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Disability insurers wrestle for mind share

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Sellers of disability insurance and other non-medical benefits are facing Patient Protection and Affordable Care Act (PPACA) challenges of their own.

PPACA has had no direct effect on group disability insurance rates or packages, or on most of the supplemental health benefits that typical disability insurance writers sell.

But implementation of major PPACA provisions, including employer notice public exchange requirements and the start of the exchanges themselves, have taken benefits managers’ and human resource managers’ time.

The Obama administration has postponed PPACA-related benefits reporting rules and employer coverage mandate rules until 2015. But, because employers will need 2014 data to handle the 2015 reporting and coverage requirements, employers are gearing up to get serious about full-time equivalent tracking in just a few months.

Barron Dorf, a senior market manager at Unum Group Corp. (NYSE:UNM), said in an interview that one major, concrete change is that many small employers are trying to avoid 2014-PPACA turmoil by renewing their coverage on Dec. 1, rather than Jan. 1.

The shift means that small groups that might normally be thinking about group disability renewals a few weeks from now are already working on plan renewals, Dorf said.

Dorf also has seen one large group disability client shift to a private exchange program and proceed as if the Obama administration had kept the original PPACA employer rules in place.

In the past, many employers required workers to work 35 hours per week or more to qualify as full-time employees. PPACA has set the official cut-off at 30 hours per week.

The employer moving to the private exchange is leaving eligibility for its employer-paid group disability plan as is, but it may make voluntary disability benefits available to the employees who are now counted as full-time workers due to the cut-off change, Dorf said.

When Unum or other companies sell voluntary, employee-paid products, they use call centers or in-person enrollers to provide on-on-one service. Voluntary products sellers have been promoting the ability of those enrollers to help with PPACA-related education.

PPACA already requires employers to distribute standardized benefits summaries, for example. In-person enrollers can hand out the benefits summaries, document that employees have received the summaries, and document that the employees have a heard an explanation of what the summaries and other PPACA notices, such as the PPACA exchange program availability notice, mean, according to Jascha Bennington, a senior account executive at Unum.

Overall, a PPACA-related surge in demand for communications support has helped make up for a modest drop in traditional group disability benefits activity, Dorf said.

Dorf and Bennington have seen an increase in employer interest in executive disability benefits programs.

PPACA seems to be leading to more standardization of health benefits. Because employers now have a tougher time attracting top talent with unusually rich medical benefits, they are looking harder at ways to set themselves apart with other types of benefits, Bennington said.

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