Understanding Insurance

Some Insurance Companies are Losing Money on Obamacare Exchanges

A recent article in the Wall Street Journal details the financial sustainability for insurance carriers as it relates to the Affordable Care Act Exchanges (Marketplaces).  Journalist Anna Wilde Mathews explains why the insurance companies are under pressure to improve their margins on all of their ACA health plan offerings.  For example, a recent analysis of Blue Cross and Blue Shield plans, found that they paid out more for health care in the first three quarters of 2015, than they received in premiums on their Individual plans.

Though the health law has added customers to many insurers' rolls, much of that growth has been unprofitable, reflecting medical costs that have often run ahead of what insurers projected when they set premiums, among other factors.

Also recently in the headlines, CNN Money reported that UnitedHealth expects to lose nearly $1 billion on plans they offer through the Obamacare exchanges.

UnitedHealth, which sat out the first year of Obamacare in 2014, said it is not looking to grow its exchange business. Instead, it has increased prices, eliminated marketing and commissions and withdrawn its top-tier products. In an effort to stem the losses, it is also working more closely with providers and enrollees to manage their illnesses and care.
UnitedHealth warned in November that it might pull out of the Obamacare exchanges altogether in 2017, citing higher-than-expected claims. In particular, it blamed the large number of members signing up outside the open enrollment period who were using a lot of medical services.
Some insurers argue that Americans are waiting until they get sick to sign up and then finding a way to qualify during the so-called special enrollment period, which is traditionally open to those who change jobs, get married or divorced or have a baby. The Obama administration has since said it would tighten the rules for joining Obamacare during this period.

Time will tell if these losses result in higher premiums, higher out-of-pocket costs, or insurance carriers pulling out of the market altogether.

Email Marketing 101 for the Insurance Professional

Times are changing, fast. In the last few years the insurance agent client relationship has changed in a big way. With the development of incredible communication tools it is easier than ever to keep in touch with all of your clients on a personal basis. With tools like a website, email, and social media you can keep your clients in the know while finding new potential clients. Today we will look at email marketing in depth and see how it can be used to keep your old customers and foster new clients.

Email marketing has been around for over two decades, but the tools has gotten considerably better over the years. Now with tracking you can truly understand what your clients want to know more about and what they don’t care about anymore. 

Keeping Up with your Clients

The first thing you should make sure that you need to be doing is keeping in touch with your clients on regular basis. Having a weekly or monthly newsletter just to keep up and make sure they know all of the benefits available to them. By reaching out to your clients and keeping them up to date on benefits, new plans, or just a place for them to email you back and ask a question.

Keep your newsletters short but informative. Have around 5 pieces of content in each newsletter, and explain new things in a language that your clients will understand. By being transparent you will make a strong connection with your customers that will keep them loyal for years to come.

Fostering New Relationships

Keeping up with your current clients is only part of the equation for email marketing. The real potential in email marketing is reaching out to people that are not yet clients to show to them why they need to become your customers. By reaching out to these potential clients and informing them about the perks of signing up with you they will understand what makes you the superior choice to be their agent. 

In this newsletter make sure to include interesting and informative articles and videos on the plans you offer, on the benefits of your company and a simple and easy way that they can contact you for more information. 

Use the Data

After you have sent your emails you need to look into the data and see what interested your subscribers and what they don’t care about. By keeping a constant eye on the data you can easily tweak what you send to be more interesting to your readers. If you do it right people will be excited to get your emails and be interested in what you have to say.


By using email marketing to its fullest you can cultivate the relationships you already have and create new potential relationships so that you can grow your business in a way that was never possible before. 

If you are open and honest in your newsletters you will connect with your subscribers in ways that were only dreamed of years ago, which will lead to real gains in your bottom line.

Want to learn more about how to do email marketing? You can read more about email marketing here.

Azriel Ratz, CEO of Ratz Pack Media, is an expert in social media, email marketing, and online advertising. He has been working in the industry for several years. If you have any questions or comments about this article contact him directly at ARatz@RatzPackMedia.com.  

How To Use the BenefitCompare Tool - Webinar

Our goal at BenefitCompare is to create an effortless user experience for health insurance brokers when comparing plans for their clients.  We have a simple user-interface, extensive help resources, and unlimited customer service to help you in navigating the tool.

Employer Costs and Estimating Best Plan Options for Clients

The Kaiser Family Foundation recently conducted an annual survey of employers providing "...a detailed look at trends in employer-sponsored health coverage including premiums, employee contributions, cost-sharing provisions, and employer opinions. The 2015 survey included almost 2,000 interviews with non-federal public and private firms."

The Wall Street Journal recently published an article based on these results.  Journalist Anna Wilde Matthews wrote that nationally, "...the average cost of employer health coverage passed $17,000 for a family plan this year, despite continued muted growth on a percentage basis..."

In California, CHCF conducted a similar study on employer coverage, costs, and benefits -- and published the results in March, which can be found here:

Using this data and other benchmarks, the BenefitCompare tool automatically makes plan recommendations based on an employee and/or family's anticipated medical claims.  BenefitCompare gives you estimated out-of-pocket costs for local specific claims based off your bronze, silver, gold, or platinum plan.

New Consumer Site Provides Quality Ratings & Costs!

A new site recently released by California state officials is really a breakthrough for consumers of health insurance.  They can now look up the average costs for the most common medical procedures based on location, as well as review the quality ratings of various providers.

The consumer site can be accessed here:

The BenefitCompare tool will include a convenient link to this site for both agents and their employer groups to easily access while narrowing down their plan options.  The hardest part about choosing a health plan is understanding the true cost of premiums, treatments, and cost-sharing.  With this consumer website linked for easy access, it will help employers and their employees have simplicity and clarity as it pertains to their true overall out-of-pocket costs.

Barbara Feder Ostrov of Kaiser Health News covered the details of this new consumer site, along with links to other useful sites for quality reviews of hospitals (affiliated with Medicare), and CalQualityCare.org, "which provides information on the state’s hospitals, doctor groups, nursing homes, assisted living facilities, home health and hospice services, adult day care, and services for the developmentally disabled."  You can access the full article by clicking on the KHN logo on the right.

BenefitCompare is dedicated to making agents' lives easier, so they can provide valuable evaluation tools that aren't available through straight proposals with a general agent.  With this added consumer site, your clients will have a full picture of the true costs of medical care.

See below for a related article on this new state website in the Los Angeles Times:

If you or your client(s) have used the new website, we encourage you to comment below and share your experience.

The Cadillac Tax

Recent ACA discussion has turned to the so-called "Cadillac Tax" (scheduled to take effect in 2018), which is a 40% non-deductible excise tax on employer-sponsored health coverage that provides high-cost benefits.  It's expected to affect over 25% of employers as the regulation is currently written.  Cigna provides the following PDF on their website with more details on how it would work, including IRS requirements:

The Washington Post's Carolyn Johnson wrote in the Wonkbook today:

The next fight over the Affordable Care Act may center on one of its most powerful provisions to contain health care costs — the "Cadillac tax" on the most generous health insurance plans.
A new analysis released this week by the Kaiser Family Foundation estimated that just over a quarter of employers that offer health plans would pay the 40 percent tax in 2018 on at least one plan if they don't make changes. The National Business Group on Health, a nonprofit association of large employers, found that half of its members reported that at least one of their health plans would trigger the tax in 2018. Both groups predicted that the proportion of employers affected would go up significantly over time.
That means many employers are scrambling to find ways to avoid the tax. Ultimately, that will probably mean a combination of paring benefits and shifting cost to employees through high deductible plans, capping or eliminating flexible savings accounts, and offering less generous plans that, for example, limit access to a narrower networks of doctors and hospitals.

"The 'Cadillac tax' will have a very powerful effect on health care costs, and that certainly a good thing. But the way the tax helps to keep health costs down is primarily by shifting it to workers," said Larry Levitt, a senior vice president at the Kaiser Family Foundation who did the analysis. "While it certainly sounds good to control heath care costs, the way it is likely to happen won’t feel very good to consumers."

The opposition to the tax comes from a motley collection of unlikely allies, beyond the usual cast of anti-tax Republicans. In late July, The Alliance to Fight the 40 launched a concerted campaign against the tax, backed by a coalition that puts the insurer Cigna, the labor group Unite Here, the utility Eversource Energy, and school districts on the same side.  The Hill reported that House Republicans will likely put repealing the tax on the fall agenda. Even Hillary Rodham Clinton is concerned.

The Henry J. Kaiser Family Foundation has excellent resources and research on the "Cadillac Tax" and many other topics related to health care reform:

Also related to the Cadillac Tax, BenefitsPro.com published an article on how the regulation might affect FSA's (flexible spending accounts):

As always, we welcome your thoughts and comments below.

Employers, HSA's, and Education

One of the many benefits of using our tool, is that agents/brokers can define an HSA plan benefit option to compare, and then BenefitCompare will summarize the net costs to employers, often bringing better coverage with lower overall costs to both employer and employee.

A recent article in Employee Benefit Adviser pointed out that even though HSA's are a valuable plan offering, a better understanding is needed:

 "...employees remain confused about HSAs and more education could help them utilize the accounts to their fullest intent and realize more savings for employers. The good news for advisers is most consumers prefer one-to-one conversations to improve their knowledge, according to the findings of a survey of more than 300 health care industry professionals conducted by Acclaris."

See also our blog post / video learning resource on explaining HSA's:

As a plan benefit adviser, do you offer HSA's to your clients?  We welcome your thoughts in the comments section below.

Proposed Bill Would Roll Back HRA Penalties

BenefitsPro.com recently published an article related to HRA's and small employer compliance issues.  With the ACA in full effect, employers need to stay on top of all the new regulations and penalties.  For those utilizing an HRA, the new bill would change the new rules that disallow small groups from using HRA's to pay employees for health costs:

Employers would be able to use standalone reimbursement arrangements (HRAs) to compensate employees for health care expenses under a bipartisan bill recently introduced in Congress.

The Small Business Healthcare Relief Act (H.R. 2911 and S 1697) would roll back Treasury Department guidance that prohibits employers from using standalone HRAs to compensate employees for health care-related expenses.

You can also review our previous blog posts on this topic:

Flexible Spending Account (F.S.A.) Explained

This video gives an easy-to-understand explanation for a Flexible Spending Account as it relates to a health plan and its tax implications.


A Health Care Flexible Spending Arrangement (FSA) is an employer sponsored benefit that enables employees to set aside pre-tax dollars out of their paycheck to pay for eligible health care expenses.  Monies put into the plan avoid both Federal Income Tax and FICA.

11/11/14 update - The Internal Revenue Service announced the following new benefit plan limits for 2015. In addition, the IRS just issued an important change to Section 125 Cafeteria Plans. We're notifying FSA clients about this change now.

Flexible Spending Account (FSAs) Limits:

Healthcare FSA: The annual maximum for Healthcare FSAs has increased from $2,500 to $2,550 for 2015.

Dependent Care FSA: At this time, the IRS has not released information on contribution limit changes to these plans.

Transit & Parking FSA: Contribution limits remain unchanged for 2015. The monthly limits are $250 for parking, $130 for transit and $20 for bicycle commuting.

F.S.A. definition from Healthcare.gov:

A Flexible Spending Account (also known as a Flexible Spending Arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs.

You don’t have to pay taxes on this money.  This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.

You can use funds in your FSA to pay for certain medical and dental expenses, including copayments and deductibles.

FSAs are available only with job-based health plans.  Employers may make contributions to your FSA.

You can’t spend FSA funds on insurance premiums.

As always, be sure to consult your CPA and Plan Administrator on the rules for limits, carry-overs, and allowable deductions for every plan year.

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Long Term Care, Long Term Costs

Informative excerpt from an April 1st, 2015, San Diego Union Tribune article on Long Term Care insurance by Matthew Craft:

Thirty years ago, insurance companies had the answer to the soaring cost of caring for the elderly. Plan ahead and buy a policy that will cover your expenses.  Now, there’s a new problem: Even insurers think it’s unaffordable.

Life insurance firms pitched long-term care policies as the prudent way for Americans to shoulder the cost of staying in nursing homes. But those same companies have found that long-term-care policies are squeezing their profits.  Earnings for life insurers slid 11 percent in the most recent quarter, according to Moody’s Investors Service, and long-term care was
the chief culprit.

“Insurers that sell these products lose money on them,” said Vincent Lui, a life-insurance analyst at Morningstar. “So they’re raising prices and also trying to get out of the business right and left.”

Four of the five largest providers — including Manulife and MetLife — have either scaled back
their business or stopped selling new policies, according to Moody’s. The largest provider, Genworth Financial, continues to offer them, yet has struggled under the weight of rising costs.

To cope with mounting costs and faulty assumptions, insurers have been cutting benefits and hiking their premiums year after year. Average premiums for new policies rose nearly 9 percent over the past year.

Prices range widely, depending on where you live, your age, level of benefits, and much else. In Tennessee, for instance, a 55-year old woman who is healthy enough to qualify for a policy can expect to pay $2,411 in the first year for $136,000 in benefits. That’s a brand-new policy, likely the lowest premium a person will pay. The expense climbs steadily as people age, and those holding policies typically don’t make a claim until they reach their 80s.

Analysts who follow the industry think that insurers have learned from their missteps and probably figured out the right price to charge for long-term care policies to turn a profit. The problem is, it might be too high for most people to pay.

“I’m of the opinion that it’s appropriately priced today,” said Macquarie Group’s Dargan. “But it’s also out of reach for most middle-income Americans. And that’s who needs it the most.”

UPDATE 4/30/15:  A colleague shared this useful article from Fidelity Investments on items to consider when purchasing long term care and how to weigh the pros and cons of your own unique situation.

BenefitCompare Employee User Guide

To begin the process, go to www.BenefitCompare.com and use the Family Log In to enter your last name, birthdate and secret code (which is provided to you by your Broker).

At the bottom of the page, you will see the following choices:  Start, Profile, Household, Profile, Medical, Review, and Finish.  You will continue each step by selecting the NEXT button at the bottom right of the page.  If at any time you need to move to another section, you can use the bottom navigation buttons.

You will be creating your Profile with a short survey about your health history (that takes less than 5 minutes).

Household and Dependent Information

Start by entering your household information.  Add any dependents you want on your plan, including their names, birth dates and zip codes.  With the ACA, health insurance carriers now have a rate for each person on a health plan (i.e. Employee, Spouse, or Child) so they need these additional details for each person you are quoting.

NOTE:  Entering your household income is optional.  If you choose to include your Income in this section, BenefitCompare can also calculate the approximate subsidy you might qualify for on the Covered California (ACA) marketplace for Individual enrollments.

Next up, you will answer a short series of questions in the “Your Profile” section, which will enable the system to evaluate the cost of different health plans for you.  You will need to answer the following questions:

Are you (or a dependent) expecting to be pregnant this year?

Do you have a planned surgery for this year?  No?  Outpatient?  Inpatient?  Inpatient over 3 days?

(Next, you have the option to decline health coverage at this point if you would like.  If you continue, the system will help you narrow down plan options and find the best option for you)

Do you already have health coverage through a spouse or parent?

Are you generally healthy, having low and infrequent medical costs?


Now that you entered in all of your information (including any dependents), BenefitCompare will help you choose the best health plan for your needs.  In this section, you will see the health plan that BenefitCompare finds to be the best fit for your budget and medical claims.

Additionally in this section, you can manually update Doctor Visits, Hospital, and Prescription Costs.  If you know what your yearly expenses are, it would be best to enter them so that BenefitCompare can truly capture the best plan for you.   

The best plan and the lowest premium plan will be displayed.

BenefitCompare will help make the plan choices easy to understand.  And if your Employer is offering such benefits, you can also select any Voluntary products at this point, such as Dental and Vision.

Once you choose what plan you want, you would select “Add To Cart”.  

Review you product selection and then click “Next” to send your choices to your Broker.  That’s it!  Congratulations!

PLEASE NOTE:  This process does NOT enroll you automatically in a health plan, it sends the selected health plan to the broker so they know which plan you have selected.