Author: jhyman@jeffhyman.net

I prepared this list of CEOs, carriers who write worksite premiums, and the CEO pay based on public records from several sources.

A lot has been said since medical carriers have issued their financials and proxy statements outlining their CEOs pay in 2022.

What are your thoughts about their pay?

Here’s what the CEOs of major national payers earned last year (fiercehealthcare.com)

As we prepare for the release of the 4th quarter earnings over the next two weeks, let’s review the first three quarters of 2022 for the supplemental worksite carriers to see where they stand.

The supplemental carriers are ten public insurance companies and are some of the industry’s leading carriers. The data is based on information in 10Q and 10K public filings from 2018 to the 3rd quarter of 2022.

What Products Are Employees Purchasing?

The attached file reflects the products that employees have purchased at open enrollment. The report is for 2018 – 2021 by carrier and product line. You will notice that not every carrier is focused on the same products. For example, Lincoln National, The Hartford, and Prudential only product with any clear positioning is their term life product (61% of their combined written premiums). Likewise, MetLife and Aflac have more balance in their product line. MetLife led the industry in term life premium, dental, vision, accidental death, and long-term disability. Aflac led the industry in accident, cancer, critical illness, short-term disability, and hospital indemnity premium.

Guardian and UnitedHealthcare are the 2nd and 3rd largest dental carriers but dental is their only product with a strong presence. New York Life is similar; its only strong presence is its term life product.

Feel free to comment on my webpage at www.jeffhyman.net

Employees need their employers to share the cost of mental health treatment as a bona fide employee benefit.

According to the National Alliance on Mental Illness (NAMI), 20% of adults in the U.S. will experience mental health problems each year, yet less than half of those diagnosed receive treatment. Why? The almighty dollar, of course.

Mental health care is expensive, and many adults, even those gainfully employed and with tremendous benefits, cannot afford the ongoing costs necessary to treat the many common mental health issues afflicting society today.

Anxiety, depression, substance abuse, PTSD, eating issues, phobias, bipolar disorder. These were an issue pre-pandemic; in 2019, the National Institute of Mental Health (NIMH) reported nearly 52 million adults experienced some form of mental illness. According to the Centers for Disease Control (CDC), depression interferes with physical and mental job tasks between 20% and 35% of the time.

But these conditions alone are not the only problem.

Mental health disorders often lead to other medical problems. For example, NAMI reports individuals with depression are 40% more likely to develop cardiovascular or other metabolic disorders, and 32% of adults with mental illness also experience a substance abuse disorder. In addition, the CDC reports that “the costs for treating people with mental health disorders and other physical conditions are two to three times higher than for those without co-occurring illnesses.”

I see this as a public health crisis the workplace must engage in, considering the average adult spends roughly one-third of their waking hours at work — when they aren’t absent.

Mental health and comorbidities significantly impact employee absence, as employee wellbeing and absenteeism are inextricably linked. Beyond that, productivity suffers when mental illness goes untreated. Known as “presenteeism,” mental health costs employers significantly when employees are at work but not focused. Simply put, workers struggling with mental health issues get less done.

According to research from the National Safety Council and the National Opinion Research Center at the University of Chicago, employees with mental health problems cost their employers nearly $5,000 per year in lost workdays, increased turnover, and higher health care costs.

So, what can employers do? Staying the course is not an option, and it shouldn’t be if the end goal is a healthier, safer, and more productive workforce.

Employees need their employers to share the cost of mental health treatment as a bona fide employee benefit. Supplemental benefit products can help accomplish this, whereas mental health and drug or alcohol issues have been exclusions previously. Therefore, removing these exclusions is a positive step forward.

Riders are also a possibility, enabling employees to elect the coverage. However, with a rider, employees receive only a streamlined version of benefits that would otherwise be more robust and flexible if it were a separate policy.

Another option is expanding Employee Assistance Plans (EAPs), covering a practical and sufficient number of doctor visits instead of one or two that have been the standard practice. However, most EAP plans are not subject to COBRA as they are, in essence, referral sources instead of actual health plans.

We need to innovate.

While these options are all well and good, building insurance products where mental health services are a part of the plans — such as inside critical illness insurance (CI) product — is the future. This is important for several reasons, including the high value placed on this employee offering. In addition, the insurance carrier will not be subject to adverse selection like it can be as a rider.

To make this a reality, carriers and employers must come to the table.

In a recent announcement from Thrive, the behavior-change technology company founded by Arianna Huffington, and the Society for Human Resource Management (SHRM), Johnny C. Taylor, Jr., SHRM President, and CEO, stated, “Now more than ever, employers must commit and provide adequate resources to support their employees’ successful mental health and wellbeing. It’s not just good for their businesses – it’s also the right thing to do.”

Thrive and SHRM brought more than 80 companies together, including brands such as Marriott International, CVS Health, and Microsoft, to pledge that “The times are uncertain. Our commitment to mental health is not… That’s why we’ve come together to pledge to continue prioritizing our employees’ wellbeing and mental health through the uncertain times ahead — and maintain our investments and commitments in this critical area.”

In most employees’ minds, employers must realize this situation is real; mental health coverage is second only to traditional health and dental care. So, they must find a broker or consultant willing to be the collaborative link between themselves and insurance carriers – one who can be creative in this partnership to help carriers deliver innovative solutions.

As for carriers, they must realize this is their opportunity to help employers shine and build stronger relationships with their employees. Carriers that design customizable products with offerings such as mental health care built-in will ultimately differentiate themselves in a marketplace where product differentiation is critical. This strategy will also allow them to charge an appropriately higher premium that will offset any adverse selection concerns, which may be a problem for carriers that create standalone mental health care products.

“There are several things an insurance carrier can do to make mental health a bigger priority in their critical illness products, including covering mental health screenings under wellness benefits, providing EAP resources at the time of the claim, or adding mental health conditions as insured benefits under their plan,” said Matt Ennis, Director, Strategy, Product and Marketing at Reliance Standard.

Finally, brokers must keep fighting the good fight, demanding this of carriers. If they want to see a better result for their clients, brokers must engage; be that creative, collaborative partners; and be intentional about finding – and helping create – the ancillary products their clients need and deserve.

“While mental health conditions are a challenge as they cannot be diagnosed definitively with blood tests or x-rays, this is a challenge the industry must come together to solve. Mental health greatly impacts a person’s likelihood of being disabled or dying prematurely,” Ennis concluded. It’s a problem where the employer, employee, carrier, and broker are aligned in their interests – an excellent starting point.”

What’s the worst thing that could happen? Doing nothing. And the best?

Successful employers; productive, healthy employees; trusted brokers and consultants; and profitable carriers.

Positives all around.

Over the last twenty months, what we have witnessed is nothing short of unprecedented: unprecedented deaths, unprecedented business closings, and unprecedented personal disruption for millions of employees and their families. My heart goes out to those who suffered the loss of a loved one, health, job, or financial security. I know the feeling firsthand. I will never forget that phone call that notified me that my family member had passed away.

These losses created disruptions in the daily lives of families and their plans for their future. Thankfully, I have seen employees and their families react to their lack of financial wellness, which has made for an unprecedented demand for life insurance, critical illness, and other products to fill the gaps in protecting their families.

As I reflect on the last twenty months, I’m more excited today than ever before about serving as an intermediary for employers and their employees. My role is to ask questions, take notes, go out to the market and build the best possible solution for the employer and their employees.

Are your employees paying too much for their voluntary benefits? Most likely.

Contact me at jhyman@jeffhyman.net for a Cost-Benefit Analysis of your voluntary benefit products and your core medical plan.

For cancer patients, the road from diagnosis to survivorship feels like a never-ending parade of medical appointments: surgeries, bloodwork, chemotherapy, radiation treatments, scans. The routine is time-consuming and costly. So, when hospitals charge patients double-digit parking fees, patients often leave the garage demoralized.

Iram Leon vividly remembers the first time he went for a follow-up MRI appointment at Dell Seton Medical Center in Austin, Texas, after he had been treated at another hospital for a brain tumor.

The medical news was good: His stage 2 tumor was stable. The financial news was not. When he sat down at the receptionist’s desk to check out, Leon was confronted by a bold, red-lettered sign on the back of her computer that read: “WE DO NOT VALIDATE PARKING.”

Below that all-caps statement was a list of parking rates, starting with $2 for a 30-minute visit and maxing out at $28 a day. Lose your ticket? Then you could pay $27 for an hour.

“To this day, I remember that sign,” Leon, 40, said of the 2017 appointment, which he posted about on Facebook. “These patients were people who were coming in for various types of cancer treatment. These were people who were keenly aware of their own mortality, and yet the sign was screaming at them, ‘We do not validate parking.’” (Hospital officials did not respond to requests for comment about their parking policy.)

JulieAnn Villa, who was diagnosed in March with her third bout of cancer, estimates she has spent “thousands of dollars” on parking fees during her years of treatment and follow-up care. She faces a transportation dilemma every time she commutes 6 miles to Chicago’s Northwestern Memorial Hospital from her apartment. Should she take public transit? Call a pandemic surge-rate Uber? Ask a friend to drive her? Or pay $12 to $26 (with validation) to park in a garage where each floor is named after singers like Dolly Parton and Frank Sinatra?

She was hospitalized for multiple days in April after spending 23 hours alone in an overburdened ER, because she didn’t want friends to pay to wait with her. “I almost drove myself, and I’m so glad I didn’t,” Villa said. “That would have been expensive.”

Long a source of frustration for patients, the cost of parking while in cancer treatment is finally drawing national scrutiny from oncology researchers and even some hospital administrators.

“If you want to rile up patients or caregivers or family members, just bring up parking costs,” said Dr. Fumiko Chino, a radiation oncologist at Memorial Sloan Kettering Cancer Center in New York who studies the “financial toxicity” of cancer treatment, including costs not covered by insurance, such as parking fees.

Chino, who enrolled in medical school after her husband died of a rare neuroendocrine cancer in 2007, added, “For people who have to pay $15 to $18 every single time, which is what I remember paying, it really feels like the last straw, frankly — like kicking you when you’re down.”

Public transit is possible for some cancer patients in larger cities, but not for those too ill or immunocompromised. Others have accessibility issues. Many must travel to get care, making driving the best option.

Parking fees can have implications for more than just the patient. “Some patients say, ‘This is the reason I didn’t participate in a clinical trial, because I couldn’t afford the parking,’” Chino said.

At a time when hospitals and drug companies are under increasing pressure to diversify clinical trial populations, testing only patients who can afford high parking fees is problematic, Chino said.

There are some pilot programs to improve access to drug trials, and some charities, such as the Leukemia & Lymphoma Society, offer travel grants, but accessibility remains a substantial barrier to cancer care, said Elizabeth Franklin, president of the nonprofit Cancer Support Community, which offers financial aid to patients and advocates in Washington, D.C., for “patient-centered” health policies.

“The true definition of a patient-centered health care system,” Franklin said, is one that allows patients to choose the best means of transportation. “It’s not making them go into debt because they’ve had to pay a ton of money for parking each time they go to the clinic or the hospital.”

Chino and colleagues published a short study in July showing that some cancer patients pay $1,680 over the course of treatment.

According to readership statistics released in late March, the study was the most read and downloaded article in JAMA Oncology last year, and it continues to prompt a lively social media response. A thread on Reddit has logged more than 1,100 comments, including many from patients in other countries voicing surprise at U.S. parking policies.

The researchers calculated the cost to park at 63 National Cancer Institute-designated cancer centers while receiving the standard number of treatments for each of three types of cancers: node-positive breast cancer, head and neck cancers, and acute myeloid leukemia, or AML. They did not calculate costs for follow-up appointments, blood draws, routine scans and immune-boosting injections.

They found that, while 20 of the hospitals provided free parking for all cancer patients, the other 43 had widely varying fees.

“The range was $0 to $800 for breast cancer,” Chino said. “That’s huge, and it’s not like the person who’s paying $800 is necessarily getting any better treatment.” The maximum charges for a standard course of therapy for head and neck cancer were $665 and for AML, $1,680.

Practices should change, Chino said, “to alleviate this strain for our patients.”

Of the 63 hospitals, including those where parking is free for cancer patients, 54% offered free parking for chemotherapy and 68% for radiation treatment.

The top daily parking rate, according to the researchers, is $40 at New York’s Mount Sinai Hospital. (A spokesperson for Mount Sinai declined to comment.) Chino’s own institution, Memorial Sloan Kettering, is not far behind; parking at one of its main garages begins at $12 an hour and maxes out at $36 a day. A spokesperson for the hospital said some locations do offer free parking, and all patients can apply for aid to cover parking costs.

A few colleagues scoffed when Chino said she was researching parking charges, she said, but a growing number of mostly younger oncologists are concerned about indirect costs that contribute to the financial toxicity of cancer.

“It seems ethically incorrect to nickel-and-dime patients for parking charges,” a trio of doctors wrote last year in an editorial published by the American Society of Clinical Oncologists. They acknowledge that most top cancer hospitals are in urban centers, where parking costs are often high and third-party agencies may operate the garages. “Nevertheless, in 2020, with our multibillion-dollar cancer center budgets, we as health care systems should do everything we can to help patients and caregivers,” the editorial said.

City of Hope National Medical Center in Los Angeles is one of the 20 NCI-designated hospitals that do not charge patients for parking. Dr. Vijay Trisal, a surgical oncologist who serves as City of Hope’s chief medical officer, takes pride in that distinction.

“Charging cancer patients for parking is like a knife in the back,” he said. “We can’t control copays, but we can control what patients pay for parking.”

While Trisal would never want a patient to choose City of Hope for the free parking alone, he acknowledges the policy gives his hospital a competitive advantage.

“You would not believe how many patients have said to me, ‘Thank you for not charging for parking,’” he said.

Click on the link below to watch my discussion with CFO Steve Watson as I discuss why most employees are paying too much for worksite benefits and how I can help change that trend.

https://www.linkedin.com/embed/feed/update/urn:li:share:6788197828247220224

In my conversations with CEOs and CFOs, I often hear why our employees did not purchase the voluntary benefits that they offered at open enrollment through XYZ company. My response is, let me review your summary plan documents on your most recent open enrollment to understand your offering better.

As we all know, the pricing of insurance products may vary depending on different factors. What are some of the critical factors that make up the rate?

Total expenses are developed based on the internal expectations of commission, premium taxes, administrative costs, and overhead. The expense assumptions outlined below represent an example of a  new case:

Claims Adjudication 1.75%

Commissions 15%-20%

Premium Tax 2%

Overhead 10%

Profit Margin of 8%

Loss Ratio 55-60%

Also, at the case level, expense assumptions may vary.

Click on the link below to listen to my recent conversation with @stevewatson, CFO as we discuss heaped, level, or net commissions.

http://trendbreakers.buzzsprout.com/1122509/5507068-54-building-worksite-employee-benefits-net-of-commissions-jeff-hyman-principal-consultant-jlh-consulting