Most conservatives and liberals agree that we should not consider cost in deciding whether people should undergo medical procedures that have the potential to save lives and cure diseases. Unfortunately, most conservatives and liberals are wrong. Declaring the idea of cost-effectiveness a “forbidden topic in the health care debate,” Aaron Carroll shows just how averse we are to the idea of comparing money cost with health outcomes. It’s even written into the Affordable Care Act: “… We in the U.S. are so averse to the idea of cost-effectiveness that when the Patient Centered Outcomes Research Institute, the body specifically set up to do comparative effectiveness research, was founded, the law explicitly prohibited it from funding any cost-effectiveness research at all. As it says on its website, ‘We don’t consider cost-effectiveness to be an outcome of direct importance to patients.’” He gives another example: “Take the U.S. Preventive Services Task Force, which was set up by the federal government to rate the effectiveness of preventive health services on a scale of A to D. When it issues a rating, it almost always explicitly states that it does not consider the costs of providing a service in its assessment. “And because the Affordable Care Act mandates that all insurance must cover, without any cost-sharing, all services that the task force has rated A or B, that means that we are all paying for these therapies, even if they are incredibly inefficient.” Here is the brutal reality: We don’t have an unlimited pile of money to spend on anything. And if we don’t pay attention to what we get for the money we spend (which has historically been the case for government regulatory agencies), we will end up spending money in ways that actually reduce life expectancy for the average American. In a 1996 study for the National Center for Policy Analysis, Tammy Tengs found that:

• By spending $182,000 every year for sickle cell screening and treatment for black newborns, we add 769 years collectively to their lives at a cost of only $236 for each year of life saved.

• By spending about $253 million a year on heart transplants, we add about 1,600 years to the lives of heart patients at a cost of $158,000 per year of life saved.

• Equipping 3% of school buses with seat belts costs about $1.6 million a year, but this effort will save less than one life-year, so the cost is about $2.8 million per year of life saved.

• We spend $2.8 million every year on radionuclide emission control at elemental phosphorus plants (which refine mined phosphorus before it goes to other uses), but this effort will save at most one life every decade, so the cost is $5.4 million per year of life saved.

Tengs, along with Professor John Graham and a team of researchers at the Harvard Center for Risk Analysis, systematically gleaned from the literature annual cost and lifesaving effectiveness information for 185 interventions. Some of these interventions had been fully implemented, some partially implemented and some not implemented all. The researchers then asked: What if we reallocated funds from regulations and procedures that give us a low rate of return to those procedures that give us a high one?

• The 185 interventions cost about $21.4 billion a year and saved about 592,000 years of life.

• If that same money had been spent on the most cost-effective interventions, however, more than 1.2 million years of life could have been saved — about 638,000 more years of life than under the status quo.

• Implementing the more cost-effective policies, therefore, could save twice as many years of life at no additional cost.

This same principle applies to health insurance. Unless you want your premium to go through the roof, you should choose an insurer that follows a reasonable standard for what care is covered. But that brings us back to Carroll’s point. How are you to know what standard your insurer is using if the whole subject is a “forbidden topic”? A few years ago, Time Magazine reported that $50,000 for a year of life saved is “… the international standard most private and government-run health insurance plans worldwide use to determine whether to cover a new medical procedure…. Nearly all other industrial nations — including Canada, Britain and the Netherlands — ration healthcare based on cost-effectiveness and the $50,000 threshold.” But a Stanford University economist calculated that the threshold for kidney dialysis for Medicare enrollees should be $129,000. Mark Pauly and his colleagues suggested a standard of $100,000 in Health Affairs. Economists generally believe that such standards should be based on the implicit values people reveal when they make choices between money and risk in the job market and make choices as consumers. Studies show that the implicit “value of a statistical life year,” to use a term of art, ranges from $50,000 to $150,000. As Pam Villarreal, Biff Jones and I explained in Health Affairs: “This is not the amount of money that people would accept to give up their lives. It is instead the implicit value that people place on their lives when making choices between additional risk and money, when the risks involved and the amount of compensation needed to induce people to accept those risks are both small.” For the many problems involved in arriving at a figure, see a review by Ike Brannon. For an extension of the idea to “quality adjusted life years,” or QALYs, see Aaron Carroll’s discussion and links to the literature. The main point there is that a year spent on a respirator shouldn’t count anywhere near as much as a year doing normal activities. There remains the question of “rationing” and “death panels.” I’ll address that in a future post. This article first appeared on Forbes.com.

If you’re thinking about selling your business, try not to make it a hasty decision. Take a step back and consider all of your options. Details like, if you should sell, if you should sell right now and what you need to consider before selling are just a few of the considerations to make before reaching a final decision. So, is it time to sell your business? Here are some of those important questions to ask yourself to help figure out: Is my business ready to sell? Most businesses need at least two years of preparation before being listed on the market. This is to make sure your books are in order, tax returns are organized and the company is presented in its best condition to potential buyers. Trying to do these things in the month before you sell could reduce the selling price of your company or compromise the sale altogether. How much is my business worth? Many business owners wait too long before deciding to sell. Businesses should be sold before their technologies are outdated or they suffer a decrease in sales. It’s important to sell while operations are still strong, to get the best valuation. What are the current market conditions? Before deciding to sell, take a look at the market conditions for your industry. You may want to sell immediately, or you may wait out what you hope is a dip in the market so you can get a higher return a few years down the road. In 2006, for example, a carpentry company would have sold for three to four times as much as it would have after the financial crisis. Sometimes, even if your business is prepared for sale and with a good valuation, market conditions force you to rethink your plans. Can I cope with the changes? As a business owner, you have most likely poured yourself into your job. If you sell, are you personally prepared for the transition from business owner to the next opportunity on your horizon? This decision is primarily personal but is an important factor to consider in whether you should stay or go. Am I willing to stay on if the buyer wants me to? Sometimes, to ease the transition between owners, new buyers ask that the previous owners stay on in a consulting role for a predetermined amount of time, usually six months to a year. Having the prior owner stick around can help avoid any dips in business during the transition. For you, however, is it worth it? You should figure that out ahead of time so you don't fold under pressure conditions when you just want to close the deal. What are your deal breakers? Would you consider alternatives to a cash sale? Who gets the rights of intellectual property created during your time at the company? Will the new owner keep your current employees? These are all questions to consider sooner rather than later so they can be resolved before you’re near a deal. Ultimately, one of the best investments you can make when considering the sale of your business is to build a team of trusted advisers. Accountants, attorneys and insurance agents are just a few of the specialists who can be supremely helpful. These professionals have an understanding of each moving part and, more importantly, of how they all play together. A successful exit or transition strategy takes preparation and a wealth of time. It involves taking inventory of all aspects of your business and personal life to form an integrated strategic plan. After considering all of the questions, it’s time to come to a decision about whether the timing is right to maintain or sell your business. No matter what decision you come to, remember that preparation is the key to taking a successful step into the future.

Having returned from a week in Dubai, where I co-chaired the 4^th Annual Middle East and North African ERM Conference and led a two-day workshop on risk and strategy, I am pleased to report that ERM is alive and well half-way around the world. This reinforces my similar experience at the same forum (2^nd annual) in 2012. While there may be a perception of free-flowing money and excess in this region, it is clear that key companies in many industries, including finance, energy and healthcare, face most of the same challenges in driving effective risk management strategies and programs as many of the companies in the West. Even though many risk leaders in the Middle East gained their educational backgrounds in Western institutions, where in many cases ERM is still a suspect discipline, many have nevertheless gained significant traction with advanced risk management strategies in their companies. An interesting angle was revealed at the MENA conference that raises challenging questions for many of these practitioners. It emerged first as an informal, anecdotal comment about the challenge of raising the profile and effectiveness of risk management functions where there was little or no tolerance for risk. While most risk professionals face this challenge at one point or another in their careers, it appears more widespread in this region. The question is: why, and how to do you manage through this dilemma? First, recognize that all organizations have a risk attitude that ranges from extreme risk aversion to a radically risk-seeking culture -- you have a risk culture by default, if you don’t actively design and implement the risk culture you desire. Most often, the actual risk attitude plays itself out in risk-taking behaviors that form the basis for a risk-appetite framework and strategy. Within the context of a risk culture, which is defined primarily by the risk-taking behaviors of employees, every person has a risk attitude and appetite for risk. The collection of these appetites and associated risk-taking behaviors can lead to what the MENA region seems to reflect, namely little or no tolerance for certain risks. That risk culture will frequently lead to performance issues or product/service pricing challenges that affect competitiveness and reputation. While it is appropriate to avoid certain risks, doing so is generally a bad choice when growth through innovation is desired; risk-taking comes with that strategy. So attendees at MENA and others who wrestle with risk aversion should realize that this is incompatible with  long-term success in a competitive environment. As a result, they should commit to developing a consensus for a risk culture that aligns with an appetite for risk that is consistent with balanced or prudent risk taking.

Two days after Congress adjourned for the year without reauthorizing the Terrorism Risk Insurance Program Reauthorization Act of 2014 (TRIPRA), many organizations are working to understand the impact on their insurance programs when the federal insurance backstop expires on Dec. 31, 2014. Most experts had expected Congress to reauthorize the law in some form. The failure to do so has implications for insureds with TRIPRA terrorism coverage in most any line, with particular concerns for property, primary and excess liability, workers’ compensation and captive programs. Organizations that purchased terrorism coverage as part of their insurance programs (and not as a standalone program) may be affected. Potential solutions will depend on individual programs and needs but may include:

1. Re-approaching insurers to see if they will not invoke sunset clauses or conditional terrorism exclusions, and provide stop-gap coverage until either Congress renews TRIPRA or the policy expires.
2. Looking to the global standalone terrorism insurance markets for stop-gap coverage. The standalone market has large but limited capacity -- it will not be able to fill all requests.
3. Canceling and rewriting insurance programs with new markets that are able to offer terrorism limits (without sunsets).
4. Seeking agreement from markets without sunsets to assume terrorism risk from sun-setting markets on the same risks.

It must be noted that these options may come with additional premium charges. Also, organizations should explore any loan, lease or other contracts or covenants that may require them to purchase terrorism coverage. Congress is set to reconvene on Jan. 6, 2015. It is unclear how congressional leadership will deal with the issue, although some have already been quoted in the media as saying TRIPRA will be a top priority for the new Congress. Among the possible scenarios are:

1. Immediately after reconvening, Congress could pass a short-term reauthorization to allow the new Congress to formulate a long-term reauthorization bill, which could be materially different than the 2014 version.
2. Alternatively, both the House and Senate could immediately reintroduce new legislation mirroring the 2014 bill and pass it on an expedited basis.

For more information from the Marsh TRIPRA Update Center, click here. 

Losses stemming from the destruction of the World Trade Center and other buildings by terrorists on Sept. 11, 2001, totaled about $31.6 billion, including commercial liability and group life insurance claims -- not adjusted for inflation -- or $42.1 billion in 2012 dollars. About two-thirds of these losses were paid for by reinsurers, companies that provide insurance for insurers. Concerned about the limited availability of terrorism coverage in high-risk areas and its impact on the economy, Congress passed the Terrorism Risk Insurance Act (TRIA). The act provides a temporary program that, in the event of major terrorist attack, allows the insurance industry and federal government to share losses according to a specific formula. TRIA was signed into law on Nov. 26, 2002, and renewed for two years in December 2005. Passage of TRIA enabled a market for terrorism insurance to begin to develop because the federal backstop effectively limits insurers’ losses, greatly simplifying the underwriting process. TRIA was extended for seven years to 2014 in December 2007. The new law is known as the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) of 2007. This week, Congress failed to reauthorize TRIA before members adjourned for the holiday recess. Now, with the expiration of the law on Dec. 31, some businesses may be left without insurance coverage in the event of a terrorist attack on the U.S. Both houses of Congress have been discussing legislation that would set out the federal government’s involvement in funding potential terrorism losses, but bills proposed by the two houses earlier this year differed, and no extension was passed. A report from the Wharton Risk Management and Decision Processes Center found that, under the current TRIA program, some insurers have already reached a level of exposure to losses from a terrorist attack that could jeopardize their ability to pay claims, based on a critical measure of solvency: the ratio of an insurer’s TRIA deductible amount in relation to its surplus. The report, "TRIA After 2014: Examining Risk Sharing Under Current and Alternative Designs," found that as the deductible percentage rises, as it does under the Senate bill and proposals put forward in the House, more insurers have a deductible-to-surplus ratio that is above an acceptable level. The report also sets out in detail the amount the American taxpayer and federal government would have to pay under differing scenarios. A RAND Corp. study published in April 2014 found that in a terrorist attack with losses of as much as $50 billion, the federal government would spend more dealing with the losses than if it had continued to support a national terrorism risk insurance program, because it would likely pay out more in disaster assistance. A report by the President’s Working Group on Financial Markets made public in April 2014 generally supports the insurance industry’s view that the expiration of TRIA would make terrorism coverage more expensive and difficult to obtain. The insurance broker Marsh released its annual study of the market, "2014 Terrorism Risk Insurance Report," in April. Among its many findings is that uncertainty surrounding the potential expiration of TRIA significantly affected the property/casualty insurance market. Some employers with large concentrations of workers and companies with property exposures in major U.S. cities found that terrorism insurance capacity was limited and prices higher, and some could not obtain coverage at all. If the law is allowed to expire or is significantly changed, the market is likely to become more volatile with higher prices and limited coverage, the study concludes. Before Sept. 11, 2001, insurers provided terrorism coverage to their commercial insurance customers essentially free of charge because the chance of property damage from terrorist acts was considered remote. After Sept. 11, insurers began to reassess the risk. For a while, terrorism coverage was scarce. Reinsurers were unwilling to reinsure policies in urban areas perceived to be vulnerable to attack. Primary insurers filed requests with their state insurance departments for permission to exclude terrorism coverage from their commercial policies. From an insurance viewpoint, terrorism risk is very different from the kind of risks typically insured. To be readily insurable, risks have to have certain characteristics. The risk must be measurable. Insurers must be able to determine the possible or probable number of events (frequency) likely to result in claims and the maximum size or cost (severity) of these events. For example, insurers know from experience about how many car crashes to expect per 100,000 miles driven for any geographic area and what these crashes are likely to cost. As a result, they can charge a premium equal to the risk they are assuming in issuing an auto insurance policy. A large number of people or businesses must be exposed to the risk of loss, but only a few must actually experience one, so that the premiums of those that do not file claims can fund the losses of those who do. Losses must be random as regards time, location and magnitude. Insofar as acts of terrorism are intentional, terrorism risk doesn't have these characteristics. In addition, no one knows what the worst-case scenario might be. There have been few terrorist attacks, so there is little data on which to base estimates of future losses, either in terms of frequency or severity. Terrorism losses are also likely to be concentrated geographically, since terrorism is usually targeted to produce a significant economic or psychological impact. This leads to a situation known in the insurance industry as adverse selection, where only the people most at risk purchase coverage, the same people who are likely to file claims. Moreover, terrorism losses are never random. They are carefully planned and often coordinated. To underwrite terrorism insurance -- to decide whether to offer coverage and what price to charge -- insurers must be able to quantify the risk: the likelihood of an event and the amount of damage it would cause. Increasingly, they are using sophisticated modeling tools to assess this risk. According to the modeling firm AIR Worldwide, the way terrorism risk is measured is not much different from assessments of natural disaster risk, except that the data used for terrorism are more subject to uncertainty. It is easier to project the risk of damage in a particular location from an earthquake of a given intensity or a Category 5 hurricane than a terrorist attack because insurers have had so much more experience with natural disasters than with terrorist attacks, and therefore the data to incorporate into models are readily available. One problem insurers face is the accumulation of risk. They need to know not only the likelihood and extent of damage to a particular building but also the company's accumulated risk from insuring multiple buildings within a given geographical area, including the implications of fire following a terrorist attack. In addition, in the U.S., workers' compensation insurers face concentrations of risk from injuries to workers caused by terrorism attacks. Workers' compensation policies provide coverage for loss of income and medical and rehabilitation treatment from "first dollar," that is, without deductibles. Extending the Terrorism Risk Insurance Act (TRIA): There is general agreement that TRIA has helped insurance companies provide terrorism coverage because the federal government's involvement offers a measure of certainty as to the maximum size of losses insurers would have to pay and allows them to plan for the future. However, when the act came up for renewal in 2005 and in 2007, there were some who believed that market forces should be allowed to deal with the problem. Both the U.S. Government Accountability Office and the President’s Working Group on Financial Markets published reports on terrorism insurance in September 2006. The two reports essentially supported the insurance industry in its evaluation of nuclear, biological, chemical and radiological (NBCR) risk -- that it is uninsurable -- but the President’s Working Group said that the existence of TRIA had inhibited the development of a more robust market for terrorism insurance, a point on which the industry disagrees. TRIA is the reason that coverage is available, insurers say. The structure of the program has encouraged the development of reinsurance for the layers of risk that insurers must bear themselves -- deductible amounts and coinsurance -- which in turn allows primary insurers to provide coverage. Without TRIA, there would be no private market for terrorism insurance. Studies by various organizations have supported a temporary continuation of the program in some form, including the University of Pennsylvania's Wharton School, the RAND Corp. and the Organization of Economic Cooperation and Development (OECD), an organization of 30 member countries, many of which have addressed the risk of terrorism through a public/private partnership. The OECD said in an analysis that financial markets have shown very little appetite for terrorism risk because of the enormousness and unpredictability of the exposure. RAND argued not only that TRIA should be extended but also that Congress should act to increase the business community's purchase of terrorism insurance and lower its price. RAND also advocated mandatory coverage for some "vital systems," establishing an oversight board and increasing efforts to mitigate the risks. For the full report from which this is excerpted, click here.

I was greeted this morning with the news that Congress failed to act on the Terrorism Risk Insurance Act (TRIA) before adjourning for the year. This means TRIA will be allowed to expire at the end of the year. This was a big surprise, as most felt the House would be the reason for TRIA's not getting extended. Last week, the House passed a TRIA extension bill, but it was the Senate that ultimately failed to take up a vote on the issue. Why did this happen? Unfortunately, Congress has a habit of tacking unrelated riders onto bills with the hope of getting these issues passed. In this case, the House added amendments to NARAB II legislation, which has to do with licensing of insurance agents and brokers. Some in the Senate were not comfortable with those amendments, which kept the Senate from approving the House bill on TRIA. So what happens now with TRIA? The new Congress will reconvene on Jan. 6, 2015, and the expectation is it will take up TRIA. However, given what just happened, you cannot assume the new Congress will pass a TRIA bill, and, even if it does, the bill may look substantially different than what was on the table. What does this mean to the workers’ compensation industry? We have already seen the reaction from the marketplace. Back in February 2014, carriers started issuing policies that contemplated coverage without the TRIA backstops. We saw some carriers pull back from certain geographic locations, most notably in New York City, and particularly in Manhattan. We also saw some carriers change the terms of their policies and only bind coverage through the end of the year, giving themselves the flexibility to renegotiate terms or terminate coverage if TRIA did not renew. There were legitimate concerns that the workers’ comp marketplace in New York City would be in chaos by the fourth quarter of 2014 as brokers scrambled to place coverage beyond Jan. 1, 2015. The New York State Insurance Fund was in the middle of these discussions, as it faced the prospect of having to provide coverage for employers if the private marketplace did not respond. As the year progressed, something else happened. The marketplace responded. While some carriers pulled back in certain geographic locations, others stepped up to take their place. While some carriers tied their policy expiration to the expiration of TRIA, other carriers did not. Ultimately, employers were still able to obtain workers’ compensation coverage in the private marketplace. What does this mean going forward? There may still be some policies out there that have endorsements allowing the carrier to cancel or renegotiate terms if TRIA expires, but I do not get the impression that this is a widespread issue. Because workers’ compensation is statutory, and carriers cannot exclude for cause, there cannot be terrorism risk exclusions on a workers’ compensation policy. The carrier’s only choice is to provide coverage or decline the risk. While this may not hold true for other lines of coverage, the workers’ compensation marketplace has adapted to the absence of TRIA. Carriers are likely paying more attention to their geographic concentration of exposures, which means employers will have fewer choices, and may see higher pricing. But, at the end of the day, employers should be able to obtain workers’ compensation coverage without the TRIA backstop in place.

‘Tis the season… when leaders everywhere scramble to find the perfect holiday gift for their staffs. This year, will it be:

• The latest business title?
• A gift card for designer coffee?
• An outing featuring laser tag, team building and pizza?

Perhaps you’d like to do something entirely different.  Why not give employees something they really want this year – a gift that will keep giving long after the egg nog is gone? Consider something from my Holiday Gift Guide for leaders who want to delight employees and deliver results. 1.  Encourage career development. Employee Delight:     Price: $0 According to recent research conducted by Aon Hewitt, 91% of all employees report that career development is among their top priorities. Yet, in engagement survey after engagement survey, managers consistently earn their lowest marks in this area. Imagine your employees’ delight if this holiday season you invested some genuine attention in understanding who they are and what their hopes and dreams are, as well as toward helping them develop plans toward their career goals. (This gift teaches why giving is a good as receiving because, as you grow others, you’ll also deck your own halls with greater capacity and capability.) 2.  Remove roadblocks. Employee Delight:     Price: N/A Forget the visions of sugar plums. What employees really dream about is working without unnecessary obstacles, fire drills or other irritants.  Ask them about what gets in the way of their best work, and you’ll likely be surprised by the struggles and workarounds that are part of their daily routines. Watch employees light up brighter than any holiday decoration if you take even small steps toward clearing the way for them. 3.  Express genuine appreciation. Employee Delight:     Price: Priceless Spread good cheer in the form of recognition and positive feedback. Too frequently, leaders become inadvertent Scrooges, withholding praise and wondering why performance is lackluster and morale is low. Catch people in the act of doing things right. Be on the lookout for contributions -- large and small. “Thank you” doesn’t require fancy wrapping or a bow, yet it’s warmer to the hearts of employees than chestnuts roasting. These Holiday Gift Guide suggestions come with a range of benefits. They’re value-priced to fit any budget. There’s no tax or shipping.  And you can even hope that they’re "re-gifted" as employees find ways to extend the positive practices you model to others. So, with the number of holiday shopping days quickly dwindling, skip the malls, dig deeper -- within yourself, not your wallet -- and experience some real magic this holiday season… and all year long. "Gift me" with your own thoughts!  What do your employees want most? What gifts are you considering this holiday season?

Today, many small businesses are canceling group health insurance coverage, and it's not because they don't want to offer employee health benefits. Businesses are canceling group health coverage because of cost, participation and administrative hassle -- or simply because their employees can get cheaper and better coverage on the individual health insurance exchanges. This shift in small business health insurance is happening now and will only accelerate in years to come. For small business owners and HR professionals, this brings up both uncertainty and big relief. When a business cancels group health coverage, employees not only lose their health insurance but also lose the tax advantages associated with employer-based premium contributions. The change can be hard for employee morale and retention. At least, this was the case in the past. Now, most employees are better off purchasing individual health insurance and receiving reimbursement to cover a portion of their out-of-pocket premium cost. This type of approach is called a defined contribution health benefit. As more and more small and medium-sized businesses cancel group health coverage, this is the emerging way to offer a formal health benefit without the cost and complication of group health coverage. Here are three steps to cancel group health coverage while offering the same (or better) health coverage to employees. Step 1: Cancel Group Health Coverage When you cancel your group health coverage, you need to call a customer representative with the insurance company. An insurance representative can confirm the steps the company must take to successfully cancel the policy. For instance, some insurance companies may require that a fax or letter be sent confirming the cancellation. Correspondence via email only may result in the company's being obligated to pay for next month’s premium. Your health insurance agent or broker will be able to assist you with the process, but you, the policy holder, need to call directly. Most group health insurance plans are "unilateral contracts." This means that businesses can cancel a group health insurance plan at any point during the year. While most carriers “request” 30 days' notice, this is not always required. Tip: When you cancel group health coverage, you make all employees covered under the plan eligible for a special enrollment period for individual health insurance. By canceling group health coverage, you are also giving eligible employees access to discounts on individual health insurance (via the premium tax credits). Step 2: Establish a Defined Contribution Health Plan Work with your broker or a defined contribution software provider to establish a defined contribution health plan. In setting up the defined contribution health plan, you'll give employees a set monthly amount to spend on their own health insurance policy. Employees can purchase a policy in a state health insurance exchange, or through the private market via a broker, online, etc. Then, employees can use their employer-funded allowance to be reimbursed for qualified health insurance premiums, up to the amount in their balance. To stay compliant, the plan must be formally administered to meet certain requirements of the IRS, HIPAA, ERISA and ACA. For more: How to Set Up a Defined Contribution Health Plan Step 3: Implement the Defined Contribution Health Plan Once you have set up your defined contribution plan, there are five steps to successfully implement the program.

1. Enroll employees
2. Educate employees
3. Provide resources to help employees select a health plan
4. Plan for reimbursements
5. Communicate with employees early on, and frequently

As you can see from this list, besides planning for the administration, implementation is all about educating employees. Educate employees on:

• How defined contribution healthcare works
• Why the company has decided to offer health benefits in this way (remember, it is better for them, too!)
• The benefits of individual health insurance and defined contribution such as plan choice, flexibility and cost savings
• How to purchase individual health insurance for themselves and their family
• How to request reimbursement and use their defined contribution employee portal

For sample ways to communicate defined contribution to employees, see this guide. These three steps will empower your business to cancel group health coverage and offer employees better health benefits with defined contribution. What questions do you have about how cancel group health coverage, and make employees even happier? Leave a comment below. Originally posted at Zane Benefits.com.  

IBM's CEO Ginni Rometty’s speech a year and a half ago giving marketers 18 months to "sink or swim" raised a few eyebrows, and her deadline is upon us. She defined three imminent waves of change: Wave 1: The shift from the market segment to the individual. It spells the death of the marketing to the “average customer.”  With the right data, you can do things like real-time pricing. Wave 2: The evolution from reaching out to customers to creating a “system of engagement” that keeps track of interactions between brand and customer and uses insights at every touch point. Wave 3:  Data is used to personalize interactions and provide the right context. Telling words, indeed, if you are a marketer who hasn't gotten on the big-data bandwagon. For insurers, these words have a chilling relevance. Let's see how these three waves can be adopted by insurers, especially in the healthcare space: 1.  The shift toward individualized marketing is already in full swing, primarily because of healthcare reform, and its main enabler is data -- mostly structured data, because insurers are still not ready to fully embrace big data. The more accurate and timely information an insurer can collect on an individual member's interactions with the healthcare system, the more realistic its performance evaluation by the government. Of course, data-savvy insurers won't have to wait for the government to identify gaps in the delivery of care and will work toward closing them. One doesn't need the foresight of IBM's CEO to predict that these insurers would be in the best position to squeeze competition out of the marketplace. 2.  A system of engagement is also in various stages of existence at various health plans to closely monitor interactions between their members and providers and to manage aspects of the members' health through programs for case management, disease management, etc. Those familiar with care management would readily recognize the role that predictive modeling plays in identifying and prioritizing candidates. We all know that without the right amount and quality of data, such models are useless. In the coming years, the scope of care management is only going to broaden, simply because the industry has shifted from a model of reactive interventions to proactive care management. 3.  The idea of personalizing care more for the individual (or families) has been around for a few decades already. If you look at patient-centered medical-homes, you can see that the industry is already working, albeit slowly, to realize this vision. Ideals such as continuous and integrated care, seamless coordination and communication and constant improvement all rest on the effective use and exchange of information (structured and unstructured) among the various stakeholders. It's safe to conclude that the three waves are already upon us in the healthcare industry. Some insurers will ride them more effectively than others, because they will be able to harvest so much information -- from electronic medical records, lab results, X-rays, MRI results, even genetic data. Setting a hard and fast deadline might be a bit presumptuous, but it isn’t too hard to predict that it won't take more than a few years to transform the role of big data from a luxury to an absolute necessity for them!