TASNEWS March April 2014 volume 14 number 1

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1 TASNEWS March April 2014 volume 14 number 1 A Publication of Transamerica Affinity Services Transamerica Affinity Services is a business unit of the Transamerica Carriers PBM s What s Trending? Pharmacy Benefit Managers Pharmacy Benefit Managers (PBMs) act as the middle man between health plans, hospitals, employers and other entities in the health care system. Similarly to the industries they serve, PBMs are facing significant changes such as the shifts in drug-mix, health care reform, technology, and transparency pressures. Aside from the ongoing mergers and acquisitions, there are additional issues shaping the PBM market, say experts. These trends include: Generics and Specialty Drugs Major brand name drugs will lose their patents in the next three years (e.g. Nexium expires May 2014, Lantis in February 2015 and Advair in September 2016). Multiple generic launches are anticipated. The expansion of specialty drugs is also expected to continue. Both generics and specialty drugs have higher margins for PBMs than brand drugs. Read our PBM partner MedImpact's white paper on Specialty Drugs (medimpact.com/specialtymanagement). Preferred Pharmacy Networks This trend is evident in the Medicare Part D program with the vast majority of the plans having preferred networks. Removal of Protected Status The Centers for Medicare & Medicaid Services (CMS) currently defines six classes of drugs as having protected status, meaning Medicare Part D plans are required to cover all or substantially all medications in a given class. CMS has proposed a rule that calls for antidepressants, antipsychotics, Continued on page 4 Health Care Reform (HCF) What s Coming? The following updated information highlights areas of health reform affecting many of our brokers and their clients in : In This Issue PBM's What's Trending? p. 1, 2 Health Care Reform (HCF) p. 1, 3, 4 Travel Growth p. 2 Update On Brand Initiatives p. 4 Employee Spotlight p. 5 Congratulation, Zach! p. 6 Individual Mandate Everyone must have health coverage or pay a penalty (or tax). In 2014, the individual penalty amount is $95 or 1% of your income, whichever is greater. In 2015, the penalty for each individual without coverage will be $325 or 2% of income, whichever is greater Continued on page 4 1

2 Travel Growth Tourism Industry on the Rise Again In the first nine months of 2013, international tourism grew by 5% to reach a record 845 million worldwide, according to the latest World Tourism Organization Barometer, December 12, More people are traveling now than ever before. As the number of tourists continues to increase, so does the need for travel insurance. The travel insurance product offered by Transamerica is versatile enough to suit a variety of business partner models. Even more important than the product itself is the level of service provided to partners and consumers. The travel product offered by Transamerica is customizable to fit the needs of business partners and end consumers. The business partner chooses the structure of the product or products they want to offer, and there are a number of variables from which to choose. At the core of the product is protection against trip cancellation, interruption, or delay. The remaining benefits are optional and are sold in conjunction with one of the core benefits. There are two medical-related benefit options - accident and medical expenses and emergency medical evacuation. Additionally, there and immunosuppressants to be removed from protected status. This will have a negative impact on brand drug manufacturers and positive impact to PBMs. Health Reform, Consumer-Directed Health Plans (CDHPs) such as Health Savings Accounts (HSAs) and Private Health Exchanges As employers look to implement health care reform and are moving from defined benefit plans to defined contribution models, PBMs play a significant role in the administration of either self-insured or fullyinsured plans. Additional individuals becoming insured through Medicaid and the health care exchanges are expected to increase volumes and prescription utilization. Electronic Prescriptions and Mobile Technology PBMs are using technology and integrating information between the pharmacist, provider, retail and mail order settings. This is particularly are two baggage-related options - baggage loss and baggage delay - and an option for accidental death and dismemberment. Our travel product is sold in conjunction with Travel Assistance Programs. This means that the end customers receive all the support they need during their trip from a designated assistance provider. This feature ensures that the customer receives the level of service needed. The travel product provides great value to the end customer. If a trip is canceled for a covered reason, the benefit reimburses up to 100% of the trip cost. In some plans, children are covered at no cost under an adult plan, and rates are based on price and duration of stay, not destination. If you are interested in learning more, we encourage you to talk to a Business Development representative. Continued from PBM's What's Trending the case with consumers with chronic conditions. Information technology and advanced analytics are being used to provide decision-support tools, such as alerts, to facilitate patient compliance and more. Transparency There is increasing demand for transparency into and prices for both retail and mail order pharmacy services. Greater transparency will likely include disclosure of rebates from pharmaceutical companies. Source: MedImpact Healthcare Systems, Inc. MedImpact is the PBM for Transamerica s prescription drug solutions, Transamerica MedicareRx (PDP) and Medicare GenerationRx (Employer PDP) serving Employer Group Waiver Plans (EGWP). MedImpact is in its ninth consecutive year of supporting Part D clients. If you have a question or if there is a topic you'd like to know more about, please talk to a Business Development representative. 2

3 Continued from Health Care Reform (HCF) Employer Mandate Employers with more than 50 employees were to provide health coverage or pay a penalty in While the rule is still technically in place, the administration announced earlier this year that it would not penalize firms that did not comply in 2014, essentially delaying the mandate until the start of Auto Enrollment Employers that offer coverage and have more than 200 fulltime employees must auto-enroll employees (employees can opt out). Pre-Existing Conditions Individuals are guaranteed coverage for pre-existing conditions. Rating Restrictions There are a number of new changes to the way health insurance is regulated, including the limitation of how much premiums can differ. These regulations include restrictions on age rating, and no longer allow premiums to differ based on health status or gender. The law allows for differences of premiums based only on four criteria: age, location, family size, and smoking. Minimum Benefit Requirements The federal government minimum benefit requirements for all health insurance plans was effective January 2014, including essential health benefits, actuarial value and new benefit mandates (these include first-dollar coverage for preventive care, no annual limits on coverage and no lifetime limits on coverage). State Health Insurance Exchanges Operating Public exchanges must include four standard levels of coverage. Employer Penalties (For those with 50+ full-time employees) Do you offer coverage YES Does the plan provide "minimum value"? (60% + of total allowed ) YES Is the coverage affordable? (<=9.5% of Income) YES No penalty Type of Insurance Plans NO NO NO $2,000 per FTE (minus first 30) Only applies if one full-time employee receives federal premium assistance for exchange coverage. Lesser of $3,000 per FTE receiving tax credit or $2,000 per FTE (minus first 30) The maximum any individual will pay out-of-pocket in one year is about $6,000. The maximum a family of 4 will out-of-pocket in one year is about $11,000. Your out-of-pocket maximum depends on how much money you make. Platinum Gold Silver Bronze Catastrophic 90% of paid by High premiums 80% of paid by Moderate premiums 70% of paid by Moderate premiums 60% of paid by Low premiums Available to age 30+; exempt from mandate to purchase Minimal out-ofpocket Low out-of-pocket Medium out-ofpocket High out-of-pocket Continued on page 4 3

4 Continued from Health Care Reform (HCF) Taxes Risk Adjustment Program a fee used to develop a risk adjustment methodology that will compensate certain plans with membership that is less healthy than average. This fee is assessed on all individual and small group policies in Sector Tax (Health Insurance Tax, or HI Tax ) This annual fee will be assessed on all fully-insured health plans based on premium. Transitional Reinsurance Program Fees collected from all commercial plans (fully and self-funded) sold both on and off of the public exchange and in both group and individual markets. This is a temporary program and is assessed on all plans beginning January 2014 through Health Care Electronic Funds Transfers and Remittance Advice Transactions Health plans and health care providers must comply with operating rules by January 1, 2014 (this rule also applies to Medicare plans and Medicare Supplement). W-2 Reporting Companies with fewer than 250 employees must report on 2013 W-2s (issued January 2014) the value of health benefits provided to each employee including medical, dental and vision coverage. Source: America's Health Insurance Plans, If you are interested in learning more, we encourage you to talk to a Business Development representative. Update on Brand Initiatives Supporting our strategy to strengthen and unify the companies under our Transamerica brand, which is our best known and strongest brand, we made the decision to change the name of Monumental Life Insurance Company to Transamerica Premier Life Insurance Company and change the name of Stonebridge Casualty Insurance Company to Transamerica Casualty Insurance Company. We are expecting these changes to be effective on July 31, However, system changes and sales under our new name could be delayed as they are dependent upon state insurance department approvals. We will communicate details on timing as these projects progress. In anticipation of these changes, we are working on our transition plans and would like to fully understand the impacts on your business. We are asking our Business Partners and TPAs to develop plans targeting implementation of the name changes no later than December 31, As transition plans continue to develop, our Relationship/Account Managers and other key contacts will reach out to your organization to discuss. We appreciate your support throughout this effort. 4

5 Employee Spotlight Jessica Schuleri Jessica was born in Cleveland Ohio, but lived most of her life in the Pittsburgh area. She moved to Maryland after graduating from University of Pittsburgh with a Bachelor of Science degree in 2000 and has lived in the downtown Baltimore area ever since. Jessica is new to the company working as a Business Development Manager for the last year on the Transamerica Affinity Services team. Prior to her current position, she worked for 11 years at Enterprise Fleet Management as a consultant for small to medium sized companies headquartered in the Maryland area. What You Do (what are your current responsibilities)? My current role is to manage and grow our business though new and existing partnerships with brokers, consultants and third party administrators. Goals for Your Position: My primary goal is to promote and grow our core programs with customized solutions for our clients; however, I also participate in the creation, testing and development of new and innovative products to serve our clients better in the future. Industry Outlook: The insurance industry is an ever changing world, but even more so in recent years. Transamerica is dedicated to staying ahead of the curve and providing beneficial products and superior customer service while ensuring that we comply with the latest insurance laws and regulations. Advice: Think outside the box and don t be afraid of change. Innovation and customized solutions lead to growth and sustainability. Outside the Industry, a Dream Job: I would love to own my own restaurant that features local bands, a lakeside view and excellent food. Jessica Schuleri Business Development Manager Transamerica Affinity Services Phone: jessica.schuleri@ transamerica.com Most Passionate About: Making a difference whether it is growing and developing client relationships to positively impact their business or putting together a fundraiser from scratch to help our local community. I love to utilize the resources and skill set that I have to make a positive impact on those around me. On a Saturday Afternoon: Playing football in the rec leagues in Baltimore the more teams I can join, the merrier! Favorite TV Show: Castle. Favorite Movie: The Princess Bride. Currently Reading/Listening to: Any CIA/FBI novel including action, suspense and espionage. My Favorite Place to be: Lake Como, Italy. Most Adventurous Thing I ve Done is: Flew to Barcelona last minute just for the weekend.. Why Someone Would Want to Contact You I m new, full of energy and ready to help! I have a lot of amazing people and resources around me, and I know that we can work together to come up with an excellent solution for your supplemental health needs. 5

6 Calendar of Events April 18 Closed for Good Friday May 26 Closed for Memorial Day Upcoming Events Benefits Selling Expo April 1-3, 2014 The Broadmoor Colorado Springs, CO Booth 520 AIPAGIA Mid-Winter Conference April 3-6, 2014 The Meritage Resort & Spa, Napa Valley, CA SALGBA National Conference & Exhibition April 6-9, 2014 The Peabody Memphis, TN Booth 214 SHRM Annual Conference June 22-25, 2014 Orange County Convention Center Orlando, FL Booth 644 Transamerica Affinity Services Offices: Sales and Marketing 100 Light Street, Floor B1 MS 3239, Baltimore, MD Phone: (800) Transamerica Affinity Services, Inc. All rights reserved. Reproduction in any form, in part or in whole, is prohibited without written permission. This newsletter is for information only and is not intended as an offer or contract. Comments on this newsletter: c/o Marcia Moore, 100 Light Street, Floor B1, MS 3239, Baltimore, MD Congratulating, Zach! Tomorrow Maker and Champion of Champions Team Transamerica s Zach Johnson s championship-caliber skills were on full display during his victory at the 2014 PGA TOUR Hyundai Tournament of Champions. Zach demonstrated the consistency and perseverance of a true champion throughout the entire event. He was at or near the top of the leaderboard from start to finish, and once again Zach showed his ability to come from behind when the pressure was on, rallying from two strokes down on the tournament s last day. With his commitment to planning for the future and working with a trustworthy team, Zach is an excellent ambassador for Transamerica. In his short Climb to the Summit video, Zach makes a point to work with his team at the end of each season in order to plan ahead and work on areas to improve his game. As Zach says, he s the one out there on the course who has to make the shots, but he couldn t do it without working together with his team. The win on the Plantation Course at Kapalua marks Zach s 11th career victory on the PGA TOUR. It also extends an impressive run that has seen Zach finish in the top ten in nine out of his last 15 official PGA TOUR events. His latest victory also comes on the heels of Zach s thrilling come-from-behind win in December at the Northwestern Mutual World Cup, in what was one of the most exciting finishes you ll ever see on the golf course. In a fan decision, Zach Johnson was voted the January PGA TOUR Player of the Month awarded by PGA TOUR and Avis Car Rental. As the official rental car company of the PGA TOUR and as sponsor of the PGA TOUR Player of the Month program, Avis will make a $50,000 contribution to the Zach Johnson Foundation, a non-profit organization dedicated to helping Cedar Rapids, Ia., children and their families lead happy, healthy lives A.M. Best Standard & Poor s Monumental Life Insurance Company A+ AA- Stonebridge Life Insurance Company A+ AA- Transamerica Financial Life Insurance Company A+ AA- Transamerica Life Insurance Company A+ AA- 6