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Welcome to Don Brown Group Benefits Newsletter, DBGB Brown Paper, a benefit update from Don Brown Group Benefits.
Periodically, we will update our customers and prospects on trends in the industry, regulatory developments, new products, and services. We will also offer fun facts and special contests. We welcome your input, comments, suggestions, and ideas. Please email your thoughts to donbrown@dbgroupbenefits.com.
In this issue:
Disability Insurance Awareness Month casts spotlight on why coverage is critical
Employers, brokers and insurance carriers will have their hands full in May, which is now known for yielding much more than flowers from April showers thanks to its designation as Disability Insurance Awareness Month (DIAM) for the past two years.
The Life and Health Insurance Foundation for Education (LIFE) has sought to promote greater awareness about the importance of disability insurance coverage much as it has done with life insurance during September. Major industry players, such as The Guardian Life Insurance Company of America, are doing their part to spread this important news.
"Disability, probably even more so than other protection coverage, remains one of the more overlooked or misunderstood kinds of insurance," observes Barry Petruzzi, Guardian's second vice president of group life and disability. "Unfortunately, too many people don't realize the effects of a disability on their paycheck before it occurs."
Odds of becoming disabled
Mindful of the "wallet-share" phenomenon wherein there's fierce competition for limited benefit dollars, Guardian lets the numbers do the talking when promoting disability insurance concepts so that employee populations can make informed decisions about whether to sign up for coverage.
The statistics are startling, even in the eyes of seasoned benefit managers, brokers, agents and advisers who are familiar with the extent to which the disability market is being under-served. Consider how roughly 30% of working Americans will become disabled during their career, according to the Social Security Administration. Petruzzi says the "true" number is at least 35% and even slightly higher in some segments of the population.
But there's much more to the story. America's Health Insurance Plans estimates that one in three employees can expect to become disabled for three months or longer. Moreover, the LIFE Foundation has that found 70% of working Americans do not believe they could last more than a month before financial difficulties would set in and more than 25% say they wouldn't last a week.
A Guardian survey shows that 50% of consumers have three months or less of their living expenses saved. And of those with three months or less saved, 29% admit that they don't have enough savings to cover any of their living expenses if they have to stop working. While research published in Health Affairs traces more than half of all personal bankruptcies to disability, the same number also has been bandied about with regard to home foreclosures. "We've heard anecdotally that this connection has been exacerbated by the current market crisis," Petruzzi reports, adding that the nation's negative savings rate means people have an even narrower margin of error for paying bills in the event that they become disabled.
Calculating monthly bills
Be that as it may, he says disability insurance costs much less than many people think (as little as $3 to $4 a week for a good basic plan). The rule of thumb is to calculate one's mortgage or rent, food, clothing, automobile, health care and other expenses as a percentage of salary based on monthly bank statements before determining an appropriate coverage level. One helpful online resource is LIFE's disability calculator, which can be found at www.life-line.org. Guardian also has a special disability insurance section with resources for DIAM on GuardianLife.com.
Key features to look for include income replacement in the 50% to 70% range and a waiting period of 90 to 180 days known as "elimination." Another issue to consider is portability or a so-called conversion feature, which he says is just starting to emerge in the voluntary group disability market.
Simple and clear communication materials also are imperative for a successful campaign. Petruzzi suggests the aforementioned monthly bill analysis, as well as a few bulleted points featuring industry research into why coverage is so critical in today's world and how relatively inexpensive disability insurance can be relative to its potential payout. In keeping with that theme, multiple channels of online and offline communication are recommended to leverage key messaging — from face-to-face meetings to telephonic support and Web-enabled technology.
At Guardian about 100 benefit advisers are trained to help enroll employee populations in disability insurance products and conduct group meetings. "Their goal is to help educate consumers about the value of coverages like disability so consumers can make informed decisions to protect themselves adequately," he says, noting the need for strong employer support to leverage employee buy-in. "We also work with our sales reps to help agents and brokers educate their clients, and ensure our support centers are always ready to answer customers' questions."
The ultimate objective is to advance each of these efforts year-round so that the educational process isn't confined to Disability Insurance Awareness Month. Guardian is building on an already comprehensive educational program for its own employees to "help them communicate the value of disability insurance on a day-to-day basis," according to Petruzzi.
Source: Employee Benefit News, May 2008
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Retiree Health Care Options Expand HSAs
Features that make it attractive for employers to offer health savings accounts (HSA) and health reimbursement arrangements (HRA) to employees also make them appealing as retiree health care funding vehicles, an expert says.
For employers who contribute to HSAs or HRAs, the costs are predictable; for employees, there are tax breaks such as tax-free accumulation of earnings and tax-free distributions taken to pay for health care expenses.
While neither arrangement will provide all that is needed to cover health care expenses after retirement, HSAs and HRAs are among the most tax-effective vehicles to accumulate savings, said Brad Kimler, executive VP with mutual fund giant Fidelity Investments.
Speaking last month at the 5th annual World Health Care Congress in Washington, Mr. Kimler said employers face a retiree health care coverage dilemma.
On one hand, old-style retiree health care plans have become unaffordable and many employers have terminated the plans, which often extend coverage for younger retirees or supplement Medicare for older retirees. However, without employer-provided coverage, some employees may be unable to afford to retire and will stay on the job longer than either they or their employers would like, potentially blocking advancement of younger employees.
HRAs and HSAs can be an attractive middle ground between providing coverage that may prove unaffordable or offering no coverage at all.
“Employers are taking a step back...and looking at what is the most effective mechanism” to help fund retiree health care coverage, Mr. Kimler said.
Earlier this year, Ford Motor Co. put in place an HRA-linked program for nonunion retirees. For both pre-Medicare and Medicare-eligible retirees, Ford each year contributes $1,800 per retiree, plus an additional $1,800 for a retiree's spouse, to an HRA. In the case of pre-Medicare-eligible retirees, Ford continues to provide retiree health care plans, though its contribution is capped at what it paid in 2006 with future increases born by retirees.
Fidelity's HRA is designed differently. Under the program set up last year, Fidelity provides employees with a $3,000 annual credit in an HRA. Employees can draw from the account after turning 55 to pay for retiree health care expenses on a tax-free basis. Employees vest in the credits after 10 years of service.
Fidelity began to consider such a program based on employee surveys that found an overwhelming majority of employees said they didn't know how they would pay for retiree health care expenses.
HSAs also can be retiree health care funding vehicles. To the extent that employees haven't used accumulated contributions and investment earnings to pay for health care expenses while working, those funds will be available to pay retiree health care expenses on a tax-free basis.
HSAs “can be useful tools” for retiree savings, Mr. Kimler said.
Still, some employees probably won't conserve HSA assets to have funds available when they retire. Some may believe they don't have to save up for retiree health care expenses.
“Some people think Medicare covers everything. They don't budget for health care,” said Beth Bierbower, vp-innovation at Louisville, Ky.-based Humana Inc., who also spoke at the session.
At the same time, rapidly growing HSAs have been under congressional scrutiny.
Tax legislation passed last month by the House of Representatives requiring the substantiation of distributions from HSAs would increase paperwork and costs for enrollees and give them fewer choices in which to open and maintain their accounts, experts say.
Under the legislation, banks would have to report unsubstantiated distributions on tax forms, making HSA enrollees automatically subject to income taxes and, in certain cases, penalties.
To meet these requirements, HSA enrollees would have to fill out claims forms and provide receipts in many cases. Currently, HSA enrollees can take distributions with no questions asked as to their purpose.
Handling that paperwork “will impose a much higher cost structure” for banks, Mr. Kimler said.
Those higher costs will lead some smaller banks to exit the market and reduce competition for enrollees' accounts, Ms. Bierbower.
“We think that competition is healthy,” she said.
Both Ms. Bierbower and Mr. Kimler questioned the need for the substantiation requirement. Individuals now must report HSA distributions on an IRS tax form. As with other information reported on tax reforms, individuals who misstate the use of HSA distributions face penalties if their tax returns were audited and the IRS caught those misstatements, Ms. Bierbower said.
On the plus side, the White House has warned that President Bush would veto an HSA substantiation requirement, reducing the chances that the proposal will become law, at least in the near-term.
Amid that legislative development, HSAs continue to grow. A survey released last week by America's Health Insurance Plans said enrollment in high-deductible health insurance plans linked to HSAs leaped 35% last year to 6.1 million.
Additionally, an earlier survey by Mercer L.L.C. found that 9% of employers with at least 500 employees offered HSAs in 2007, up from 6% in 2006, while the 6% of employers offered an HRA program both years.
Source: conexis.com, May 20, 2008
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High Deductible Plans Report Rapid Growth
Enrollment in high deductible health insurance plans linked to health savings accounts (HSA) continues to surge, with the plans rapidly becoming a mainstream benefit plan offering.
As of Jan. 1, 2008, 6.1 million people were enrolled in HSA-linked health insurance plans, a 35% increase over Jan. 1, 2007, according to an America's Health Insurance Plans census released last week.
Enrollment in the plans shot up across all markets, according to AHIP, with the biggest percentage increase in the small-employer market. Employers with 50 or fewer employees had 1.8 million people in HSA-linked plans, roughly a 70% increase over the previous year.
Enrollment also increased sharply in other markets. In the large-employer market, employers with at least 51 employees, enrollment in HSA-linked plans increased to 2.8 million, up about 35%, while enrollment in the individual market climbed to 1.5 million, also about a 35% increase.
Enrollment has been growing “at a very consistent and strong pace,” said AHIP President and Chief Executive Officer Karen Ignagni in Washington.
Enrollment increases have been at such a high level that the plans no longer are niche products but are now a part of the mainstream health care benefit plan market, said Jeff Munn, a principal and consultant in the Falls Church, Va., office of Hewitt Associates Inc.
HSAs, authorized under a 2003 federal law that added a prescription drug benefit to the Medicare program, first became available on Jan. 1, 2004, and enrollment has been surging ever since. For example, earlier AHIP surveys reported HSA enrollment at 1 million in March 2005, 3.2 million as of Jan. 1, 2006, and 4.5 million as of Jan. 1, 2007.
AHIP said it believes its annual census covers virtually all people enrolled in health insurance plans linked to HSAs.
A key reason for the big enrollment increase is that premiums for high deductible health insurance plans linked to HSAs are much lower than more traditional health insurance plans, where member cost-sharing is much less.
For example, as of Jan. 1, the average annual premium for family coverage provided through the best-selling HSA-linked HDHP in the large group market was $8,241, according to the AHIP survey. That compares with an average premium of $12,106 for employer-sponsored family coverage last year, according to a Kaiser Family Foundation survey.
Benefit experts say enrollment growth is coming from two sources: employers that are offering HSA-linked plans for the first time and in existing plans where positive employee experience is leading other employees to sign up.
“The early enrollees are kind of like poster children. They talk to other employees. That is becoming a powerful influence,” said Jay Garriss, national director-HSA client relationship management at Affiliated Computer Services Inc. in Raleigh, N.C.
Additionally, the one factor that turned many employees away from HSAs, the exposure to high health care costs through the linked high deductible health insurance plan, has become much less of a negative as employee cost-sharing in more traditional health plans has climbed.
“The high deductible is not so high anymore,” Mr. Garriss said.
Under law, the HDHP linked to an HSA must have a deductible no lower than $1,100 for individual coverage and $2,200 for family coverage.
Another big appeal of HSA-based plans is tax breaks that are not available for other plan designs. Employee contributions to HSAs are made on a pre-tax basis, can be indefinitely rolled over, earn tax-free interest and are distributed on a tax-free basis to pay for covered health care expenses.
By contrast, while employee contributions, for example, to flexible spending accounts also are pre-tax and distributions are tax-free, account balances are forfeited either at the end of the year, or if an employer adopts a so-called grace period FSA, unused account balances can be used to pay claims incurred during the first two-and-a-half months of the following plan year.
Still, it will be some time before HDHPs linked to HSAs become the dominant health care plan design. Many employees, Hewitt Associates' Mr. Munn notes, remain reluctant to accept the trade-off inherent with the plans: a lower premium but exposure to claims costs that may not be predictable.
Employees reason that they would “rather have predictability than a lower premium and the potential for a major out of pocket expense,” Mr. Munn said.
And the one action that employers could take that would supercharge growth of the plans is a step few are willing to take: making the plans the only plan design they offer.
“Employers are sensitive to the need to offer choice,” said Brad Kimler, an executive VP with Fidelity Investments in Boston.
Future growth also could be affected by how much support the arrangements receive from federal lawmakers. Until recently, lawmakers have increased the appeal of the arrangements through various legislative initiatives.
For example, legislation passed in 2006 effectively allows employees to make significantly higher contributions to HSAs than they could have under prior law. The legislation also allows employees to make the maximum contribution allowed under law, regardless of when during the year they became eligible to contribute to an HSA. Previously, HSA contributions had to be prorated to reflect when an employee became eligible for coverage.
Lately, though, the political climate has become chillier. Last month, the House of Representatives passed a tax bill with a provision that would require banks in which enrollees have established HSAs to substantiate that HSA distributions were for health care expenses.
That would result in employees having to save and file receipts along with claims forms, substantially increasing administrative overhead and forcing banks to increase charges and perhaps resulting in some pulling out from the HSA market, experts have said.
If the political climate continues to deteriorate, that could hurt future growth. “How much the market continues to grow will depend at least in part on the prevailing political climate,” Mr. Munn said.
Source: Conexis, May 20, 2008
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Individual health more stable for some
Individual health insurance appears to be more secure than relying on employer-sponsored small-group health coverage for workers in fair or poor health.
The findings resulted from a study by researchers from the University of Pennsylvania, in which workers with a minimum of one year of continuous health coverage during the period of 2000 to 2004 were asked to rate their own health as either excellent, very good, good, fair or poor. According to findings, for workers in very good health, coverage-loss rates were lower for group coverage than for individual coverage; however, findings were reversed for group workers with health ratings of fair or poor.
For example, for a 45-year-old male with $80,000 in annual family income expecting an 8 percent increase in income, the risk of losing small-group coverage was 5 percent for someone in excellent health and 20 percent for a worker in poor health. With individual health coverage the same worker would face a 16 percent risk of losing coverage at all health levels, according to findings.
The study found that for a 28-year-old female with $50,000 in annual family income expecting a 4 percent increase in income, the risk of losing individual health coverage was 17 percent at all income levels, while the risk of losing small-group health coverage ranged from 9 percent if in excellent health to 35 percent if in poor health.
Source: ProducersWeb.com, May 13, 2008
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Dollars and sense: Long-term care insurance basics
As millions of Baby Boomers head into their retirement years, it’s surprising how few actually know that the government provides little more than a few weeks of financial support for nursing home care when the average person needs it for at least a year.
A 2006 Genworth Financial Survey says the national average private room rate at a nursing home (the most expensive care option) was $194.28 per day/$70,912 annually. The current cost of nursing care can be over $100,000 a year in many facilities in the Boston area.
Long-term care insurance (LTC) may be one solution for those who need to bridge the gap between their savings and the actual costs they could face if they or a family member requires care.
Determining and paying for long-term care is almost too complex a topic to be covered in a short article like this, which is why it makes sense to discuss your individual situation with a qualified professional. Here are some of the questions you need to answer before investing in long-term care insurance or other options:
What resources do you have? We’re not just talking about money here. While care giving puts a strain on family, it’s important to consider whether family and friends are truly willing and able to help with your care, which can provide a considerable financial and emotional benefit. Also, if you live in a community with reliable volunteer resources to help, that’s something to note, though today’s services may not be there tomorrow.
How old are you and your spouse and what’s your health history? People in good health purchasing long-term care insurance in their 50 usually get the most affordable deal. But an individual’s family health history and current health status are the real determinants of what your LTC insurance policy will cost – or if you’ll qualify for coverage at all. Also, it’s important to note that 40 percent of long-term care is provided to individuals between the ages of 19 and 65, so the need for care can strike at any time. I believe, that for some individuals depending on their situation, considering this insurance in their 30s or 40s can make a lot of long-term financial sense.
Are you a single female? Again, personal and family resources come into play here, but since women typically live longer than men; women should take a heightened interest in providing for their long-term care safety net. Long-term care insurance might be a good solution given their other investments and their health history.
What types of services are covered? Over the course of time, long-term care policies have evolved to place more emphasis on home-based care or assisted living, since most people would choose to recover or live out their last days in a familiar environment. A basic LTC insurance policy pays for assistance with activities of daily living including eating, dressing, bathing, toileting, incontinence and transferring (bed to chair, etc.). Each policy lists the types of services that are covered under nursing home care and under home health care. Homemaker services are generally covered and other services as listed in the policy. It’s very important to spend the time to make sure you know the ins and out of any insurance contract you are considering.
What triggers coverage? A qualified LTC policy won’t go into effect until the covered individual can’t perform two tasks of daily living for a period, typically 90 days, or when that person needs substantial supervision related to cognitive impairment. This is where you have to read the fine print since some policies are more restrictive than others.
What if I never want to go to a nursing home?The best-designed LTC policies will pay the same amount of benefit whether care is received in a long-term care facility, an assisted living facility, an adult day care center, or in the home. Some policies do offer reduced percentages for home health care versus nursing home care, but it’s a better idea to keep full percentages on home health care benefits since most people would rather stay in their homes.
What’s the record of particular companies in this business? Over the past generation, more companies have gotten involved in the LTC insurance business, and it makes sense to see not only who the leaders are at the time you’re buying and what they’re offering, but how financially healthy these companies are and have been over the course of time. You’ve probably heard of insurance companies that have gone out of business and stranded customers. There’s no restriction on that happening with LTC providers, so check their ratings and financial history very carefully.
Source: wickedlocal.com, May 2008
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Senators told to tread carefully on health care
With the presidential candidates fighting over how best to rein in soaring health care costs and cover the uninsured, a veteran of the last major U.S. health care reform battle urged lawmakers on Tuesday to build broad public support before embarking on any reform.
Donna Shalala, who served as Secretary of Health and Human Services under President Bill Clinton, told the Senate Finance Committee that public support for Clinton's health reform effort in the early 1990s diminished as people with health insurance began to worry about what it would mean for their coverage.
The 1990s proposal also faced staunch opposition from the health care industry, which launched a series of television ads that helped doom the plan.
"We shouldn't be mislead because there is widespread agreement in this country that we have a broken system," Shalala told the Finance Committee.
"Both agreement on the definition of the problem and solution must be present if we are to succeed," she said in testimony.
Health care costs and insurance premiums have been rising rapidly and an estimated 47 million Americans are without coverage, making health care a major issue in this year's congressional and presidential elections.
"This happens to be an issue out there that both political parties for the first time are saying something has to be done," Tommy Thompson, former Secretary of Health and Human Services under President George W. Bush told panel. "We never really had a presidential campaign in which we really fought the issue of health care."
Thompson suggested lawmakers first tackle Medicare, which he said will start going broke in 2012. He suggested an independent commission look at changes that will help shore up this government health care program for the elderly.
"You are not going to be able to transform health care without first addressing Medicare," Thompson said. "That is the big 800 pound gorilla."
Americans spend about $2 trillion a year on health care, accounting for about 16 percent of the U.S. economy, said Senate Finance Committee Chairman Max Baucus, a Montana Democrat. Baucus said his committee plans a series of hearings to lay the groundwork for reform under the next president.
The candidates have been battling over the best way to overhaul the system. Republican John McCain wants to make insurance more affordable and provide more choices to people by ending tax breaks for employer-sponsored insurance and instead provide a tax credit to help individuals buy policies.
Democrats Hillary Clinton and Barack Obama want to provide universal coverage through a mix of private and public insurance.
Clinton would require everyone to have coverage and use tax subsidies to help make it more affordable. Obama would require coverage for all children and create a program to help businesses and individuals without employer-based coverage buy insurance.
Source: reuters.com, May 6, 2008
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Cancer remains top cause for long-term disability claims
The American Cancer Society reports the number of cancer survivors in the United States has increased four-fold in the last 30 years, and prevalence of cancer is expected to double by 2030. Consequently, for the seventh consecutive year, cancer is the leading reason for long-term disability absence in 2007, found Unum, a provider of group disability insurance.
The company reports that 12.2% of its long-term disability claims resulted from cancer cases. According to the National Institutes of Health, cancer cost more than $219 billion in 2007, including $89 billion in health care expenditures and $130 billion in lost productivity.
Yet, Unum also notes increasing survival rates and success in returning to work after a cancer-related disability leave, as well as a growing number of paid cancer claims.
For example, between 2001 and 2005, the company saw a 77% increase in return-to-work rates in cases of short-term cancer disability and a 24 % increase in return-to-work rates in cases of long-term cancer disability.
"Survivorship rates have moved to levels that are more characteristic of a serious chronic disease than of a terminal illness," says Kenneth Mitchell, Unum's vice president of health and productivity. "There are clear patterns of factors leading to return-to-work success, including early identification, age in long-term disability cases and work-site flexibility," he adds.
Unum's annual report on disability trends reflects 2007 data from its disability database, which tracks 25 million covered individuals and an estimated 178,000 employer policies.
The other top causes of long-term disability claims for 2007 included complications from pregnancy (12.1%) and back injuries (11%).
Source: employeebenefitnews.com, May 6, 2008
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Health plan study shows performance varies region to region
Employers hope that a health insurer managing regional plans across the country will deliver consistent services to all members. New research by J.D. Power and Associates shows that may not always be the case.
"Health insurer performance fluctuates greatly, even among different [regions] with the same insurance company, and this lack of service consistency can present a real challenge for human resources executives attempting to select the best health benefits for their employees working in multiple regions across the country," says Jim Dougherty, executive director of the health care practice at J.D. Power and Associates.
In its 2008 National Health Insurance Plan Study, the California-based marketing firm studied member satisfaction among 107 health plans in 17 regions throughout the United States. Analysts examined seven key factors: coverage and benefits; choice of doctors, hospitals and pharmacies; information and communication; approval processes; claims processing; insurance statements; and customer service.
The data shows that the majority of health plan members rate their insurer lowest for the communications and information that are provided to help them understand their plan. In addition, only 45% of members report that they fully understand how to use their health insurance coverage and member services.
Other key findings on regional performance include:
- Arizona-Utah Region
BlueCross BlueShield of Arizona ranks highest, receiving a customer satisfaction index score of 763 on a 1,000-point scale.
- California Region
Kaiser Foundation Health Plan of California ranks highest with 755.
- Illinois-Indiana Region
BlueCross BlueShield of Illinois ranks highest, earning a score of 729.
- Michigan Region
Health Alliance Plan of Michigan ranks highest with 772.
- New York-New Jersey Region
United Healthcare (New Jersey/New York) ranks highest with 749.
- Texas Region
Humana of Texas ranks highest with 753.
- Virginia-Maryland Region
CareFirst BlueCross BlueShield ranks highest with 740.
Source: employeebenefitnews.com, May 6, 2008
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A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country
The U.S. Senate last week unanimously approved the Genetic Information Nondiscrimination Act (see below), a significant piece of health care legislation that is expected to pass easily in the House and be signed by President Bush. The bill would bar health insurers from using genetic information to determine enrollment eligibility, and it would prohibit employers from using it in hiring, firing and promotion decisions. Aetna has long supported the general thrust of this bill and recognizes the industry has an obligation to protect the confidentiality of individually identifiable health information, including genetic information. In fact, Aetna broke new ground in 2002 when it formulated an influential set of guidelines for health insurers, defining appropriate and inappropriate uses of individuals' genetic information. Aetna built on this effort in 2007 when it began offering members confidential telephone and web-based cancer genetic counseling services as part of benefit plans that cover genetic testing. It now appears the time has arrived for legislative action on this important, futuristic sphere of health care.
Federal
The Senate passed its Genetic Nondiscrimination bill on Thursday by a vote of 95-0. The Senate bill is a modified version of the House-passed bill from 2007. Specifically, Aetna worked with staff to assure that underwriting for manifest disease would be permitted in the individual and small group market, and that insurers could continue to provide disease management and wellness programs. The bill will now need to be passed by the House (in its amended form) before it can go to the President for final approval.
In an effort to push the Senate version of mental-health parity (rather than the problematic House version), Senators Edward Kennedy and Pete Domenici hosted a health "expo" to highlight and demonstrate innovations in behavioral health and in health information technology for the benefit of Senate and House staff members. On April 22, several health insurance companies participated in the event in one of the Senate Committee rooms; Aetna demonstrated innovations in both arenas -- Dr. Michael Golinkoff for Aetna Behavioral Health and Nivedita Stella for ActiveHealth Management. After his opening remarks, Senator Domenici spent considerable time with Dr. Golinkoff learning first-hand about Aetna's programs. This event was well received and may prove important, since the House is about to release its response to the Senate compromise offer of March 30.
States
COLORADO: In the past week, three new and problematic bills have been introduced in Colorado. A prohibition on provider inducements bill would prohibit inducements to health care providers to deny, reduce, limit, or delay specific medically necessary and appropriate services to a covered person. The prohibition does not apply to incentive plans that involve general payments such as capitation payments or certain shared-risk arrangements. A colorectal cancer screening mandate bill would require that health plans cover colorectal cancer screenings, with cost sharing limited to 10 percent of the cost. A third proposal would use both newly created remedies and changes to existing law to allow increased penalties to be exercised by the Commissioner of Insurance for certain activities of insurers.
CONNECTICUT: Rep. Chris Donovan's proposal for adding municipalities and small businesses to the state employees' health insurance purchasing pool passed in the House last week. The amended bill makes participation by municipalities and small businesses voluntary, not mandatory. The bill also was amended to add Municipal Shared Risk Grouping, permitting towns and cities to collaborate to purchase health insurance locally rather than joining the state employee pool. The estimated premium per family to join state employees would be $23,000. The significant cost will prove daunting for most small businesses. The House also approved a bill mandating coverage for autism spectrum disorder therapies. These bills now await action in the Senate, which is likely to happen this week. In other action, the Finance Committee did not act on legislation creating a tax credit for employers of 50 or fewer employees who provide wellness benefit programs, effectively killing the bill.
FLORIDA: Last week, Aetna joined with Governor Charlie Crist at a press conference in support of his uninsured initiative, Cover Florida. While Aetna did not agree to participate in the voluntary plan, we praised the Governor for his efforts and pledged to continue to work with him. Cover Florida is a voluntary program for the uninsured who cannot gain access to coverage through their employer or other means. It is guaranteed issue and requires coverage for certain benefits, but it also allows health plans to create plans with limits on benefits, as well as lifetime and annual limits.
MICHIGAN: The Republican-led Senate Health Policy Committee has one week to pass an individual market reform bill to the full Senate. There is strong disagreement among Republican senators on the matter. Majority Leader Mike Bishop is convening a small group of senators and one representative each from Blue Cross Blue Shield of Michigan, the insurer coalition, and the HMO Association to negotiate a compromise. Aetna opposes the implementation of a high-risk pool that is redundant to BCBSM's role as insurer of last resort, medical underwriting by non-profit Blues, and a proposed medical loss ratio of 75. At a hearing last week, numerous groups testified against the Blue's individual market reform strategy. The UAW, for example, testified that a high-risk pool would cause rate increases, while the Alliance of Health Care Workers said the pool could result in 100 to 200 percent increases for the group's members. The most powerful testimony came from the Consumers Union, the publisher of Consumer Reports magazine, which called the BCBSM-sponsored package of legislation a "de facto" conversion and explained to the committee how the State of Michigan would lose a valuable asset.
NEBRASKA: The Legislature recently adjourned without discussion of any major health care reform. However, several significant pieces of legislation were filed that died during the process, including bills that would have mandated coverage of hearing aids and prosthetic devices as well as a bill that would require health plans to disclose to large groups (51 or more employees), upon request, the group's claims history for the past 12 months.
NEW JERSEY: Aetna hosted a conference call on April 18 with New Jersey Assemblyman Herbert Conaway and representatives from the Council for Affordable Quality Healthcare to discuss issues impacting physician credentialing. Conaway, a practicing physician, is seeking to improve the overall time in which it takes to complete the process. After the call, Assemblyman Conaway indicated he was determined to lead an effort resulting in a mandate for, or widespread voluntary adoption of, CAQH as the single-standard for physician credentialing statewide.
Source: Aetna Health Reform Weekly, April 28, 2008
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Long-term care liability costs stabilize
Average national liability costs to the long-term care sector have stabilized for the first time in nine years, according to a report released Monday by the Aon Corporation.
Average liability costs are $1,460 per bed, according to the report. That compares with a high of $2,030 in 1998. Also, the average cost of a claim was $138,000 in 2007, versus $261,000 10 years ago. The numbers were even lower in 13 states that had passed tort reform laws: $1,270 per bed and $104,000 per claim.
This year's report finds the actual number of claims evening out, as well. It has steadied in the last year to around 10.6 claims per 1,000 occupied beds. In 1997, Aon reported 6.7 claims per 1,000 occupied beds. That number nearly doubled by 2005.
States that do not have tort reform laws on the books saw their average per-bed liability costs double over the last 10 years, from $630 to $1,260. The report was conducted in cooperation with the American Health Care Association.
Source: McKnights.com, May 13, 2008
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SPRING OUTDOORS FOR AN ENERGIZING WORKOUT
Although we’ve moved our clocks ahead an hour and daylight stays with us a little longer, you still may find yourself doing the same old dark workouts inside the gym. So why not spring forward -- right out the door. Taking your workout outside this spring can recharge your batteries and give you a renewed enthusiasm for exercise.
But first, keep some pointers in mind. When transitioning your indoor workout outside, take things a little slowly at first. Aside from bumps in the road and slippery surfaces to watch out for, you don’t want to overdo it the first time you head for the hills or rough terrain. On the elliptical or treadmill machines in the gym you can manipulate the incline and resistance, but outdoors you are at the mercy of Mother Nature, so you may have to adjust your speed or intensity accordingly. Of course, when heading outside also be sure to bring lots of water and wear sun block and dress in moisture-wicking layers of clothing that you can peel off as you warm up.
And if you’re looking for an entirely new outdoor workout to kick off spring, here’s one of my favorites:
*Warm up. Start off with 5 to 10 minutes of walking, light jogging, jumping jacks or jumping rope. Then perform the following series of exercises all the way through and, if you’re up for more, repeat two to three times.
*Jack squats. Squat down while clapping your hands above your head. Bring your arms to the side when standing up. Repeat 20 times.
*Push-up combo. Do 10 push-ups with your hands on a wall or tree, then 10 with your hands on a bench, then 10 with your hands on the ground.
*Jumping jacks or jump rope. Go for 3 minutes.
*Walking lunges. Start standing tall and then lunge forward with your right leg until your thigh is parallel to the ground. Bring your left leg up as you stand tall and then repeat on the opposite leg. Do 15 reps with each leg.
*Planks. Rest your forearms on the ground and lift up on your toes so that your body is parallel to the ground. Elevate one leg up behind you for 30 seconds, then switch legs for another 30 seconds.
*Mountain climbers. Crouch down with your hands on the ground in front of you. Extend one leg back and place one knee in toward the chest, then quickly switch. Repeat for 20 reps each side.
*Standing side crunches. Stand with your hands clasped behind your head, elbows pointing out to the sides. Bring your left knee up and your left elbow down so that they meet at waist level. Return to the starting position and quickly repeat on the right side. Alternate for a total of 20 reps.
*Jogging, running, jumping jacks or jump rope. Go for 3 minutes.
*Sitting V-crunches. Sit on the edge of a bench and grab the back of the seat with both hands. Lean back at a 45-degree angle and extend your legs out in front of you. Then bring your knees into the chest for 20 reps. (No bench? Start by sitting on the ground and placing your hands behind your butt.)
*One-leg squats with forward reach. Balance on your left leg with your right leg slightly behind you. Reach forward with your left hand and touch the ground. Stand and repeat for 15 reps. Then switch sides for 15 reps.
*Power walking, jogging, running, jumping jacks or jump rope. Go for 3 minutes.
*Cool down. Walk slowly for 5 minutes. Then stretch your entire body. Place an emphasis on calm yoga-style breathing while you enjoy the scenery of the great outdoors.
Source: thefitlist.com, March 25, 2008
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Recipe Corner: Grilled Pork Tenderloin & Asparagus with Peanut Dipping Sauce
In this recipe, half the marinade is used to flavor the meat and vegetables. The other half is whisked with peanut butter to create a tasty dipping sauce -- a fun job that kids can lend a hand with. You can also enlist their help preparing the asparagus: show them how to gently hold an end in each hand and then bend the stalk into an upside-down U until the tough part snaps off.
RECIPE INGREDIENTS:
1/2 cup soy sauce
1/2 cup rice wine vinegar
2 tablespoons toasted sesame oil
2 tablespoons honey
1 teaspoon peeled and grated fresh ginger
2 cloves garlic, minced
1/2 teaspoon lemon pepper
1 pound fresh asparagus, rinsed and snapped
1 pound pork tenderloin
1/2 cup peanut butter (smooth or crunchy)
1. Make the marinade by whisking together the soy sauce, vinegar, sesame oil, honey, ginger, garlic, and lemon pepper in a bowl, and reserve 1/2 cup of the mixture in a separate container.
2. Place the asparagus in a ziplock bag and pour in 1/4 cup of the marinade from the bowl. Work the bag gently with your fingers to distribute the marinade. Do the same with the pork tenderloin, using a second ziplock bag and the remaining marinade from the bowl. Let the meat and vegetables marinate at room temperature for 30 minutes. Meanwhile, prepare a charcoal fire or heat a gas grill to medium-high, and oil the grates.
3. Add the peanut butter to the reserved marinade and whisk the mixture until smooth.
4. Grill the tenderloin for 3 to 4 minutes on each side, rotating it a quarter turn at a time, until the internal temperature registers 145° in the center. Remove the meat from the grill and let it rest for about 5 minutes (the internal temperature will rise to 150°). Meanwhile, grill the asparagus spears for 2 minutes per side.
5. Slice the pork diagonally into 1- to 2-inch slices. It should be juicy and slightly pink inside. Serve the meat and the asparagus with the peanut dipping sauce. Serves 4.
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Don Brown Group Benefits is a Baltimore/Washington based benefits consulting firm specializing in group health, life, disability and retirement plans for employers. Call 301.249.1301 for more information on any of the issues discussed in this newsletter or for answers to other benefit questions you may have or visit us online at http://www.dbgroupbenefits.com/.
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