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The Fine Line Between Differentiation and Disruption

Posted by Laura McMullen on Thu, Nov 16, 2017

Switching networks can be rough, as the Texas Employees Retirement System found out when they switched to a Blue Cross Blue Shield of Texas HMO plan after using United Healthcare for several years. The Texas Blues plan uses the HealthSelect network which was designed for large groups offering ample coverage in Dallas, Houston, and other big cities. In rural areas, the Blue Advantage network, designed for small groups and individual plans, would have been a better fit, according to local experts. Blue Cross Blue Shield of Texas has moved quickly to address the network gaps. Members who are more than 30 miles from an in-network PCP or more than 75 miles from an in-network specialist can request network gap exceptions. Click here to read the Health Business Daily story that has more details from November 6, 2017. (registration required)

This type of situation happens all the time in the employee benefits industry. A network looks like it matches a group’s locations but when members start making appointments there are gaps. Minimizing network disruption to avoid employee dissatisfaction is often a big factor in making changes to the overall benefits package. Estimating disruption is one of the most common uses of NetMinder.

disruption.jpgCarriers have taken different approaches to managing the inevitable disruption that comes with changing benefit plans and networks.

  • Dental benefits companies frequently “stack” multiple lease partners on top of their direct contract network. Since many lease partners are working with multiple carriers, these networks are very similar which reduces disruption.
  • Vision benefits companies are starting to work with multiple lease partners which reduces disruption when moving between networks as well. Additionally, vision networks rely heavily on retail chains such as Target, Wal-Mart, and JCPenney which also reduces disruption.

Broad medical networks are alike due to the nature of employer-sponsored medical insurance: very few people decline it when offered and virtually all doctors accept insurance because costs are high and utilization is virtually guaranteed over a lifetime. Narrow networks, however, have introduced a new element of disruption into the medical network marketplace. As they continue to evolve, it will be interesting to see what tools and strategies are developed to minimize disruption and dissatisfaction caused by changing plans and doctors while keeping costs down.

How are your networks different from your competition? How do you measure and track the differences?

Tags: disruption reporting, Vision insurance, healthcare benefits, employee benefits, dental benefits, network disruption, medical networks

The Role of Technology in Expanding Vision Tests

Posted by Laura McMullen on Wed, Aug 10, 2016

This summer, my daughter found out she will need glasses soon, my cousin’s daughter got glasses, and my mom had cataract surgery – I’ve worn glasses since I was a kid so eye exams and buying glasses and contact lenses is always a topic in our house.  

eye_exam.jpgTechnology has made a big impact on vision care. The latest trend is apps to test your vision. When I looked at the iTunes store, I found 10 apps in a search for “eye exam medical” and in Google Play, I found more than 50. They have names like Eye Exam – Eye Test, Eye Test, and Eye Exam. Some of them were created by eye care professionals and others by tech experts. These apps use mobile devices to check for visual acuity, color blindness, astigmatism, and macular degeneration. When you look at the reviews, people rave about the convenience and low price. The results aren’t a prescription that you can use to get eyeglasses or contact lenses. 

Another trend is websites that let you refract your own eyes and send the results to an eye doctor to be certified. Once the results are certified, you can use them to get eyeglasses or contact lenses. Opternative and EyeXam are two of the biggest sites. Opternative markets directly to patients and encourages them to use their prescriptions at any retail location. The results are signed by a board-certified ophthalmologist licensed in the patient’s state. EyeXam markets to eye care providers as a way to attract new patients and to patients as a way to connect with an eye care provider. 

The American Optometric Association is concerned that apps and websites like these are operating without proper medical supervision and recently sent a formal complaint to the FDA. A recent article in Employee Benefit News summarized the AOA’s position: 

  • Self-serve apps and websites can give “inaccurate or misleading information and may miss deeper health issues.” 
  • These apps and websites confuse refraction test and exams. According to, a refraction test checks to see that light is bending properly when it passes through the cornea and retina of the eye. The results of this test tell the eye care provider what correction is required to make your vision 20/20. Self-serve apps offer refraction not exams. 
  • More comprehensive adult eye exams should be available to all consumers similar to the pediatric vision benefits required by the Affordable Care Act. 

SHRM estimates that 87% of employers offer vision benefits to their employees and eye exams and refraction tests are the services that people with vision benefits use most frequently. More complicated conditions such as low vision caused by diabetes are usually covered by medical plans.  

More vision tests would seem to mean more people looking for glasses and contact lenses. How do you think these trends will impact your network? 

Tags: health insurance, Affordable Care Act, Vision, Vision insurance, employee benefits

Voluntary Ancillary Growth is a By-Product of ACA

Posted by Laura McMullen on Fri, Jun 24, 2016

Business is booming for insurance companies specializing in ancillary benefits for employer groups – and the mandated benefit requirements of the Affordable Care Act are driving the growth. A 2016 study of Form 5500 Schedule A data by analytics firm, miEdge, valued the market at more than $1 billion in 2015, a gain of 3.32% over the previous year.

Employee Benefit Advisor interviewed four ancillary companies with double-digit growth to learn more about their strategies to capitalize on this trend. Click here to read the article. Here are some highlights:

  1. Medical premiums are still growing in part due to mandated benefit provisions in the Affordable Care Act. Brokers and employers are looking for ways to offer comprehensive benefits without raising overall cost and voluntary ancillary options fit right in.
  2. Private exchanges make it easier to offer a mix of voluntary and employer-paid benefits from multiple carriers. Employees are comfortable with e-commerce so online enrollment is business-as-usual.
  3. Pediatric dental care is required by the ACA creating a new market for dental benefits. More interest and education about dental has opened the door to other ancillaries, such as vision (often sold with dental) and even legal plans.

Employee Benefit Advisor reported “the top five grossers in voluntary benefits, according to miEdge, were Delta Dental of Rhode Island (up 105.59% and over $40 million), Delta Dental of Illinois (up 99.34% and over $46 million), Combined Insurance Company of America (up 82.03% and over $81 million), Hyatt Legal Plans (up 21.12% and over $15 million), and Principal Financial Group (up 20.83% and over $14 million).”

How is your company capitalizing on this trend?

Tags: Affordable Care Act, Ancillary benefits, ACA, insurance companies, employee benefits, HIX

Private Exchanges and Voluntary Benefits Grow Together

Posted by Laura McMullen on Fri, May 20, 2016

Several trends and market conditions came together to make private exchanges possible. Joe Markland of HR Technology Advisors sums them up well in this piece for Employee Benefit Advisor:

  • Employers want simpler ways to offer benefits to employees, i.e. online tools vs. employee meetings.
  • Employers are looking for more and better outsource services, i.e. single signup for payroll and benefits.
  • Employers want predictable costs for benefits, i.e. defined contribution payment model.
  • Employees want more financial wellness information as they take more responsibility for their healthcare costs, i.e. investment strategies for 401(k)s and HSAs.

Another trend that has surfaced recently is the combination of private exchanges and voluntary benefits. hCentive added Assurant Employee Benefits, Chard Snyder, and Guardian, among other benefits, to its WebInsure Benefits offering. Liazon partnered with Aflac to offer critical incident, accident, and hospital indemnity. And employees are signing up: Liazon reported that “nearly half of employees buying a qualifying health plan purchased a voluntary offering during 2015 open enrollment.” About 35% of employees in Mercer’s Marketplace bought at least one voluntary benefit in 2015.

These offerings are more than the traditional dental and vision plans that have become commonplace in employee benefits. Employee Benefit News/Employee Benefit Advisor and SourceMedia Research surveyed 273 organizations representing a broad spectrum of employers. These employers expressed interest in a wide range of nonmedical benefits:


The top three benefits, wellness, retirement, and financial/retirement services, are traditionally included to some degree in large company benefit packages. Private exchanges make these capabilities more accessible to smaller companies although the survey’s authors note “relatively few (11%) of employers in the under-100-employee segment reported being ‘very interested’ in the prospect of incorporating wellness and retirement benefits into private exchanges.”

Other categories on the list such as privacy protection, legal services, and gym memberships have been included in expanded benefit offerings for some time. The strong representation in the neutral and somewhat interested levels could indicate that since these benefits are already voluntary, there’s no need to move them to an exchange. This thinking could change as exchanges become more prevalent.

Defined contribution funding for employee benefits takes the art of workplace marketing to a whole new level. Is there an opportunity for your business?

Tags: health insurance, employee benefits, Voluntary Benefits, defined benefit plan, Private Exchanges

Private Exchanges: High Interest and Slow Adoption

Posted by Laura McMullen on Fri, Apr 29, 2016

Accenture.jpgEnrollment growth in private exchanges grew 35% in the first quarter of 2016 to 8 million people, according to Accenture, or about 5% of the employer sponsored insurance market. While not the exponential growth some experts predicted, it’s enough growth to attract new entrants like Fidelity, ADP, and Zenefits to the employee benefits market. Many people are still expecting a steep growth curve as employers look for ways to reduce costs and streamline administration.

A recent survey by Employee Benefit News/Employee Benefit Advisor and SourceMedia Research found that 20% of the 273 firms surveyed were using an exchange, in the process of moving to an exchange, or considering the option. A further breakdown of these responses shows 17.2% are “considering, but not planning” to switch to a private exchange platform while the remainder are either “planning, but not implemented” or using an exchange. No employer in the survey with fewer than 100 employees has moved to an exchange yet.

What’s holding employer groups back?

The “Cadillac tax” is widely thought to be suppressing growth in private exchanges. “The Cadillac tax itself was a driver for people to drop the more expensive health plans, and therefore … it was considered to be a driver to a private exchange, but frankly, given that it's delayed now, I would say if anything the growth that you were expecting from that is not probably going to be there,” Jay Godla, Chicago-based partner with PricewaterhouseCoopers L.L.C., which doesn't operate an exchange, told Business Insurance.

Other reasons frequently cited in the EBN/EBA study for not moving to a private exchange are:

  • Private market is not mature enough (37.7%)
  • Unsure about the employee experience (28.1%)
  • Not enough information (23.1%)
  • Unsure of costs (23.1%)
    (Respondents could choose multiple answers)

But they’re still interested…

"Growth [for private exchanges in 2016] will continue to be slow. Employers seem to like the concepts that private exchanges offer — such as online enrollment, broader choice, decision support, defined contribution, voluntary integration — better than they like the private exchanges themselves, " Mike Smith, Lockton Benefit Group's director of exchange solutions, told AIS's Inside Health Insurance Exchanges.

And the big payoff will be in employee engagement. Employees who use private exchange decision support tools and have high-deductibles and other cost-sharing plan features are more engaged than those who have to accept a plan that their employer selected. Some of the exchanges sponsored by benefits consultants go one step further and offer care management options. In Employee Benefit Advisor, Barbara Gniewek, a principal in the healthcare practice of PricewaterhouseCoopers who oversees the Private Exchange Evaluation Cooperative, says “the two consultancies that offer care management overlays typically state savings of between 1.5% and 3% over carrier-only models.”

And a lot of companies are betting that the combination of lower costs, streamlined administration, and higher engagement will be worth buying by investing in platform-vendor exchanges like Liazon (purchased by Towers Watson in 2013) and bswift (purchased by Aetna in 2014), or building their own capabilities like Aon Active Health Exchange and Mercer MarketplaceSM.

When do you expect to see more employers entering the private exchange market?

Tags: ACA, healthcare exchanges, employee benefits, HIX, Private Exchanges

Private Exchanges Attract New Competitors

Posted by Laura McMullen on Fri, Apr 15, 2016

healthinsurance.jpgMany experts are talking about private benefit exchanges as the next big thing in employee benefits and new exchanges are announced regularly. In the last six months, Fidelity announced Fidelity Health Marketplace and ADP launched ADP Private Exchange while Zenefits is re-focusing its model. 

PBE Operator Report: Options Abound, a whitepaper from Employee Benefit News/Employee Benefit Advisor and SourceMedia Research, defines private exchanges as:

“A private exchange is an online platform that allows an organization’s employees to enroll in healthcare and other bene­fits. The exchange functions as a web-based marketplace, offering an online shopping experience that facilitates the enrollment process.“

In reporting the results of a survey of 36 private exchanges, the study estimates the size of the market at 100-150 private exchanges. In general, private exchanges have been active for two years or less, are operated by benefits brokers, and tailor their offerings for employer groups of a certain size in certain industries. Virtually all of the private exchanges support defined contribution and defined benefit plans.

In a 2012 whitepaper, Fueling the “consumerization” of employer-sponsored health insurance, PWC described two main types of private exchanges:

  • Single-carrier exchanges. Promoted by a single payor and designed for employers who want to retain control over the carrier and plan designs offered to their employees.
  • Multi-carrier exchanges. Promoted by brokers and benefit consultants and designed for employers who want to provide more options.

Since then, platform-vendor exchanges have entered the market. These exchanges are provided by technology companies and let employers customize plan offerings and streamline the shopping experience while retaining control over the carriers and plan designs. The technology companies are partnering with brokers and benefits consultants to enhance multi-carrier exchange offerings, for example hCentive and Fidelity in the Fidelity Health Marketplace, and being acquired by carriers to enhance their offerings, for example Aetna acquired bswift in 2014.

 In general, dental PPO networks are the same whether they are offered to traditional employer groups, on private exchanges, or on public exchanges. Medical PPO networks, however, differ significantly in the three marketplaces. Depending on your approach to each market, your recruiting needs and philosophy could vary widely.

 How do private exchanges fit into your growth strategy?

Tags: ACA, employee benefits, HIX, Private Exchanges

4 Network Metrics to Help Make Your Network Stand out from the Crowd

Posted by Laura McMullen on Wed, Aug 26, 2015

In a previous post, we talked about the four types of network analysis the employee benefits industry developed to measure and compare provider networks. Each type of analysis is valuable at different points in the selling process:

  • Early stages to convince groups and brokers to consider a network
    • Network counting: measure the quantity of providers in each network
    • Accessibility analysis: correlate network provider locations to employee home and work location
  • Later stages to demonstrate savings and convenience for members
    • Disruption reporting: match historical provider utilization and claims experience for a group to the providers in a different network
    • Repricing: compare cost of claims for all providers (in- and out-of-network) if a different network were in place to the cost experienced in the current network
Apples_ResizedBut not every selling situation calls for a report. Sometimes all you need are a few metrics to catch someone’s attention so that you can have a larger discussion about why your plan is a good option for a group. Here’s a look at four network metrics that can help you make your network stand out:
  1. Counts. Access points, unique providers, or unique locations? Choosing the right counting method can make all the difference in how your network is perceived. If you have fewer access points and fewer locations/provider you might find that a unique provider count presents a better picture of your network than access points.
  2. Locations/provider. Use the NetMinder Snapshot to find this metric or compare access points to unique locations to see how your network looks versus your competitors’ networks. A high locations/provider ratio can indicate directory inflation.
  3. Total change. The sum of adds and drops in a network during a specified time period. Use this metric to showcase a geographic area – deliberately adding and removing providers to improve the network.
  4. Net change. The difference between adds and drops in a network during a specific time period. Use this metric to show growth or contraction over time.
    (Total change and net change are both available in the NetMinder Network Change report.)

In general, the process of comparing provider networks is the same whether you are comparing dental, vision, or medical HMO networks. However, each line of business has a few specific metrics to address unique situations. Here are a few that we use regularly:

  • PCPs/total providers. The percentage of a medical network that is primary care providers (usually internal medicine, general practice, family practice, OB/GYN, and pediatrics) is particularly important when evaluating a medical network. A lower percentage can result in longer wait times for members to get appointments. It also could indicate that different types of providers are identified as PCPs which could also cause disruption to members when changing plans.
  • ECPs/total providers. The percentage of a vision network that is eye care providers (optometrists and ophthalmologists) is a significant distinction. Consumers gravitate to ECPs for exams and retail chains for glasses and contact lenses so having a selection of both types of providers can increase member satisfaction.
  • Practicing providers and locations/all locations. The percentage of a dental PPO network that is practicing can make all the difference because directory inflation is common. NetMinder validates locations using claims data which helps focus recruiting efforts and clarify the network landscape.

When you tell your network story, which metrics do you use to support it?

Tags: compare networks, network metrics, health insurance, network comparison tool, disruption reporting, network change, provider networks, employee benefits

Focusing on vision networks

Posted by Laura McMullen on Tue, Jul 07, 2015

A few years ago, we published a whitepaper called Clearing Up the Vision Market. Since then, the demand for vision networks has increased significantly with the number of people who take a vision plan when it’s offered growing from 78% in 2012 to 83% in 2013 in a 2014 SHRM study on vision care, so we decided to take another look.

As of March 2015, there are 48,000 optical locations in the top 10 national vision networks. They fall into two categories: independent eye care professionals (ECPs) and retail chains.

  • ECPs are defined by VisionWatch as having three or fewer locations with an ophthalmologist, optometrist, an optician, or an optical retailer on site. Nearly all ECPs are small businesses.  According to a whitepaper sponsored by Vision Source, ECPs are typically single location operations with less than $1.5 million in annual revenue and 12 or fewer employees. They have been in practice on average for 20 years.
  • Retail chains have 4 or more locations and may or may not have an ophthalmologist or an optometrist on site. The best-known brands in this category are widely available, such as LensCrafters, Pearle Vision, Walmart, and Costco.

ECPs make up two-thirds of locations and 45% of market share while retail chains are the rest. A recent Bain and Company study shows the second most influential factor (after cost) in selecting a managed vision care plan is the retail network the plan provides. This helps explain why retail chains account for 55% of vision sales, with only one-third of the locations.

A Consolidating Market

In a recent Wall Street Journal blog post, Optometrists Catch FFL’s Eye, Thomas Puckett of merger and acquisition advisory firm HPC Puckett & Co., said “There aren’t many operators with over 100 locations, but there are quite a few independents with under 50 locations. It is logical for businesses to consolidate in a geographic area.”

Private equity firms are projecting that the number of retail outlets will drop by half over the next five years through consolidation. Investors are most interested in firms valued at $10 to $50 million and the expected growth from the Affordable Care Act and the aging US population makes the industry even more attractive.

Other Vision Network Trends

A recent review of the top 10 national vision networks in NetMinder found some interesting trends:

  • Vision networks are growing. The number of unique providers in these networks grew about 8% annually from 2011 to 2015. Unique locations grew more slowly (3% annually) and access points grew more quickly (11% annually). This is most likely because retail chains, such as Pearl Vision or Lenscrafters, generate more revenue with fewer locations.
  • Some ECPs practice at many locations. On average, ECPs are listed in provider directories at 2.4 locations with a range of 1.6 to 3.2 locations. This could be the beginning of a trend toward overstated access in vision networks. We see about 25% access point inflation in dental PPO networks and have put a validation process in place using claim data to adjust counts. We are watching vision networks closely to see if a similar filter is needed. 
  • vision_networksECPs are joining more networks. In March 2011, the average ECP participated in 2.5 networks. By March 2015, that count was up to 3.7 networks. This shift is quite dramatic: five years ago 75% of eye care providers in these networks were in 1-3 networks and now only 53% are while 15% are in 7-10 networks.

Are you seeing these trends play out in your network? Are vision benefits in demand among your customers and their employees?

Tags: network providers, Affordable Care Act, optical retail, Vision, Vision insurance, healthcare benefits, Managed Care, employee benefits, vision networks, practicing locations

TPAs move beyond claims and eligibility

Posted by Laura McMullen on Thu, Jun 11, 2015

Large employer groups, unions, associations, and other plan sponsors are all looking for ways to minimize healthcare costs. Historically, one way is to self-fund to keep the administrative costs low and allow for customization of benefits offered. One of the ripple effects of the Affordable Care Act is that smaller groups are investigating self-funding as well. When groups self-fund, they commonly turn to third-party administrators to provide the services and expertise needed to establish and maintain the plan.


Third-party administrators and cost management experts work on behalf of employers and other groups to keep claims costs low. In addition to reporting on claims, eligibility, utilization, and other dimensions to help employers manage costs, they also aggregate and manage networks.Using supplemental networks can extend healthcare benefits to employees who don’t work in centralized locations and improve employee morale.

In 2013, Business Insurance ranked the largest TPAs that specialize in employee benefits. The top five were:

Third-party administrators commonly re-price claims by recalculating billed medical charges based on the rates and rules a PPO has negotiated with supplemental networks. They also directly negotiate with providers to ensure that all claims are discounted. These networks are often a combination of risk and non-risk PPOs, depending on the plans that are being offered to the group’s members. When there is a combination, it is important to make sure that all providers are properly contracted to offer discounts to members.

Another way that TPAs factor into the changing network landscape is to provide the claims administration, eligibility management, and other back office functions hospitals and health systems need when they start to sell to groups and individuals. This has become an important service in removing the barriers for new entrants into the healthcare market.

How can you leverage your TPA relationships to expand your sales and/or network reach?

Tags: health insurance, Affordable Care Act, health reform, consumer choice, employee benefits, third party administrators, TPAs

Guest Blog: How Will Affordable Care Act Affect Your Tax Bill?

Posted by Louis Balbirer on Wed, Jan 29, 2014

David Merzel of Kaufman Rossin CPAs

Louis Balbirer of Kaufman Rossin writes a guest blog for NetMinder about tax changes related to healthcare reform.

Several tax changes are being rolled out as a result of the Patient Protection and Affordable Care Act (ACA). Here are a few that may affect you or your business this tax season.

Refundable Tax Credits

  • Health Care Tax Credit (aka Premium Assistance Credit)
    – Individuals or families with less than 400% of the Federal Poverty Level can qualify for the health care tax credit for the 2014 tax year, which can be applied in advance toward health insurance premium payments to the exchange. 
  • Small Business Health Care Tax Credit – Small businesses that offer health insurance to employees and cover 50 percent or more of the insurance premiums might qualify for a tax credit. Employers can complete Form 8941 to find out if they are eligible.

Additional Taxes Under ACA for 2013 Tax Year

  • Net Investment Income Tax – A new 3.8% tax will be assessed on net investment income for individuals with modified adjusted gross income above $200,000 (above $250,000 for married filing jointly and above $125,000 for married filing separately). Net investment income includes interest, dividends, rents, royalties, capital gains and other passive income.
  • Additional Medicare Tax – Individuals with wages or self-employed earnings that exceed $200,000 will be subject to an additional 0.9 % Medicare tax. For those who are married filing jointly, the threshold is $250,000 and it is $125,000 for those who are married filing separately.

Contact your accounting professional to learn how these ACA-related tax changes will affect your tax bill.

Louis Balbirer, CPA, is a director of tax services with Kaufman Rossin, one of the top CPA firms in the U.S. He has 20 years of experience providing tax and accounting services to clients and can be reached at

Tags: Affordable Care Act, healthcare reform, ACA, employee benefits, medicare, health care tax credit, premium assistance credit





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