Subscribe to Insurance Insider News
by Leila Morris
IN CALIFORNIA
• These Mistakes Will Delay Your Exchange Certification
• California Exchange Gets An A
• Health Net Aligns with Prime Healthcare Hospitals
• AXA Advisors, LLC Opens In San Mateo
HEALTHCARE
• Consumer-Driven Health Plans Have Break-Out Year
• CDHPs May Become the Most Popular Plan Type
• A Look at Off-Exchange Health Plan Premiums
• A Look At Exchange Advertising & Marketing
• How the ACA Helps Allergy and Asthma Patients
NEW PRODUCTS
• Voluntary Educational Benefits
• Supplemental Disability
• Stop Loss Insurance for Self-Funded Health Plans
• Employee Hour Tracking
EMPLOYEE BENEFITS
• The Argument for Bringing Back DB Retirement Plans
• A Positive Work Environment Can Improve Wellness
• The Growing Use of Non-Cash Incentives
IN CALIFORNIA
These Mistakes Will Delay Your Exchange Certification
CAHU contacted Covered California after hearing concerns from brokers who are having trouble getting certified to sell through the exchange. CAHU president Sam Smith said, “Hundreds of agents have been certified and more are being added every day. Covered California is very aware of their software performance issues. They are as unhappy and concerned as CAHU is and they are updating their system and continue to update as issues arise. The problems are affecting everyone, not just agents.” However, Smith noted that agents may be responsible for some of the delays.
Covered California says that agents are making mistakes in 70% to 80% of all agreements submitted. Every time there is a mistake an agreement, it gets tossed back for correction. When that happens, Pinnacle/SHOP must contact each agent and ask them to correct their forms. When they cannot reach the agent, they are leaving voice mails. Smith says, “Check your voicemail to be sure they haven’t tried to reach you!” Agents are making these common mistakes:
• Agents are submitting the old draft version of the agent agreement. Agents need to check and see if what they submitted has “DRAFT” at the top. If that is what they submitted, they need to redo the form using the agent agreement that was emailed to them from Covered California after they passed the test. Using the draft, not final version, is one of the most common mistakes. Agents need to be sure to download FINAL version of agent agreement from their email to fill out and re-submit.
• The Darfur form in the Agent Agreement. — Most agents are checking every box. If they don’t have employees in Darfur, they should only check box that says, “I have no employees in Darfur” and nothing more. Do not check all the boxes!
• Forgetting to date the agreement — Make sure the agreement has dates inserted where needed.
California Exchange Gets An A
When it comes to state exchanges, California and Massachusetts are at the top of the heap. Some agents and consumers may disagree, but both states got an A grade for implementation of their state exchanges, according to a report card issued by HealthLeaders Interstudy.
HealthLeaders says that state-run and partnership exchanges are generally more advanced. Most partnership and state-run exchanges are in full marketing mode, with grants awarded to any group that can spread the word. Some states are going door-to-door, and some launched speakers’ bureaus to blanket every county. On the other end of the spectrum, some states have forbidden any state government role in promoting the exchanges.
California and Colorado ranked higher for choosing a Kaiser Permanente plan; Kaiser’s staff-model HMO allows for more concentrated benefits, a narrower formulary and promoted exchange competition. Benchmark plans set the floor for what policies sold in the exchange will look like. Most benchmark plans provided relatively robust drug benefits, and all are required to offer at least one drug per therapeutic class. Because the benchmark serves as a starting point for benefits, it will have less impact over time.
Nevada is among the few states to institute aggregate billing – meaning that regardless who provides care for different members of a family (Medicaid, CHIP or different exchange carriers); they will receive one bill from the exchange itself. California and Vermont are among the states with active purchaser models, requiring MCOs to bid to sell in the exchange. For more information, visit www.hl-isy.com/state-exchange-report-card.
In related news, 7% of Americans say that they or someone in their household has tried to sign up for health insurance through the exchanges. Seventy-five percent of them said they had problems signing up, according to an AP-GfK poll. Forty percent of Americans the launch went well and 20% said went somewhat well. The AP-GfK Poll was conducted October 3 to 7.
Health Net Aligns with Prime Healthcare Hospitals
Health Net members will now be able to receive care at in-network benefit levels from Prime Healthcare hospitals. This agreement gives Health Net’s insured commercial, Medicare and Medi-Cal members access to 14 of Prime Healthcare’s hospitals. Additionally, members enrolled in Health Net through the Covered California health insurance exchange will have in-network coverage at Prime Healthcare’s Southern California Hospitals. For more information, visit www.primehealthcare.com.
AXA Advisors, LLC Opens In San Mateo
AXA Advisors, LLC, opened a San Mateo office at 1840 Gateway Drive, Suite 150, San Mateo, CA 94404. Cindy Zheng of AXA Advisors said, “We have expanded our reach to accommodate our continued growth in the San Mateo area.” The company’s areas of focus include financial planning as well as life insurance and annuities. For more information, visit www.axa-equitable.com.
Correction
Last week, we ran a news item titled “Law Limits Self-Insured Plans for Small Employers,” which said, “A new law in California, CA SB 161, limits the ability of small employers (under 100 employees) to self-insure their health benefits.” We thank an astute reader for pointing out that the law defines small employer as two to 50 on January 1 2014 and doesn’t move that up to 100 until 2016.
HEALTHCARE
Consumer-Driven Health Plans Have Break-Out Year
CDHP enrollment has had a breakout year after steady increases over the past decade. More than 12% of commercial enrollment was in consumer-driven plans as of January 2013, according to the latest census of MCOs from HealthLeaders-InterStudy.
Sheri Sellmeyer, a vice president at HealthLeaders said, “National players, such as UnitedHealth Group, Aetna, and WellPoint, are driving CDHP enrollment, but so are regional insurers. The percentage of commercial enrollment in consumer-driven plans varies on a state-by-state level. One extreme is Utah, where an important regional player and a national plan are heavily marketing CDHP, which makes up almost 21% of commercial enrollment.”
“The growth of CDHPs across the country will drive patients to influence physician prescribing as more people become motivated to own their healthcare. While some will seek lower cost care and generics, patients with chronic diseases may actually demonstrate additional adherence and compliance, as those medications are often built into CDHP benefit design. For pharmaceutical companies, understanding where each brand falls within the patient priority set will be vital to forecasting the impact of CDHP,” said John Jaeger a vice president at PharmaStrat. For more information, visit www.hl-isy.com.
CDHPs May Become the Most Popular Plan Type
Consumer Driven Health Plans (CDHPs) could become the most common plan type offered in the next three to five years, according to a study by Aon Hewitt. CDHPs are now the second most prevalent plan offered by employers after PPOs.
Fifty-six percent of employers offer CDHPs, and another 30% are considering offering one in the next three to five years. While 10% of employers offer CDHPs as the only plan option, another 44% are considering doing so in the next three to five years. In 2012, employers reported a cost trend of 4% for CDHPs compared to 6% for PPOs, 7% for HMOs, and 6% for exclusive provider networks.
Employers are using a variety of tactics to encourage enrollment, including subsidizing premiums at a higher level than they do for other plan options (44%), making the high-deductible plan the default plan option (22%), and covering preventive medicines before the deductible applies (44%).
A growing number of employers are considering offering voluntary benefits to address consumers’ fears that they will not be able to afford a catastrophic illness with a CDHP. While just 9% of employers offer voluntary benefits with a CDHP, another 44% are considering adding this type of coverage in the next three to five years.
Seventy-eight percent of CDHP consumers are satisfied with their plan and 89% say they will re-enroll, according to recent Aon Hewitt’s research. Sixty percent of employees who were enrolled in CDHPs say they have made positive health changes. Twenty-eight have gotten routine preventative care more often, 23% have sought lower-cost health care options, and 19% have researched health costs more frequently. For more information, visit www.aonhewitt.com.
A Look at Off-Exchange Health Plan Premiums
Given the technical difficulties affecting the federal health insurance exchanges, off-exchange health plans are attracting attention. Off-exchange plans are health plans that are purchased outside a state’s health exchange. Since these health plans are not sold on an exchange, lower-income enrollees cannot receive premium subsidies for them. For some well-known insurance companies, such as Aetna and United Healthcare, their individual and family health plans are only available outside the exchanges in several states.
When investigating off-exchange premiums, HealthPocket found that many insurance company web sites were not yet displaying their 2014 rates. For example, Humana has not released on its web site the off-exchange Bronze Plan rates for Milwaukee Wisconsin. The rates for Aetna are limited to 2013 plans in many states supported by the Aetna web site. United Healthcare also was not displaying 2014 off-exchange rates online for many states in which they sell insurance.
HealthPocket did uncover some 2014 off-exchange rates. In Atlanta, HealthPocket found that the lowest priced Bronze Plans for a 27 year-old nonsmoker were more expensive at Coventry ($180.26) and Aetna ($196) than for the lowest priced Bronze Plan available on Georgia’s exchange ($166). In South Dakota, the off-exchange Bronze Plans faired better with Wellmark BlueCross and Blue Shield at $171.60 for its least expensive entry for a 27 year-old nonsmoker compared to $196 for the lowest priced Bronze on the state exchange. However, the given the paucity of exchange rates, HealthPocket was unable to release a comprehensive analysis of on-exchange versus off-exchange premiums.
Kev Coleman, head of Research & Data at HealthPocket said, “For those insurance companies only offering off-exchange health insurance plans within a state, there is a need to make a compelling case to the public that their premiums are worth investigating. If off-exchange rates cannot be easily reviewed on an insurance company’s web site consumers may assume that the rates aren’t competitive.” For more information, visit www.HealthPocket.com.
A Look at Exchange Advertising & Marketing
Having launched Affordable Care Act online advertising campaigns in 39 States, Audience Partners is in a unique position to analyze the early promotional efforts. The multi-million dollar online advertising campaigns include sponsors from the federal government, state exchanges, advocacy groups, and private insurers nationwide. Interestingly enough, Audience Partners finds that no one refers to the Affordable Care Act (ACA) by name. Even the HHS only refers to the ACA as “the healthcare law.”
State exchanges are focusing their messaging around several common themes. Many focus on financial help. One ad in California that “welcomes” viewers “to the financial help” they “need to get health coverage.” An ad in Maryland that offers “$0 or low cost health coverage is now within your reach.” New York is stressing the affordable nature of the health insurance coverage with copy like “Today’s the day that a broken arm doesn’t have to break the bank.” New York also stresses quality coverage in order to overcome the objection that people may view these health plans as inferior. One ad said, “Today’s the day you can afford a quality health plan.”
The insurers seem to be taking a different route. Many are just offering general branding. One online video from Health Republic Insurance differentiates itself from the larger insurers by saying that the company doesn’t pay millions to CEOs or have to worry about shareholders. ConnectiCare focuses its ads on “budget-friendly rates” and extras like its college tuition rewards program. Many insurers’ ads stress that they have answers to what health reform means to consumers. For more information, visit health.audiencepartners.com.
How the ACA Helps Allergy and Asthma Patients
People with allergies or asthma will breathe easier under the ACA, according to a report by the Allergy & Asthma Network Mothers of Asthmatics. Under the ACA, these patients are more likely to get cost-effective preventive, primary, and specialty care services. Asthma and Allergy Patients will benefit from these key provisions:
• Health insurance companies cannot cancel health insurance arbitrarily due to a chronic illness, such as asthma, or high use of healthcare, such as immunotherapy.
• Doctor-recommended allergy and asthma screenings and tests are covered under all plans at no cost.
• Patients can buy individual health insurance policies that go into effect Jan. 1, 2014. These policies cannot charge more for pre-existing conditions.
• Parents can purchase health benefits for children on the individual health insurance market without being denied or paying significantly more due to pre-existing conditions.
• Lifetime dollar caps for all health insurance policies are now illegal. Annual caps are being phased out and will be eliminated by Jan. 1, 2014.
For more information, visit http://www.aanma.org.
NEW PRODUCTS
Voluntary Educational Benefits
Purchasing Power’s employee purchase program recently added healthcare education and certification courses to its voluntary educational benefits. For more information, visit www.PurchasingPower.com.
Supplemental Disability
Petersen International Underwriters is offering unique supplemental disability income insurance. It provides coverage for individual personal income with benefits to age 65. For more information visit www.piu.org
Stop Loss Insurance for Self-Funded Health Plans
Guardian Life introduced a stop-loss insurance product for employers that self-fund their own health plans. Guardian’s Stop Loss insurance helps mitigate employers’ financial risk when self-funding a medical plan by providing protection against catastrophic or unpredictable claims. The product is approved in 23 states with nationwide approval expected by mid-2014. For more information, visit www.GuardianLife.com.
Employee Hour Tracking
American Fidelity Administrative Services is offering a tool that helps employers continually track employee hours to determine their eligibility for health care coverage under the ACA. WorxTime monitors employee hours in real time and sends automated alerts to the employer when action is required. It also calculates whether an employee will be considered full time, provides affordability testing, offers rate of pay safe harbor testing and a penalty calculator. and captures information that will need to be reported to the IRS. For more information, visit http://www.americanfidelity.com.
EMPLOYEE BENEFITS
The Argument for Bringing Back DB Retirement Plans
A report from Milliman recommends that private companies bring back defined benefit plans for employees. Milliman says that DB plans provide a secure and predictable benefit life that is safe from market fluctuations. DB plans also help stretch the value of retirement dollars. Numerous studies show that, on average, corporate DB plan investment returns exceed those for DC plans.
For more information, visit http://us.milliman.com.
A Positive Work Environment Can Improve Wellness
Some employers are implementing sophisticated wellness plans, but they may be overlooking an important factor in employee wellness. A study by Integrated Benefits Institute (IBI) reveals that employers can boost the health of workers by offering employees reasonable workloads, work-life balance, and better relations between workers and managers. Thomas Parry, PhD, IBI president said that by overlooking these issues, employees may be missing a more immediate source of improvements in illness-related lost productivity.
Better workplaces produce less stress and better health, which results in less illness-related lost work time and improved productivity. Workload has the strongest connection to sick days, followed by work-life balance, relations with management, and demands on workers’ time. Workers with the heaviest workloads average five more sick days a year than those with better-than-average workloads. Employees with better-than-average workloads report 7.2 sick days per year while those with the heaviest workloads average 12 sick days per year. Employees with typical workloads average 9.6 sick days per year.
Poor workplace climates that produce symptoms of stress-related illness (such as pain, gastrointestinal discomfort and hypertension) or psychological distress (such as depression or other emotional problems). These issues can also result in lost work time and reduced job performance. For more information, visit www.ibiweb.org.
The Growing Use of Non-Cash Incentives
The non-cash incentives market is thriving with 74% of U.S. businesses spending $76.9 billion annually on incentive travel, merchandise, and gift cards, according to a study by the Incentive Federation. Half of the market is driven by smaller businesses ($1 million to $10 million in annual revenue).
The study also reveals the following about employers that offer non-cash incentives:
• 98% include merchandise or gift cards, spending $54.3 billion each year.
• 46% include incentive travel, spending $22.6 billion per year.
• Non-cash employee awards are the most prevalent with 56% of U.S. businesses having programs, followed closely by corporate gift programs.
• Non-cash sales incentive programs are present in almost one-half of U.S. businesses, and non-cash customer loyalty programs are used in one-third, while only one-quarter of U.S. firms use non-cash channel programs.
• Gift cards are used more often for employee programs (88%) than for corporate gifts (55%) while merchandise is used relatively evenly.
• The incidence of all program types tends to increase with firm size.
For more information, visit www.incentivefederation.org.