PPACA uncertainty haunts benefits market

Disability insurers continue to face low interest rates, volatility in claims — and competition for mindshare from a product they may not even sell.

Executives from StanCorp Financial Group Inc.  talked about the effects of lingering Patient Protection and Affordable Care Act (PPACA) uncertainty on sales today during a conference call with securities analysts.

• The company reported $42 million in net income for the second quarter on $701 million in revenue, compared with $58 million in net income on $717 million in revenue for the second quarter of 2013. 
• The discount rate used to price new long-term disability (LTD) reserves increased just a little, to 4 percent, from 3.75 percent a year earlier.

David McMillan, vice president of employee benefits at StanCorp (NYSE:SFG), said PPACA disruption continues to affect his company’s efforts to sell group disability and group life coverage.

“We’ve seen it taper just a little,” McMillan said. “It’s still a major issue in the marketplace.”

This week, federal appeals courts in the 4th Circuit and the District of Columbia Circuit came to opposite conclusions about whether PPACA lets the public health insurance exchanges run by the U.S. Department of Health and Human Services (HHS) offer health insurance premium tax credits. Some observers say a Supreme Court decision banning HHS exchange tax credits could disrupt the exchange program.