Medicare Supplement Premiums Vary Widely
A 65-year old male purchasing Medicare supplement insurance will pay anywhere from a low of $126 per-month to $444 per-month, according to the 2016 National Medicare Supplement Price Index. Costs for Medicare supplement insurance, also called “Medigap,” vary significantly for men and women, says Jesse Slome, director of the American Assn. for Medicare Supplement Insurance (AAMSI), which released the first phase of the study.
A 65-year-old woman will pay from $118-per-month in San Antonio, Texas to $444 a month in Manhattan. For a 65-year old male, the average difference was 39%. For 65-year-old women, the average difference was 34% but the spread between the lowest and highest costs was as much as 48% in some cities.
Some 12.2 million Americans had Medicare Supplement insurance in 2015, which is a significant increase compared to 9.7 million in 2010. With 10,000 Americans turning 65 every day, the number of Medigap policyholders will continue to grow. The Association examined monthly rates for Medicare Supplement Plan F, the most commonly purchased coverage. Sixty-six percent of individual purchasers choose Plan F. No single insurer is consistently the least expensive or most expensive. For more information, visit www.medicaresupp.org.
How Benefit Structures Affect Utilization and Spending
Health insurance benefit structures, particularly cost-sharing, can encourage or discourage patients from seeking care, according to a recent study by the National Institute for Health Care Reform (NIHCR). NIHCR looked at contracts between the International Union, UAW, and Fiat Chrysler, Ford, and General Motors in 2011, which significantly changed autoworker health benefits. There was expanded coverage of outpatient physician visits and additional cost sharing for emergency department visits unless the patient was admitted to the hospital. The changes contributed to higher spending in these areas:
- Advanced imaging
- Diagnostic tests
- Minor procedures
- Prescription drugs
Lower patient cost sharing for physician visits resulted in substantially higher spending as a result of more physician visits and increased diagnostic services and procedures. However, higher cost sharing did not significantly decrease emergency department visits or expenditures. For more information, visit nihcr.org.
Free White Paper on HSA Program Strategies
HSA Bank released a white paper that reveals best practices for a successful health savings account (HSA) program. The white paper provides insight on the following:
- How to Design an HSA program that engages employees, increases adoption, and promotes healthy saving and spending behavior.
- The necessary ingredients of a communication plan.
- How to evaluate how the administrator drives enrollment, the success of its implementation team, and the administrator’s overall capabilities.
- Case histories.
The white paper was written by Jason Kessler, HSA Bank’s senior vice president and director of product management.” To download a free copy, visit www.hsabank.com.
Costs and Eligibility Are the Biggest Barriers for the Uninsured
Two-thirds of uninsured Californians were eligible for coverage in 2014, but most said they did not enroll because of the cost. The remaining third were ineligible for coverage under the Affordable Care Act due to their immigration status, according to a study by Berkeley’s Center for Labor Research and Education and the UCLA Center for Health Policy Research. The study finds uninsured Californians fall into four groups:
- Undocumented residents 32%: Residents who don’t qualify for health coverage under the Affordable Care Act are predominantly low-income, Latino, and have limited English proficiency.
- Those eligible for Medi-Cal 28%: Adult citizens and legal immigrants with incomes at or below 138% of the federal poverty level and children at 266% of the poverty level.
- Those eligible to buy health coverage through Covered California with a federal subsidy 31%: Citizens and legal immigrants with incomes from 139% to 400% of the poverty level.
- Those eligible to buy health coverage through Covered California without a federal subsidy 9%: Citizens and legal immigrants with incomes above 400% of the poverty level, which disqualifies them from federal subsidies.
The largest percentage of citizens and legal immigrants (46%) cited cost as the main reason for being uninsured. Miranda Dietz, a researcher at UC Berkeley said, “We’re a relatively high cost-of-living state. It’s no wonder that some Californians, who may be unaware they qualify for health subsidies and other programs, still find the cost of health insurance out of reach.”
California has more than 1 million undocumented immigrants who don’t benefit from the Affordable Care Act. Nadereh Pourat, director of research for the UCLA center said, “Hundreds of thousands of men, women and children, not to mention the workers who power California’s economy, are one health emergency away from potential financial ruin because they lack insurance. From an economic perspective, it’s bad business to rely on workers and then not offer them equal health protection. And from a humanitarian perspective, it’s just wrong.”
UCLA and UC Berkeley also collaborated on a related on Medi-Cal study. About one-third of those who were uninsured, but eligible for Medi-Cal thought they were ineligible or didn’t know if they were eligible. Another 20% said they were getting insurance, reflecting a major backlog during the first year of processing applications, which has largely been resolved since then. Both studies were funded by the Blue Shield of California Foundation. The study notes that many previously uninsured Californians have enrolled for coverage, but fully covering those still uninsured will require changes in policy to improve affordability and expand eligibility.
Anthem Increases “New to Medicare” Discount on Plan F in California
Anthem Blue Cross has increased its “New to Medicare” discount in California from $15 a month to $20 a month for the first year in which members are enrolled in an Anthem Blue Cross Medicare Supplement Plan F. Total savings are $240 for the year, making it among the lowest introductory rates for this plan in the state. The discount is available to those who are 65 or older, are within six months of their Part B effective date, and have a coverage effective date starting March 1, 2016, or later. Members can also save each year if they pay their annual premium up front, have another household member on an Anthem Medicare Supplement plan, or sign up to pay their premiums electronically through bank draft. Other benefits are available for additional costs, such as drug, dental, and vision, benefits . For more information, visit www.facebook.com/AskAnthem.
Anthem & Dignity Health Introduce an EPO/PPO Plan
Anthem Blue Cross and Dignity Health, one of the largest hospital systems in the country, introduced a tiered EPO/PPO plan designed to improve employee health and lower costs through integrated care management. The Premier Tiered EPO/PPO product is designed for self-insured large groups or employers with more than 101 employees. It will launch on May 1, 2016 in Ventura County. Product expansion is planned across select California regions over the next 18 months. Members can choose the exclusive provider organization (EPO), which provides the best price with a pre-determined network of Dignity Health providers. Another option is the PPO, which provides access to a wider range of providers at varying copay- and cost-sharing levels. In 2014, Anthem launched Vivity, a partnership with seven hospital systems in Los Angeles and Orange counties. Anthem has joined with 19 medical groups to create accountable-care organizations across the state. For more information, visit facebook.com/AskAnthem or dignityhealth.org.
Insurance Agent Helps Send Annuity Scammer to Jail
Dwen Curry, 47, of Winnetka, Calif., was arrested by California Dept. of Insurance detectives and booked on multiple counts of identity theft and attempted grand theft. He had possession of personal identifying information of over 10 people. Curry stole the identity of multiple people, impersonated them, and attempted to withdraw funds from their annuities. Investigators with the Department of Insurance Investigation Division found a counterfeit driver’s license, a Social Security card, checks, and dozens of stolen financial portfolios and information. Curry planned to use or was using these people’ financial information to steal money from their investments. Curry used a person’s stolen identity to submit a change of address on an annuity investment. He attempted to withdraw $35,000 from two annuities owned by a victim.
The victim’s insurance agent noted the unauthorized change of address, and reported to the department. Insurance. Commissioner Dave Jones said, “This crime was uncovered by an alert consumer and their insurance agent who recognized unauthorized activity on the consumer’s annuity investment. Consumers should pay close attention to any mail from their insurance company or financial institutions alerting them of attempts to access their information or make changes to their records.”Curry was arraigned in Los Angeles County Superior Court on February 16, 2016 and remains in custody. Bail is set at $195,000.
The Importance of Employee Engagement
Many employers say that employee engagement is as a key strategy for their company, but many are cutting funding for these initiatives, according to a study by TalentKeepers. (Editor’s note: The Ivy Business Journal describes employee engagement as when an employee is fully involved in and enthusiastic about about their work.) The TalentKeeper study finds that more than 80% of employers say that employee engagement is a priority. The number of employers that say they are very effective in engaging employees nearly doubled from 14% in 2015 to 26% in 2016.
Seventy-two percent of employers say that poor engagement has the biggest effect on morale and culture compared to 50% in 2014. However, employee engagement budgets have fallen for the third straight year. In 2014, 71% of employees had some funding for engagement compared to to 61% in 2016. “Best-in-class employers dedicate some of the highest percentages of their labor and operations budgets to engagement strategies, said Craig Taylor, a vice president at TalentKeepers. For the past four years, corporate leadership has has had a growing effect on turnover. “This emerging trend should motivate us to refocus efforts on making leaders the primary reason people stay. In 2015 Millennials became the largest cohort in America workforce. Forty percent of employers are acknowledging that [trend] by providing formal training for leaders on how to manage them. This is incredible growth in just two years ˗ up from 25% in 2014,” said Taylor. For more information, visit talentkeepers.com.
Employees Want Financial Guidance and Benefits
Forty-six percent of employees expect their financial situation to get better in the next year, and they’re turning to the workplace for financial education, according to a recent MetLife study. These financial concerns may be making employees more loyal, with 45% of employees planning to work for their current employer 12 months from now, compared to 41% last year. The study finds the following:
- 47% of employees say that non-medical benefits can help limit their out-of-pocket medical expenses.
- 52% of Millennials understand life insurance compared to 69% of Baby Boomers.
- 38% of Millennials understand long term disability insurance compared to 57% of Baby Boomers.
- 68% of Millennials prefer one-on-one consultations with a benefit expert, compared to 62% of Gen Xrs and 57% of Baby Boomers.
- 44% of Millennials want their employer to help them solve their financial concerns compared to 20% of Baby Boomers
- 75% of Millennials say employers have a responsibility for the financial well-being of employees.
- 62% of employees are looking to their employer for more help in achieving financial security through employee benefits, compared to 49% in 2011.
- 44% of employees feel in control of their finances.
- 65% of Millennial employees don’t have a savings cushion of three months of salary.
The study finds that strong communication is a key driver of employee confidence when selecting benefits. The most effective resources are one-on-one consultation. Todd Katz, executive vice president, Group, Voluntary & Worksite Benefits, at MetLife said, “Employers looking to harness the power of one-on-one consultations can turn to outside experts such as brokers, consultants, and enrollment communications firms. For employers, this is an opportunity to evolve into a more consultative role and provide meaningful education and training for employees, while engendering loyalty. Helping employees understand the value of their benefits through engaging communications is critical for employee and for the workplace. If employees fully understand their benefit options, they’ll make better purchasing decisions and decrease their financial stress. To alleviate confusion about benefits, it’s critical that employers…enable their employees to make informed decisions about which benefits best suit their needs. This includes providing a variety of decision-support resources and offerings to help them make educated benefit decisions.” For more information, visit benefittrends.metlife.com/us-perspectives/opportunity-is-knocking.
More Companies Are Offering Financial & Emotional Wellness Programs
More companies are investing in total well-being programs to address financial and emotional health of their employees, according to a report by Fidelity Investments and the National Business Group on Health. Employers are adding programs that help employees manage stress, improve their resiliency, and meet financial challenges. In 2016, 87% of employers offer emotional or mental well-being programs, and 76% provide financial health programs. Sixty-seven percent plan to expand their efforts while 17% plan to maintain offerings at the current level. Adam Stavisky, senior vice president, Fidelity Benefits Consulting said that employers are focusing on things that affect well-being, such as emotional stress and financial challenges.
Mollie O’Brien is director of Total Rewards at BASF, which has more than 15,000 employees in the United States. She said that BASF has seen strong employee participation and engagement since launching its wellness program a few years ago. O’Brien said that the company is looking at strengthening financial wellness offerings to meet the needs of a diverse workforce.
By far, stress management is the most popular emotional well-being program. Fifty-four percent of employers offer this program and 12% plan to do so in 2017. Also popular is resiliency training, which helps employees manage setbacks in the workplace or outside of work. Twenty-seven percent of employers offer this program, with another 20% planning to do so in 2017.
Seventy-three percent of companies offer on-site financial seminars, and 59% make a financial coach available to employees. In 2016, 13% of employers offer student loan repayment assistance – a benefit that’s typically been offered only in the public sector. Another 21% are considering adding this benefit.
In 2015, 81% of employees received incentives, up from 73% in 2014. The percentage of employees receiving incentives increased steadily as employers expanded well-being programs. The number of employers using outcomes-based incentives is expected to drop from 44% in 2015 to 24% in 2016. Brian Marcotte, CEO and president of National Business Group on Health said that social factors and the work environment play an important role in employee engagement and their view of their well-being. Companies are integrating initiatives that focus on financial and emotional well-being, social connectedness, and job satisfaction with more traditional offerings. For more information, visit www.businessgrouphealth.org.
Unum to Acquire Starmount Life
Unum has entered into a definitive agreement to acquire H&J Capital, LLC, the parent of Starmount Life Insurance Company and AlwaysCare Benefits. The acquisition will expand Unum’s portfolio of workplace financial protection products. Starmount, which is licensed in 49 states and the District of Columbia, markets individual products under the Starmount Life brand, including dental, vision, life and accident coverage. Its group and voluntary benefits are marketed under the AlwaysCare Benefits brand. Unum is acquiring Starmount for $127 million plus net assets. “We see strong demand for dental and vision insurance. The Starmount business will help us expand access to these benefits at the workplace,” said Unum U.S. president Mike Simonds. Starmount will remain headquartered in Baton Rouge, La.
Small Business Retirement Plan
Lincoln Financial enhanced its Lincoln Director employer-sponsored retirement plan for small business clients. It includes a broad investment universe of revenue-neutral funds and a flexible, simple, and transparent pricing structure. The program now offers a deeper, non-proprietary investment universe, made up of more than 250 revenue neutral investment options in nearly 60 different asset categories, represented by 40 popular fund families. It also includes a broad range of qualified default investment alternative options. These enhancements will allow sponsors and their advisors to choose from one of the largest investment options universes in the industry. For more information, visit: www.LincolnFinancial.com/Director.
Advertising Compliance Manual
The Professional Insurance Marketing Association (PIMA) released its 2016 Advertising Compliance Manual. The manual covers best practices for print and electronic media advertising, state advertising filing requirements, and more. It assists in ensuring that advertising copy and marketing materials meet statutory and regulatory requirements. The manual is published in a searchable CD format. It is free to PIMA members and $695 to non-members. For more information, visit pima-assn.org.
Group Accident Product
Boston Mutual launched a group accident insurance plan. This competitively priced product is the company’s first group accident plan. Employers can customize their voluntary benefits and offer employees the same accident plan and rate across multiple states. It offers eight flexible modules, providing many personalized options. Each benefit category can be customized including hospital care, emergency care, emergency room care, diagnostic imaging, continuing care, specific loss, major injury, fractures, and dislocations. Three shelf plans are available (Silver, Gold, and Platinum), or the plan can be tailored to offer additional versatility for employers. Currently available in 41 states, enrollment will begin in April 2016, with issue dates effective starting in June 2016. For more information, visit bostonmutual.com.
Life Expectancy Estimations
Cambridge Guarantee released a life expectancy estimation tool. It is designed to generate credible and scientifically backed life expectancy estimation reports automatically on individual and joint lives based on health and medical data. For more information, visit cambridgelifeanalytics.com.
Study Shows an Improving Climate for Life Insurance
A growing number of consumers say they would recommend life insurance to others, which contributes to a more positive climate for the product, according to a report by LIMRA and Life Happens. Sixty-six percent of consumers are at least somewhat likely to recommend life insurance, an increase of 11% over last year. Eighty-six percent agree that most people need life insurance. “We’re encouraged by Americans’ understanding of the need for life insurance and their openness to…purchasing it. While not everyone who shows interest in life insurance buys it, increased awareness…is a promising development,’ said Marvin Feldman, CLU, ChFC, RFC, president and CEO of Life Happens.
Seventy-seven percent of Millennials are likely to recommend having life insurance. Fifty-one percent of Millennials and 30% of people overall are very or extremely likely to consider wearing an activity tracker and sharing the results with a life insurance company to get financial rewards. Sixty-five percent of consumers who already use an activity tracker would consider sharing the results for financial rewards. “New technologies, such as wearable activity trackers and smart scales are not only able to help Americans live healthier lives, but they can also be the key to developing relationships between insurance companies and policy owners throughout their lives and into retirement,” said Todd A. Silverhart, Ph.D. of LIMRA.
For 66% of American consumers, having enough money for a comfortable retirement is the top financial concern. Next on the list are paying for long-term care and medical expenses at 58%. Twenty-five percent of all consumers and 40% of Millennials said they’d be very or extremely likely to choose life insurance and long-term care combination products when purchasing life insurance. While two out of three Americans agree that most people need long-term care insurance, fewer than one in five have a policy, signaling a great opportunity for the life insurance industry to engage with more consumers.
Sixty percent of Americans say they have life insurance (individual and/or group), and 34% are at least somewhat likely to purchase it in the next year. These intentions are more positive than they have been over the past few years, thanks to more favorable attitudes about life insurance among Generation X and Millennial consumers. Even as people accomplish many day-to-day activities online, 51% still prefer to purchase life insurance in person. Three out of four say that a major reason to meet with a financial advisor or agent is to get immediate answers to their questions. Feldman said, “The findings show that consumers recognize the need for insurance products to protect their financial security. Even in this digital age, speaking to an advisor and getting their guidance is still very important to consumers.” For more information, visit limra.com.