Symetra Benefits Blog

Stop Loss in 2018: cost vs. value; striking the right balance for your self-insured clients (part 2)

Part 2: Contract quality—inclusive vs. exclusive

Are your clients exposed to coverage gaps between their plan document (from which the administrator determines claim eligibility) and the stop loss policy?

Many top-tier carriers have inclusive contracts designed to eliminate these gaps. Typically, these contracts are not the lowest cost, and we tend to see a correlation between contract strength and industry tenure. In contrast, exclusive contracts can contain 18 or 20 exclusions or limitations. These contracts are designed to mitigate liability and allow the carrier to deny a claim reimbursement. It's no surprise to see these carriers lead with low pricing.

With the significant growth in the stop loss market—an industry estimated to be $14 billion to $17 billion annually¹—we are seeing some new carriers enter the marketplace. Without significant blocks of business capable of absorbing surges in large claim incidence and severity, it’s not uncommon to see new-to-market carriers file their contracts with several "gotchas."

To avoid falling into a gap situation, here are some questions to ask carrier finalists: 

• Does the contract include an exclusion for claims in excess of "usual and customary"?
• Does the contract have an actively-at-work requirement? If so, employees who are on disability or other types of leave at contract inception may not be covered under the stop loss policy.
• Does the contract define "medical necessity" or "medically necessary"? If so, claims may be denied if the carrier deems them not medically necessary. How the carrier defines medical necessity is critical in determining gap potential.
• Is the plan document used to determine whether expenses are eligible for reimbursement? This is often referred to as "mirroring" the plan document and may be offered as a "mirroring endorsement."
• Does the contract exclude expenses associated with medical tourism?
• Does the contract exclude medical review and case management fees?
• Does the contract exclude or limit claim reimbursements in the event the administrator loses a PPO discount or other discount?

Consultants who have witnessed a claim denial (when the employer ends up holding the bag) can spot exclusionary contract language and recommend carriers that eliminate gaps for their clients. Be sure to ask these questions to avoid gaps in your clients’ coverage.

In our next post, we’ll discuss why cash flow is king! 

 

^{1 “}2016 employer stop-loss market” – A Milliman survey, June 2017.

 

 

Stop Loss in 2018: cost vs. value; striking the right balance for your self-insured clients (Part 1: Our stop loss market)

Part 1: Our stop loss market

Because of the Affordable Care Act (ACA), more employers are opting to self-fund their medical programs than ever before. In fact, 60% of all employer groups now self-fund.¹

This growth in the market has recently enticed several new players to the stop loss space. The field now includes established direct-writing carriers, new-to-market direct writing carriers, and managing general underwriters (MGUs).

So, what are the most important variables to consider when choosing a stop loss partner for a self-insured medical program? Three primary factors are:

1. Contract quality: Is the contract inclusive or exclusive by design? Mind the gap(s)!
2. Claims expertise and service: How efficient and proactive is your carrier partner? Cash flow is king!
3. Underwriting practices: Is the policy renewal-friendly? Underwriting culture can introduce volatility into the pricing of your self-insured program.

Self-funding a medical plan has many advantages, but along with that comes many responsibilities. Partnering with a best-in-class stop loss carrier can help ensure that the self-funded plan runs as intended and that there are no surprises along the way.

In our evolving stop loss market, are your clients getting what they pay for? Find out more in our next post.

¹ The Kaiser Foundation and Health Research & Educational Trust, “Employer Health Benefits 2015 Annual Survey,” 2015.

In-house administration for supplemental health products

When it comes to supplemental health and voluntary products, we know that working directly with your carrier, and not through a third-party administrator, is important to you and your clients. That’s why billing and claims for all Select Benefits products – from fixed-payment insurance to critical illness— are handled by our in-house team, Symetra Select Benefits.

Learn more about how we can help eliminate the noise with Select Benefits >

Paid in five business days or less

We pay the majority of claims in five business days or less – so your clients won’t be wondering where their stop loss reimbursement is weeks later. Plus, our low documentation requirements mean less paperwork for everyone. As one of the nation’s first medical stop loss carriers, we bring a level of expertise and plan design flexibility that most carriers can’t match

Learn more about how we can eliminate the noise with our stop loss policies >

 

A collaborative approach to group life and disability

 

Our collaborative approach and flexible policy designs ensures your clients’ employees get the coverage they need at a price that fits their budget. From implementation to claims, we help eliminate the noise through innovative problem solving and make it simple for groups to manage costs, increase productivity and expand their benefit offerings.

Learn more about how we can help eliminate the noise with group life and disability >

 

How do we eliminate the noise?

From our straightforward and flexible products to our responsive customer service, we strive to reduce the complex, the confusing and the complicated. In other words, we eliminate the noise. Symetra is a financially strong, well-capitalized company on the rise, as symbolized by our brand icon—the swift. Swifts are quick, hardworking and nimble—everything we aspire to be when serving our customers.

We help you, your clients, and their employees eliminate the noise with our:

• Clear contracts
• Responsive service
• Expert guidance
• Flexible products
• Creative solutions 

Learn more about Symetra and how our group benefit solutions can help eliminate the noise >

A message from Michael Fry

Dear Symetra Partner:
 
As another year comes to a close, I want to thank you for your ongoing partnership and business with us. The continued uncertainty surrounding health care reform has challenged all of us this year, and your support is a testament to your trust in Symetra.

This was a significant year for our stop loss line, which broke a company sales record. Managing this business is not without its challenges, though. Medical breakthroughs and technological advances have created unprecedented opportunities for patients, but at increased costs for employers and carriers. As a result, loss ratios have gone up and we’ve had to adjust our prices to stay competitive. But this isn’t new territory for us. We’ve seen similar trends throughout our 40+ years in stop loss, and we will continue to adapt and influence the market as an industry leader.

Rising costs have also affected employees, who are being asked to foot a bigger share of their health care bill. Our supplemental medical products are designed to help cover out-of-pocket costs associated with high-deductible health plans. These products include group critical illness and accident insurance, which can be offered as standalone products or as part of GapAssist (a package with hospital indemnity benefits). High-deductible health plans and HSAs are the new norm in the group benefits space, so having products that complement these coverages will be a continued focus for us in 2018.

Positive feedback
2017 was also a record year for group life and disability sales. We are proud of the strong reputation we’ve built in this business and the level of service we provide. Recently we asked our customers how we’re doing and the results were great—we received an overall satisfaction rating of 4.6 out of 5 on our implementation process. 

Our high-touch approach to implementation and account management served us well as we finished transitioning the large group cases from AIG. That agreement not only helped grow our group life, disability and absence management block, it also gave us an opportunity to develop partnerships with many of you as new Symetra producers.  

A commitment to delivering exceptional service and products extends to all of our group business as it’s also a hallmark of our stop loss and Select Benefits suite. Having this consistent level of service across our entire division is critical, especially as more and more policyholders place multiple lines of business with us.  

And while we’re thankful for the positive response from our customers, we won’t rest on our laurels. We will continue to reach for excellence in every area of our business in 2018 and beyond.

New leadership
In 2017 we marked our second year of ownership by Sumitomo Life Insurance Company. We have fostered strong working relationships with our new owners, and they remain committed to Symetra and the U.S. marketplace.

As you may have heard, Symetra CFO Margaret Meister will succeed Tom Marra as CEO on Feb. 1, 2018. Tom will remain with the company as executive chairman. Margaret has worked at Symetra for nearly 30 years, and she brings a depth of knowledge of the company and its operations that will serve us well. I know she will challenge us to rise to even greater levels of performance as a company, and I am excited about Symetra’s next chapter under her leadership.

Finally, I want to thank our employees. It takes hard work and dedication to deliver outstanding service and that is something they are committed to providing each and every day. Our success would not be possible without their talents and the steps they take to ensure every interaction you and your clients have with us is a great one. 

On behalf of all of us at Symetra, I wish you a happy holiday season and a prosperous new year. We look forward to continuing to meet your group insurance needs in 2018.

Best regards,
 
Michael Fry
Executive Vice President, Benefits Division
Symetra Life Insurance Company  

Looking for a way to expedite catastrophic claim payments?

 

 

Symetra’s Preferred ASO Claim Advance option can significantly reduce the wait time for large and catastrophic claim payments. Watch our new video to learn more.

How to file a long-term disability claim

How to file a long-term disability claim

An injury or illness can have a significant impact on an employee’s income. Long-term disability income insurance (LTD) from Symetra can help protect their income if a health condition prevents them from working for an extended period.

Making sure your clients’ employees understand the benefits of long-term disability coverage and how to file a claim is important, so we invite you to read and share our FAQ for more information.

Need help to close the coverage gap?

 

 

 

A fixed-payment gap plan can be a great option for employees in a high-deductible health plan. But your clients may have a hard time explaining these benefits to their workforce. That’s why we’ve developed this new video to help illustrate what a gap plan is and how it can provide financial relief by helping employees with out-of-pocket costs—all in under two-and-a-half minutes. To learn more, contact your Symetra representative.

Introducing GO for Select Benefits

Introducing GO for Select Benefits

Group Online (GO) is a convenient, user-friendly online administration tool that allows you to securely access and manage your policy information. With GO you can view policy details, quickly generate billing statements, manage insureds and much more.

To learn more about GO for Select Benefits, visit symetra.com/learnGO or talk with your Symetra representative.

Benefits Video Library Now Available

Looking for a way to expand your knowledge of Symetra group benefits? Our new benefits video library houses videos that can help your clients and their employees understand their policies throughout all steps of the process.

Visit our benefits video library to learn more about Symetra’s group benefits solutions.

Symetra Spotlight: Jeff Farmer

What do you like most about working for Symetra?

The dedication to “VTS” throughout Symetra, and the entire team’s genuine desire to deliver a superior service experience.

What's been the biggest change in the industry you've seen in your career?

The speed of information. Everybody wants answers NOW! When I started in the business we didn’t even have a fax machine, much less e-mail. Business was conducted in person or via “snail mail”. Of course there are positive and negative impacts to technology – we are more efficient, but we risk losing the personal connection with the customer if we are not vigilant about nurturing those relationships.

What's the most important quality in an insurer?

Trustworthiness. My team talks often about maintaining our trusted advisor role. It is important that our customers view us as a partner, not a vendor.

What’s the most important thing you've learned in your career?

Admit mistakes quickly, apologize, learn, and make things right.  An initial mistake rarely sinks you, but ignoring the mistake in the hopes that it will go away always comes back to bite you. 

Do you have a personal quote we can feature or any last thoughts to share?

“Work hard and be nice” – I’d like to send that sign to all of our elected officials!

 

About Jeff

Jeff Farmer is vice president and national sales director of life, disability and Select Benefits for Symetra Life Insurance Company’s Benefits division.

Farmer’s career spans over 28 years in the insurance industry. Before joining Symetra five years ago, he spent 12 years on the insurance carrier side in various sales and management positions followed by 11 years in consulting/brokerage management. He earned his degree from Boston College where he studied Communications and English.

Fun facts

• First job: Agent services representative (customer service for career agents) at John Hancock in Boston
• How he takes his coffee: Cream. When in Seattle, LOTS of cream! 
• Hidden talents: Absolutely none, sadly! I like to think I just haven’t discovered them yet
• Favorite book: The Golf Omnibus, by English humorist P.G. Wodehouse (check it out even if you don’t like golf!)
• Favorite movie: Forrest Gump
• Pets: Always! Current residents are Jack (Jack Russel/Rat Terrier mix), Buddy (Miniature Schnauzer) and Larry, an Albino Leopard Gecko (handsome!)

Looking for ways to minimize your self-funded plan’s health care risk?

When large amounts of money are at stake, it pays to do your homework. Medical stop loss insurance is an essential purchase for employers who self-fund their employees’ medical benefit plans—but each carrier’s contract can be very different when you look under the hood.

Whether you’re considering new coverage or a change at renewal, it’s important to look at more than names and proposed premium rates. Without careful consideration, you could increase the financial risk of high dollar or catastrophic claims under your employee benefit plan.

Read our recent Inside Track educational paper to learn about some of the items you should consider when evaluating potential stop loss carriers.

A guide to Select Benefits administration

Managing a new insurance policy can be a daunting experience for many groups. With Select Benefits, our in-house administration team is dedicated to providing your clients and their employees with outstanding customer service through every step of the administration process. We’ll work with you to provide your clients the forms and materials they need to make enrollment successful. We also offer an online administrative tool that lets employers actively manage their policy information, including adding and terminating participants. For more on these and other topics—including billing and filing a claim—take a look at our Select Benefits administrative guide.

Is your self-funded plan protected?

We’ve updated our catastrophic claims video with new 2016 claims data. Check it out to see how large and catastrophic claims may affect your self-funded medical plan and why stop loss protection is so essential.

How voluntary benefits help employees prepare for the unexpected

In today’s high-deductible health plan (HDHP) marketplace, employees are expected to pay a growing share of out-of-pocket expenses. This can encourage them to be better health care consumers, but can also lead to greater financial stress when they face unexpected health care costs. By offering voluntary benefits like accident, critical illness or disability income insurance, employers can help protect the financial wellness of their workforce while managing their bottom line. Employees who take advantage of this coverage can receive benefits before they meet their deductible, helping them focus more on their recovery and less on the financial burden they may otherwise face.

Voluntary benefits can be offered at no cost to the employer, and can encourage more employees to participate in the HDHP by offering them some immediate coverage. However, employers should carefully consider the needs of their group and work with their broker to create a financial wellness plan that meets their goals. To learn more, check out our Inside Track educational paper.

It’s summer break! Are your client’s employees prepared for vacation?

Emergencies happen. When they happen far from home, it’s comforting to know there’s a team of multilingual professionals standing by to help. The Travel Assistance Program offered with Symetra group life and disability coverage is available 24 hours a day to help protect employees, their spouses and dependent children from the unpredictable when traveling 100 miles or more from home.

For more information about program advantages and eligibility, read our Travel Assistance Program flyer.

Limiting your risk with medical stop loss

The removal of annual and lifetime dollar caps from group health plans makes it difficult to predict claims costs with any accuracy. Catastrophic claims have become more frequent and dollar amounts continue to rise, leaving self-funded plans open to greater financial risk. Check out our 2017 catastrophic claims flyer to learn more about these trends and see how Symetra stop loss coverage can help protect your client’s self-funded plan from the risk of catastrophic claims.

Symetra Spotlight: David Manning

What do you like most about working for Symetra?

Good group of people that know their business and strive to serve the customer with integrity.

What do you like most about working in stop loss?

Competing with other carriers for business and being responsible for profitability on a large block.

What's been the biggest change in the industry you've seen in your career?

The shift of control from TPAs to Brokers.

What's the most important quality in an insurer?

The delivery on the promise to be straight forward and honor claims.

What inspires you?

Individuals with a passion about their work.

What’s the most important thing you've learned in your career?

That to manage a group of people you need to give them enough responsibility so that they can mature and contribute to the team.

Any last thoughts to share?

Anybody can look good when the going is smooth. Where the real top players shine is their ability to lead and execute when the times are tough.

About David

David Manning is vice president and head of medical stop loss underwriting for Symetra Life Insurance Company’s Benefits division.

Manning’s career spans over 30 years in the insurance industry. Before joining Symetra in 2004, he was an assistant vice president with The Hartford Insurance Group and held management, underwriting and sales positions with ING, HCCB, and Medical Risk Managers. He earned his bachelor’s degree from Boston University in 1982.

Fun facts

• Favorite vacation spots: Vermont and Mexico
• Favorite music genre: Rock & Roll
• Favorite movie: Predator
• Hidden talent: Ran the Hartford ½ marathon the last 3 years
• One thing he wishes he knew 15 years ago: To invest in Microsoft and Apple

Group benefits that match your client’s budget and coverage goals

A comprehensive benefits package can make a difference in helping your clients recruit and retain a quality workforce, but it’s hard to know where to start. From implementation to claims, we deliver a high-quality customer experience to our clients. Our collaborative account management, prompt customer service and convenient online administration tools make it simple for groups to expand their benefits offerings.

For a better understanding of Symetra’s group life, disability, and absence management solutions, check out our product overview for more information.

The phone physician: Direct access to a doctor, 24/7

A cold or flu can strike anywhere and anytime—whether you’re at work, on a business trip or lounging on the beach. And what if you need medical help after normal business hours? With Select Benefits, valuable health care may be at your fingertips.

Teladoc¹ is a unique value-add service that provides, for an additional cost, 24/7 access to a national network of U.S. board-certified doctors. Employees and eligible family members can connect via phone or video conference for help with a multitude of health issues. Doctors can diagnose common medical conditions, recommend treatment, answer questions—even provide prescriptions when necessary. It’s quick, easy, and can save on costly ER visits for non-emergency medical needs. To learn more, check out our Teladoc flyer.

¹Not available in all states.

Symetra Spotlight: Tom Costello

What do you like most about working for Symetra?

Providing stop loss solutions and protection to our policyholders in what is a challenging healthcare market.

What's been the biggest change in the industry you've seen in your career?

The shift in our business, as it used to by be controlled by managing general underwriters (MGUs) and now market share is controlled by the direct writing carriers and ASO carriers.

What is the most important quality in an insurer?

In our business the most important quality is commitment to our clients. A carrier that stands behind the client when there is a catastrophic claim really shows their value.

What inspires you?

Watching us grow our business and doing it profitably with the great people that work here.

Any last thoughts to share?

In a business that has been commoditized, doing the basics well will help you stand out. By "basics" I mean getting quotes back on time, responding to emails and phone calls promptly and, most importantly, paying your claims as quickly as possible.

About Tom

Tom Costello is vice president of medical stop loss insurance sales for Symetra Life Insurance Company’s Benefits division. His responsibilities include the oversight and management of Symetra’s stop loss distribution in the U.S., while working collaboratively to promote the distribution and cross-selling of Symetra’s group life, disability, absence management and supplemental medical products.

Costello started his career as a group life and health underwriter for Phoenix Mutual in Enfield, Conn., and later joined Alden Risk Management Services as an underwriting regional group manager. Tom graduated from the University of Massachusetts in 1990 with a bachelor’s degree in economics. He is a member of the New England Employee Benefits Council, Massachusetts Association of Health Underwriters and the Advisory Board for the South Boston Boys and Girls Club.

Fun facts

• First job: Delivering newspapers door to door
• Favorite movie: The Shawshank Redemption
• Takes his coffee: Dunkin Donuts cream only
• Pets: A family pet – guinea pig named Goetze
• Favorite quote: “Get busy living or get busy dying” – Andy Dufresne in The Shawshank Redemption

Do your clients have questions about EOI?

You’re probably well-versed in evidence of insurability (EOI), but your clients and their employees may have questions. That’s why we’ve compiled some frequently asked questions to help explain why this application is used to determine eligibility for certain types and amounts of coverage. From questions like “why should I submit evidence of insurability?” to “how long does the EOI application process take?” our FAQ flyer can help your clients and their employees understand the EOI application process.

GapAssist: Added protection from unexpected costs

It’s no secret that many groups are turning to high-deductible medical plans as a way to combat rising health care costs. But while such plans may help both employers and employees achieve more affordable premiums, they can leave employees and their families vulnerable to significant out-of-pocket costs when things like accidents or serious illnesses occur. One solution? GapAssist supplemental coverage.

GapAssist is a package of accident, critical illness and inpatient hospital benefits that’s designed to supplement any high-deductible plan to give employees and eligible family members an additional layer of protection. Benefits are HSA-compatible and available in three pre-approved plan design options. Best of all, employees are covered without any deductible, co-pay or coinsurance requirements. Employers can give their workforce peace of mind when unexpected medical costs arise, while keeping their health care budget in check. You can learn more about GapAssist by reading our one-page solutions flyer.

Value-Add Programs for Symetra Group Life and Disability Insurance

We can’t predict where life is going to take us. An injury or illness could send an otherwise active person out on disability leave for an indefinite period of time. Or the loss of a loved one may leave a family struggling to cope with the emotional and financial stress of rebuilding their lives. That’s why employees truly appreciate the network of professional support offered with Symetra group life and disability income insurance. Our value-add programs complement the insurance benefits provided with the goal of helping people get to a better place.

To learn more about the programs offered with Symetra group life and disability income insurance, check out our value-add brochure.

Questions to ask a potential stop loss carrier

With new entrants to the stop loss market and medical costs on the rise, it’s important to research potential carriers before making a recommendation. Here are five questions to ask to help ensure your clients’ self-funded plans are properly protected.

1. Who actually holds the risk on the paper?
   Some reinsurance treaties are first-dollar percentage arrangements that may require approval before a reimbursement can be made. Make sure you know how many parties are involved in the reinsurance, at what dollar levels, and who is involved in claims decisions.
   
   
2. Has a policy evaluation been completed?
   The definition and exclusion sections of each policy should be evaluated to ensure there are no conflicts between the stop loss policy and the plan the employer wants to provide. This is a critical issue when it comes to reimbursements.
   
   
3. Does the policy contain reasonable (usual) and customary language or stipulations that determine what is considered reasonable and customary?
   Some carriers include reasonable and customary language in their stop loss policies, or they stipulate how reasonable and customary limitations will be determined. This could be in direct conflict to the employer’s plan, potentially leaving the policyholder with a gap between what their plan pays and what the stop loss carrier will pay.
   
   
4. How are reimbursements handled?
   Make sure you know how claims are processed and how quickly they are reimbursed.
   
   
5. How do the firms view their renewal underwriting?
   Inconsistent renewal underwriting could leave the employer with high levels of non-insured risk. Think about what recent experience you have with each carrier regarding renewal underwriting and be sure to ask if they laser at renewal.
   
   

To see how Symetra measures up, check out our “Questions to Ask” flyer.

Stop Loss 101

As health insurance premiums continue to rise, you may have clients that could benefit from the added flexibility and cost-savings associated with self-funding their major medical plan. But with these benefits comes the added risk of high-cost and catastrophic claims. Fortunately, medical stop loss can help.

Watch and share our Stop Loss 101 video to help your clients better understand how stop loss coverage can help limit the risk for self-funded groups.

Conversion vs. Portability – Continuing Protection after Coverage Ends

Group life insurance is one of the simplest and most accessible financial benefits available. In an increasingly complex financial world, it is a benefit that is easy to understand and appreciate. One of the trade-offs for the low cost of group life insurance is that it is not permanent. If an employee leaves their company for a new job or is laid off, coverage will end. While many employees will quickly sign up for new plans with another employer, others will not.

This may lead to gaps in an individual’s overall life insurance coverage. Fortunately, group life insurance providers typically include provisions in their policies that allow existing employees to convert to permanent, individual coverage or to temporarily continue their existing group term life insurance coverage. Which option fits best—“converting” or “porting”— depends on the life insurance needs of each employee.

For more information about conversion and portability, read our Inside Track educational paper.

Beyond the dollars: Value-add programs for Select Benefits

The fixed-payment medical benefits of a Select Benefits plan help employers offer valued coverage to their group. But not all benefits can be measured in dollars and cents. Value-add programs can enhance any Select Benefits plan by providing additional services to employees and their families. To learn about some of the value-add programs available to Select Benefits participants, take a look at our value-add flyer.

Understanding advance funding provisions for medical stop loss claims

Employers who self-fund their employees’ medical coverage enjoy flexibility and cost-savings that fully insured coverage may not provide, but they must be prepared for sometimes shockingly large claims. These employers typically rely on medical stop loss insurance to help them cover claims that are higher than expected. But stop loss is a reimbursement, and the employers must make the initial claims payments themselves. For employers operating on slim margins or limited budgets, a sudden and unexpected catastrophic claim could be difficult to pay, and may even require a short-term loan. Fortunately, many stop loss carriers include advance funding provisions in their contracts that can accelerate the reimbursement of qualifying catastrophic claims.

To learn more about advance funding – including how it works and what to look for in a contract – check out our recent Inside Track educational paper.

Group short-term disability income insurance: Will your income stay afloat?

A disability could sink an employee’s finances if they’re unable to work. Are your client’s employees ready for what’s next? If an employee is unable to work due to an illness or injury, group short-term disability insurance can replace a portion of their paycheck for a limited period – usually nine weeks to a year – so they can focus on recovery with less concern for their finances. Watch and share our enrollment video to get a better understanding of how this coverage can help employees keep their income afloat.

Symetra’s response to the IRS Memo regarding tax treatment of benefits

On January 20, 2017, the Office of Chief Counsel of the IRS issued a field assistance memorandum (Memo) addressing the tax treatment of fixed indemnity health plans. The Memo seems to conclude that all benefits paid under such plans are taxable if the premiums are paid with pre-tax employer contributions or pre-tax employee salary reduction contributions through a cafeteria plan. This conclusion is inconsistent with current controlling law under Internal Revenue Code Section 105, which allows benefit amounts paid under a pre-tax funded fixed indemnity health policy to be received tax free, but only up to the amount of otherwise unreimbursed medical expenses.

This advisory provides a summary of Symetra’s position with respect to the impact of the Memo.¹ We are confident that, despite the Memo’s overly broad conclusions, it does not disturb existing law regarding the tax treatment for our fixed indemnity health products.

Why did the IRS issue the Memo? 
The Memo was issued in response to a request by IRS field agents to provide assistance and guidance to address certain abusive practices associated with hybrid wellness/self-funded health indemnity coverage arrangements under review by the IRS (e.g., arrangements that provided disproportionally large self-insured indemnity benefits triggered by discretionary non-medical events such as calling a fitness trainer.)  

What is the existing law? 
Sections 105 and 106 of the Internal Revenue Code (IRC) provide the general tax rules for the taxation of employer (including pre-tax salary reduction) funded medical insurance. Specifically, employer-funded medical insurance is exempt from tax in two ways

• First, with respect to funds used to pay premium, IRC Sec. 106 provides that when an employer pays employee premiums for accident or health coverage, employees can exclude the amount from gross income. In addition, under IRC Sec. 162, the employer can take a deduction for such premiums as a business expense. Similarly, when an employee pays premium via salary reduction (also treated as employer paid) the premium amount is excluded from the employee’s gross income.
  
  
• Second, with respect to the value of policy benefits received, IRC Sec. 105(b) provides that benefits received by the employee can be excluded from the employee’s gross income to the extent such amounts represent direct or indirect reimbursement for expenses actually incurred for medical care. A separate section (IRC Sec. 104 (a) (3)) provides a similar tax exclusion for policy benefits when employees pay for coverage on an after-tax basis.

How do the general tax rules for medical insurance apply to fixed indemnity insurance?

Fixed indemnity health insurance is included in the definition of medical insurance even though such products pay a fixed benefit without regard to the amount of expense incurred (e.g., because the benefit is not limited to the amount of out-of-pocket cost). IRC Sec. 105(b) is applicable even though such amounts may be paid without proof of the amount of the actual expenses incurred, as provided in Treas. Reg. 1.105-2.

The IRS specifically addressed fixed indemnity medical benefits in a 1969 Revenue Ruling (Rev. Rule 69-154), which clarified, consistent with tax regulations under Section 105 (Treas. Reg. 1.105-2), that fixed indemnity benefit payments are treated as reimbursement to the extent the benefit is triggered by a medical expense and does not exceed the expense incurred. Accordingly, the exclusion from taxable income is limited to the amount of unreimbursed medical expense only. 

How does this apply to Symetra’s fixed indemnity health insurance products?
Symetra’s fixed indemnity health products require a triggering medical event, such as a doctor’s office visit, before a benefit is paid. We believe this continues to satisfy the correlation between benefit payment and the occurrence of medical care required by existing law, in order to support exclusion of some portion of the benefit from gross income.

Why is there no mention in the Memo about these prior rulings under existing law?
We cannot know for sure. Perhaps the IRS was so focused on the specific programs under review that it stated the rules in overly broad terms.  

What are the next steps for the Memo?
The Memo was issued to provide internal assistance and guidance to the IRS staff. Technically, it is not law. There have been some informal statements that its overly broad conclusion may be revisited. In any event, without more formal guidance (e.g., in the form of a regulatory change binding on all taxpayers) it remains an informal position and not law. 

Does Symetra suggest any change in how its policies are implemented, such as allowing only post-tax premium contributions?
Symetra cannot provide tax or legal advice. Nonetheless, we do not believe it is appropriate to restrict the policyholder’s choice regarding the funding of premium payments. Policyholders should consult their employee benefit advisers if they wish to re-evaluate whether they exclude or include the value of premium payments or benefits received in an employee’s gross wages.  

Does Symetra plan any further action?
Symetra will continue to monitor developments in the law and will evaluate operational practices as necessary.

Closing the coverage gap

High-deductible health plans (HDHP) are quickly becoming standard operating procedure for a lot of employer-sponsored plans. But for many employees, meeting these high deductibles can be a challenge.

To help close this coverage gap, groups can supplement a major medical policy with a fixed-payment insurance plan that complements the benefits outlined in the HDHP. A fixed-payment plan pays a preselected benefit amount for covered services, up to a calendar year maximum. When structured as a medical gap plan, they can offer employees some relief from the financial pressure of meeting their deductibles, while still lowering employers’ monthly premiums and encouraging health care consumerism. This balance is achieved by carefully crafting a medical gap plan that complements—not duplicates—the benefits currently offered in the HDHP.

To learn more about medical gap plans, check out our Inside Track educational paper.

Supplemental Group Term Life Insurance: Stay financially protected

Your clients’ employees may know that life insurance is important, but understanding how it works can be a completely different story. Similar to a fire extinguisher, auto insurance or warranties, life insurance is that “just in case” protection that helps provide peace of mind. Supplemental group term life insurance lets your clients’ employees choose the amount of coverage they need, and it’s offered at an attractive group rate. Watch and share our supplemental life enrollment video for a better understanding of how the coverage works and why it’s important.

Understanding Select Benefits

You may have heard of Select Benefits. But what is it? What does it cover? How does it work? These common questions and more are answered in our latest video. This new training module gives brokers and employers a crash course on our suite of fixed-payment medical benefits. It explains what’s covered, how benefits are paid, and what Select Benefits can do to help groups and participants alike.

Medical stop loss: What matters to carriers and employers

In today’s health care environment, more employers are exploring the flexibility and cost-savings resulting from self-funding their employee health care plans. Medical stop loss insurance helps protect these employers from the financial risk of catastrophic claims, but in order to secure the stop loss coverage that best fits a company’s needs, it can help to understand not only what employers should look for in a stop loss carrier, but also what carriers look for when pricing and evaluating the risk they are assuming. Check out this recent Inside Track educational paper to learn more about what matters to carriers and employers.

Help when the unexpected happens

After an accident, unexpected medical costs can make a bad situation even more stressful. Group accident coverage can help relieve some of the financial pressure for employees and their families.

This benefit pays for services and supplies related to an accidental injury, unless covered by workers’ compensation or similar law, up to the benefit amount selected per occurrence. This means that eligible expenses related to the original accident—even if they are incurred on different days or with different providers—will be paid.

For more information about how group accident coverage works and eligibility, read our flyer.

MEC-Select – two coverages, one health care solution

Are your clients looking for a new way to explain MEC-Select to their employees? If so, we’ve got you covered. Our new video is a powerful education tool that your clients can use to help employees understand the coverage. Featuring an overview of how MEC-Select works, what’s covered and why they’ll like it, this video can help employees make an informed health care decision.

Administrative support when family responsibilities call

The Family and Medical Leave Act (FMLA) provides valuable job protection for employees but its growing use presents a challenge for businesses in a world where doing more with less is standard operating procedure. Administering and tracking FMLA-supported leaves has become an overwhelming task for many employers. Companies that fail to successfully maneuver through this maze are at risk for noncompliance—a potential problem that can extend beyond the organizational level as individual managers and supervisors can also be held responsible for FMLA violations.

Why should your client’s spend valuable time interpreting the FMLA, deciding which employees do or do not qualify for job protection, tracking leaves and training staff to administer the Act? Symetra’s in-house absence management offers fully-integrated administration of all types of leave.

Check out our absence management programs brochure to learn more about how Symetra can help ease the administrative burden for your clients.

Help your clients bridge the gap to reduce health care costs

Looking for ways to help your clients close the coverage gap for employees? Select Benefits fixed-payment medical insurance can be customized to help cover some of the out-of-pocket costs that occur before benefits in a high-deductible health plan (HDHP) begin—reducing immediate out-of-pocket costs for services like doctor visits, hospital inpatient admission and more. By pairing Select Benefits with a high-deductible health plan, your clients can enjoy lower premiums as compared to a lower deductible health plan while providing first dollar benefits to their employees. To learn more about Select Benefits gap plans, check out our brochure or talk to your Symetra representative.

Responsive and personal service

Our fixed-payment medical customers tell us that one of the reasons they renew with us year-after-year is the responsive and personal service they receive from Symetra Select Benefits (formerly Select Benefit Administrators). As Symetra’s in-house administration team, they serve as a dedicated resource for all enrollment, claims and billing for our Select Benefits suite of products, accident, critical illness and our newest product, GapAssist.

Defining ‘disability’

There is no one-size-fits-all definition of “disability.” Because the scope, severity and duration of employees’ conditions vary, insurers look at several components when determining whether an individual is disabled according to the terms of a group contract. Understanding each of these components can be useful when discussing coverage options.

Read our Inside Track paper to learn more about the components that make up a definition of disability.

Seamless implementation that shows

We asked a random sampling of our group life and disability clients to rate their implementation experience on a scale of 1-5 (with 1 being ‘poor’ and 5 being ‘outstanding’).

Questions asked include:

• Was the implementation process fully explained during your kick-off call?
• Did the implementation manager follow up with an email documenting key takeaways from each call/meeting?
• Following your call, did you feel confident you understood the process and had access to resources if further assistance was needed?

100% of respondents answered ‘yes’ to all of the above and Symetra received an overall satisfaction rating of 4.7 out of 5!

Critical illness insurance: financial protection when it’s needed most

Medical emergencies can happen to anyone—at any time. While medical and disability insurance help defray the cost of care and potential loss of income, additional out-of-pocket costs can add financial pressure to an already difficult situation.

Critical illness insurance is designed to help with unplanned expenses that can add up quickly when a medical crisis hits. The one-time, lump-sum financial benefit paid to insureds upon diagnosis of a covered medical condition can be used to help with items not covered by medical insurance, to supplement existing disability coverage, or to pay daily expenses while waiting for disability insurance payments to start. It’s a financial boost for employees when they need it most, and at little to no cost to the employer.

For more information about critical illness insurance, read our Inside Track paper.

How much life insurance do I need?

Your clients’ employees likely know life insurance is a good idea – but how much coverage do they really need? There are a number of factors to consider so we’ve created this helpful life insurance needs calculator. We invite you to share this tool with your clients to help employees determine how much life insurance they may need to protect their family’s financial future.

Waiver of premium benefits: questions answered

Group life insurance provides affordable life insurance coverage for employees who may not purchase individual coverage. But what happens if employees can no longer work because of permanent disabilities? Are they at risk of losing their life insurance as well?

Fortunately, waiver of premium (WOP) riders offered with many carriers’ group life insurance products allow employees who become permanently disabled to continue their life insurance coverage without paying premiums. The waiver of premium process can be relatively simple or complex, depending on whether long-term disability and life coverage are provided by the same carrier or multiple carriers. Read our recent Inside Track paper for some of the questions you should consider when evaluating waiver of premium options for employees.

New GapAssist explainer video

Want to learn more about our GapAssist bundle? Or maybe you’re looking for a quick and easy way to explain the coverage to your clients and their employees. If so, you’re in luck. Our new explainer video provides a clear, concise overview of this package of accident, critical illness and inpatient hospital benefits and how it can help close the high-deductible coverage gap for employees.

Multiline group benefits solutions

As a multiline carrier, our experienced, knowledgeable team is committed to delivering customer-focused benefits solutions that meet your client’s budget and coverage goals. In 2017, our blog will share how our products, service and expertise can help with employer challenges like:

• Closing the coverage gap from high-deductible major medical plans
• Helping employees protect their financial future with group life and disability coverage
• Protecting self-funded medical plans from large and catastrophic claims
• Reducing the burden of administering employee time away from work

For more information about our multiline group benefits solutions, contact your Symetra representative. 

A message from Michael Fry

Dear Symetra Partner:

As the end of the year approaches, I want to thank you for your business and your trust in Symetra.

The last several years have been challenging for our industry as we’ve worked through the complexities of health care reform to provide meaningful and valuable solutions for your clients. With the 2016 election now complete, it seems like we all have more questions than answers about what comes next. None of us knows what is on the horizon, but one thing I am certain of is that Symetra is committed to this business and fulfilling the promises made to you and your clients. We are here to stay, and with your partnership, we can conquer any obstacles we face in 2017 and beyond.

Celebrating our history, focused on growth

This year we celebrated our 40^th year as a leader in the medical stop loss business. This is a significant milestone that demonstrates our dedication to the market and to delivering a best-in-class experience every step of the way.

On the group life and disability side, we’ve become a trusted partner known for providing high-touch, personalized service for your clients and their employees. We continue to grow this business, and in October, we were selected as the recommended carrier to accept AIG’s block of 500+ life cases for group life, disability and absence management as they exited the U.S. group life and disability business. This agreement is a great opportunity for us to accelerate our progress with a large block of policies that fit well within our preferred group size.

In addition, we launched a new hospital indemnity, critical illness and group accident package called GapAssist. This turnkey coverage bundle helps employees cover out-of-pocket costs associated with high-deductible health plans. And our standalone Select Benefits fixed-payment medical policy continues to be a valuable product that helps close coverage gaps while providing benefits for part-time, seasonal and temporary workers.

An exciting future

Finally, as you’re probably aware, in 2016 Symetra was purchased by Sumitomo Life Insurance Company—the fourth largest insurer in Japan. We are excited for this opportunity to be Sumitomo’s primary presence and growth platform in the U.S. With their expertise, commitment and financial strength, we have even more resources to make Symetra's vision a reality.

On behalf of the entire Symetra team, I offer our warmest wishes for the holiday season and a prosperous new year. Symetra’s Benefits Division stands ready to meet your group insurance needs in 2017 and the years to come. 

Best regards,

Michael Fry
Executive Vice President, Benefits Division
Symetra Life Insurance Company