When asked how they like their benefits, employees gave the lowest rating in six years, according to a survey from Unum. Only 47% say their benefits are excellent or very good. Only 33% say that the benefit education their employer provides is excellent or very good, and 28% say their benefit education is fair or poor. This is a reversal to the upward trend in ratings since 2009. Only 49% say their workplace is excellent or very good. Seventy-seven percent of workers who say their benefit package is excellent or very good also say the same of their employer. In contrast, only 17% of employees who say their benefit package is fair or poor also say that their workplace is excellent or very good. And 79% who say their employer’s benefit education is excellent or very good say the same of their employer — compared to only 30% of those who say their benefit education is fair or poor. Bill Dalicandro, vice president of the consumer solutions group at Unum said, “This research underscores the value of an effective benefit education plan because when an employee understands their benefits, they tend to value them more and…may value their employers more for providing access to them.” For more information, visit www.unum.com.
Voluntary Sales by Employer Size
A survey by the Eastbridge Consulting finds that employers with over 2,500 employees accounted for the largest volume of voluntary sales again last year. This segment accounted for 36% of all voluntary sales, up from 33% in 2012. The following are voluntary sales broken by employer size:
• Less than 10 employees 4%
• 10 to 25 employees 7%
• 26 to 99 employees 12%
• 100 to 499 employees 17%
• 500 to 999 employees 11%
• 1,000 to 2,500 employees 13%
• Less than 2,500 employees 36%
Gil Lowerre, president, Eastbridge, said, “For 2013, the 500 to 999 segment continues to have the highest sales, followed closely by the 1,000 to 2,500 segment, indicating both have good penetration. The least penetrated segments are the two smallest ones — under 10 lives and 10 to 25 lives. “This comes as no surprise since many carriers and brokers do not write in these smaller segments. However, it is interesting that the 2,500 or more employee segment had the third lowest [sales]. This segment is obviously still under-penetrated despite having the highest sales,” said Bonnie Brazzell, Eastbridge vice president. For more information, visit eastbridge.com
401(K) Plans Put Retirement Readiness Within Reach
Americans who have access to 401(k) plans can achieve a more secure retirement if they start early and save consistently, according to new research sponsored by Prudential Financial. “This latest research shows if saving starts earlier and retirement occurs a few years later, the required savings rate becomes even more achievable,” says George Castineiras, senior vice president, Total Retirement Solutions at Prudential Retirement and one of the authors of the Prudential paper. For people with a workplace-based retirement plan an average of 35% of their retirement income should come from a 401(k) or other retirement savings plan. And the average required savings rate to achieve that level of targeted income is 14% — if savings starts at age 35 and retirement occurs at age 65.
“What’s particularly compelling is that this research helps to highlight the strength of the existing retirement system. Modern plan design allows individuals to get tax-advantaged savings and the ease of payroll deduction as well as investment education, advice and institutionally priced products,” said James McInnes, senior vice president of product management and development at Prudential Retirement, the paper’s co-author. The research finds that the required savings rate for an average wage earner in a single income household drops from 15% to 10% if the individual starts saving at age 25, instead of age 35. When the target retirement age is changed to age 67 — the retirement age of Social Security for those born after 1959 — the average required savings rate (starting at age 35) is lowered from 15% to 12%. When the retirement age is further delayed to age 70, the average rate drops to 6%. If savings start at age 25 and retirement occurs at age 70, the required savings rate drops to 4%. For more information, visit prudential.com.
ANNUITIES
New Regulations Boost Annuities
The Treasury Dept. has enacted new rules allowing employees to convert a portion of their IRA or 401k retirement funds into a qualifying deferred income annuity. The value of longevity annuities can now be excluded from calculations of required minimum distributions. Ken Nuss, founder of AnnuityAdvantage, sees this as an opportunity for near-retirees to hedge against the possibility of outliving their retirement savings. As the name implies, deferred income annuity payouts begin at a later date — at age 80 or 85. Deferred income annuities function much like an individual pension plan, creating a lifelong and predictable income stream. The final rules allow for a return of premium option for heirs. Since insurance companies introduced these annuity products three years ago, growth has been strong. For more information, visit http://www.annuityadvantage.com or call 1-800-239-0356.
Americans Are Interested in Annuities
Seventy-one percent of Americans would consider buying an annuity to meet a variety of needs, including having predictable monthly income, being able to provide an inheritance, meeting chronic care expenses, and achieving asset accumulation. However, 53% are not familiar with annuities, and only 20% plan to use an annuity to convert their retirement savings into an income stream, according to a survey by the Phoenix Companies. “The majority of Americans don’t have a deep understanding of today’s annuities. They don’t necessarily understand the basic income protection traditionally offered on all annuities; and they are not aware of the range of benefits available on newer products, such as accumulation and chronic care features. At the same time, when these newer types of features are described, a lot of people say they would consider buying the product,” said Mark Fitzgerald, national sales manager for Saybrus Partners, Phoenix’s distribution subsidiary. Consumers would purchase an annuity to get these benefits:
• 49% having predictable monthly income in retirement.
• 41% being able leave money for a spouse or heirs.
• 36% having money for chronic healthcare expenses.
• 31% having asset accumulation opportunities.
For more information, visit http://www.phoenixwm.com.
IN CALIFORNIA
Burnham Benefits Hires Senior Account Exec
Burnham Benefits Insurance Services hired Helen Vits as a senior account executive. Vits’ career in employee benefits first began at Baker, Thomsen Associates, where she climbed the ranks and remained with the firm as it was acquired by Brown & Brown and exhibited adaptability to the changing tides of the industry. In addition to consultation, Vits launched and led a webinar series at Brown & Brown, managed partner relationships, served as a technical lead and pursued new business opportunities. For more information, visit www.burnhambenefits.com
EPIC purchases Jenkins Insurance Services
The shareholders of Jenkins Insurance Services (Jenkins), a Leavitt Group agency, have sold 100% of their shares in Jenkins to Edgewood Partners Insurance Center (EPIC). Jenkins, which has offices in Concord, Sacramento, San Jose, Orange County, and in Reno, Nevada, employs 160 and has about $34 million in annual revenue. While the terms of the deal were not disclosed, Jenkins shareholders Curt Perata, John Connell, and Mark Karpenko became shareholders of EPIC. Leavitt Group Enterprises, the Leavitt Group’s parent company, received cash for its majority ownership in Jenkins. Eric Leavitt, the Leavitt Group’s CEO said, “EPIC’s offer made all four Jenkins shareholders interested in doing a transaction we did not anticipate or previously desire. The deal was compelling and will open new vistas for all four Jenkins shareholders. We are in a very unique time in the market cycle and we expect this transaction, as it pertains to the Leavitt Group, to be just that — unique. The Leavitt Group has been built through acquiring, forming, and fostering independent insurance agencies. We remain committed to this course. However, in this instance, it just made good sense to sell.” For more information, visit www.edgewoodins.com.
HEALTHCARE
HSAs Provide Financial Flexibility
Fifty-two percent of HSA account holders spent more than 80% of their HSA funds for health care expenses during 2012, according to a survey by America’s Health Insurance Plans (AHIP) and the American Bankers Assn. Since Congress authorized HSA plans in 2004, AHIP has conducted three surveys on HSA banking activity. This latest report measuring the financial activity of more than 1.4 million HSAs, shows consumers taking an active role in managing their health care dollars. Fifty-five percent of HSAs received personal contributions during 2012. While end of the year account balances varied, roughly 80% of accounts had a positive balance that could be carried over to the next year to help pay for future expenses. Fifty-eight percent of accounts had withdrawals during the year. Of those accounts, the average withdrawal during 2012 was $2,081. For more information, visit http://www.hsaalliance.org.
Latinos Benefitted Most from In-Person Enrollment Assistance
During the first open enrollment period for plans under the Affordable Care Act, Latinos benefitted most from free in-person enrollment assistance, according to a survey by PerryUndem, a health care research firm. Thirty-four percent used enrollment experts compared to 12% of non-Latino whites. Seventy percent of Latino enrollees plan to get a check-up in the next few months thanks to their new health plans compared to only half of non-Latino whites. The survey found the following about Latino consumers who remained uninsured:
• 41% thought they could not afford health insurance.
• 26% thought that they would not be eligible.
• 78% did not know about financial assistance or subsidies, underscoring the need for continued education in this community.
• 66% did not know that free in-person enrollment assistance is available.
• 66% did not know that they could not be denied because of a pre-existing condition.
• 20% found the enrollment process to be confusing compared to 9% of non-Latino whites. For more information, visit www.enrollamerica.org
Appeals Court “Cuts the Heart Out of the ACA”
In the case, Halbig v. Burwell, The U.S. Court of Appeals for the District of Columbia Circuit ruled that the Affordable Care Act’s (ACA) tax credits are only available to persons in state-run marketplaces. Elizabeth Taylor, executive director of The National Health Law Program (NHeLP) said, “Today’s ruling is misguided and, if not corrected, will cut the heart out of the ACA. Only 14 states established their own Marketplace.” As noted in the amicus brief filed by AARP Foundation Litigation and NHeLP, tax credits are crucial to achieving the law’s mission of providing near universal health care coverage. According to analysis by the Urban Institute, 7.3 million people could lose their subsidies. Jane Perkins, NHeLP legal director said, “If today’s decision stands…older adults, the chronically ill, and those with low to moderate incomes would feel the brunt. Without the financial help required by the ACA, quality coverage will be out of reach. These Americans will be too poor for private coverage, but not eligible for public programs — the very situation the ACA was designed to avoid.” The ruling does not immediately affect the availability of financial assistance in the federal Marketplace. The government is likely to petition the appeals court for review by the full 11 judge panel.
More Patients Are Visiting Retail Clinics
Retail clinics are playing a growing role in health care delivery, according to a study from Walgreens. Patients are relying more on nurse practitioners at retail clinics to provide chronic and preventive health services. The study also reveals marked increases in the number of patients who are making return visits to clinics. Visits to healthcare clinics for preventive services, screening, and chronic care increased from 4% in 2007 to 17% in 2013. The annual percentage of return patient visits to Healthcare Clinic climbed from 15% in 2007 to more than 50% in 2012 and 2013. For patients age 17 and under, visits for preventive services and vaccinations increased 180% For patients ages 18 to 64, visits for health testing increased 90% while preventive health service visits increased 66%. Acute visits increased 84% for patients 65 and older. The Convenient Care Association estimates that 33% of Americans live within 10 minutes of a retail healthcare clinic. Walgreens has increased the variety of services at select Walgreens clinics from providing vaccinations to diagnosing and treating a number of chronic conditions. Clinics at select locations are open seven days a week, with extended evening and weekend hours, and offer walk-in service. Healthcare Clinics accept most major insurance plans and Medicare and Medicaid, and offer affordable, transparent pricing for those without insurance coverage. Healthcare Clinic’s board-certified nurse practitioners and physician assistants deliver patient-centric care, driving patient satisfaction rates that are consistently greater than 90%. For more information, visit www.walgreens.com.
Most Medicare Beneficiaries Have Modest Means
A small share of the 52.4 million elderly and people with disabilities on Medicare have relatively high incomes, but most are of modest means, according to a survey by the Kaiser Family Foundation. Half live on less than $23,500 last year. Although the majority of beneficiaries have some savings, the value of their assets varies dramatically, and is much lower for black and Hispanics, widows, younger Medicare beneficiaries with disabilities, and seniors over 85. For more information, visit http://kff.org/interactive/visualizing-income-and-assets-among-medicare-beneficiaries-now-and-in-the-future.
NEW PRODUCTS
Retirement Plan Monitoring Tools
The companies of OneAmerica introduced OneCheck, a set of plan health monitoring tools and reports for participants and sponsors. OneCheck analyzes an employee group’s average income replacement ratio. This can help indicate how successful the plan is and whether employees are on track for adequate retirement savings. For more information, visit www.oneamerica.com.
FSRI Designation
The LOMA Secure Retirement Institute launched the third course of the Fellow, Secure Retirement Institute (FSRI) designation program, Planning for a Secure Retirement (SRI 131). For more information, visit www.FSRIdesignation.org. About LIMRA LOMA Secure Retirement Institute
Affordable Long Term Care Insurance
Genworth introduced affordable long-term care insurance that addresses the primary barriers to purchasing long term care insurance – price and complexity. The FlexFit Premium package starts at $1,000 annually. The FlexFit Coverage package starts at $100,000 of initial coverage to protect a certain amount of income and/or assets. Both packages include the following:
• 3% compound inflation to protect against rising costs of long term care services.
• First day home care so you don’t have to satisfy a waiting period for care received in your home (90 day waiting period for covered facility care).
• Privileged Care Coordination services with a registered nurse who can help the insured find appropriate care services from local home care agencies.
• Caregiver support services offering information and referral services available to non-insured immediate family members For more information, visit www.genworth.com/costofcare.
INSURANCE SALES
Many Americans Say They Don’t Have the Right Level of Insurance
A survey by PolicyGenius reveals that 50% of Americans say don’t have the right level of insurance. The survey also reveals the following: • Women are less comfortable than men about their protection against financial risks, with 41% of women not too confident and 61% of men pretty confident. • Most respondents take an online, DIY approach to getting their insurance questions answered and associate a negative shopping experience to feeling underinsured. • Fifty-nine percent conduct online research as their first step when shopping for insurance • Forty-eight percent who say they have less insurance than they need also said that their latest experience dealing with insurance was negative. • 25- to 34 year olds are the least confident in their insurance decisions (54% said too much or not enough insurance. The group is six times more likely to turn to online sources for insurance information than consulting family or friends For more information, visit www.PolicyGenius.com.
