When the health-savings-account-based, “consumer-driven” insurance concept was introduced about 10 years ago, it puzzled many and enrolled few, but brokers say with the deepening recession and persistent health benefit cost increases the plans are gaining traction.

“I would definitely say there has been more interest,” said Michael Parr, a life and health benefits specialist with NorthWest Insurance Agency of Santa Rosa.

“When you tell an employer they can save about a third of what they were paying for a high-deductible plan, now they are saying, ‘Where do I sign?’”

In general, the plans have a high-deductible (a minimum of $1,150 in 2009) with full coverage afterwards and no co-pays. But employers can contribute to a savings account accessed through a debit-like medical card for doctor visits, prescriptions and other costs.

Surveys from the California Health-Care Foundation released in December found that about 8 percent of respondents are now covered by the plans, double the number from last year, which could be due in part the increasing number of carriers adding the option.

In 2006, HMO-giant Kaiser Permanente introduced its version of the plan, and this year it estimates it will hit about 1 million enrollees, or about 12 percent of its members.

Other large carriers including Health Net, Anthem Blue Cross, Blue Shield and others also in the last few years unveiled their variations. San Francisco-based Canopy Financial recently developed a version it calls a “green health savings account” that claims to be completely paperless.

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Fireman’s Fund Insurance Co. of Novato unveiled two new specialty products recently, including one exclusively for retailers and another for small business hotels, motels and inns.

The latest line made specifically to cover breaches in payment-card systems was introduced Jan. 6. The coverage kicks in when a retailer is subject to credit and debit card fraud or in cases where it is penalized for violations of the Payment Card Industry Data Security Standards. In situations where the business is found in violation of those rules, Fireman’s coverage also pays for upgrading software where it is required.

Common violations include improperly storing cardholder data, using system default passwords and exposing unsecured networks to the Internet. Purchasers of the product are also enrolled in a risk-management program.

The small hotel coverage was released late last year and includes 40 offerings such as payment for crisis management, reputation protection, penalties for personal information breaches, cash-flow protection, historic property valuation and green-building coverage.

Fireman’s Fund has introduced an assortment of specialty offerings in the past two years, most notably the nation’s first green-building coverage. Other products covering specific industries include farm and ranch equipment, campgrounds, green marine engines, commercial auto fleets, senior living facilities and many others.

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California Department of Insurance Commissioner Steve Poizner announced last month that the agency will permanently reduce its discretionary budget by 10 percent.

The commissioner said the reduction will be accomplished through streamlining operations and increasing efficiencies and will not result in lay-offs or hours reductions. The department completed a strategic planning process for the first time and set priorities, which included a top-to-bottom reorganization.

The reduction will amount to savings of about $13 million annually.

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Blue Shield of California agreed to reinstate coverage to 678 residents after settling a case with the Department of Insurance in early January.

With the agreement the public agency dropped the $12 million suit that alleged the carrier improperly rescinded the policies during a five-and-a-half-year period ending in May 2008. The carrier did not admit wrong-doing.

Blue Shield will pay the out-of-pocket expenses incurred by the customers while they didn’t have coverage, and officials have agreed to set up a third-party review system for any future policy rescissions.

“People pay their insurance premiums and expect to be taken care of if they have an emergency,” Insurance Commissioner Steve Poizner said in a statement. “Canceling someone’s insurance can have devastating medical, emotional and financial impacts.”

The department said Blue Shield could incur another $5 million fine if it does not meet all terms of the agreement. Last summer, the carrier paid $3 million in a settlement with the state Department of Managed Health Care for rescinding policies of customers in its HMO plans.

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Cigna Corp. health benefits provider announced recently that it will reduce its staff by about 4 percent, or a total of 1,100 jobs, by mid-2009.

The carrier said it will close several offices and take an after-tax charge of $30 million to $40 million in connection with the job cuts.

“Given the unprecedented economic situation we and our customers are facing, these actions are essential to ensure we can meet their needs for high-value, cost-effective products and services,” said Cigna Chairman and CEO Edward Hanway.

“Decisions like these are difficult and never made lightly, but they are necessary given the current environment.”

The company is the latest in several rounds of major insurer layoffs, including 4,000 positions with UnitedHealth Group and 1,000 at Aetna, both announced last year.

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Health Net Inc. executive Patricia Carey was recently appointed to the board for the California Employees Retirement System, the nation’s largest government pension fund.

Ms. Carey serves as senior vice president and chief regulatory and external relations officer for the 6.7 million-member insurer and is also a former staff person to Gov. Arnold Schwarzenegger and former Gov. Pete Wilson.

As a member of the 13-person state panel, she will manage investments that pay for benefits and health coverage for about 1.3 million retired public employees and their families.

The fund is now estimated at a value of about $178.3 billion after recently losing about a quarter of its value during the downfalls on Wall Street. In addition to stock, the portfolio includes bonds, real estate, hedge funds and commodity investments.


Submit items for this column to Ashley Furness at afurness@busjrnl.com, 707-521-4257 or fax 707-521-5292.