Daily Insurance Report  
Walt Bernard Podgurski,  Editor,  440-773-1108, 

Don't miss the insurance industry daily updates: Subscribe Here for Complimentary Subscription

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.
  Friday, 02/16/18

Walmart steps up and into the health care fray
When United flight 3715 touched down in Houston on Dec. 26, Gordon Warlick didn't much care that he was part of some grand experiment to turn the American health care delivery and payment system on its ear.
The 63-year-old Walmart truck driver from Oklahoma just wanted his neck fixed.
Houston First chief ousted after announcing retirement plans Rockets might be at the no-stopping point 'I have seen enough death': Sugar Land father fights execution... Blowing the whistle on the Texas Constitution Base of talent provides lift to Houston's renewable energy sector After years on the streets, a Houston couple says 'I Do' all... HISD needs an audit, not a revolution and deep budget cuts
He balked at the sight of a chauffeur waiting at baggage claim, holding up a sign with his name on it like they do in the movies. But by the time he and his wife, Connie, were settling into the back of the Lincoln Town Car taking them to their Marriott suite, he was thinking he could get used to this.
In two days he would get the operation he needed at Memorial Hermann-Texas Medical Center. One of the best neurosurgeons in the nation would be scrubbing in to remove the bone spurs pressing against his spine.
His bosses at Walmart had stepped in just when the health-care system seemed to be failing him.
The corporate retail giant, known for its price slashing and tough bottom line, has cast itself against type by sending employees with specific, serious health conditions to the nation's most elite medical institutions for what it calls the best of the best care.
Walmart then foots the entire bill, skirting traditional insurance reimbursement models by paying one flat fee for everything. It even throws in limo service. The employee pays nothing.
The company says its Centers for Excellence program is open to any worker who averages 30 hours a week and is enrolled in a Walmart health benefits plan. About 1.5 million people work for Walmart in the U.S., making it the nation's largest private employer.

Life / Health / Employee Benefits

Budget Law Eases 401(k) Hardship Withdrawals
Measure provides flexibility for employees facing emergencies and financial challenges
By Stephen Miller, CEBS / SHRM
Hardship withdrawals from employer-sponsored 401(k) and 403(b) retirement plans will be easier to make under new provisions in the budget law passed Feb. 9. The legislation also takes steps toward ensuring the ongoing solvency of multiemployer defined benefit pension plans.
Under current rules for 401(k) and similar defined contribution plans, hardship distributions are limited to the elective deferral amount contributed by plan participants, and employees are prohibited from making new contributions for six months after making a hardship withdrawal.
Those constraints won't apply much longer, however. The Bipartisan Budget Act will allow employees not only to withdraw their own money but also to take the earnings on the money and company contributions as part of a hardship withdrawal.
Significantly, "employees who take hardship withdrawals would not be required to suspend their contributions to the plan, thereby allowing them to continue to get the company match and not have to remember to rejoin the plan when the suspension ends," said Robyn Credico, practice leader of defined contribution consulting at Willis Towers Watson, an HR advisory firm.

Four Perks of Voluntary Benefits
You’re working hard to provide your employees with best-in-class benefits while maintaining costs. This often comes with difficult decisions and a search for alternatives. To top it off you want to boost employee morale and attract top talent.
Many Human Resources professionals are looking for ways to compensate for rising medical costs, while accommodating the multi-generational workforce with a diverse employee benefits package. The employee population is more diverse and more educated than ever before, and they are demanding more choice. Based on the 2016 EBRI/Greenwald & Associates Health and Voluntary Workplace Benefits Survey, 82% of employees say that having a choice is of high importance.1
There is no silver bullet, but the most common theme among the best-in-class companies is offering voluntary benefits to their employees. The term “voluntary benefit” has evolved over the last decade to include a full suite of insurance and work/life products such as accident, critical illness, hospital indemnity, dental, vision, auto/home, pet insurance, vacation perks, discount programs, student loan assistance, and more.
The marketplace is also seeing the emergence of new voluntary products such as pet and legal insurance, identity theft protection, student loan assistance, and discount programs. This tells us that employees value a range of voluntary benefits, that solve for short and long term financial protection as well as lifestyle needs. In turn, there is also a positive impact and some hidden perks for the employer.
When evaluating offering such a program, here are four employer perks to consider.

US health-care spending to climb 5.3% in 2018
Rising prices of medical goods and services and higher Medicaid costs contributed to the increase.
The rate represents a sharp uptick from 2017 spending.
Government agencies projected that health-care spending will on average rise 5.5 percent annually from 2017 to 2026.
A box of masks is shown in the emergency room at Palomar Medical Center in Escondido, California.
United States health spending is projected to rise 5.3 percent in 2018, reflecting rising prices of medical goods and services and higher Medicaid costs, a U.S. government health agency said on Wednesday, an upward trend it forecasts for the next decade.
The increase represents a sharp uptick from 2017 spending, which the U.S. Centers for Medicare and Medicaid Services (CMS) now estimates to have been a 4.6 percent climb to nearly $3.5 trillion. It had previously forecast a 2017 rise of 5.4 percent.
The primary drivers of the increased spending include the aging baby-boom population that will increase enrollment in the Medicare health insurance program for the elderly and disabled, a climb in the prices of medical goods and services and more disposable personal income, the report said.
CMS projected that health-care spending will on average rise 5.5 percent annually from 2017 to 2026 and will comprise 19.7 percent of the U.S. economy in 2026, up from 17.9 percent in 2016. By 2026, health spending is projected to reach $5.7 trillion.

Other Insurance News

IBM: Insurance companies should embrace insurtechs
by Lyle Adriano / Insurance Business America
One of the key findings of the report was that 81% of outperforming insurers surveyed said that they have either invested in or are already working with insurtech businesses. Similarly, nearly three in four (57%) insurance C-suite executives who participated in the study believe insurtechs are driving innovation across the industry.
By contrast, 43% of the surveyed C-suite executives see the same disruptive effect in their own businesses, which IBM calls a discrepancy that reflects their overconfidence in their more traditional insurance processes.
The study also revealed that insurtechs are typically focused on the following:
Personalization: 56% of insurers said insurtechs present an opportunity to improve customer relationships. Technologies such as AI, cognitive computing, IoT, blockchain and cloud “can redefine the nature of policyholder engagement.”
Innovative offerings: 80% of insurtech leaders said that usage-based or other value-added services (such as hourly car insurance) are pushing the industry toward preventative advice and other forms of risk management services.
Insurance distribution: Insurtechs are allowing insurers to engage their customers in new, more convenient ways – 26% of insurtechs are creating online-only digital solutions, 10% engage in peer-to-peer insurance, 3% in on-demand insurance.

NCUA Board Approves $736 Million Share Insurance Distribution in Q3 2018
Board Action Bulletin
Share Insurance Fund Maintains Provisions for Potential Losses
ALEXANDRIA, Va. (Feb. 15, 2018) – The National Credit Union Administration Board held its second open meeting of 2018 at the agency’s headquarters here today and unanimously approved two items:
A Share Insurance distribution of $736 million to eligible, federally insured credit unions in the third quarter of 2018.
A final rule amending the agency’s share insurance requirements rule to provide greater fairness, predictability, and transparency and add a temporary provision to govern share insurance equity distributions related to the Corporate System Resolution Program.
The Chief Financial Officer briefed the Board on the performance of the National Credit Union Share Insurance Fund, which ended 2017 with a net position of $15.7 billion.

Insurance Commissioner Jones opens investigation into alleged denials of life insurance policies for gay men taking HIV/AIDS prevention medications
SACRAMENTO, Calif. — "Today I directed the California Department of Insurance to open an investigation into published reports that gay men have been denied insurance policies covering life, disability, or long-term care because they were taking medication to protect themselves from HIV/AIDS. Such denials, if they are occurring, could amount to illegal discrimination based on sexual orientation under California law, and if so, the companies doing so could be penalized. The New York Times has reported that various insurers nationwide have denied policies to gay men after learning they took Truvada to protect against HIV. The taking of medication to protect against HIV/AIDS, called pre-exposure prophylaxis (PrEP), is recommended by the Centers for Disease Control and Prevention. These denials may effectively penalize applicants based on sexual orientation. Insurers cannot choose to deny coverage based on discriminatory reasons.

Associated Bank to acquire Diversified Insurance
Brookfield brokerage to join Benefits and Risk Consulting division
by Molly Dill / BizTimes
Green Bay-based Associated Banc-Corp plans to acquire Brookfield-based Diversified Insurance Solutions Inc.
The Milwaukee offices of Associated Banc-Corp.
The transaction is expected to close next month, and the price has not yet been disclosed.
Diversified Insurance, an employee-owned, independent insurance brokerage founded in 1982, provides employee benefits, business insurance, risk management, and personal, auto and home insurance. It has approximately 70 employees.
The Brookfield insurer would be integrated into Associated’s Benefits and Risk Consulting brokerage division, which offers multi-line insurance and consulting. ABRC has about 400 employees, and offers employee benefits, retirement plans, compliance, business insurance, risk management and individual insurance.


Did you know that agency valuations are at an all-time high? And there are ample financial resources available that are pursuing businesses with renewable income streams. We have numerous qualified buyers with the liquidity to offer very attractive deal terms. And many of them want the current ownership to remain with the business in an active role post-transaction. In other words, you could receive a substantial amount of cash at closing, have a 3-5 year earnout, AND still participate in the future growth and profits of the business with a financially supportive business partner. Now that is a winning strategy worth thinking about.


Daymark Advisors (www.daymarkadvisors.com) is a boutique management consulting and merger and acquisition intermediary serving the insurance, benefits, voluntary benefits and workforce management industry sectors. Founded in 2001, Daymark has advised several hundred brokers, agencies and consultants regarding how to optimize their business asset value and how to successfully exit their business.

Jack Kwicien, CLU, ChFC
Registered Investment Advisor

Contact Us
Walt Bernard Podgurski - - Editor