducing prescription drug use.

Study 2: Using Exercise to Relieve Back Pain and Improve Health

Exercise is critically important in preventing and treating back pain. In fact, exercise actually reduces pain and improves the quality of life for chronic pain sufferers. A 2009 study conducted by the University of Alberta in Canada and presented at the American College of Sports Medicine revealed that participants with chronic low back pain who exercised four days a week had a better quality of life, 28% less pain, and 36% less disability than those who exercised less often.
The 16-week study was conducted on groups of 60 men and women with chronic back pain.

Those who exercised four days a week reported a 28% decrease in pain and a 28% improvement in general physical and mental well-being.
Those who exercised three days a week reported an 18% decrease in pain and 22% improvement in general physical and mental well-being.
Those who exercised two days a week reported a 14% decrease in pain and 16% improvement in general physical and mental well-being.

Study 3: Resistance Training Vs. Aerobics

A 2009 study, published in the Journal of Strength and Conditioning Research, compared resistance training to aerobics. Participants with chronic back pain took part in a 16-week exercise program. Those who did resistance training with dumbbells, barbells and other load-bearing exercise equipment showed a 60% improvement in pain and functioning levels. In contrast, people who did aerobic training, such as jogging, walking on a treadmill, or using an elliptical machine to ease their back pain only experienced a 12% improvement.
The findings of these and other studies show that integrative health and wellness strategies offer a promising solution to reducing chronic pain and increasing functioning while reducing the costs of sick days, disability, and high tech medical care.

Taking a 360-Degree View of Pain Management

To be sure, a sound pain management strategy doesn’t begin and end with integrative health and wellness strategies. For the best results, your groups should take a 360-degree view of pain management that starts with prevention, continues with effective evidence-based interventions, and ends with a solid return-to-work plan. The most effective programs might include some or all of the following:

Worksite Ergonomics, Injury Prevention, and Wellness Programs

On-the-job injuries can occur for the following reasons: the worksite has not been evaluated appropriately for potential repetitive motion, back, or other injuries; workers have not been educated about potential safety issues; or workers have an overall lack of general physical fitness, which can contribute to chronic pain syndromes.

Talk with your groups about identifying potential jobs, equipment, or environments that could cause workplace injuries and chronic pain. Solutions can sometimes be as simple as making sure computer keyboards are the correct height on a desktop or that back braces are provided to avoid injuries. Only 38% of worksites with fewer than 200 workers offer injury prevention programs, according to the 2009 Kaiser Family Foundation survey.

Employer wellness programs can improve employee fitness and health through worksite exercise, weight management and healthy eating campaigns and contribute significantly to reducing chronic pain and disability. Employers with highly effective health and productivity management programs have cost increases that are five times lower for sick leave, 4.5 times lower for long-term disability, four times lower for short-term disability, and 3.5 times lower for general health care coverage. Effective health and productivity management programs were also reported to achieve 20% more revenue per employee, according to a 2007/2008 study by Watson Wyatt and the National Business Group on Health.

Pain Education Programs and Early Interventions

Employers often underestimate the prevalence of employee pain in the workplace because employees come to work despite being in pain. Workers would often rather go to work in pain than call in sick, leading to a less engaged, less productive employee, according to a 2006 survey by Harris Interactive. Suffering caused by pain can dramatically affect presenteeism and productivity. Pain awareness programs that encourage employees to seek help from a multitude of effective sources can improve productivity and reduce future disabilities that could occur without early intervention.

Complementary and Integrative Therapies

Study after study has shown that complementary and integrative therapies, such as massage, acupuncture, chiropractic and mind/body therapy, offer a safe, satisfying and clinically conservative pain treatment alternative to specialty physician visits, hospitalization, surgery and prescription drugs.

Not surprisingly, many Americans are turning to complementary medicine for pain management, especially as an alternative to more invasive interventions like surgery. About 38% of U.S. adults have tried complementary and alternative therapies for chronic pain and other health problems, according to a 2008 survey by the National Institutes of Health and the U.S. Centers for Disease Control and Prevention. Back pain was the leading reason that Americans reported using complementary and alternative medicine techniques, followed by neck pain, joint pain, and arthritis. Many respondents say these therapies may work better for them than typical medical approaches with fewer harsh side effects.

Return-to-Work Programs

As a final step in a solid pain management strategy, employers should consider implementing a return-to-work program that offers appropriate analysis of the equipment, duties and environment for employees who are returning to work with chronic pain.  Employers can re-engage the employees at their highest possible level of productivity and happiness with thoughtful interventions, such as ergonomically designed workspaces.

The pain management solutions described above can be a potent remedy for chronic pain in the workplace. But many employers may not be able to implement all of these solutions together. Brokers should work with insurers and wellness plans to develop cost-effective and budget-minded strategies that integrate with their other wellness and health management programs to help employers minimize the financial and physical toll of chronic pain in the workplace. q
George DeVries is chairman and chief executive officer of American Specialty Health Inc. (ASH) in San Diego, CA. ASH is a provider of complementary health benefit plans covering care chiropractic, acupuncture, massage therapy, dietetic counseling, naturopathy, mental imaging, and relaxation benefits. ASH’s wellness subsidiary, Healthyroads Inc., provides wellness and personal health improvement programs such as smoking cessation, weight management and fitness improvement through its Healthyroads Lifestyle Coaching program. For more information, visit www.ashcompanies.com, or e-mail George at GeorgeD@ashn.com.

Health Insurance-Five Healthcare Innovations to Watch in 2010

by Brent Hitchings
With all the uncertainty generated by federal heath reform these days, it’s important for brokers not to get paralyzed by the change, but to look for new ways to provide even more value to clients. Producers can build better relationships by staying ahead of new trends that will affect employers in this new era of healthcare.

Government incentives to tamp down costs and improve quality of care are spawning all kinds of innovations including greater transparency in pricing, highly personalized wellness programs, and new clinical partnerships that promote efficiency and boost quality. At the same time, technological tools are changing the face of communications dramatically with clients and members, especially with younger customers. Brokers who seize these opportunities will be better positioned to succeed in the transformed healthcare world. Here are five trends to follow in the coming year.

Next-Generation Disease Management/Wellness Programs

Disease management and wellness programs have experienced several cycles over the past 30 years. Since the 1980s, “we have gone from a touch of prevention, to disease management, to wellness, and now population health management,” says Jan Berger, M.D., chief medical officer of Silverlink Communications, which delivers interactive voice services to healthcare consumers.
As brokers review different programs on behalf of their clients, they need to know that the benefits will be personalized to the individual or the population regardless of their age or health status, says Berger. Selling benefits that only reach out to someone once they have been diagnosed with a chronic condition, like hypertension or diabetes, does less to improve health than a program that covers an entire population, providing a multitude of information and services.
“The more progressive brokers are using this as a key tool to manage cost and trends over the next three to five years,” says Joe Torella, president of the employee benefits division at HUB International Northeast. Scott Hauge, president of Cal Insurance and Associates, and president of Small Business California, agrees that brokers who can help employers set up the right wellness program will be providing a highly valued service. “People say they want to start a wellness program and put some things in place, but nobody keeps on top of it and it fails,” says Hauge. A broker could add real value, he explains, by offering to work with a designated person within the employer company.

Accountable Care Organizations (ACOs) on the Rise

Aligning incentives between health plans, hospital, and physicians is hardly new. However, the rise of ACOs is a relatively recent phenomenon that has been generating industry buzz in the last few years and is encouraged by the new health reform law. ACOs are clinical delivery systems composed of assorted healthcare stakeholders, including hospitals, medical groups, and health plans that agree to coordinate care and share the financial risk and cost savings for a group of patients or members as they move through the care continuum. The goal is to boost quality and drive down costs by delivering care more effectively. ACOs are different from pay-for-performance and other incentive models in that “the providers who establish the ACO are responsible for setting key performance metrics,” notes the report Accountable Care Organizations: A new model for sustainable innovation, by the Deloitte Center for Health Solutions.

ACOs also give the federal government a way to trim costs in the Medicare population by offering bundled payments that are split between hospitals and physicians, thus encouraging each player to better coordinate care. In fact, the recent healthcare legislation calls for ACO pilots starting with Medicare beneficiaries. Several states are also testing ACO pilots of their own. In California, we are also starting to see some real movement in this direction. Earlier this year, the California Public Employees’ Retirement System (CalPERS), Blue Shield of California, Hill Physicians Medical Group, and Catholic Healthcare West began piloting their own ACO for CalPERS members in the Sacramento area. Their aim is to improve quality, cost, and service through aligned incentives and shared risks. CalPERS members who sign up for the ACO will see no increase in premiums for 2010, with CHW, Hill and Blue Shield sharing the risk if they don’t hold the line on costs.

Since ACOs encourage cooperation in any given market, brokers can expect to see smoother contract negotiations and more reasonable premium increases. In turn, health plans would conceivably see a downward trend in the cost of healthcare. Employers and individuals benefit from more affordable insurance policies and gain greater control of their out-of-pocket medical spending as costs grow more transparent and quality improves. “It is important for brokers to look at it as an asset that they can take out in the market,” says Berger, with Silverlink Communications.

Social Media Crosses the Healthcare Barrier

Social media is overwhelming with Facebook, LinkedIn, Twitter, MySpace.com, YouTube, online forums, and blogs, but it’s here to stay and it’s not just kids and young adults who are connecting with one another online. Fifty-one percent of adults from 35 to 44 have a personal profile page on sites, such as Facebook, Myspace.com, and LinkedIn. The number of adults from 45 to 54 with a personal profile page jumped from 14% to 35% in two years, according to a 2010 study by Edison Research. Social media now intersects throughout healthcare. Health plans use Facebook, Twitter, online video, and online forums to share benefit information and encourage members to talk with one another about wellness. One plan in California even allows members to post ratings and reviews.
Brokers need to add social media tools to their communication toolbox as well. Just having a static Website or an e-mail newsletter is no longer effective in reaching all segments of the population. “People put companies in two buckets: the technology-enabled companies and brokerages and then there is everybody else,” says Shawn Jenkins, president and CEO of Benefitfocus, which provides a Web-based benefit platform for employers, health plans and consumers.

Start by using simple social media applications that will help familiarize you with the technology and enable you to open up channels of conversation. A lot of the technologies are free. “It can be as simple as having a Facebook page or a Twitter account and posting updates,” says Jenkins. “Anybody 18 to 25 would rather text you or get information on Facebook. That is their preferred model and if you don’t have that capability, they may look past you.” So, where do you start? “A broker who specializes in a small group market and wants new business could have a Facebook page, start friending people at the local chamber, post relevant information on health savings accounts and offer to help,” says Jenkins. If you are still not a believer, try connecting to 50 people and then watch the snowball effect it has on spreading awareness about your business.

Mobile Health Technology Offers Greater Connectivity

Like social media, mobile health has been booming. It allows information to be transmitted wirelessly to and from mobile devices like the iPhone. On the hospital/physician side, new technology enables healthcare providers to monitor patients with chronic conditions remotely through wireless devices that transmit vital health information to an online platform, which then feeds it to an electronic medical record. New wireless technology also allows physicians to access electronic medical records and other clinical information, such as X-rays, through a smart phone or other mobile device. There are endless innovations for consumers. Already, large health systems, such as the Mayo Clinic, are preparing to go mobile, starting with consumer applications for smart phones that provide basic information about symptoms and how to find a doctor, said Scott Eising, director of product management for Mayo Clinic Internet Services, in a recent article by MobiHealthNews.

“Mobile support is big and growing, whether it is an iPhone application to get healthcare videos or an iPad application to check eligibility,” agrees Jenkins of Benefitfocus. “Last year the number of new computers sold in the world was 100 million. The number of mobile devices was 900 million.” Two-thirds of physicians and 42% of the public used smartphones in 2009, according to a recent report from the California HealthCare Foundation. “The creation of applications related to health and healthcare is also moving quickly. As of February 2010, there were nearly 6,000 such apps within the Apple AppStore,” finds the report.

How can brokers get involved in the mobile health movement? Consider developing an application, suggests Jenkins. “What does a broker do? They get up in the morning and try to find people to talk to about buying products. If the biggest platform is a mobile device, it makes sense to consider it. An iPhone application can be developed inexpensively.” He notes that a health plan in the Midwest recently developed a text application allowing consumers who did not have insurance to text their age to a local radio station. Each person received a text message back with a rate, along with a link back to the health plan’s site. “It was very simple and they got hundreds of responses,” says Jenkins.
Medical Tourism Gains Ground

In 2007, 750,000 Americans got medical care abroad. This number could rise to 1.6 million by 2012, according to the report “Medical Tourism: Update and Implications,” by Deloitte Center for Health Solutions. Such numbers are not surprising given our focus on trimming costs and the fact that consumers are having more outpatient surgeries. Several health plans already offer their own cross-border health plans or are implementing medical tourism pilot programs.

“Employers and administrators are adopting it and recognizing that it is here to stay,” says Vic Lazzaro, CEO of medical travel company BridgeHealth Medical, which contracts with 25 domestic centers of excellence and an international network of 35 accredited hospitals in 15 countries. Self-insured employers, TPAs, and even fully insured companies are getting in on the act. Savings can range from 20% to 40% domestically and as much as 80% internationally after expenses.
One million Californians get medical care in Mexico each year – 150,000 of which are covered by private health plans, according to a recent California Healthline news article. One of the most pressing hurdles to medical tourism is the worry over how medical liability issues might be handled. It still needs to be worked out and is getting attention from some plans.

Brokers who are interested in medical tourism for their clients should consider offering affiliate programs with the few U.S. companies offering access to international care. Moving forward, the level of support from health plans and employers will likely determine how quickly medical tourism grows, says Deloitte. “It is likely to be a more visible feature of benefits programs offered to enrollees through employer-sponsored plans and commercial insurance offerings.”
Brent Hitchings is vice president of producer sales for the individual, small group, and government business unit at Blue Shield of California, a not-for-profit health plan dedicated to providing Californians with access to high-quality care at a reasonable cost. Mr. Hitchings can be contacted at brent.hitchings@blueshieldca.com. For more information, visit www.blueshieldca.com.