North Bay Business Journal

Monday, November 26, 2012, 6:00 am

Insurance: Western Health seeks to join exchange

Federal rules issued for health plans starting in 2014


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    Dan Verel, Business Journal Staff ReporterWestern Health Advantage formally filed plans with the state to be a part of Covered California, the state’s online health exchange that will go live in 2014 as part of the federal health care reform bill, the Affordable Care Act.

    Western Health AdvantageThe Sacramento-based HMO said it intends to offer both employer group and individual plans through the exchange, which will be in effect starting in  October 2013 to ramp up for the launch date in 2014.  The HMO, which recently expanded into Marin, Sonoma and Napa counties, will offer exchange coverage in three of 19 designated state regions. Region 2 consists of Solano, Marin, Sonoma and Napa counties. 

    The exchange eventually hopes to be self-sufficient, run without any state or federal funding, by 2017. Currently, the cost of running Covered California is being carried by the federal government.


    On the federal level, the Obama Administration last week issued a host of new rules and details on how insurers can structure benefits and premiums beginning in 2014.  The new proposed rules include a number of key elements of the bill, including how essential health benefits, premium structures and wellness programs.

    Under the bill, all health plans for individuals and employers must contain “essential health benefits,” unless the employer is self-insured. Such essentials include emergency care, hospitalizations, pediatric services and dental and vision care, among others.

    The new proposed rules echo previous directions from the administration that individual states can base the package of benefits that insurers must include on the most popular plans sold in each state, according to Kaiser Health News. 

    With respect to wellness programs — an increasingly common tool in curbing health care costs  by employers — the proposed rule permits businesses to reward employees who see improvement in health measures such as lowered blood pressure, improved cholesterol levels and weight loss through medical fitness.

    The proposal also  increases the maximum reward, discount or penalty from 20 percent to 30 percent on health care costs by employees.  It also increases the reward for employees  who curb tobacco use to 50 percent.  But employers must offer alternative wellness initiatives for employees who may have difficultly meeting certain health goals.

    More clarifications and details on elements of the bill are expected in the near future, addressing topics such as the Medical Device Tax, a 2.3 percent excise tax that will be levied on device makers beginning in January 2013,   reduced Medicare and Medicaid payments for hospitals from the federal government, and bundled payments, which involves lump sum payments to providers, similar to capitation, for outcome-based care.


    Fireman’s Fund Insurance Company announced the appointment of Travis Bethune to the position of vice president, distribution management and services leader. In his new role, Mr. Bethune will provide strategic and operational direction for the distribution and agency management team. He is based in Fireman’s Fund’s corporate office in Novato. He  previously held leadership roles in underwriting, sales, marketing, and distribution at Chubb and in operations and customer service at Travelers.

    Fireman’s Fund also appointed  Robert Haibi to the position of personal insurance distribution and agency management executive. In his new role, Mr. Haibi has full distribution responsibility for personal lines business, focusing on the specialized needs of the high net worth market. He will be based in Chicago.

    Submit items for this column to Business Journal Staff Writer Dan Verel, dverel@busjrnl.com or 707-521-4257.

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