A Beneficial Conundrum

Well, actually a Beneficiary poser: Long time life insurance client needs to change/update his beneficiaries, which is normally the most mundane thing we do (other than maybe address changes). But, there a twist: he has four (4!) primaries listed, including a trust for one of his adult children.

Of note: my client named zero (0) contingent beneficiaries. Typically, these are folks "second in line" in case the primary predeceases the insured. Not required, or even typically critical, but kinda comes into play here.

Okay, so far not really a big deal, but then he throws me a curve-ball:

"Question, in the unfortunate event that [spouse] and I should pass away together, would her portion automatically go to [son]? How does that work and how do I make sure there is some sort of waterfall to protect my money and those beneficiaries I have listed?"

Hunh.

So, I had a thought, but really not very certain of its validity. So I reached out to our carrier rep, who also had an opinion, but wasn' very confient oin that, either. ZSo, he bumpled it up to the Vice President of Claims, who (very) helpfully replied:

"The rules vary by state and are usually called the Simultaneous Death Act (or similar).

In Ohio, the statute says this:

Except as provided in section 2105.36 of the Revised Code, an individual who is not established by clear and convincing evidence to have survived an event by one hundred twenty hours is deemed to have predeceased the event for purposes of a provision of a governing instrument that relates to the individual surviving an event, including the death of another individual.

So, what that means is that, if the husband and wife die in the same accident, then it would be assumed that the insured died first, unless there is clear and convincing evidence that the beneficiary survived for 120 hours after the accident.   The contingent beneficiary would receive the proceeds.  If no contingent, then it would go to the policyowner’s estate.

If the spouses die two days apart, then it would still be the same scenario, since the beneficiary did not survive for 120 hours.  If it is six days apart, and we have clear and convincing evidence of such, then the proceeds would go to the Estate of the beneficiary, because they survived the insured by more than 120 hours."

Hunh!

So the bottom line is that, if they're both hit by a bus and die simultabeously, the wife's portion of the policy would be paid into my client's estate. Which is I think what he was trying to ascertain.

Regarldess, I was told that the carrier would even be using this as part of a training module. Cool beans!

Also, #LearnedSomethingNew.

[Hat Tip: FoIB Brian D]

Re-thinking transparency

We first blogged on transparency in health care pricing and consumer-centric health care in 2005:

"One of these tools is the pilot transparency program."

So yes, we've long been advocates of what I called the McDonald's Model:

[click to pic to embiggen]

But FoIB Bob Graboyes of the Mercatus Institute offers a contrarian's take:

HEALTHCARE TRANSPARENCY MANDATES — FIRST, DO NO HARM: Op-ed on a point that Jessie McBirney and made in a recent @mercatus paper: why broad-brush healthcare price transparency mandates can paradoxically REDUCE competition and INCREASE prices. https://t.co/o2X1YoAYoQ

— Robert Graboyes (@Robert_Graboyes) August 31, 2020

Interesting.

Teacher's Pet?

This isn't necessarily huge, but it was kinda heartwarming:

Earlier this week, got a call from a nice lady, referred to me by another client (always a nice warm fuzzy), who had a dilemna:

She had just retired from teaching, and was trying to decide between taking the State Teacher's Retirement (STRS) health insurance plan, which was quite extensive, and quite expensive or opting for a short term plan (she wasn't interested in even discussing an ACA-compliant plan). Better still, she had to decide literally that day, because she had to let the STRS folks know by the following morning.

And yeah, I wondered why she'd let such a potentially financially impactful decision go 'til the last last minute, but I could sense the distress in her voice, so I simply said:

"Look, if you can swing the STRS premium for a month or two, then pull that trigger. Doesn't mean you're married to it, just gives us space to find other alternatives."

I could literally hear the sigh of relief as she took that in. She thanked me profusely, and said she'd be in touch.

I really like my job, and sometimes I really love it.

Spoiled baby food

This in from FoIB Jeff M:

"The [North Carolina insurance] department says an examination of 300 claims from over seven years revealed many violations with Gerber Life’s accidental death and dismemberment policies."

Ooops!

The carrier, primarily known for its "$1 for the first 6 months" juvenile life insurance plans, has been ordered to pay over $3.5 million in fines, recoveries and interest.

Not a good look there, folks.

Interesting HSA query

Recently, one of my clients had occasion to interview a potential new hire, and to explain how their benefits include both an HSA-compliant health insurance plan and that the employer contributed a non-trivial amount into it.

The potential new hire replied that he was a big believer in HSA's, and already had an established one. My client reached out to me to see if that would pose any issues.

I, of course, reached out to our gurus at FlexBank/Navia, who replied:

"As long as he hasn’t fully contributed, the employer can contribute into his already established HSA."

Nice!

Fom the P&C Files: Flo meets Darth

 

Medical Kidnapping. Wait. What?

You may have read about a young teenager named Justina Pelletier, from West Hartford, CT. In 2013 Justina was kidnapped by a hospital where she had been admitted for treatment.   Her kidnapping and other similar incidents have given rise to the term "medical kidnapping".  Medical Kidnapping is a growing phenomenon that bears watching.  

I think there is not a more accurate term for what happened to Justina Pelletier than kidnap.  Justina’s ordeal, and that of her family, is described here and here.  Her story is worth reading.  Fair warning:  The story will upset you, especially if you are a parent or a medical care professional

 

The accounts are comprehensive so I’ll add only the following observations of my own. 

 

 (a)  the core issue in the Pelletier case seems to be a scientific and clinical fight about whether mitochondrial disease is actually a physical ailment or primarily psychological.   This type of issue may be present in other cases where there is overlap between the physical and the psychological. Connection with insurance = Do insurers consider a diagnosis of mitochondrial disease consistently as either medical or psychological? 

 

(b)  It is clear that cases of Medical Kidnapping are on the rise. See here and here and here and here.   You can search for yourself by entering Medical Kidnapping and just start reading 

 

 Connection with insurance = How might insurance for mitochondrial disease change as the incidence of the disease rises?  

(c)  Justina’s parents sued Boston Children’s Hospital charging medical malpractice.  Nearly 7 years after Justina’s 2013 admission to BCH, a jury took fewer than 6 hours find BCH not guilty.

Connection to insurance = How might hospital and professional liability insurance coverage/ limits  be affected as the incidence of this diagnosis continues to rise?  

(d)  I have been unable to find any account of specific reasons behind the jury verdict.  For whatever reasons, the jury believed the hospital not the parents.  But consider.  Boston Children’s Hospital is widely thought to be America’s #1 pediatric hospital.  Its teaching affiliate is Harvard Medical School. BCH is also a primary source of professional expertise in child abuse cases before the Massachusetts Department of Children and Families.  No doubt there are many strong ties among BCH officials and physicians; influential Harvard officials and alumni; and DCF officials regarding medical care, politics and even the courts. Especially in Boston.  The influence of these ties naturally extends over the general public, from which jury members are selected.  One can appreciate how difficult it is for anyone not inside that circle of influence, to prevail when taking action against it.

I suppose a teaching hospital anywhere has similarly widespread influence within its community and can be similarly immunized from scrutiny and full accountability - as appears true regarding BCH and the Justina Pelletier experience.  

 

Connection to insurance = Same as in (c).

 

(e)  Aside from medical and insurance issues, the growing number of medical kidnap cases is a social problem, increasingly encountered in the care of minor children.  The Pelletier case illustrates the kinds of problems encountered.  Here are a few that stand out to me, there must be others:

 

1.  Significant differences of opinion among physicians treating minor children

2.  Scientific disagreement over the nature of some condition(s) affecting minor children

3.  Legislative flaws e.g., do States' children & family services bureaucracies abuse their authority? 

4.  Inadequate consultation among attending physicians

5.  Inconsistencies among insurers over terms of coverage for medical & legal liabilities

6.  HIPAA protections of minor children’s patient privacy can be used to keep parents from knowing what treatment their minor children are receiving.  This can effectively remove parents from participation in decisions involving their own minor children’s care.  

7.  Growing influence of the regulatory state, in which persons accused of regulatory violations are presumed guilty, and have the burden of proving themselves innocent.  This negates the presumption of innocence historically imbedded in our legal system.

P&C Files Bleg: COVID vs Football

 I'd be very interested if one of our readers has the inside scoop:

If you know a casualty actuary, pass this along. I’d love to hear their thoughts on this perspective. https://t.co/qTUg0KjGQ3

— Greg Fann (@greg_fann) August 12, 2020

Thanks!

Tell us again about "Affordability"

 So this pops up:

ACA Affordability Threshold for 2021 Announced https://t.co/UEO6O9t0EM

— Healthcare Reform (@Health_Reforms) August 11, 2020

The article to which that refers explains:

"In order to avoid triggering a penalty ... an applicable large employer must offer full-time employees health plan coverage that provides minimum value and is affordable."

Of course, the gummint's definition of "large employer" is somewhat .... perplexing:

"... if you employ more than 49 people, you've either got to offer (and help pay for) a group plan or pay a penalty tax."

In this case, the income test - "affordable" - for next year is just shy of 10% of one's income. And keep in mind, that's just counting the premiums, not the thousands (or, commonly, tens of thousands of dollars in potential out-of-pocket costs).

Pretty bizarre definition of "affordable," no?

Monday Linkage

■ First up, interesting product news from Anthem:

"Beginning January 1, 2021, for new and renewing business, your clients will receive affordable access to groundbreaking gene replacement therapies through our new benefit protection program, Anthem Gene Therapy Solutions."

That's the good news. The catch?

"The program will be embedded in Large Group administrative services only (ASO) plans with 51 or more eligible employees (CA & CO 101+) ... New York is excluded from this program
offering."

So if you're a small group anywhere in the US, or any group in New York, no soup for you.

■ Next, another in our seemingly endless series of Business Interruption vs The 'Rona" posts:

"Legal experts Glenn Jacobsen and Mark Binsky examined the Houston Rockets lawsuit and expressed doubt that the suit would be viable or eventually prevail at trial ."

The issue is that the team's games were suspended by the NBA, and thee was no actual physical damage that would net a successful claim.

■ And last (but most assuredly not least), this:

U.S. residents under age 45 spent July shopping for life insurance as if it were a hot new phone, or hand sanitizer. Consumers in that age group filed close to 20% more life applications last month than they did in July 2019, according to MIB Group.https://t.co/zFVFypqgij

— ThinkAdv Life/Health (@TA_LifeHealth) August 10, 2020

Not-So-Intransigent Providers: An Update

The other day we posted about what appeared to be a rather unfortunate problem for one of my clients:

"Dr. [redacted - for now] is in our system under 2 separate Tax ID’s. Only one is actually in our network, and the location the patient's supposed to go to isn't."

So, I reached out to co-blogger (and certified medical office manager) Kelley B, who reached out to the doc's practice manager, who shed a great deal of light on the matter:

"We reached out to the patient to explain that [the doctor] is not in network through our practice.

There was a renal physician who passed away suddenly earlier this year in a different practice. [Our doctor] is also a nephrologist and offered to help them a little while they got their staffing situated.

[Our doctor] is in-network through them for this plan as a nephrologist not an endocrinologist."

Ah-hah!

At about the same time, I got an email from the practice's Accounts Manager, who added that they had long ago decided - as have *many* providers - to forego contracting with ACA-plan networks, and aren't presently interested in reconsidering that decision. And of course she (and the aforementioned practice manager) stressed that since my client would be out-of-network she was on her own (which we already knew).

She also mentioned something that my client and I had discussed: that she'll want to be careful about any lab work that might be ordered, in case that becomes a network issue, too.

One bright spot: the plan is HSA-compliant, and she has socked away a few shekels into it, so she can use some of those to pay for the visit (and, if necessary, lab work). Oh, and I suggested that she ask the practice if there's a discount for paying cash (never hurts to ask).

So, mystery solved, just not a very satisfying answer.

By the way, there are some great comments on that original post, worth going back and reading.

[Special Thanks to co-blogger Kelley B, as well as the folks from the doc's practice]

From the P&C Files: D&O insurance heads' up

It's been a while since we've blogged on Directors and Officers (D&O) liability coverage, and both of those times had to do with churches. But D&O coverage is for pretty much any business or charitable enterprise with boards of directors (or elders, or council members, etc), among others. And just what is this type of policy?

Well:

"Think of D&O insurance as coverage for management decisions ... Who makes the decisions? That’s who needs protection."

That's from a recent post over at the Cincinnati Insurance Company's blog, and it's really quite interesting. As the author notes, many organizations, and especially small businesses, hear the term and automatically (and erroneously!) presume it refers exclusively to organizations with a  "Board of Directors," which, if you're a sole prop or very small business, you don't have. But turns out that that kind of thinking can get a small business in a heap o'trouble:

"Anyone who believes they have been harmed by the actions of a company can take legal action against the company and its decision makers."

And who might comprise this list of possible litigators?

That would be folks as diverse as vendors and suppliers, customers, even competitors (and the list goes on).

Absent this coverage, a small business owner (or owners) could be left with some pretty big expenses, even if they prevail at trial.

How's that?

Well, attorney's aren't free, and they aren't cheap (well, you do get what you pay for, one supposes). And those legal costs are going to be out-of-pocket without proper coverage in place, including D&O.

So if you're a small business owner, make sure you discuss this with your agent. It could save you a major headache (and wallet drain) down the road.

[Hat Tip: FoIB Deb C]

Intransigent Providers

So I have a client that has some health issues, and who has an ACA plan (not mentioning the carrier because they're not necessarily in the wrong here). My client, we'll call her Sally, has a specific, chronic health condition that requires the care of an endocrinologist. Unfortunately, there haven't been any in-network endo doc's nearby, and because it's an ACA plan, out-of-network means out-of-luck.

Fortunately, one such doc has recently been added to the network, and Sally quickly made an appointment to go see her. The rub is that she apparently has two offices (or not, depending on whom you ask - more on this in a moment), and only one is in-network. The problem is that she doesn't actually have an office at Location #2, and apparently never has. But according to the carrier:

"Dr. [redacted - for now] is in our system under 2 separate Tax ID’s. Only one is actually in our network, and the location the patient's supposed to go to isn't. We've reached out to the provider to confirm."

Rock and a hard place, indeed, since she doesn't seem to actually practice at Location #1.

So with Sally's blessing, I reached out to the billing folks at the doc's office. I told them that, although I'm happy to pay conduit, my word holds no sway, but that a letter from the doc confirming Location #1 and denying Location #2 would go a long way. The billing lady didn't seem too keen on that, explaining that she saw her job as keeping this kind of thing out of the doctor's way. I thought that this was an odd way of putting the patient's interest first, but she did agree to discuss the issue with her supervisor.

Oh goody.

She then questioned whether this was even a worthwhile exercise, since it was unlikely that the matter could be resolved in time for Sally's upcoming appointment. I pointed out that the longer they put off helping her the more likely such an outcome became.

She appeared unmoved.

So as it stands, the doc may or may not have an office at two locations, and may or may not actually practice at either one, and may or may not really care about her patient's well-being (both physical and financial).

Nice gig.

In any case, I'll keep this on the top of the pile. and hope for the best.

Travel Medical: A Perspective

Recently, a colleague referred one of his clients to me (a very wonderful compliment) for help with a travel medical plan for a visiting guest. He introduced the two of us via email, and the client called me shortly thereafter.

Turns out, this wasn't just any guest, but his son and granddaughter coming in from Europe for a two month stay in our lovely Buckeye State. He was concerned that there would be insurance in place if either were to become ill or injured. No problem, pretty standard, although currently kind of out of the ordinary. I was just glad to see that international travel wasn't completely dead.

In any case, the gentleman had been doing a lot of online research for this kind of plan and, in frustration, called his agent for hep, and thus the referral to me.

I do a fair amount of this kind of thing, so I was pretty familiar with what he needed. I answered his questions, and then got the information I needed to obtain a quote. For these kinds of plans, I pretty much exclusively use our friends at Global Underwriters, primarily because they know what they're doing and, as important, I have a long history with them so that I know I can count on them if any glitches develop. I'm sure that other vendors are also reliable, but I know that the GU folks are.

I also know that their plans and rates are competitive, and there won't be any surprises.

Okay Henry, we get it: you know and trust them, why are you beating this horse?

Well, the client also asked me about my relationship with his agent, and I explained that the gentleman and I are colleagues and that he has referred these types of cases to me in the past. He then said "well, [agent] always gives me several quotes, will you also be doing this?"

I immediately replied no, for the reasons stated above. He seemed satisfied with this, and I agreed to send him a quote ASAP. Which I did, but did not realize that I had forgotten to attach a summary of benefits, and he asked me for that. Of course I obliged.

I had now spent a total of almost an hour on the phone, obtaining and sending the quote, and sending the Summary of Benefits. All in a day's work, and happy to do so.

Now, my commission on this plan will be in the neighborhood of $35, not bad for an hour or so's work. And of course, I'm happy to assist a colleague. But would I be upset if the client ultimately chose to DIY? No, not really: disappointed, sure, but not upset. After all, it's his choice, no?

Oh what a tangled web

Our friend Jeff M sent along this (poorly written) article about the sometimes duplicitous world of reinsurance:

"A businessman and political donor ... has been sued by Universal Life Insurance Company (ULICO) over a personal guaranty Lindberg made to back PB Life and Annuity Company."

It appears that the companies had come together to form a reinsurance agreement (this is essentially a contract that helps minimize risks that carriers take on, more here). and it seems that one of the parties has been ... negligent ... in holding up his end:

"ULICO alleged that PB Life was not in compliance with the reinsurance agreement because 65% of the investments of the trust fund were in loan obligations to affiliates of PB Life which exceeded the threshold of 10% established by the insurance code."

As FoIB (and extremely knowledgeable carrier rep) Brian D explains:

"This guy doesn’t stand a chance.  PB Life is out of compliance.  The worst part of this (agreed it’s a poorly written) story is what Lindberg’s connection is to PB Life and why he would ever personally guarantee a loan of that size.  Seems ridiculous.  But as a reinsurance entity, you cannot have 65% of your assets in loan obligations.  Not in this economy.  That is insane."

Oh, I think we can tell right away why Mr Lindberg agreed to underwrite this out of pocket.

Will be interesting to see how this plays out.

Stay tuned....

Time's running out: HRA edition

Our friends at FlexBank (now Flexbank/Navia) have a timely reminder for employers with Health Reimbursement Accounts (HRA's):

"Don't forget! The HRA PCORI fee is due by July 31, 2020"

As in: tomorrow.

This year's fee is about two-and-a-half bucks per participant, and it's due no later than tomorrow (July 31).

Oh, and just what is this fee?

"[T]he Patient-Centered Outcomes Research Institute, which "funds studies that can help patients and those who care for them make better-informed healthcare choices."

Okay, thanks for clearing that up.

Timing & LTCi

A few years back, I ran into a colleague at the grocery. She had recently been licensed to sell Long Term Care insurance, and wanted to "talk shop."

Okay, I’m all ears.

Turns out, she had been trained (??) to advise her clients to put off filing a claim for as long as possible, on the theory that using their own funds would allow the insurance dollars to last longer.

I nodded and said "well, that’s interesting," and we went our separate ways.

It was not, in fact, "interesting,” it was stupid.

Whoa there, Henry them's sharp words. Care to 'splain’ yourself?

Sure.

Last Fall, my mother-in-law was in a pretty nasty car wreck, and ended up in a very nice  Assisted Living facility. She had long ago bought a Long Term Care insurance policy through an affiliate program that her husband's employer offered. Since she had multiple physical issues as a result of the accident, she qualified for benefits under the policy, and they began rolling in a few months later.

Unfortunately, she passed away recently, which is what prompted this post.

The most important aspect of the claims issue is that we don't know how long that person will live, and had we listened to my colleague's advice, we may well have left significant "money on the table." Here's why:

She needed help with activities of daily living, and part of the claims process is an evaluation by a company representative (usually a nurse or service that they contract with) to make that assessment. If we had waited, there would have been no way for that evaluation to have taken place, and the claims process would have been very messy (or just straight-out declined). There was absolutely no upside to waiting, but significant potential (more likely, probable) downside.

Alternatively, had she been cleared for claims up-front and we had simply waited before filing the claim (which is another way to have interpreted my colleague's idea), we would not have been reimbursed until later. Yes, we would likely have still received the funds (this was a reimbursement-type plan) but why would we have given up the interest (this was a fairly decent amount)? After all, money is fungible, and using the carrier's funds instead of Mom's meant her money was able to keep earning interest.

Take heed.

COVID & BI: One more time...

We last discussed this issue a couple months ago:

"It's going to perhaps send a false sense of hope and promise to a community of folks who need action and relief now."

That was in response to a threat by DC Council-critters to force carriers to pay Business Overhead (BI) claims for quarantined businesses. Regular readers know that this coverage does not extend in that circumstance.

Fast forward a bit, and we get this in email:

"The ruling reaffirms that BI policies only cover physical damage."

That is, the closing of a business due solely to government mandate, with no actual physical loss, is not a covered BI expense.

This is important because it's one more nail in the proverbial BI/COVID coffin.

Click on through for the gory details.

Kind of Off-Topic, but...

This is pretty amazing:

"2nd baby is born from dead donor's transplanted womb at Cleveland Clinic"

Most of us are familiar with posthumous organ donation (heck, there's even a checkbox on drivers' licenses), but I daresay that likely includes corneas and kidneys, hearts and lungs, that kind of thing. I've even heard of harvesting sperm from a dying father.

But this one is new to me. And it gets even more interesting:

"It's the second child in the hospital system to be born from a dead donor's transplanted womb." [emphasis added]

Wow - And Mazel tov to Mom!

[Hat Tip: Holly R]

From the folks in DC

Comes this helpful video on how to report federal pandemic unemployment compensation. Although it's geared for agents, seems perfectly suitable (and informative) for consumers, as well:



In case you're debating whether or not to watch, the video covers how folks can:

• Update their income information due to unemployment
• Add in unemployment benefits to their income
• Determine what types of unemployment benefits should be counted as income
• Accurately estimate their yearly income

And heck, it's less than 6 minutes long.