Daily Insurance Report     Thursday, 07/02/20

Walt Bernard Podgurski,  Editor,  440-773-1108, 


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The "Daily Insurance Report" is now subscribed to by 25,000 elite insurance industry influencers who receive it Monday - Friday and have a quick overview of what is appearing in the media regarding the insurance industry; with an emphasis on life, health, and employee benefits. The "Daily Insurance Report" publishes the life insurance, health insurance, and employee benefits news that matters.

Obamacare Backers See Hope in Roberts Opinion in Non-Health Case
Lydia Wheeler / Bloomberg Law

Case raises same question Obamacare challenge asks
Chief justice cautions against ‘a major regulatory disruption’
Chief Justice John Roberts may have assured advocates fighting to save Obamacare that he plans to save the law a second time.

In striking down a provision of the Dodd-Frank Act that protected the director of the Consumer Financial Protection Bureau from being fired and leaving the agency intact, Roberts signaled Monday that he may do something similar with the Affordable Care Act—toss out its mandate to buy insurance without throwing out the entire law, health lawyers say.

The high court’s 5-4 ruling in Seila Law LLC v. CFPB has nothing to do with health care, but it asks the same question that’s central in the fight over former President Barack Obama’s signature health-care law: whether one unconstitutional provision sinks an entire statute.

Dismantling the CFPB “would trigger a major regulatory disruption and would leave appreciable damage to Congress’s work in the consumer-finance arena,” Roberts said in delivering the majority decision.

“Congress would prefer that we use a scalpel rather than a bulldozer in curing the constitutional defect we identify today,” he said.

Nationwide completes shift to independent agents

Nationwide has completed a shift to an independent agency model, a move that has changed the business for thousands of insurance agents around the country.

The company has transitioned all captive agents to independent agents after an 18-month process, the company said in a statement. The move follows larger industry trends: "Captive" or "exclusive" agents typically work for and are paid by one insurance company, while independent agents can sell products from multiple carriers and own their own business.

Nationwide had 2,000 captive agents when it announced the shift in 2018, most east of the Mississippi River and including 270 in Ohio. It says 99% of the formerly captive agents will continue to distribute its products as independent agents. The company's insurance is now sold through a network of 11,000 independent agents.

Federal Reserve Board announces that it is seeking individuals to serve on its Insurance Policy Advisory Committee

The Federal Reserve Board on Monday announced that it is seeking individuals to serve on its Insurance Policy Advisory Committee, or IPAC, which was established by the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The Board seeks a diverse group with expertise in life, property and casualty, and reinsurance issues. The Board also seeks a mix of professional backgrounds, including in insurance accounting, actuarial science, academia, insurance regulation, and policyholder advocacy.

In 2019, the Board selected 21 individuals, who are serving staggered terms of up to three years. This year, the Board will select seven individuals to serve a three-year term for newly vacant seats. The Board may also select additional individuals to fulfill any two or three-year term that is unexpired and vacated by an existing IPAC member.

IPO dreams die, but Personal Capital gets '$1 billion' price tag from life insurance giant's 401(k) unit that includes a de facto discount from early-bird VC dollars
Empower's sister company has built a 25% stake in Personal Capital since 2016 and test drove the company with two board members.
By Lisa Shidler / RIABiz

Empower Retirement will pay up to $1 billion for Personal Capital, a $12-billion Silicon Valley work-in-progress, yet Empower's Canadian parent shareholders will get more of a bargain than those valuation numbers suggest.

The Greenwood Village, Colo., 401(k) recordkeeper will plunk down $825 million at closing and up to $175 million if it meets Personal Capital's growth goals.

But there is an aspect to the deal of robbing Peter to pay Paul.

Empower is a subsidiary of Canadian life insurance giant, Power Corp., which owns a majority stake in IGM Financial. That subsidiary already owns 24.8% of Personal Capital, which it acquired for a relative pittance.

401(k) suits target Trader Joe’s, Costco, others
By Emile Hallez / InvestmentNews

This year has been an active one for 401(k) litigators, with companies including Trader Joe’s, Estee Lauder, Costco and Oshkosh Corp. facing new lawsuits over plan costs in recent weeks.

On Monday, plaintiffs filed a class action case against Trader Joe’s in U.S. District Court for the Central District of California. The sponsor of the $1.7 billion 401(k) “did not try to reduce the plan’s expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent,” the plaintiffs alleged in the complaint.

Participants incurred record-keeping expenses of $48 per year during the class period beginning June 29, 2014, which is significantly higher than the average rate for plans of similar size, according to the complaint.

Additionally, the plaintiffs in the Trader Joe’s case allege that the company failed to include low-cost investment options in the plan, including the lowest-fee share classes that were available for otherwise identical funds in the plan.

Third Circuit Rejects Claim for Lifetime Medical Benefits
James Barnett, Proskauer - Employee Benefits & Executive Compensation Blog / JDSUPRA

Several retired employees of Dominion Energy Transmission, Inc. sued their former employer alleging that they were entitled to lifetime healthcare benefits, and the unilateral changes made by Dominion to their post-retirement medical benefits violated ERISA.

The Third Circuit concluded that the retirees failed to state a claim.

Applying ordinary principles of contract interpretation, the Court concluded that the CBA did not “clearly and expressly” vest the retirees with lifetime benefits.

In so ruling, the Court rejected the retirees’ argument that because the Plan required union consent before altering medical benefits and also did not include a general durational clause, it could be inferred that “the parties clearly expressed their intent to vest post-retirement medical benefits.” The “absence of a termination clause combined with a consent clause does not clearly and expressly vest retirees” with lifetime benefits, said the Third Circuit.

Morneau Shepell Selects Corestream for Delivery of Broadest Selection of Personalized Lifestyle Benefits and Automated Benefits Administration

Corestream, the leading platform for connecting employees with personalized lifestyle benefits, today announced it was chosen by Morneau Shepell, a leading provider of technology-enabled HR services, to bring an ever-growing number of personalized lifestyle benefits to the millions of employees Morneau Shepell serves. Personalized lifestyle benefits, also known as voluntary employee benefits, are vital to attracting and retaining the best talent, as well as to maintaining employee engagement throughout the recent abrupt shift to a period of remote work.

The Corestream cloud-based platform is an employer-branded source for voluntary benefits education, communication, enrollment and administration.

Morneau Shepell employs approximately 6,000 employees who work with some 24,000 client organizations that use our services in 162 countries. For more information, visit morneaushepell.com.

Hospitals and Health Systems Continue to Face Unprecedented Financial Challenges due to COVID-19
American Hospital Association

Hospitals and health systems currently report average declines of 19.5% in inpatient volume and 34.5% in outpatient volume relative to baseline levels.

The AHA estimates an additional $120.5 billion in total financial losses from July 2020 through December 2020 should hospitals and health systems reach baseline patient volumes by July 2021, or an average of $20.1 billion per month.
These estimates are in addition to the $202.6 billion in losses the AHA estimated between March 2020 and June 2020 bringing the total projected losses to hospitals and health systems in 2020 to at least $323.1 billion.
Read Full Report: https://www.aha.org/system/files/media/file/2020/06/aha-covid19-financial-impact-report.pdf

The Benefits of a Paperless Healthcare Industry
In 2014, provisions in the Patient Protection and Affordable Care Act (PPACA) included a mandate that requires all healthcare providers to use health information technology, including EHR. Because of this, a new era of healthcare management was introduced, one where it’s easier for clinical practices and their patients to manage and access their records and eliminate the inefficiency of paper records.
Naeem K. Manz / Health TECH ZONE
But the digitization of data isn’t the only benefit of using EHR and other types of health IT. By going paperless, healthcare practices can enjoy the following benefits:

1. It Lowers the Risk of Exposure
2. It Improves Accessibility
3. It Increases Efficiency
4. It’s Environment-Friendly
5. It Cuts Costs

Temporary Safe Haven for Safe Harbor 401(k) Plans: Relief for Midyear Changes to Safe Harbor Contributions
Sidley Austin LLP / LEXOLOGY

In response to the unexpected challenges many employers are facing as a result of the COVID-19 pandemic, the U.S. Internal Revenue Service (IRS) and Department of the Treasury (Treasury) are providing temporary relief with respect to midyear reductions or suspensions of safe harbor matching contributions and safe harbor nonelective contributions to safe harbor 401(k) and 401(m) plans (together, safe harbor contributions).

Associated Banc-Corp Closes Deal to Sell Insurance Business
Zacks Equity Research / Nasdaq

Associated Banc-Corp ASB has completed the sale of the insurance business, Associated Benefits & Risk Consulting, to USI Insurance Services LLC for $265.8 million in cash. The deal was announced in May.

Being a multi-line insurance agency with 400 employees, Associated Benefits & Risk Consulting provides employee benefits, retirement plans, compliance, business insurance, risk management and individual insurance solutions.

At-Risk Coaches and Managers Need to Sit This One Out
Dustin Foote / DEADSPIN

This morning, the Minnesota Twins became the first MLB team to sideline “at risk” coaches for the season due to COVID-19 with the Minnesota Star Tribune reporting that Bill Evers, 66, and Bob McClure, 68, would not coach in this year’s truncated season. Evers and McClure are the oldest coaches on the Twins.

Last week, multiple Twins players tested positive for the virus.

COVID infections can happen to anyone, obviously. But as one gets older, the risk for severe illness increases. Look in MLB dugouts and you will see a few grey haired managers, coaches, and staff. For at least two months, these senior citizens will travel around a country that has not been able to quell a highly-infectious outbreak. And according to the Centers for Disease Control, 8 out of 10 deaths in the U.S. due to the coronavirus have been in adults 65 years and older.

Illustration for article titled At-Risk Coaches and Managers Need to Sit This One Out
Graphic: Eric Barrow
And going through each team’s roster, Deadspin found that there are 11 MLB coaches/managers over the age of 65, and that a total of 41 were born before 1960 (see graphic), including Evers and McClure. In case you can’t do the mental math, these 51 men are all above 59 years of age, and some are in their seventies.

There are also 10 MLB umpires 59 years old and older


Monday - 06/29/20 - - Oscar announces $225 million in new funding to drive growth and expand access to affordable health care

Tuesday - 06/30/20 - - Walmart divulges plans for ‘healthcare supercenters’

Wednesday - 07/01/20 - -  MassMutual $3 Billion Free Life Insurance Program Now Available Nationwide for Frontline Healthcare Workers Battling COVID-19

Thursday - 06/2520 - Hospitals lose bid to keep secret the rates they negotiate with insurers

Friday - 06/26/20 - - House Democrats unveil ObamaCare ‘enhancement’ health bill

Editorial Mission Statement: The goal of this publication is to provide readers a broad selection of what is being written about the insurance industry and related issues. Some articles may have a “tilt” towards a particular perspective one way or another. Inclusion in this newsletter is not an endorsement of any views or content; but report the various and differing views appearing in media.
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Walt Bernard Podgurski - - Editor