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by Leila Morris
IN CALIFORNIA
• Covered California Expands Service Center Hours
• Medi-Cal’s Solid Performance
HEALTHCARE
• Blues to Dominate State Exchanges
• Short-Term Health Insurance Finds Its Place
• Many Americans Want More Regulation of Health Insurance
• Employers Reveal Private Exchange Preferences
• Not Just the ACA Is Shaping the Healthcare Industry
• Shopping Experience Improves for Public Exchanges
• Average Out-of-Pocket Costs for Obamacare Plans
LIFE INSURANCE
• Life Insurers To Penetrate New Markets
EMPLOYEE BENEFITS
• Voluntary Benefits To Take on a Bigger Role
• Holiday Wish Lists For Benefits
NEW PRODUCTS
• Fiduciary Management
• Section 125 Premium Only Plan Documents
• CoverageCalculator.com
IN CALIFORNIA
Covered California Expands Service Center Hours
With health care coverage set to begin on January 1, Covered California has expanded its service center hours and outlined some key dates for consumers. Covered California’s Service Center, at 800-300-1506, will now be open from 8:00 a.m. to 8:00 p.m. on Sunday, Dec. 22, to help consumers enroll. The agency also extended the deadline for enrolling in plans and paying for coverage beginning January 1. Coverage will be retroactive on January 1, 2014 if a consumer chooses a plan by Dec. 23, 2013, and the insurance company gets payment by January 6, 2014. The Affordable Care Act requires most people to enroll by March 31, 2014 or face a tax penalty. If consumers enroll from March 16 to March 31, their coverage will begin on May 1, 2014. People applying for health insurance through Covered California will find out if they qualify for financial help with premium payments or if they are eligible for low-cost or no-cost insurance through Medi-Cal. For more information, visit www.coveredca.com/FAQs/Enrollment-and-Payment-FAQs-FINAL.pdf
Medi-Cal’s Solid Performance
Medi-Cal managed care performs at or above the national Medicaid median on 17 of 19 quality indicators, according to a report by the California HealthCare Foundation. Medi-Cal lags behind the national median in postpartum care and timeliness of prenatal care — a gap that has persisted over the past four years. For more information, visit http://www.chcf.org/publications/2013/12/monitoring-performance-medical-managed-care.
HEALTHCARE
Blues to Dominate State Exchanges
Blue plans are likely to be among the leaders in the state exchanges where they can leverage their dominance into creating narrow-network plans that offer a price advantage over competitors, according to a report by Decision Resources. Humana is expected to be among the five largest carriers in enrollment for each exchange it competes in. Centene is poised to capitalize on its position as a leading managed Medicaid carrier and could become a major exchange player nationally through its Ambetter plans. Through its acquisition of Coventry, Aetna is in a prime position to be a top exchange player in several states and is particularly strong in the Southeast.
However, the health plans’ participation in the exchanges is expected to decline along with rising merger and acquisition activity and the continued introduction of narrow network products, said Carolyn McMeekin, vice president of Insight Products for Decision Resources Group. For more information, visit www.DecisionResourcesGroup.com.
Short-Term Health Insurance Finds Its Place
More consumers will be turning to the short-term insurance to address temporary lapses in coverage as the exchanges experience technical glitches, according to a report by HealthPocket. Jeff Smedsrud, president of Healthcare.com said, “Short-term medical plan may make sense for some people facing a health insurance coverage lapse for a limited period of time, but these consumers should understand the restrictions and the rules of these plans before enrolling.” For more information, visit HealthPocket.com.
Many Americans Want More Regulation Of Health Insurance
Health insurance ranks among the industries for which more Americans want to see increased regulation. They are oil (41%), pharmaceuticals (39%), tobacco (35%), health insurance (34%), banks (31%), electric and gas utilities (24%), packaged food companies (24%) and managed care companies such as HMOs (24%).
In contrast, less than 10% want more regulation of computer hardware and software companies (6% each), online search engines (7%), online retailers (7%) or supermarkets (9%). The biggest changes from last year are drops of 7 points in those who want more regulation of electric and gas utilities and drops of 6 points each for those who want more regulation of managed care companies, life insurance companies and health insurance companies. For more information, visit www.harrisinteractive.com.
Employers Reveal Private Exchange Preferences
Nearly 70% of employers say it is very important for an advisor to be independent of the private exchange they are considering, according to a report by the Private Exchange Evaluation Collaborative (PEEC). If employers could contribute towards employees’ coverage on the public exchange/marketplace in 2017 and 2018, 58% of employers say they would consider encouraging employees to get coverage through the exchange.
“The survey results indicate a strong interest in private exchanges, but also uncertainty about the benefits,” said Laurel Pickering, President & CEO, Northeast Business Group on Health. Many firms that have served as trusted employee benefit advisors are now vendors themselves; providing private exchange solutions to employers, said Christopher Goff, CEO & General Counsel, Employers Health Coalition.
Private exchanges could gain traction as an alternative to traditional employer sponsored benefit options over the next five years. The greatest barriers to private exchanges are their immaturity, the uncertainty about their long-term stability and the employer’s loss of flexibility, especially in tailoring benefit plan designs. Only 25% say that moving to a private exchange will save them money
Interest in private exchanges extends across all industry segments and employer size while the importance of exchange features varies among employers. For more information, visit www.thepeec.com.
Not Just the ACA Is Shaping the Healthcare Industry
The Affordable Care Act (ACA) is only one factor that will rapidly reshape the healthcare industry in 2014, according to a report by PwC’s Health Research Institute (HRI). Kelly Barnes of PwC said, “While health insurance exchange implementation is driving headlines, the next 12 months will be marked by…a range of core business challenges. Businesses must address rapid innovation and competition from non-traditional players but, above all, they must respond to empowered consumers as customer-centric transformation sweeps healthcare.” The survey finds the following:
• The public is wary of new entrants in health insurance. Only one in 10 consumers say they are very likely to buy insurance from a new start-up, and only 15% are very likely to purchase a health plan run by a hospital or health system. Twenty-seven percent of employees have a strong preference to have a choice of three to five health plans while 14% have a strong preference to be offered a single plan.
• More large employers are using private exchanges. This trend is likely to grow in 2014 as employers explore strategies to hold down costs, shed administrative burdens, and expand plan choices.
• Cost-conscious employers are making transparency a top factor in their negotiations with health plans and providers. Earlier this year, CMS released a trove of hospital pricing data for the first time, showing significant cost variability. Price-sensitive consumers are distinguishing high-quality care from high-cost care. Sixty-five percent of consumers say that expensive medical treatment doesn’t necessarily mean better quality care.
• Providers and consumers are increasingly adopting mobile health technologies; more than one-quarter of consumers use mobile apps to schedule healthcare appointments, up from 16% a year ago.
• States are struggling to contain rising Medicaid costs while an aging Baby Boom population has not saved enough for health costs in retirement. Demographic and economic trends point toward many years of rising long-term care costs. States are looking to managed care to help hold the line on long-term care spending. Ten years ago, only eight states had a Medicaid managed long-term care program; in 2014, that number is expected to climb to 26.
• Instead of just prescribing drugs, providers are prescribing exercise regimens and using data to help keep patients on track to meet health goals. In 2014, the trend could fundamentally alter how health organizations deliver care while keeping costs down. For the full report, visit www.pwc.com/us/tophealthissues.
Shopping Experience Improves for Public Exchanges
The shopping experience at HealthCare.gov is now on par with leading private insurer web sites, such as Aetna, eHealth, and Kaiser Permanente, according to a report by Change Sciences Group. The new HealthCare.gov site has become dramatically more engaging, usable, and likely to convert than it was in early November.
Pamela Pavliscak, who directed the research project, said, “There has been a perception that private insurers were far ahead of the public exchanges. This new data shows that the public exchanges can be competitive, at least in support of shopping for plans. However, online direct-to-consumer health insurance has a long way to go before it is as easy to shop for as a TV or a plane ticket. As a group, health insurance sites perform far worse than the two top e-commerce sites for usability.
Insurance shoppers found Covered California, significantly less engaging than AccessHealthCT. Some private exchanges fared poorly according to other measures as well. eHealth is significantly more usable than any private or public site. For more information, visit https://www.changesciences.com/trending/healthcare-web-site-user-experience-2013.
Average Out-of-Pocket Costs for Obamacare Plans
There are significant differences in out-of-pocket costs among the new ACA metal plans, according to a HealthPocket report. Deductibles drop more dramatically among metal plans than their differing actuarial values would suggest. When comparing the new Affordable Care Act health plans, consumers should factor in their expected healthcare use along with premiums. However, for those who need a specific doctor or hospital, it is important to note that annual out-of-pocket expense protections only apply to covered medical services delivered by in-network healthcare providers, said Kev Coleman, Head of Research & Data at HealthPocket.
Health plans under the ACA are differentiated by the percentage of medical costs that the health plan pays. The entry-level bronze plan covers 60% of enrollee costs; the silver plan covers 70%; the gold plan covers 80%; and the platinum plan covers 90%. However, when looking at the average deductible amounts for each of the metal plans, the differences were significantly larger than the 10% plan payment increments differentiating the plans.
HealthPocket found the average deductible amount for each of the four metal plans as follows:
* Bronze Plan: $5,081 for an individual/$10,386 for a family.
* Silver Plan: $2,907 for an individual/$6,078 for a family.
* Gold Plan: $1,277 for an individual/$2,846 for a family.
* Platinum Plan: $347 for an individual/$698 for a family.
LIFE INSURANCE
Life Insurers to Penetrate New Markets
With the rise in consumer confidence and ongoing economic recovery, life insurers are poised to rebuild product portfolios; expand into under-penetrated markets; and deploy the capital they have accumulated into profitable business opportunities, according to Ernst & Young’s 2014 outlook.
Doug French of Ernst & Young said that insurers need cost-effective ways to distribute products through alternative channels. Insurers can streamline their operations and support growth by using sophisticated technology and data analysis and investing in the right people and processes. Ernst & Young says that life and annuity insurance companies must pursue five key areas in 2014:
1. Companies that integrate social media with other distribution and communication channels will have a competitive advantage.
2. Outsourcing, co-sourcing, and shared services can streamline processes and increase profitability, enabling companies to compete more effectively in the expanding market.
3. To outperform competitors in 2014, life insurers should focus on common standards and policies, enhanced and predictive analytics, and a data framework that defines ownership and controls. Companies must also adopt data security to protect against the exponential rise in cyber attacks.
4. In a volatile economic environment, life insurers can enhance shareholder returns by improving the yield on investments in products and operations and balancing risks and rewards in their asset portfolios.
5. The trend toward greater regulatory intervention and related pressures will continue in 2014. This will increase the need for life insurers to assess enterprise risks, heighten operational transparency, enhance government efficiency, and establish clear risk ownership and accountability. For more information, visit www.ey.com/insurance.
EMPLOYEE BENEFITS
Voluntary Benefits to Take on a Bigger Role
After health care reform, the big story in 2014 for employee benefits will be the substantial role that voluntary benefits will play for employers and their employees. Both traditional and non-traditional voluntary benefits are making their way to the forefront of the benefits package that employers will offer next year.
Voluntary benefits will become an essential element of the benefit program that many employers use to attract and retain employees,” said Elizabeth Halkos, Purchasing Power’s Chief Revenue Officer.
A wider array of traditional voluntary benefits will be included in the employee benefits package starting in 2014. Employers will be adding gap coverage, short-term disability, cancer, critical illness, prescription, dental, life insurance and hospital supplemental policies.
More than three-quarters of employees responding to the Employee Benefit Research Institute’s 2013 Health and Voluntary Workplace Benefits Survey say that the benefits package an employer offers prospective employees is extremely or very important in their decision to take the job.
A TNS Omnibus survey reveals that 86% of employees say it is important to be able to customize their benefits to fit their lifestyle. With voluntary benefits employees can customize their benefits by adding on traditional voluntary insurance products as well as non-traditional voluntary benefits, such as employee purchase programs, financial education, pet insurance, legal plans and identity theft policies.
This past year has seen non-traditional voluntary benefits offered more frequently in the benefits package. A recent Eastbridge Consulting survey reveals that employee purchase programs are among the most popular, with 13% of employees owning the product through work. Next is legal plans with 8%, identity protection at 3%, and pet insurance at 1%. Eastbridge notes that ownership of these products is low because many have only recently begun to be accepted as employee benefits. Look for this trend to escalate in 2014. Non-traditional voluntary benefits offer workers a way to get items and services through convenient payroll-deduction. Most of the non-traditional offerings allow workers to get something they need right away as opposed to many core benefits that employees only appreciate when they are sick or injured. Non-traditional voluntary benefits, such as group legal plans, financial planning, and employee purchase programs, have become more popular.
The latest non-traditional voluntary benefits include financial planning and online educational services, including college courses, certifications and career development courses for health care professionals. Also coming will be affordable solutions to work-life balance, such as vacations available through employee purchase programs. Employers will also add more financial wellness benefits to their voluntary benefit offerings. For more information, visit www.purchasingpowertoday.co.
Court Allows New York Catholic Groups to Refuse Contraceptive Coverage
A federal judge ruled that a group of Catholic institutions in New York don’t have to comply with the Affordable Care Act (ACA) contraceptive coverage requirement. The ACA guarantees that all new health insurance plans cover FDA-approved contraceptives, including the pill and IUDs, without co-pays or deductibles.
US District Judge Brian Cogan in Brooklyn ruled that the six plaintiffs – Archdiocese of New York, Catholic Health Care System, Catholic Health Services of Long Island, Diocese of Rockville Centre, Cardinal Spellman High School, and Monsignor Farrell High School – are exempt from the mandate because of their religious beliefs. This case is Roman Catholic Archdiocese of New York v. Sebelius.
Although the ACA provision has helped thousands of women obtain contraception – the proportion of women paying zero dollars for oral contraceptive pills increased from 15 to 40% since it went into effect – this ruling will make it harder for the more than 25,000 employees of the plaintiffs to obtain affordable contraception, according to the Feminist Majority Foundation.
Several for-profit companies have also challenged the ACA contraceptive coverage requirement in federal courts. In November, the US Supreme Court agreed to hear a challenge by Hobby Lobby, a for-profit national craft store chain, and Conestoga Wood, a wood cabinet manufacturer. Both are arguing that the requirement violates the religious beliefs of these corporations and that they should not be required to provide health insurance plans that cover certain types of birth control. The feminist majority launched a petition to send the Supreme Court a clear message that companies should not be able to use religion as cover to discriminate against women.
The Archdiocese of New York applauds Judge Brian Cogan’s ruling saying “The court has correctly cut through the artificial construct, which essentially made faith-based organizations other than churches and other houses of worship second-class citizens with second-class First Amendment protections. Religious freedom is our “First Freedom,” guaranteed in the Constitution of the United States. This decision wisely and properly affirms that this freedom must extend beyond merely being free to choose how we worship, and must include how we act in accord with our religious beliefs.”
Holiday Wish Lists for Benefits
What tops the benefits wish lists of America’s employers and workers this holiday season?
Colonial reveals what employers want most from their benefits:
• Ways to save money – With the cost of providing benefits to workers continuing to rise, employers are looking for all means possible to trim their costs.
• Help understanding the Affordable Care Act — Employers are finding it difficult to keep up with changes in the new health care legislation and how it will impact their business — and their bottom line.
* Greater participation in the company’s wellness program — When more workers participate in employer-sponsored wellness programs and improve their health, employers save on health care costs.
• What employees want most from their benefits plans
• Help understanding their benefits — Employers aren’t the only ones confused by the Affordable Care Act and how it affects their employee benefits. Forty-seven percent of workers say they are not very knowledgeable or not at all knowledgeable about the impact the Affordable Care Act will have on them.
• Benefits that meet their individual needs — Employees have different needs for benefits based on their marital status, income, age, lifestyle, and family situation. Having a choice of affordable benefits allows workers to choose the coverage that best meets their needs.
• Financial security for their families — Thirty-six percent of American workers say they always or usually live paycheck to paycheck. Employees need benefits that protect them from financial disaster. For more information, visit www.coloniallife.com
NEW PRODUCTS
Fiduciary Management
Aon Hewitt launched SimPlus Savings, which enables plan sponsors and plan fiduciaries to delegate certain fiduciary obligations and outsource administrative functions related to their defined contribution (DC) plans. At the same time, they can maintain a line of sight into the strategic direction of their plans. For more information, visit www.hewittennisknupp.com.
Section 125 Premium Only Plan Documents
Core Documents has produced a new YouTube video titled, “$99 Section 125 Premium Only Plan PDF Documents.” See it at http://www.youtube.com/watch?v=4TPMg-xjm5o.
CoverageCalculator.com
Coverage Calculator Inc. launched its new website, www.coveragecalculator.com, which helps consumers compare the out-of-pocket medical costs associated with different types of health insurance plans, including the metal plans sold on the Healthcare.gov website.