Red Rock Financial Group: Workers Compensation & Employee Benefits

There’s no denying that target-date funds are easy to understand and wildly popular with 401(k) plan participants, especially among new and inexperienced investors. But their performance has fallen considerably short in a still-fragile economy, as leading fund managers have pursued misguided strategies.

These developments come at a time when retirement savings clearly need to be maximized. So, the question becomes: Are participants better off switching to another fund that could bring better returns or should the TDF model be redesigned to better address stock market volatility?

Kent Smetters, a professor at the University of Pennsylvania’s Wharton School, believes TDFs oversimplify to a point where “they can potentially be a bit dangerous.” One such criticism is that these funds typically buy into the myth that a long time horizon alone should determine investment allocation.

While it’s appropriate for younger people to have more exposure to equities, in large part because they have a lot of working years ahead of them, he says “they still have a pretty aggressive equity allocation when people approach retirement, and that’s why some of these things blew up in the 2010 target-date funds.”

But Ted Benna, known as the “father of 401(k),” feels TDFs have received a bad rap for heavy equity ownership during the economic downturn, explaining, “you are going to get hammered whether you are at target maturity or got hands-on advice.” He says it’s pointless for a 30-year-old to worry about a 50% drop in the stock market – that’s the time to take any lumps – because the investment mix is age appropriate.

Increased popularity

TDFs are now the leading default investment option for auto-enrolled retirement plans. Simplicity makes them appealing to the lion’s share of defined contribution plan participants who’d rather not think too deeply about how to grow their nest egg. These funds are comprised of a premixed portfolio whose asset allocation strategy becomes more conservative as plan participants age, known as the “glide path.”

TDF assets swelled to nearly $400 billion last year from $15 billion in 2002 and are expected to reach $2 trillion by 2020, according to a number of leading industry sources that include BrightScope, Morningstar and Financial Research Corporation. But performance was anemic in 2011, dipping 0.4% on average, relative to a 2% rise in S&P 500 returns and a nearly 8% gain in the Barclays Capital Aggregate Bond Index reported by Morningstar.

“Competition for pure performance distorted the objective of target-date funds,” explains Joseph C. Nagengast, a principal at Target Date Analytics LLC in Marina del Rey, Calif., creator of the BrightScope On Target Indexes. “They were always meant to have returns and risk commensurate with the distance to the target date.”

Nagengast believes account balances overwhelmingly are driven by a plan participant’s contribution rate, not the return rate, noting that “looking to the returns to make up for a poor contribution rate is a fool’s errand.”

Many investors assume they’re going to be protected in the final decade prior to the target date being reached and are deeply disappointed when there’s a different outcome, according to Robert Pozen, senior lecturer of business administration at the Harvard Business School and a senior research fellow at the Brookings Institution.

“They all know that in the last 10 years the stock component is going down,” he says. “But what they don’t know is that there are huge differences among fund complexes as to how far down that equity component is going, which leads to big dispersions and results.” The chief culprit is a wide variation in the equity portion that fund managers hold as the retirement age of their investors draws near.

Also, while it’s safe to assume that some plan participants will live for a long time, he says others may need to liquidate most of their portfolio and live on those funds. Thus, one size does not fit all investors when their retirement needs and time horizons for investing differ so significantly.

Smetters’ research suggests that sometimes TDFs “are so misallocated that it would actually be better to have defaulted people into very low-risk vehicles that invest just in Treasury inflation-protected securities.”

A movement to determine best practices certainly should help improve the state of TDFs. There are 33 Morningstar TDF indices to gauge the performance of conservative, moderate and aggressive approaches. Two of the most noteworthy efforts include “Using a Target Date Benchmark” and “Selecting a Target Date Benchmark,” which suggests that “from a qualitative standpoint, an appropriate target maturity benchmark should have a similar glide path philosophy, asset class set and methodology for determining the detailed intra-stock and intra-bond allocations.”

However, a recent General Accounting Office report noted that significant variations in a number of critical areas that include objectives, asset allocation, investment strategy and underlying funds may render a particular TDF benchmark useless.

While custom composite benchmarks were cited as a means of measuring whether a fund outperforms the general market, the GAO cautioned that “they lack the ability to evaluate a TDF’s glide path strategy or investment objectives” and that the bottom line is that “there is no universally accepted benchmark that can be used to evaluate all TDFs.”

Mike Hartnett, a GAO senior analyst, says that while an agreed-upon benchmark for a midcap or large cap fund might be useful year to year, performance may vary.

“The problem with the TDF benchmark is that if you have a streak of years where the market is doing very well, your aggressive, high equity target-date fund is going to be doing fairly well compared to a more conservative one,” he observes.

“But, depending on what kind of a TDF you really want as a plan sponsor or participant, that can be very misleading if your interest is conversely in capital preservation as you approach retirement. Another TDF may be more appropriate – one that is less exposed to the stock market, for example.”

One alternative to benchmarks mentioned in the report involves “forward-looking metrics that evaluate the risk/reward characteristics and the range of possible long-term performance outcomes of the TDFs – such as retirement income replacement rates and longevity risk (e.g., the risk that a participant runs out of money before death).”

Emergence of custom designs

As scrutiny of cookie-cutter approaches to TDFs mounts, the market is expected to make adjustments. Damon Winter, vice president of the Majestic Eagle Agency, Inc., in Clackamas, Ore., and a member of the Million Dollar Round Table association of financial professionals, believes plan sponsors will embrace custom designs and tactically managed strategies with better asset allocation mixes made over time to reduce risks associated with market downturns.

This could involve a more conservative, moderate and aggressive approach to individual target dates and is superior to what he calls the buy-and-hope model (a pithy reworking of the buy-and-hold strategy that he says hasn’t worked well since the 1990s).

Custom target-date funds are proliferating at the expense of their off-the-shelf counterparts, in part because plan sponsors want to have greater control over what’s in a fund and have access to a wider array of investments to put in them.

Indeed, about 20% to 25% of plan sponsors with target-date funds are likely to switch to customized approaches by 2015, up from roughly 13% today, research and consulting firm Celent projected in a recent report.

Customized approaches allow plan sponsors to choose multiple managers and replace them as necessary. They also give access to asset classes such as commodities, direct real estate, and hedge fund and private equity investments that retail funds may be prohibited from owning.

They also can charge lower fees to plan participants because of institutional pricing and give the ability to customize the so-called “glide path” for changing over to more conservative investments, depending on the demographics of a particular workforce.

But they’re usually only available to larger plan sponsors because of the time and cost involved in setting them up and running them. Sponsors also assume additional fiduciary responsibility when they choose managers and tailor glide paths.

“As markets continue to demonstrate volatility, it’s likely, though not guaranteed, that sponsors will look to these custom designs,” says Alexander Camargo, the author of the Celent report.

Benna is a big fan of what he calls “TDFs done right.” A few years ago, he moved a $50 million retirement plan to this model and gave participants the option of running the plan on their own through a mutual fund window. More than 90% of those plan participants have stayed in those funds, which are indexed to better withstand market fluctuations and high expectations associated with annual performance vis-à-vis industry benchmarks. It’s also worth noting that the plan overhaul reduced total plan cost to just 16 basis points from 75.

TDFs “aren’t designed to be just one of another in a menu of 25 funds,” Benna cautions. “You get stupid results when participants continue to pick individual funds and 10% or so of a couple of target maturity funds. They should be in a plan where these are the only funds there.”

His point is that TDFs provide adequate diversification in a single fund. But that’s not reflected among most TDF investors. For example, slightly more than one-quarter of 401(k) participants with Fidelity Investments parked all of their assets in TDFs at the end of last year, whereas it used to be just 21.4% in 2010 and 17.4% in 2009.

One bright spot is that better disclosure about glide paths means “presumably people will know whether their fund is going down to 30% equity or 10% equity,” Pozen observes. But he says there also needs to be “better disclosure that there is no guarantee against losses in the last 10 years.”

Plan sponsors should embrace fund companies that are moving back to the fundamentals involving growth in the early years and preservation in the latter years as part of a prudent, safe and proven investment policy, according to Nagengast.

Five-year returns were poor among the three leading TDF players (Fidelity, Vanguard and T. Rowe Price) when measured against BrightScope On Target Indexes because of what he describes as a failure to protect investors in down times – with too much equity at the target date (see sidebar, left).

But the real issue is how these concepts are explained to plan participants. Winter laments the fact that most plan participants don’t bother to learn about their investment portfolio when so many sponsors provide excellent educational materials.

He says this phenomenon feeds a mentality advanced by the Pension Protection Act – that plan participants can simply check a box for automatic enrollment without fully understanding their options. Winter has seen many eyes glaze over during employee meetings. “They are intimidated and uncomfortable even having these conversations.”

Bruce Shutan, a former EBN managing editor, is a freelance writer based in Los Angeles. Additional reporting by Nelson Wang, a writer for On Wall Street, a SourceMedia publication.

3 reasons to think twice about TDFs

1. Some funds take too much risk too late in the game.

Imagine you were planning to retire in 2010, and had invested in a target date fund. On aver-age, target-date funds set to mature that year declined 37% between the market peak in Octo-ber 2007 and March 2009, according to Morningstar. Why? Too much exposure to stocks. Yet, the percentage of stocks that target-date funds hold at their target date rose to an average of 43% in 2010 from 40% in 2007, according to Brightscope.

2. TDF risks aren’t clearly disclosed.

There’s a debate over whether a target-date fund should hit its most conservative allocation — known as the “landing date” — the year an investor retires, or provide for the rest of his life.”To” funds — think a target-date fund should hit the target date and landing date the same year. Thus, an employee who retires in 2040 at age 65, just as his TDF cuts the per -centage of stock it owns to its lowest level. About 40% of funds followed this philosophy in 2010, Brightscope found.The other 60%, known “through” funds, think they should provide for retirees for the rest of their lives. Since people run the risk of outliving their money, this camp continues to take some risk after the target date so his money has a chance to grow. It’s critical to under -stand if you have a “to” or “through” fund to gauge risk. However, it’s tough to figure out a fund’s philosophy by looking at the fund documents. Even the gurus at the Morn -ingstar, which ranks mutual funds, have complained that the data is hard to find.

3. Fund managers have conflicts of in -terest and mediocre regulatory safe-guards.

Investors have to pay more for actively-managed stock funds than bond funds (or index funds, which simply mimic the major indexes such as the S&P 500). That gives the managers an incentive to stuff the target-date fund with the more profit -able (and riskier) funds.

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CHICAGO | Thu., Apr. 19, 2012 3:32pm EDT (Reuters) — Currently, 59% of major employers have a consumer-driven health plan option in place, up from 53% a year ago, according to a survey by Towers Watson and the National Business Group on Health. The groups queried companies with 1,000 or more employees across a range of industries.

More significantly, employee enrollment in CDHPs has spiked at companies offering them as a choice. This year, 27% of eligible employees are enrolled, a 35% increase from 2011. That finding mirrors a Fidelity Investments report last week showing a 61% surge in sign-ups for health savings accounts among its client companies – the largest one-year gain since Fidelity has been offering HSAs.

CDHPs are linked to tax-advantaged HSAs, because contributions can be used to accumulate funds to help pay costs not covered by the high-deductible plans.

Savings on premium costs are the key driver. Employers expect their healthcare costs to jump 5.9% this year, according to the Towers/NBGH survey. Total annual premiums paid by employers and workers for high-deductible plans in 2011 were 10% to 19% lower than for managed care or traditional point-of-service plans, according to a Kaiser Family Foundation study.

For example, Kaiser found that the average annual cost for individual coverage through a high-deductible plan last year was $4,793 — 15% lower than for a PPO managed care option.

“Everyone saves some money, and that really matters in tough economic times,” says Helen Darling, president and CEO of NBGH.

Another motivator for employers is to avoid the excise tax on high-value “Cadillac” health plans under the Patient Protection and Affordable Care Act. Starting in 2018, plans with total value over $10,200 for individual coverage and $27,500 for families will be subject to a 40% tax on the amount exceeding those thresholds. High-deductible plans offer employers a way to avoid triggering the tax.

(Editing by Beth Pinsker Gladstone, Linda Stern and Dan Grebler)

© 2011 Thomson Reuters. Click for Restrictions.

Although the focus of discussion among health plan thought leaders who convened in Florida last month at The Managed Care Executive Group ran the gamut from care management to meaningful use, to medical informatics, payment reforms, HSAs and more, technology’s role in the industry’s success was evident.

Led by industry experts, the 23rd Annual Forum focused heavily on considerations—such as whether this is “the end of health care as we know it,” a conversation that has been floating around recently. Other discussions centered around “innovation and technological change,” “making the leap from volume to value,” “Federal plans, programs and challenges” and “how the social organization might tap the collective genius of health plan communities.”

Each year MCEG compiles a list of issues considered most important to its members via polls, surveys, webinars and other events.

Beyond more complex issues being considered, this year’s top 10 shifted most significantly from a year ago with “Bending the Cost Trend” becoming the number one concern. Things like reform uncertainty and consumer roles, which were hot topics a year ago, gave way to new issues such as big data warehousing and analytics, along with PHI privacy and security.

“This year there was an overwhelming sense that everything seems to be a top priority. Bottom line, the biggest challenge health plans are facing is staying focused on the issues that are aligned with their strategies,” says Vince Ferri, Chairperson of MCEG and VP and CIO of AvMed Health Plans. “The Forum discussions provided critical insight for MCEG members to consider relevant factors that will lead to their health plan’s success.”

Voted and ranked as the Top 10 health plan issues in 2012 were:

1. Bend the Cost Trend in both Medical and Administrative Expenses (Tie with # 2)

2. Care Management, Data Analytics, and Informatics to Improve Outcomes (Tie with # 1)

3. New Provider Payment Models & Delivery Systems (ACOs, PCMHs)

4. Medicare, Medicaid and Other Government Programs

5. Health Information Exchanges (HIEs)

6. Big Data, Warehousing and Analytical Capability Expansion

7. Payer/Provider Interoperability (Tie with #

8. Administrative Simplification, Mandates and Efficiency (HIPAA 5010, ICD-10, MLR) (Tie with # 7)

9. Health Insurance Exchanges (HIXs) (Tie with # 10)

10. PHI Privacy and Security (Tie with # 9)

Two other issues—innovation and collaboration of business and IT as well as transparency of pricing, outcomes and operations—were very close to making the top 10, noted the survey results.

“The way MCEG members address these issues will be critical to their success in 2012 and beyond,” says Alan Abramson, SVP & CIO of HealthPartners, Emeritus Chair of MCEG and the recipient of the 2012 MCEG Alumni Award. “The discussions these last three days have been the best we have had in 23 years and we invite all health plan executives to join us in continuing periodic panel discussions and next year’s forum on their impact and implications.”

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Over time, Chrysler LLC delivered a 2.6 to 1 return on investment for its wellness programs by engaging employees, revealing company resources to those with high risk factors and rewarding healthy behaviors with premium incentives. Notably, the programs are completely voluntary.

“I think [these results] are significant because these programs aren’t mandatory; people participate on their own,” said Kate Kohn-Parrott, the former director of integrated healthcare and disability at Chrysler LLC. Now President and CEO of the Greater Detroit Area Health Council, Kohn-Parrott shared wellness best practices the car company achieved during her tenure as part of a webinar series presented by Change Agent Work Group (CAWG) and facilitated by the International Foundation of Employee Benefit Plans.

“Millions of dollars are spent every year on unhealthy behaviors and about 70% of deaths are caused by unhealthy behaviors,” she told webinar participants. “You need to recognize as a company that your direct health care costs are just the tip of the iceberg,” adding that employers should also focus on improving quality of care for patients and on increasing employee productivity.

In late 2003, Kohn-Parrott and her team analyzed all possible contributors to rising health care costs. They discovered that while they couldn’t directly control certain factors, such as advancing evidence-based medicine, they could move the needle on a variety of employee and dependent lifestyle conditions.

“We were looking at what we can do within the four walls of the company, [and where] we could make the biggest and quickest impact,” she said.

When the company compared health risks for Chrysler employees to the American average, its employees had higher risks in all segments, driving considerably higher than average costs, based on Blue Cross Blue Shield data in Michigan.

Ultimately, the company decided to focus on four categories of risk most prevalent in their workforce: cardiovascular conditions, depression and stress, diabetes, and back pain.

Due to the physical nature of the automotive profession, many employees suffered from back pain, which contributed to more short-term disability claims and leave.

In response, the company’s most innovative wellness program, dubbed “We Got Your Back,” targeted lowering the costs and risks associated with back pain. The pilot program showed 100 employees with back pain somatic muscle relaxation techniques and other methods to physically and mentally reduce stress. At the conclusion of the pilot, 55% of participants were pain free, compared to only 5% of the 100 employees in a beta group that used traditional physical therapy. Eventually, the company introduced the program for people with any type of pain as well as employees with chronic stress.

The company also rewarded employees for their commitment to improving their health and behaviors. Workers enrolled in a health plan could receive $120 credit toward their premium contribution for completing a health risk assessment, another $120 if they attended health screenings and an additional $240 if they didn’t smoke.  In all, they had the opportunity to save $480 off their premium cost.

“We recognized that it’s important to view wellness as an investment and not a cost,” she said.

In general, Chrysler posted 40% to 50% employees participation in its voluntary wellness programs, and participation surged to above 90% for the programs that offered lowered premiums as incentives.

“I thought these [numbers] were very good because we were dealing with a population working in the plant,” Kohn-Parrott noted. “Basically, they had to participate in these programs before or after working hours, and sometimes during lunch. For the most part they were working on an assembly line and it’s very difficult for them to break away and participate.”

By 2008, when Kohn-Parrott retired from the organization, Chrysler had significantly improved employee engagement around wellness and could measure its success by health improvements as well as financial savings. The slogan for the wellness campaign, “Healthy People Drive our Future,” became a truism employees could see in action.

Face it: Your employees are distracted. According to IDC Research, 30% to 40% of employee Internet activity is non-work-related, and SexTracker reports that 70% of all Internet porn traffic occurs during the 9-to-5 workday. Such workplace Internet misuse costs U.S. companies $63 billion in lost productivity annually, according to Websense Inc.

Employers have taken proactive measures – including email monitoring, website blocking, phone tapping and GPS tracking – to improve employee productivity, minimize litigation and other risks, and promote safety.

The technology options for monitoring work activity are countless, conclude the American Management Association and The ePolicy Institute. The groups’ 2007 survey determined keylogging software to be the most common method, with 45% of employers tracking content, keystrokes and time spent at the keyboard. A similar number of companies (43%) store and review computer files, while only 12% follow the blogosphere to see what people are writing about the company, and a mere 10% monitor social networking sites.

Other, less common tactics include remote webcam viewing – an employer uses a worker’s webcam to snap images at certain intervals to prove they are working. Activity tracking requires individuals to log activities in real time or when prompted at certain intervals. A similar, though less time-consuming option to track teleworkers is pop-up confirmations that employees must click to acknowledge, thus making sure they are at their computers and working.

Though some privacy experts argue that many of these tactics are too invasive and do more harm than good, Alex Konanykhin, CEO of Internet technology firm KMGi, believes they are a necessity in dealing with the realities of a modern-day workforce.

“You cannot be everywhere at every time,” he notes, suggesting that multinational employers who hire remote workers or have offices across the globe can use monitoring technology to tighten a geographically widening community.

“For the remote workforce, [a tool like this is] a must-have,” Konanykhin says, adding that even for in-house employees, it’s a great tool for managers to help keep track of the projects everyone is working on.

KMGi created the Transparent Billing application to manage a primarily outsourced employee base in an international setting. The application is a project management tool that automatically takes screen shots of a user’s activity on the job, tracks billable hours and allows employers to monitor the progress of projects in real time.

The platform’s aesthetic feels like a fantasy basketball website, with detailed metrics for tracking an employee’s work that day, week or month. A manager can see screen shots of documents an employee has opened and worked on, as well as websites visited. They can even view the images in a slideshow to see how work has progressed. Managers also can locate details on a specific day or month to find out how much time and money was spent and how many users were active during that time.

“There are no surprises [for the employer] because they know exactly what type of bill they’re going to get at the end of the month, so they eliminate all inefficiencies,” Konanykhin explains.

Interactivity is seamless, with handy buttons for reaching the employee by Skype, email or instant message. And on the other end, the employee can turn the program off with a single click so they are not monitored during their off-hours or if they need to complete a personal task during the work day.

Balancing privacy and policy

“An employer doesn’t monitor [employee activity] because they are nosy,” says Wade Ballard, partner, Ford & Harrison LLC. “I see more companies adopting these policies and procedures” due to a struggling economy and a globally dispersed workforce.

Rather, an employer elects such a program or process for a variety of other reasons, such as increasing productivity.

“How do you really know [if a remote worker] is spending eight hours a day working unless you are looking at keystrokes, computer activity, screen shots or by monitoring emails?” asks Ballard.

He adds that many employers track computer and email use and Internet access to ensure employees aren’t setting the company up for harassment lawsuits, as well as to prevent leaks of sensitive or private company information.

“People say that it’s horrible employers are doing this, but employers have a lot of legitimate reasons for check up on [activity],” Ballard defends.

Litigation concerns also play a role, where many employers use electronic evidence to defend themselves in lawsuits and regulatory investigations. But should employers worry that workers could sue over the very tools they use to combat expensive legal costs?

“The key to protecting an employer from being sued and losing, and the key to preventing a policy from being challenged, is notification to the employee,” Ballard explains. “In the U.S., it boils down to whether the employee has a reasonable expectation of privacy. If they do not, the employer is permitted to monitor [the employee's] behavior. Even if they have an expectation of privacy, if the employer has a legitimate business reason and goes about its monitoring at an appropriate level, [monitoring may be allowed].”

While only two states, Delaware and Connecticut, require employers to notify employees of monitoring, 83% of employers inform workers that the company is monitoring content, keystrokes and time spent at the keyboard, according to AMA and ePolicy. Further, 84% let employees know the company reviews computer activity, and 71% alert employees to email monitoring.

“It’s important to have a detailed, very specific policy to the extent you’re dealing with remote workers because they aren’t in the workplace,” Ballard says. He adds that courts typically uphold an expectation of privacy much more in the home than in the office. “The more detailed notice you give your employees, the better off the employer will be if it’s challenged [legally].”

Ballard advises employers to include language similar to, “we reserve the right to monitor by such means including, but not limited to … ” in their policy, so they “communicate the details, but don’t box [themselves] into a corner,” he says. When monitoring European employees, Ballard recommends employers pay attention to the latest EU rulings as well as specific national laws and regulations in each country.

Is it worth it?

Not everyone is convinced monitoring technology is the answer to modern workplace problems. In fact, the occasional electronic distraction has been shown to increase workers’ engagement and productivity according to a 2011 study from the National University of Singapore.

“It’s far from clear that all this monitoring is improving the bottom line one little bit,” says Lewis Maltby, president of the National Workrights Institute. “Why do employers monitor anything and everything? Because they can. I’ve asked more employers than you count why they monitor, and the answer always is, ‘It couldn’t hurt.’”

Maltby admits that it is only natural to want to know everything, but it’s a lot harder to manage by objectives than spying. “It’s more effective to manage by objectives than back-seat driving, but it’s also more difficult. [Monitoring technologies are] an easy cop-out,” he adds.

He advises employers to detail what they expect their employee to accomplish and determine work issues based on success. “Not every job is that quantifiable, but most jobs that you work at a desk, you can find a measurable objective,” he says.

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It seems Facebook can do it all: revolutionize retirement, interviewingand now employee productivity.

In a recent company infographic/blog post, “The case for Facebook,” Keas cites survey data that show a group of employees who browsed the web or used social networks for 10 minutes were 16% more productive than employees who took a regular 10-minute break, and 39% more productive than the control group.

So, does this mean I don’t have to feel guilty anymore about taking time out at work to post photos of my kids, comment on friends’ status updates and download their recipe recommendations from Pinterest? I hope not. The anxiety was eating me alive.

Regardless of these findings — and my ability to use them to my advantage — I’m not sure it’s Facebook or social media per se that makes folks more productive. I think it’s more likely the opportunity to unplug, disconnect, think about something — anything — other than work, even if it’s only for those 10 minutes.

What do you think? Can checking out of work and checking in on Facebook/Twitter/social media platform of choice actually increase productivity? Which sites do you visit when you need to recharge? Share your thoughts in the comments.

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Not only is it painful for an employee to hear the news that their loved one has suffered a heart attack, but the unforeseen costs of health care will soon take a physical, emotional and financial toll if they are not prepared.

“With the lack of personal savings that exists in this country, if [employees] can’t turn to insurance, they may have no other financial alternative and end up losing their homes or declaring bankruptcy,” says Kevin McNamara, vice president of client services for Innotech Benefit Solutions, a unit of Willis Group Holdings, adding that benefits professionals and their broker-advisers “have to think about critical illness as a great voluntary benefit because it allows an employer to provide an option that acts as a safeguard for an employee’s financial welfare.”

Two types of products

McNamara explains that there are two different types of products currently in the marketplace to help a plan participant in need: lump-sum CI programs and indemnity-based products.

One of the main differences between the two is that indemnity has triggers based around treatments. For example, with a cancer policy a common payout would be for surgery, chemotherapy, etc., but after every procedure the plan participant would have to file a claim. CI covers the same conditions but instead of having payouts based on treatments, payments are based on the diagnosis of the condition.

McNamara and Jodi Anatole, vice president of health risk products for MetLife, recommend CI over indemnity because, in the case of cancer, “it gets the claim benefits to the insured sooner so they can make decisions on their treatment, knowing that he or she will have cash on hand to cover their out-of-pocket expenses,” McNamara says.

“Employers tend to think that medical and disability covers most of their needs, but the reality is there are gaps in those products and there’s a need to fill them in,” Anatole adds.

However, understanding of the benefit is growing among employers and employees alike, McNamara says. “It’s not a program that’s no longer not heard of, and even in the large employer space it’s being sought after as the deductibles with the medical plans get higher and higher. I think employers are taking a hard look at these plans as a way to create a safety net for those employees who aren’t comfortable with having to pay out a large deductible and other out-of-pocket medical costs.”

New innovations

CI programs have been rapidly evolving. As a result, Willis and MetLife are adding more conditions to the roster of conditions that are covered. At Willis these include: cancer, heart attack, stroke, benign brain tumor, permanent paralysis, Alzheimer’s and many more. At MetLife, cancer, heart attack, stroke, major organ transplant, coronary artery bypass and kidney failure generally are being covered.

According to both McNamara and Anatole, although there are more offerings with the CI programs, more than 80% of claims are for cancer, heart attack and stroke.

MetLife is introducing a wellness benefit that would provide plan participants with payment for certain types of wellness tests. X-rays and other tests will also be included in the product.

Anatole adds that the carrier is also moving forward with eliminating a waiting period since they notice employees need access to benefits quickly.

“It’s a good balance between what consumers need and how we want to structure our product,” she says.

McNamara says some of the best innovation has come from larger groups because, when the product is group underwritten, it is generally guaranteed issue with no health questions asked for these products, which can provide upwards of $20,000 or $30,000 of lump-sum benefits to an employee.

McNamara explains that spouses and children of a deceased policyholder are also offered a limited amount of guarantee issue, and that’s important for people that have a family history of these conditions because they’re more prone to experience a critical illness in their lifetime, as well.

Another innovation he shares is some of the ways carriers have weaved the administration compatibility with health savings account medical plans and consumer-driven health plans, knowing that some of those conditions were traditionally more treatment-based, such as a major organ transplant.

Exclusions, limitations and other FAQs

McNamara thinks plan participants should be wary of the guarantee issue, one of the major exclusions in CI policies.

The guaranteed issue product first started appearing five or six years ago, McNamara says, and it was a common limitation but, because of pressure within the employer market and from brokers and consultants, he’s seen carriers remove that as well.

“A good adviser can negotiate a pre-existing condition limitation to be removed through their underwriting discussions with the carriers,” McNamara adds.

Another limitation he shares is defining what constitutes cancer. He thinks there are many forms of cancer that may not pose a life-threatening situation; for example, skin cancer is typically excluded. When plan sponsors think of cancer benefits, it’s usually invasive, malignant and life-threatening cancers that come to mind, says McNamara.

With older cancer policies, a typical payout would be for chemotherapy, but there are many cancers now that don’t require chemotherapy as the first line of treatment because there are new drugs available.

If carriers want to continue to offer cancer benefits, they have to constantly evolve their benefits to adjust for the treatments that are associated with cancer. With that being said, he thinks this is why there’s something magical about lump-sum CI policies, because a diagnosis is a diagnosis.

Other questions McNamara fields include: “Is this compatible with my health savings account/consumer-driven health plan?” and “What are my obligations toward ERISA and COBRA with these types of plans?” McNamara says, depending on how the carrier files this plan, there are different answers to the questions.

More responsibility falls to employees

When it comes to loopholes in the offering, McNamara hasn’t seen employers make adjustments or reduce coverage because they’re offering CI. He feels with the rise in health care costs employers are faced with a decision and have to make changes to those plan designs where they put more responsibility back to the employee.

“I think [plan sponsors] see this product as something they can offer on a voluntary basis, as a good supplement to anything that an employee would perceive as a takeaway,” McNamara says. “With all insurance plans there are exclusions and limitations, but I think this is where a good broker or a consultant can really provide valuable insight and advice to an employer by comparing these provisions across different plans.”

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PARK CITY, Utah, April 9, 2012 /PRNewswire/ — Today, Zane Benefits, Inc., a leader in Defined Contribution Health Plans and Private Health Exchanges, announced its new website, designed to educate employers, accountants, and health insurance professionals about the new federal regulations allowing simplified employer health benefits.

As group health insurance costs continue to rise, employers are looking for ways to offer health benefits at a lower price. Zane Benefits’ online defined contribution health plan allows an employer to name its price. Rather than paying the costs to provide a specific group health plan (a “defined benefit”), employers instead fix their costs by establishing a monthly dollar amount (a “defined contribution”) that employees choose how to spend.

The new ZaneBenefits.com highlights the company’s online health benefits software that enables small businesses to implement and administer a defined contribution health plan in less than five minutes per month.

This week, the U.S. Supreme Court completed final arguments in United States Court of Appeals for the Eleventh Circuit Case 11-398 on the constitutionality of the Health Reform law scheduled to take effect in 2014. Regardless of which way the Court rules, it is clear that the new defined contribution method for small business health benefits will stand.

According to Rick Lindquist, President of Zane Benefits, “It’s time to reshape the way we think about employee health benefits. Today, more than 3 million small businesses do not offer health benefits to their employees due to cost, participation, or administrative requirements. And, that number is expected to increase by 2014 regardless of health care reform.”

According to the website, the two primary benefits of Zane’s online program include:

1. No Minimum Contributions Requirements – This allows a small business to define a contribution it can afford.

2. No Minimum Participation Requirements – This allows a small business to set its own eligibility and/or participation requirements.

Using the Zane program, employers make available a tax-free monthly allowance that employees use to purchase their own individual policy directly from a carrier or independent licensed health insurance agent. Or, if an employer is not able to provide an allowance for certain employees, such employees may use a portion of their pre-tax salary to purchase a policy. This increases the employee’s after-tax purchasing power by 20 to 40 percent and also reduces the company’s payroll liabilities.

“I’m particularly pleased we are announcing our new online education center on the same day that the entire nation is focused on health benefits,” said Professor Paul Zane Pilzer, the Founder of Zane Benefits and the author of the book The New Health Insurance Solution.

“Most people don’t realize that small employers with less than 50 employees are exempt from the employer mandates in the Health Care Reform bill,” Pilzer added. “Small employers today benefit from the increased availability of affordable individual policies regardless of what the U.S. Supreme Court eventually rules on the bill.”

About Zane Benefits, Inc.

Zane Benefits, Inc, a software company, helps insurance brokers, accountants, and employers take advantage of new defined contribution health benefits and private exchanges via its proprietary SaaS online health benefits software. Zane Benefits does not sell insurance. Using Zane’s platform, insurance professionals and accountants offer their clients a defined contribution health plan with multiple individual health insurance options via a private health exchange of their choice. Learn more at http://www.zanebenefits.com.

SOURCE Zane Benefits, Inc.

– Consumer-friendly interactive Life Game from Mindbloom helps make life improvement fun, simple and effective –

HARTFORD, Conn. & SEATTLE–(BUSINESS WIRE)–Collaborating to help individuals deeply engage in their personal wellness efforts, Aetna (NYSE: AET) and Mindbloom (www.mindbloom.com) announced today that they have made the premium Mindbloom Life Game available to all of Aetna’s members, as well as Aetna employees.

“After a decade designing an award-winning computer game like F.E.A.R., I found a more important purpose for my craft – engaging people in the quality of their lives in ways that are highly dynamic, extremely effective and very fun”

The Mindbloom Life Game blends the principles of behavioral science with social gaming to offer a fun, simple and effective way for Aetna to inspire people to live healthy, productive and balanced lives. The premium Mindbloom offering includes all the benefits of Mindbloom’s popular consumer Life Game, plus access to more music, an expanded gallery of images, and unlimited personal media storage.

“A significant amount of total health care costs stem from lifestyle choices such as lack of exercise, failing to eat properly and smoking,” said Dan Brostek, head of member and consumer engagement at Aetna. “Mindbloom cannot only help users manage specific physical conditions but can also help them monitor areas often correlated to health outcomes but considered ‘unmentionables’ in the current health care system such as stress related to jobs or caregiving, relationship conflicts, unhealthy sex life or financial issues.”

Aetna users also will have access to Mindbloom’s inspiration reminder mobile app called Bloom*, which launched in November and has already garnered more than 250,000 downloads in the iTunes Store. The Bloom* app can help users keep what’s important top-of-mind while on-the-go and remind users to make healthy choices, stay connected with others, manage stress, strengthen their spirit, save money, advance their career, and enhance their creativity.

Helping People Improve Their Lives

Marvina Hirni, 47, for instance, suffers from Fibromyalgia and recently turned to Mindbloom to help manage her chronic disease. Hirni experiences debilitating pain, and simple tasks often become challenging. She uses Mindbloom to create and record her daily progress, which she then shares with her doctor.

“Fibromyalgia sometimes prevents me from stepping outside or even making a phone call to a friend. But after using Mindbloom, I’ve learned to appreciate the smallest accomplishments in life, record them and find strength to deal with my symptoms,” said Hirni. “It sounds simple because it is but Mindbloom has been an incredibly powerful, yet enjoyable experience when having to manage this disease.”

Since its official debut in September 2011, Mindbloom’s Life Game for consumers has organically grown to more than 50,000 registered users who have successfully followed through on more than 1.5 million commitments to improve their quality of life. Utilizing gamification techniques, Mindbloom has been able to successfully inspire its users to define what’s important, discover what motivates them, and take meaningful daily actions in all areas of their life. Members visit the site an average of nearly 4 times per week with an average engagement time of 14:41 minutes per visit, where they grow and maintain a virtual “life tree” and a forest of their family and friends, earn virtual rewards and most importantly make progress in their real lives. To date, Mindbloom Life Game users have followed through on more than 60 percent of their commitments to unlock rewards, new levels and content.

“After a decade designing an award-winning computer game like F.E.A.R., I found a more important purpose for my craft – engaging people in the quality of their lives in ways that are highly dynamic, extremely effective and very fun,” said Chris Hewett, co-founder and executive producer of Mindbloom. “Our collaboration with Aetna takes our social game to a new level, and brings more people new ways to prevent or manage disease and improve overall wellness.”

For an overview of how the Mindbloom Life Game works, visit http://www.youtube.com/watch?v=ezZxHCYezqM or check out the Bloom app at http://vimeo.com/31439840.

About Mindbloom

Mindbloom is a Seattle-based interactive media company that’s out to make life improvement accessible to everyone. By harnessing next-generation engagement techniques and focusing users on personal growth, Mindbloom has created a fun, simple, and effective way for people to improve the quality of their lives. To start living a healthier and more balanced life, visit: www.mindbloom.com. You can also find Mindbloom on Facebook at www.facebook.com/mindbloom or on Twitter at @mindbloom.

About Aetna

Aetna is one of the nation’s leading diversified health care benefits companies, serving approximately 36.4 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, medical management capabilities, health care management services for Medicaid plans and health information exchange technology services. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups and expatriates. For more information, see www.aetna.com.

Mindbloom and Life Game are trademarks of Mindbloom, Inc. Apple, the Apple logo and iTunes Store are trademarks of Apple Inc., registered in the U.S. and other countries. Other products and company names mentioned are the trademarks of their respective owners.

Contacts

Aetna

Media Contact:

Ethan Slavin, 860-273-6095

slavine@aetna.com

or

Mindbloom

Media Contact:

Michele Mehl, 425-205-9444

Michele@buzzbuilders.net

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Self-insured employers can save up to 20 percent1 on their annual pharmacy spend

LOUISVILLE, Ky.–(BUSINESS WIRE)–Humana Inc. (NYSE: HUM) announced today that its pharmacy benefits management subsidiary Humana Pharmacy Solutions, Inc. (HPS), is offering employers a new Rx4Value formulary and Walmart Rx Network that together guarantee up to 20 percent savings on employers’ average prescription price1.

“At Walmart, we’re committed to providing low-cost prescriptions and ensuring that people have affordable access to the medications they need to help them live healthier lives”

The new options extend HPS’s signature Average Script Price Guarantee, which guarantees the average prescription cost a self-insured employer will pay across all of its annual in-network prescriptions. Both new pharmacy benefits options are available now to self-insured employers. The Walmart Rx Network option is expected to be available to fully-insured employers later this year.

“In the midst of today’s rapidly changing PBM landscape, we’re proud to offer a simple, cost-effective solution that helps employers better predict costs and save money,” said William Fleming, PharmD, president of Humana Pharmacy Solutions. “Pharmacy is the most used health benefit, and providing new, unique pharmacy benefits services that best meet employers’ and members’ needs directly supports Humana’s mission of helping people achieve life-long health and well-being.”

The new Walmart Rx Network will allow employers to select a Walmart-focused network for their employees to fill their prescriptions. The network offers self-insured employers an average of 10 percent savings on their annual average prescription price1. The new Rx4Value formulary provides comprehensive therapeutic coverage while saving self-insured employers an average of 15 percent on their members’ annual average prescription price1. Both options are available individually and can be combined for compounded savings.

In total, self-insured employers who select both the network and formulary options will be able to save up to 20 percent on their annual average prescription price1, meaning that a self-insured employer with 1,000 employees could achieve savings of as much as $400,000 per year.2

“At Walmart, we’re committed to providing low-cost prescriptions and ensuring that people have affordable access to the medications they need to help them live healthier lives,” said Dr. John Agwunobi, president of Walmart U.S. health and wellness. “We are proud to team with Humana on this innovative benefit.”

Humana Pharmacy Solutions Guaranteed Cost Savings: Benefits and Details

Walmart Rx Network. Walmart’s commitment to health, an outstanding customer experience and lower costs, combined with Humana’s expertise in managing health costs through innovative health benefit designs, result in a unique partnership that offers employers significant cost savings and predictability. The network includes the more than 4,400 pharmacies under the Walmart, Neighborhood Market, Sam’s Club, Walmart Express and Walmart on Campus banners, as well as Humana’s RightSource mail order pharmacy. The network is available today for self-insured employers, and is expected to be available to fully-insured employers later this year.

Cost-effective Rx4Value formulary. The new Rx4Value formulary replaces certain brand-name drugs with generic alternatives that are equally effective and provide greater cost-savings. The formulary is available today for self-insured employers.

Average Script Price Guarantee. Through its Average Script Price Guarantee, HPS guarantees upfront the average cost a client will pay across its prescriptions throughout the year. This guaranteed predictability diminishes risk and uncertainty that employers have traditionally had to bear when working with PBMs – allowing them to more effectively manage their budget.

“These three initiatives represent a unique, first-of-its-kind model that maximizes the value of pharmacy benefits for employers, including guaranteed savings of up to 20 percent on their pharmacy costs,” said Fleming.

For more information about Humana’s new pharmacy offerings, visit www.humana.com/pbm or call 1-855-605-6383.

About Humana

Humana Inc., headquartered in Louisville, Kentucky, is a leading health care company that offers a wide range of insurance products and health and wellness services that incorporate an integrated approach to lifelong well-being. By leveraging the strengths of its core businesses, Humana believes it can better explore opportunities for existing and emerging adjacencies in health care that can further enhance wellness opportunities for the millions of people across the nation with whom the company has relationships.

More information regarding Humana is available to investors via the Investor Relations page of the company’s web site at www.humana.com, including copies of:

Annual reports to stockholders

Securities and Exchange Commission filings

Most recent investor conference presentations

Quarterly earnings news releases

Replays of most recent earnings release conference calls

Calendar of events (including upcoming earnings conference call dates and times, as well as planned interaction with research analysts and institutional investors)

Corporate Governance information

About Humana Pharmacy Solutions (HPS)

Humana Pharmacy Solutions, a division of Humana Inc., manages traditional pharmacy benefits with member-focused strategies to yield savings in pharmacy and total health expense. Providing prescription coverage for both individuals and employer groups, Humana Pharmacy Solutions strives to give members access to the medicine they need while offering guidance on clinically proven, therapeutically equivalent drugs that bring better value to the member and the customer.

1 Savings indicates average price per prescription, excluding specialty and compounded prescriptions, at Walmart Rx Network pharmacies, when compared to Humana’s standard broad pharmacy network with a three or four tiered formulary.

2 Actual savings will vary by employer.

Contacts

Humana Corporate Communications

Jeff Blunt, 513-826-7094

jblunt@humana.com

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Mental Health and Substance Abuse Services Make up only 2.2% of Employer Health Spending

WASHINGTON, April 12, 2012 /PRNewswire/ — The Mental Health Parity and Addiction Equity Act (MHPAEA) is unlikely to have a large effect on the growth rate of employer healthcare expenditures, according to two new studies conducted by researchers from the Healthcare business of Thomson Reuters working in conjunction with the Substance Abuse and Mental Health Services Administration.

(Logo: http://photos.prnewswire.com/prnh/20090507/NY12658LOGO)

The first study, “Spending Trends on Substance Abuse Treatment Under Private Employer-Sponsored Insurance 2001–2009,” was published in the journal Drug and Alcohol Dependence. It examines patterns in substance abuse treatment spending and utilization between 2001 and 2009 to provide a baseline for assessing the effects of recent health policy changes.

The second study, “Mental Health Spending by Private Insurance: Implications for the Mental Health Parity and Addiction Equity Act,” was published in the April 2012 issue of Psychiatric Services.  It estimates the potential cost implications for employers under the MHPAEA, which mandates that group health plans that include both general and mental health/substance abuse benefits must cover the same level of benefits for both.

Together, the studies cite a small amount of total spending and low intensity of utilization of inpatient and outpatient services as primary reasons why the new law will not have a substantial cost impact on employers. The research shows that substance abuse spending has held steady as a low portion of all costs, comprising just 0.4% of all health spending in 2009.

Additionally, mental health and substance abuse spending accounted for only 5.2% of all health expenditures from 2001 through 2009 (2.2% if psychiatric drug spending is excluded). That spending contributed just 0.3% to the growth in total health expenditures with prescription drugs included, and 0.1% when prescriptions are not included.

“Employers need not be alarmed by the new coverage mandates of the MHPAEA,” said Tami L. Mark, Ph.D., the paper’s lead author and Senior Director, Thomson Reuters. “It seems clear, given the relatively low spending on, and low intensity of use of, mental health and substance abuse services, that the additional cost incurred by employers because of the mandate is likely to be negligible.”

Data were compiled for the report from the Thomson Reuters MarketScan® Commercial Claims and Encounters Database, which provided private insurance claims records from approximately 30 million covered individuals annually.

For more information, or to access a copy of the “Spending Trends on Substance Abuse Treatment Under Private Employer-Sponsored Insurance 2001–2009,” paper, click here. To access a copy of “Mental Health Spending by Private Insurance: Implications for the Mental Health Parity and Addiction Equity Act,” click here.

About Thomson Reuters

Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world’s most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 55,000 people and operates in over 100 countries. For more information, go to www.thomsonreuters.com.

SOURCE Thomson Reuters

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Department of Health and Human Services (HHS) Secretary Kathleen Sebelius today announced a proposed rule that would establish a unique health plan identifier under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The proposed rule would implement several administrative simplification provisions of the Affordable Care Act.

The proposed changes would save health care providers and health plans up to $4.6 billion over the next ten years, according to estimates released by the HHS today. The estimates were included in a proposed rule that cuts red tape and simplifies administrative processes for doctors, hospitals and health insurance plans.

“The new health care law is cutting red tape, making our health care system more efficient and saving money,” Secretary Sebelius said. “These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients.”

Currently, when health plans and entities like third party administrators bill providers, they are identified using a wide range of different identifiers that do not have a standard length or format. As a result, health care providers run into a number of time-consuming problems, such as misrouting of transactions, rejection of transactions due to insurance identification errors, and difficulty determining patient eligibility.

The rule simplifies the administrative process for providers by proposing that health plans have a unique identifier of a standard length and format to facilitate routine use in computer systems. This will allow provider offices to automate and simplify their processes, particularly when processing bills and other transactions.

The proposed rule also delays required compliance by one year– from Oct. 1, 2013, to Oct. 1, 2014– for new codes used to classify diseases and health problems. These codes, known as the International Classification of Diseases, 10th Edition diagnosis and procedure codes, or ICD-10, will include new procedures and diagnoses and improve the quality of information available for quality improvement and payment purposes.

Many provider groups have expressed serious concerns about their ability to meet the Oct. 1, 2013, compliance date. The proposed change in the compliance date for ICD-10 would give providers and other covered entities more time to prepare and fully test their systems to ensure a smooth and coordinated transition to these new code sets.

The proposed rule announced today is the third in a series of administrative simplification rules in the new health care law. HHS released the first in July of 2011 and the second in January of 2012, and plans to announce more in the coming months.

More information on the proposed rule is available on fact sheets at http://www.cms.gov/apps/media/fact_sheets.asp.

The proposed rule may be viewed at www.ofr.gov/inspection.aspx. Comments are due 30 days after publication in the Federal Register.

Contact: HHS Press Office

(202) 690-6343

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* White House criticizes former Bush official’s report

* Obama administration says law will better control costs

By John Crawley

WASHINGTON, April 10 (Reuters) – Instead of curbing government spending, President Barack Obama’s healthcare law could add up to $530 billion to the federal debt over ten years, a Republican expert on U.S. government benefit programs said on Tuesday.

A study by Charles Blahous, a George Mason University research fellow and the Republican trustee for the Medicare and Social Security entitlement programs for the elderly, challenged the administration’s contention that the 2010 law would reduce healthcare costs.

But the Obama administration defended the law as a cost-saver and sharply criticized the report by Blahous, an economic policy adviser under former President George W. Bush.

Known as the “Affordable Care Act,” or by conservatives as “Obamacare,” the measure to expand health insurance for millions of Americans is considered Obama’s signature domestic policy achievement.

The Supreme Court is weighing whether Congress overstepped its authority to regulate commerce in approving the law. The justices heard arguments in the high-stakes case two weeks ago.

Republican presidential candidates have promised to repeal the law if one of them wins the White House in the November election. Conservatives denounce the sweeping overhaul as an unwarranted government intrusion.

Obama and the Democrats believe the law will control skyrocketing costs and curtail government “red ink.”

White House health adviser Jeanne Lambrew said Blahous’ analysis wrongly charges that some savings are “double counted.” She said government estimates from the Office of Management and Budget and from the non-partisan Congressional Budget Office show the 2010 law would lower federal deficits over a 10 year period.

“This new math fits the old pattern of mischaracterizations about the Affordable Care Act when official estimates show the health care law reduces the deficit,” Lambrew, deputy assistant to the president for health policy, wrote in a blog post on the White House website.

But Blahous, who also served as the deputy director of the National Economic Council under Bush, said in his research that the law is expected to boost net federal spending by more than $1.15 trillion and add between $340 billion and $530 billion to deficits between 2012-21.

“Relative to previous law, the (healthcare law) both exacerbates projected federal deficits and increases an already unsustainable federal commitment to health care spending,” he concluded.

The analysis, first reported by the Washington Post late on Monday, also comes a month after the Congressional Budget Office cut the estimated net cost of the healthcare law by $48 billion to $1.08 trillion through 2021.

© Thomson Reuters 2009 All rights reserved

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Hartford to sell or merge individual life, Woodbury Financial Services – Articles – Employee Benefit Adviser.

The Hartford announced Wednesday that it will stop its individual annuity business and is pursuing “sales or other strategic alternatives” for its individual life, Woodbury Financial Services and retirement plans.

The insurer says the move is a result of management and Board of Directors evaluation of the company’s strategy and business portfolio conducted over the past several quarters. New annuity sales will stop April 27.

Spokeswoman Shannon Lapierre said that while the company pursues its option, it will continue to actively sell individual life plans and has no plans to change its group benefits.

Woodbury Financial Services is The Hartford’s large independent broker-dealer and its potential sale has created tremendous uncertainty for advisers. The Hartford, under fire from its largest shareholder, hedge fund manager John Paulson, did not identify potential buyers, say when a sale might be final, or explain how the transition will be handled, says Larry Papike, founder of Cross-Search, a Jamul, Calif.-based recruiting firm specializing in financial advisers.

The uncertainty creates unnecessary distractions for advisers at a time when clients are beginning to have more confidence in the markets and investing and need their advisers’ attention, he says.

“This is unbelievably disruptive to the advisers at Woodbury,” Papike says. “Advisers are bound to ask: ‘Who will be the buyer? Will we have to change clearing firms?’ It immediately puts the advisers’ practices upside down because they don’t know what’s next.”

Top execs in HR/business speak out on hard-to-find balance with new technology – Articles – Employee Benefit News.

CAMBRIDGE, Massachusetts | Mon., Mar. 19, 2012 9:29pm EDT (Reuters) – Media executive Oscar Gomez Barbero gave a bleak assessment of his work-life balance.

“I feel compelled to be constantly in touch with my work, including weekends and holidays, but you learn to live with this situation,” said Barbero, the chief technology officer at Spanish and Portuguese-language media group Prisa. “When you are part of the most important decision-making bodies of a company, there are no limits on dedication. I have little time for family or social activities.”

In recent years, many companies on Wall Street and beyond have embraced the mantra of flexible hours and work-life balance. Read any image-building column written by a top executive, and he or she is likely to stress the importance of getting to a child’s soccer game or concert.

The idea of flexibility and fewer total hours on the job has clear popular appeal. The 2007 book “The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich,” for example, became a huge best seller. But tales of short hours and relaxed work environments do not mesh with reality for many senior managers. The problem is that modern communications may allow less time in the office, but compel them to work around the clock, according to 10 executives in six countries interviewed as part of a larger Harvard Business School survey.

Some grimly predict that those seeking to get to or stay in the C-suite will have to be plugged in almost constantly.

“There is no getting away, not at all, no, not when you are in a higher position,” said Susanne Meinl, director of human resources at marketing firm Design Hotels AG in Germany. “A call center agent, they just leave the office and go home and not bother about anything, but if you have a position with a lot of responsibility … 24/7 availability is a given, has always been and will always be.”

A CEO of another biotech company says he works 11 or 12 hours a day and is always on call. “Sometimes I stop and think whether or not I can continue with what I am doing with the level of stress that I have and then what always surprises me is that I am able to accommodate it and go to the next level of more stress,” he said.

He now regrets that he was not around much when his two teenage children were smaller, so he wants to do better with his 6-year-old. “All of a sudden I have turned around and my kids are no longer living at home, they are in college and then I have a little one at home,” he said.

Why then does he devote so much time and effort to his job?

“It’s not an objective; it is not something I want to do,” he said. “I think that people today expect that you are available and going to be available at all times, and if you don’t return an email within an hour, or even minutes, then people think that you are not paying attention to them. I feel like if I take a vacation, it is not going to be a vacation because I am going to be working all the time.”

The balance shifts even more toward the company and away from “my time” as a manager gets higher up the ladder, the executives say. If anything, most interviewed expected demands on their time to increase in the years to come.

“Technology has created an expectation that you are connected,” said Meinl, who enjoys yoga in her free time. “With the economy, there is definitely more expectation for employees to deliver now … Work-life balance will become harder.”

The California biotech executive added he believes that “the problem is just going to get worse … I can see a scenario where you have people who have every five minutes of their lives planned out, technology on the fly and data coming to them left and right. I can see where most people would look at that and say, ‘Oh my God, that’s awful.’”

(Adam Tanner is a Reuters correspondent on a 2011-12 Nieman fellowship at Harvard.)

(Editing by Martin Howell and Lisa Von Ahn)

© 2011 Thomson Reuters. Click for Restrictions.