Daily Insurance Report - July, 28 2023

Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Voluntary Benefits Association®

Maximize engagement for your 2024 benefits enrollment

By Casey Hauch - Benefits enrollment rolls around each year, but you may not be recognizing the rare chance to engage with employees in a space that makes a real impact. Benefit programs are a key touchpoint for attracting and retaining talent, and benefits enrollment offers an annual opportunity to enhance the employee experience through an effective communication and engagement strategy. Read Full Article… 

VBA Article Summary

  1. Education and Transparency in Benefits Communication: With 88% of employers planning changes to their benefit programs in the near future, it is crucial to provide clear and accessible information to employees. This can be achieved through comprehensive benefits education, demonstrating choice, flexibility, and value. The aim is to increase employees' understanding of the options available to them, with only 40% currently feeling they have selected the best option. Utilizing decision support tools can assist employees in making well-informed choices that balance cost and protection.

  2. Highlighting Comprehensive and Tailored Benefits: Employers need to accentuate benefits that not only offer financial protection, such as life, disability, and pet insurance but also those that address well-being, including mental health resources. This is particularly pertinent given the worsening mental health crisis since the pandemic. Promoting benefits that extend financial power, like tax-advantaged accounts and financial counseling resources, is also essential, especially with the rising living expenses. Thus, highlighting the breadth and adaptability of these benefits can increase employee satisfaction and engagement.

  3. Innovative Communication Strategy: Post-pandemic, with a mix of remote, hybrid, and on-site employees, it is important to develop a dynamic communications strategy that meets employees where they are. This could include virtual benefits fairs, mobile-friendly channels, QR codes for quick access to information, and simple visual communication tools like postcards, digital signs, and banners. Providing easy-to-use tools and information empowers employees to make smart benefits decisions, ideally leading to increased satisfaction, productivity, and retention.

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Gallup Report: Global Rise in Employee Engagement

Employee engagement reached a record high in 2022, according to Gallup’s State of the Global Workplace: 2023 Report. The report found engagement rose to 23% after dropping during the pandemic in 2020. That means more workers found their work meaningful and felt connected to their team, manager, and employer. The previous high was 22% in 2019. Read Full Article… 

  1. Global Employee Engagement and its Economic Impact: Engagement levels vary across different regions globally, with South Asia leading at 33% and Europe showing the lowest at 13%. The U.S. and Canada show engagement levels at 31%. Low engagement results in significant economic costs, amounting to $8.8 trillion annually, equivalent to 9% of global GDP. Workers with low engagement, termed as quiet quitters, are characterized by minimum effort and psychological disconnection from their employers. Actively disengaged workers, referred to as loud quitters, directly harm their organizations through their actions.

  2. Workplace Stress and Factors Affecting Engagement: A record high 44% of employers worldwide and 52% in the U.S. and Canada reported experiencing a lot of stress at work. Low engagement is linked to higher stress alongside other factors like inflation and family health issues. The report suggests that managers play a significant role in the level of stress experienced by employees. Changes desired by employees to make their workplace great largely revolve around improvements in engagement and culture, which includes more open communication, respect, autonomy, and employee recognition.

  3. Impact of Work Location and Job Seeking Trends: Despite ongoing debates over remote, hybrid, or on-site work, the report found that engagement had nearly four times as much influence on employee stress as work location. Globally, more than half of employees are either actively or passively seeking new jobs, with pay increase, improved well-being, and growth opportunities being the key drivers. In the U.S. and Canada, 71% of respondents believed that it's a good time to find a new job. The level of engagement was found to influence the pay increase required for an employee to consider a new job.

The Future and Fears: Public Perception of AI Explored

By Nicola Corless - A new study seeks to understand the public perception of artificial intelligence (AI) and software in general. The online survey aims to gather insights into people’s hopes, fears, and general sentiments towards AI. The research intends to shed light on the public’s stance on immediate concerns like racial and sexist biases in AI. By seeking public opinions, the researchers aim to influence ethical and responsible development of AI and software. Read Full Article… 

VBA Article Summary

  1. Public Input on AI and Software Concerns: Lero, the Science Foundation Ireland Research Centre for Software and University College Cork, is conducting a public survey to gather insights on what the general population believes and knows about AI and software. Dr Sarah Robinson, a senior postdoctoral researcher with Lero, is leading the initiative to understand the public's hopes, fears, and thoughts about the potential impacts of AI and software, emphasizing the importance of the public's role in shaping responsible software use.

  2. Recognizing the Threat of Biased AI: Dr. Robinson warned of the potential harm caused by biases embedded in AI systems. She cited her Lero colleague, Dr. Abeba Birhane's research, which found that some AI is trained with data riddled with racist and misogynist language. These biases could exacerbate marginalization and even lead to human rights abuses, particularly with technologies such as facial recognition software.

  3. Aiming for Ethical and Responsible Software: The anonymous survey, which will take around ten minutes to complete, will probe the public's views and concerns on a variety of topics related to AI and software. The goal of this research is not only to understand the public’s perception of current technology but also to gather their thoughts and priorities for ensuring ethical and responsible software development and use in the future. Lero is inviting all interested individuals to participate, underscoring the importance of their input in shaping the landscape of AI and software.

State Court Sides with Aetna Doctors

Lower courts had previously ruled against a physician nonprofit on the basis of standing.

By Natalie Hanson - The California Supreme Court breathed new life Monday into a lawsuit that accuses Aetna of having fired or threatened to fire physicians who referred patients to out-of-network providers. Aetna had previously defeated the suit from the California Medical Association for lack of standing, but Associate Justice Kelli Evans wrote for the unanimous high court Monday that this was in error. Read Full Article… 

VBA Article Summary

  1. The Background: A legal conflict between the California Medical Association (CMA), representing more than 37,000 physicians, and the insurance company Aetna was underpinned by differing interpretations of the law regarding physician referrals. CMA claimed that Aetna’s policy, designed to encourage use of in-network providers, violated several sections of the Insurance Code, Business and Professions Code, and Health and Safety Code. Aetna, however, argued that its policy was a reaction to physicians referring patients to facilities where they had financial interests. Additionally, Aetna disputed CMA's standing to sue, asserting that the physician group lacked direct business ties with the insurer and could not demonstrate clear injury from the policy.

  2. Lower Court's Decision: Initially, the Los Angeles Superior Court granted Aetna’s motion for summary judgment based on the standing grounds. An appeals court affirmed this decision, suggesting that the CMA could only seek an injunction against Aetna if it had individually suffered injury. Both courts determined that the CMA did not have standing to bring the case.

  3. The Reversal: The decision was reversed when it reached the bench of Justice Evans, appointed by Governor Gavin Newsom. Evans clarified the difference between associational standing (where a group can bring claims on behalf of members) and organizational standing (where an organization asserts claims based on its own injuries). The judge argued that CMA demonstrated valid standing as it was financially impacted by Aetna's in-network provider policy, asserting that it hindered CMA's efforts to protect public health. Evans' decision was supported by several other judges, emphasizing that CMA's engagement in this dispute was not arbitrary but rather a direct response to Aetna's policy. The legal issue of CMA's standing was one of the most significant in the case.

House Republicans' CHOICE Act would roll back some Obamacare protections

By Julie Appleby - Forget "repeal and replace," the oft-repeated Republican rallying cry against the Affordable Care Act. House Republicans have advanced a package of bills that could reduce health insurance costs for certain businesses and consumers, partly by rolling back some consumer protections. Rather than outright repeal, however, the subtler effort could allow more employers to bypass the landmark health insurance overhaul's basic benefits requirements and most state standards. Read Full Article… 

VBA Article Summary

  1. The Biden Administration's Regulations on Short-term Health Plans: The Biden administration seeks to retighten regulations on short-term health plans that were loosened by the Trump administration. These plans are often significantly cheaper due to fewer requirements such as pre-existing medical conditions coverage and set annual or lifetime limits. While critics argue these plans are misleading and inadequate, leading to them being dubbed "junk insurance", others believe they offer an essential low-cost alternative for some consumers. The proposed Biden regulation seeks to limit the policy terms to four months, compared to the current 364-day policy, which can be renewed for up to three years.

  2. The GOP's CHOICE Arrangement Act: The GOP has passed the CHOICE Arrangement Act in the House, which could potentially change the landscape of health policy. The legislation enables more self-employed individuals and businesses to join together to purchase Association Health Plans, which often bypass many ACA requirements, leading to lower costs. Critics argue this chips away at the ACA structure, while supporters believe it could help reduce insurance costs for employers, ensuring continued access to affordable healthcare.

  3. Rising Health Costs: Health policy experts agree that the real issue at hand is the continually increasing cost of health care. Regardless of policy changes, the high costs of healthcare present an ongoing challenge. Both the changes proposed by the Biden administration and the GOP's legislation highlight different strategies to address this concern, focusing on issues such as plan duration, coverage requirements, and group purchasing capabilities. However, critics argue that these changes could undermine the ACA's standards and protections, potentially leading to more substantial issues in the future.

New Eastbridge report examines compensation of voluntary brokers

By Eastbridge Consulting Group, Inc. - Most voluntary benefits carriers offer numerous options for commission schedules, bonuses and other compensation to attract, compete for and reward the business partners they depend on to market their products, according to Eastbridge Consulting Group's most recent research. Read Full Article…

VBA Article Summary

  1. Varied Commission Schedule and Bonus Programs: Eastbridge's 2023 "Voluntary Carrier Commission and Compensation Practices" Spotlight™ Report revealed that 71% of voluntary carriers provide multiple commission schedule variations, and 79% offer a bonus program. These variations allow carriers to cater to different types of brokers, attracting a broad range of talent, and ensuring competitiveness in the market.

  2. Commission for Takeover Business: Interestingly, the report showed that 68% of carriers pay the same commissions for takeover business as new business. This practice signifies the value placed on sustaining and growing existing customer relationships alongside initiating new ones.

  3. Preferred Commission Model and Vesting Practices: The report showed a preference among brokers for the heaped commission model, selected 60% of the time, despite half of the surveyed carriers imposing restrictions on this type. Furthermore, most carriers support commission vesting, with only a few limiting vesting to certain product types. These trends underscore the importance of flexible and competitive compensation structures to attract and retain top broker talent.

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FTC proposes updates to merger review that could slow healthcare dealmaking

By Emily Olsen - Last year, the FTC and DOJ announced they were modernizing merger guidelines for finding and studying potentially anticompetitive deals, which the regulators argued needed review to function in a modern economy. In response, the American Hospital Association said guidelines don’t need “major revisions,” and that significant change could derail beneficial mergers that take years to put together. Read Full Article… 

VBA Article Summary

  1. Proposed Antitrust Regulation Update: Antitrust regulators, including the Federal Trade Commission (FTC) and the Department of Justice, are suggesting revised rules for merger reviews that would mandate companies to submit more comprehensive information about planned mergers. This action is in response to a rapid increase in healthcare transactions and could slow the speed of these deals. The additional information would comprise of reasons for the merger, details about investment vehicles or corporate relationships, projected revenue, market conditions, business entity structures, previous acquisitions, and workforces.

  2. Dealmaking and Regulatory Scrutiny: There has been a significant rise in dealmaking between health services companies in the past two years, despite high interest rates, increased regulatory scrutiny, and other macroeconomic concerns. The FTC believes the updated rule will help them keep up with the growing volume and complexity of mergers. This update would be the first major review of the Hart-Scott-Rodino Form, a document companies must fill when pursuing certain transactions, in 45 years. The FTC estimates that the new form will require an additional 107 hours to complete, up from the current 37 hours.

  3. Impacts and Challenges: Regulators argue that the current data collected by the HSR form is inadequate for their teams to determine, within the first 30 days, if a proposed deal could violate antitrust laws. This has led to considerable time and effort being spent on developing an elementary understanding of key facts. According to Bloomberg Intelligence senior analyst Jennifer Rie, the proposed rule could add months to the merger filing process for companies. Regulators have seen mixed results in challenging healthcare mergers in recent years, successfully blocking some hospital mergers but failing to halt more complex tie-ups. The proposed rule is set to be published in the Federal Register later this week.

How the Veterans Benefits Administration is coping with PACT Act claims

By Tom Temin - The PACT Act, which became law in 2022, aims to help veterans who were exposed to toxins. Since June 3, it has sparked more than 625,000 new claims. For how the agency is dealing with the caseload, Federal Drive with Tom Temin spoke with Josh Jacobs, the Department of Veterans Affairs Undersecretary for Benefits. Read Full Article… 

VBA Article Summary

  1. Staffing Increase and Adaptation: Prior to the enactment of the PACT Act, the Veterans Affairs Department undertook a significant hiring campaign, increasing the total workforce by 20% over 18 months. The claims process is now handled by more than 30,000 employees who are referred to as VSRs and RVSRs. They develop evidence and rate cases, similar to the role of administrative judges in other agencies. The majority of these claims processors are handling PACT Act claims, which constitute a significant percentage of their total workload.

  2. Training and Digital Transformation: Training of the new workforce is comprehensive and can take up to two years for a new employee to become proficient. To aid their work, the organization has shifted from a paper-bound process to a primarily electronic one, supported by a system called the Veterans Benefits Management System. This transition, coupled with newly created automated decision support tools, has significantly increased efficiency.

  3. PACT Act Impact on Claims and Backlogs: The PACT Act has expanded the department's ability to deliver benefits to veterans, including those from the Vietnam War era. Since its enactment, almost 700,000 PACT claims have been processed. Despite an anticipated increase in the backlog of claims, efforts are ongoing to manage this through increased staffing, training, and technological improvements. To prioritize claims, the VA has set up a system to ensure that veterans in dire need are attended to promptly. It is also actively trying to reach out to more veterans who are not connected with VA, thereby increasing the total population they serve.