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by Leila Morris
HEALTHCARE
• Insurers Show Strong Participation in Public and Private Exchanges
• PIA Champions Using Agents to Sign Up For the Exchange
• U.S. Sees Lowest Health Care Cost Increases in More Than a Decade
IN CALIFORNIA
• Covered California Rolls Out Asian-Language Ad Campaign
• Blue Shield’s MA Plan Gets Four Stars
• Kaiser HMO Named As A Top Performing Plan
• One of the Best Places to Work in Insurance
• Law Offers Price Protections for Oral Cancer Meds
• AARP to Promote Enrollment in Covered California
EMPLOYEE BENEFITS
• Retirement Health Benefits Get Less Generous
LONG-TERM CARE
• How Long-Term Care Planning Pays Off
PRODUCTS
• Guaranteed Universal Life
• Website Addresses Personal Challenges
• Social Media Compliance and Risk Management
• Whole Life
• Financial Literacy Website
HEALTHCARE
Insurers Show Strong Participation in Public and Private Exchanges
Seventy percent of health insurers are expected to participate in private and public exchanges in the next six months, according to a survey by Array Health. The survey gathered feedback from attendees at the Defined Contribution Healthcare & Private Exchanges Summit in Carlsbad, Calif. and subscribers of Atlantic Information Services (AIS) health insurance publications. The survey reveals the following:
• Most employers are aware of private exchanges, but consumers are largely unaware – Eighty-nine percent of respondents said that employers were aware of private exchanges while only 30% of respondents said consumers were familiar with them.
• Private exchanges provide a great opportunity for employers to control costs and offer benefit choice – Ninety-three percent of survey respondents say more employers will choose a defined contribution funding model over the traditional defined benefit model — and nearly 70% say that will happen within the next five years.
• Most insurers will pursue a multi-channel exchange strategy – Nearly 80% of respondents say insurers will participate in private exchanges. This is likely due to increasing demand from employer groups and growing awareness about private exchanges in the marketplace.
• Young, healthy consumers coined the “young invincibles,” offer health insurers a new target market – More than three-quarters of survey respondents say that up to 50% of healthy, young consumers won’t comply with the Affordable Care Act individual coverage mandate, and more than one third of respondents say as many as 75% won’t comply. Insurers and public entities must find ways to attract and engage this young, Internet-savvy population to increase enrollment.
For more information, visit http://www.nbch.org.
PIA Champions Using Agents to Sign Up For the Exchange
Millions of consumers are looking into purchasing health insurance through the insurance marketplaces set up as part of the Affordable Care Act (ACA), and some face problems accessing the program because of failures of the government’s website. According to a statement by the Assn. of Professional Insurance Agents (PIA), these consumers may not be aware that they can consul their local independent insurance agent or broker for help in enrolling. While navigators cannot offer advice or recommend one policy over another, professional insurance agents are free to offer a much higher level of assistance. In addition, in most states navigators are not required to be licensed or to comply with state-mandated continuing education requirements; they are also not required to maintain professional liability insurance coverage. Agents and brokers must be licensed and must comply with all of these requirements, along with all state laws and regulations.
Many independent insurance agents and brokers have already been certified to help consumers enroll in exchange health plans. They can also make consumers aware of insurance choices not available through the exchanges.
PIA National President John G. Lee said, “Professional agents and brokers have the training and expertise needed to advise consumers about all of their insurance choices. We have always been licensed, regulated and required to carry professional liability insurance coverage. We recommend that people shopping for health insurance – or any kind of insurance – make the smart choice and not leave anything to chance. Consult a local ACA certified professional insurance A]agent.” For more information, visit www.pianet.com.
U.S. Sees Lowest Health Care Cost Increases in More Than a Decade
In 2013, U.S. companies and their employees saw the lowest health care premium rate increases in more than a decade, according to an analysis by Aon Hewitt. The average health care premium rate increase for large employers was 3.3% in 2013 after plan design changes and vendor negotiations. That’s down from 4.9% in 2012 and 8.5% in 2011. However, average health care premium increases are projected to move back to the 6% to 7% range in 2014.
Tim Nimmer of Aon Hewitt said that many fact0rs that helped lower rate of premium increases are not expected to continue. These include the recession and uncertainty around economic conditions and health care reform. Additionally, employers and insurers are subject to new transitional reinsurance fees and health insurance industry fees. “While we are seeing pockets of promising innovation in the health care industry, we expect to see 2014 premium increases shift back towards the 6% to 7% range overall,” he added.
The average health care cost per employee was $10,471 in 2013, up from $10,131 in 2012. Employees were asked to contribute an average of $2,303 toward the total health care premium in 2013, compared to $2,200 in 2012. Average out-of-pocket costs increased 12.8% ($2,239) in 2013, compared to just 6.2% in 2012 ($1,984).
Average health care costs are projected to increase to $11,176 per employee in 2014. Employees will be asked to contribute 22.4% of the total premium for an average of $2,499 for 2014. Average out-of-pocket costs are expected to increase to $2,470. Under these projections, employees’ share of health care costs will have increased almost 150% from $2,011 in 2004 to $4,969 in 2014.
In 2014, companies are expected to see cost increases of 7.5% for HMOs, 6.5% for PPOs, and 6.5% for POS plans. In 2013, some major U.S. markets experienced higher than average rate increases including Los Angeles (6.9%), Orange County (6.9%), and San Francisco/Oakland/San Jose (4.8%).
Jim Winkler of Aon Hewitt said that employers are realizing that a traditional managed trend approach is less effective in mitigating costs increases over time. They are exploring innovative approaches, such as requiring participants to be more active in their own health care planning, and holding health care providers more accountable for reducing unnecessary expenses and creating more efficiency in health care purchasing. As the health care landscape continues to evolve, employers will use a mix of traditional and non-traditional approaches to reduce costs
About 28% of employers plan to move into a private health care exchange over the next three-to-five years. Private health exchanges are becoming more attractive to employers that want to offer health care choice, lower cost trends, and reduce administrative burdens. With this model, employers continue to finance health insurance while employees choose from multiple group plan options and insurance carriers through a competitive marketplace.
Consumer-driven health plans (CDHPs) have surpassed HMOs as the second most popular plan option offered by employers. A growing number of employers are offering CDHPs as the only plan option. While just 10% of companies do so, another 44% are considering it in the next three to five years.
The survey reveals the following about employers:
• 54% are considering reducing subsidies across all dependent tiers in the next three-to-five years.
• 69% have implemented surcharges for adult dependents or they plan to do so.
• 47% are considering charging per dependent, compared to just 4% of employers that do so today.
• Two-thirds have conducted audits to ensure that only eligible dependents remain on the plan.
• 47% have increased participants’ deductibles and/or co-pays in the past year, and another 43% are considering doing so in the next three-to-five years. Employees’ share of the health care premium is 22%, compared to just 18.6% a decade ago.
• 75% offer health risk questionnaires and 71% offer biometric screenings.
• 53% plan to move toward provider payment models that promote cost effective, high quality health care. As many as one in five say it’s one of their three highest priorities.
In addition, employers are increasing cost sharing by altering plan designs, including shifting from fixed dollar copayments to coinsurance models, in which employees pay a percentage of the out-of-pocket costs for each health care service. Employers are also increasing deductibles, out-of-pocket limits, and cost sharing for non-network providers. For more information, visit www.aonhewitt.com.
IN CALIFORNIA
Covered California Rolls Out Asian-Language Ad Campaign
Covered California began its marketing campaign to Asian-language consumers through airwaves, billboards, online channels, and print media. The push is designed to get information about the new health insurance marketplace to Asians in their specific languages, using a wide range of media.
Asians make up 14% of Californians eligible for federal subsidies when signing up for health care coverage that begins Jan. 1, 2014. According to census data, half of Asians in Californian speak limited English, prompting a need to communicate with them in their individual languages.
Key markets for Asian-language advertising are Los Angeles, the San Francisco Bay Area, Sacramento, San Diego, and Fresno. Asian TV spots began last week in multiple languages, including Cantonese, Mandarin, Korean, Vietnamese, and Tagalog. While some radio stations began to run ads about the state health benefit exchange in various Asian languages on Oct. 1, a heightened campaign is now underway with additional radio spots in Khmer and Lao languages.
Covered California advertising in Asian languages will hit billboards and transit shelters in early November, along with posters in key community gathering places. Chinese online ads have been in the market since September, but those efforts will be expanded to include Korean, Vietnamese, Filipino, Hmong, Lao and Khmer. Print ads in Asian languages began earlier this month, in traditional and simplified Chinese, Korean, and Vietnamese. To see the Asian language ads, visit the news section of www.CoveredCA.com.
Blue Shield’s MA Plan Gets Four Stars
For the third year in a row, Blue Shield of California’s Medicare Advantage prescription drug plan got a four-star quality award from the Centers for Medicare and Medicaid Services (CMS). CMS uses a five-star system to measure the quality and performance of Medicare health and prescription drug plans. Among prescription drug plans sold in Blue Shield’s service area, the company is among the few to consistently get an above-average rating. For more ore information, visit https://www.blueshieldca.com/sites/medicare/home.sp.
Kaiser HMO Named As A Top Performing Plan
Kaiser Northern California HMO was named as a top performing health plan, according to National Business Coalition on Health (NBCH). Cigna and Health Net were also recognized for aspects of their plans. California Health plans were recognized for the following:
Chronic Disease Management – Kaiser Northern and Southern California HMO.
Behavioral Health Management – Kaiser Northern California HMO
Provider Management – Cigna California PPO.
Plan Profile – Cigna California PPO and Health Net California HMO
For more information, visit http://www.nbch.org/2013-Annual-Conference.
One of the Best Places to Work in Insurance
EPIC was recognized for a fourth year as a “Best Place to Work in Insurance” by Business Insurance Magazine and Best Companies Group. The retail property, casualty and employee benefits insurance brokerage is one of only 65 companies awarded this honor nationwide. Based on employee feedback, the company took second place honors in the medium retail broker/agent category. Companies were judged on employee engagement and satisfaction, benefit programs, policies, practices and other general information. Mary Smith, director of human resources said, “Recognizing the value of a ‘people-first’ culture, EPIC has developed a benefits package and work environment that attracts and retains top talent.” The company offers a generous paid-time-off package, a 401(k) match, a wellness program, and an annual employee appreciation day. EPIC encourages employees to participate in charitable events while supporting these efforts financially and offering in-kind donations. For more information, visit https://www.facebook.com/EPICInsuranceBrokersAndConsultants.
Law Offers Price Protections for Oral Cancer Meds
Governor Jerry Brown signed AB 219 into law. The legislation, authored by Assembly member Henry Perea (D-Fresno), increases price protection for oral cancer medications. California joins the 26 other states that have enacted similar legislation. Insurance Commissioner Dave Jones said, “This bill, which my department urged the Governor to sign, establishes limits that will result in substantial out-of-pocket savings for cancer patients and will prevent patients from abandoning necessary oral treatments for cancer.”
AB 219 will take effect on January 1, 2015 and will apply to new, amended, or renewed health insurance policies requiring insurers to limit patient costs to $200 for a 30-day supply of covered oral anti-cancer medication. Previously these treatments could cost $10,000 per month. A 30% co-insurance rate would only reduce out-of-pocket cost to $3,000 per month. Healthcare plans and health insurers will be allowed to increase the $200 limit a year to reflect inflation.
AARP to Promote Enrollment in Covered California
The California Endowment teamed up with AARP to create awareness about Obamacare and promote health care coverage enrollment in California. The partnership is part of The California Endowment’s “Get Covered campaign,” or “Asegurate” in Spanish. During live webinars, AARP trainers will discuss the basics of Medicare and its intersection with Obamacare. For more information, visit www.GetCoveredCa.com.
EMPLOYEE BENEFITS
Retirement Health Benefits Get Less Generous
Only 17.1% of employers offer retirement health benefits compared to 29% in 1997, according to a report by the Employee Benefit Research Institute (EBRI). Some employers have increased premium prices in addition to reducing benefits. Sam Milo of the consumer finance site, QuickLoansBadCredit.org said, “We are very concerned by the findings of the EBRI study. If employee health benefits for retirement are not comprehensive, people and families could be in for a very rude awakening. Additional costs, premiums and expenses are extremely worrying for retirees. Even despite careful planning, saving and budgeting for 30 years, employees may be getting short changed by their employers who may end health insurance benefits and other benefits so that an additional $6,000 to $10,000 per year may be needed by the retiree to plug the gap.”
LONG-TERM CARE
How Long-Term Care Planning Pays Off
When families make long-term care arrangements before a long-term care event occurs, they can save nearly $11,000 a year in out-of-pocket expenses, according to a Genworth study. Fifty-three percent of primary caregivers have lost income due to the demands of providing care. When loved ones don’t have long-term care insurance, their caregivers face additional stresses including covering the cost of daily living, medical care, and other support-type needs.
“Most families say they can solve a long-term care crisis themselves or that a family member will bear the load of caring for an aging relative. This thinking may work for the short term, but over a longer period of time, families will start to feel the burden of stress and guilt affecting the care get, caretaker and the entire family,” said Bob Bua, president of CareScout, a Genworth company.
Forty percent of people who attended a day care facility had plans in place to cover a long-term care situation compared to only 23% of those who moved into a family member’s home.
Among the many reasons for not taking steps to plan sooner, 38% of care receivers didn’t want to admit care was needed; 28% didn’t want to talk about it; and 23% didn’t know where to start. However, 58% of those without long-term care insurance regret not having a policy. Fifty-nine percent say it would have relieved their financial burden and 59% say it would have reduced the strain on the family. For more information, visit https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html.
NEW PRODUCTS
Guaranteed Universal Life
American General introduced Secure Lifetime GUL II. It provides increased options in case design for 1035 and shorter pay scenarios. It also includes an integrated enhanced surrender value rider (a return of premium feature). It is now available with the new Lifestyle Income Solution, which is designed to turn a life insurance product into a guaranteed stream of retirement income. For more information, visit www.agquickticket.com.
Website Addresses Personal Challenges
Cigna.com/GO YOU Hub is a new multimedia website that celebrates people overcoming life’s challenges. The site provides a gathering place where visitors can learn and be inspired by the stories of people overcoming adversity. The site also includes news articles and white papers by physicians, behaviorists and clinicians.
Social Media Compliance and Risk Management
OpenQpeople launched SafeGuard for Salesforce Communities. It allows businesses to create private social and branded communities to connect with their employees, partners, and customers while remaining compliant with laws that regulate their industry. Those in regulated industries, such as life sciences, financial services, insurance, health care, consumer goods, retail, and others can use dozens of implementation-ready policy templates and deploy out-of-the-box social compliance solutions immediately. SafeGuard also facilitates the e-discovery process by archiving all content and providing full audit trails through its standard reporting. For more information, visit www.appexchange.com.
Whole Life
Ohio National added two products to its Prestige whole life insurance offerings. Prestige 100 replaces the Prestige Performance and Prestige Xcel policies. It provides lifetime protection at an affordable price. It offers competitive cash accumulation and a strong death benefit while offering a full suite of optional riders ranging from a term blend rider to a chronic illness option. The Prestige 10 Pay is a limited pay whole life insurance policy. It’s an option for applicants who want to get their premiums out of the way while enjoying a lifetime of insurance protection. The purchaser can pay all premiums in the first 10 years. It provides the strongest 10-year cash values in the entire portfolio. For more information, visit www.ohionational.com for more information.
Financial Literacy Website
Guardian Life’s website (www.myretirementwalk.com) offers tools, infographics, and guidance for people at various life stages. It provides an animated, interactive experience with financial planning and retirement insights based on life’s major milestones. For more information, visit www.GuardianLife.com.