All CAL Departments Update – September 2021

Employee Benefits

Agencies Plan Coverage Changes to Contraceptive Coverage Rules

On Aug. 16, 2021, the Departments of Health and Human Services (HHS), Labor (DOL) and the Treasury (Departments) issued a frequently asked question (FAQ) regarding enforcement of the contraceptive coverage mandate under the Affordable Care Act (ACA).

This FAQ indicates that the Departments intend to amend existing religious and moral exemptions to the contraceptive coverage mandate in light of recent litigation.

Contraceptive Mandate

The ACA requires non-grandfathered health plans to cover certain women’s preventive health services without cost sharing, including all FDA-approved contraceptives.

Religious exemptions apply to certain churches, houses of worship, and other church-affiliated institutions, allowing them to choose not to contract, arrange, pay or refer for any contraceptive coverage.

On Nov. 15, 2018, the Departments published final regulations that expanded the exemptions and accommodations to the contraceptive mandate to apply to any entities with religious or moral objections to the contraceptive coverage requirement.

On July 8, 2020, the U.S. Supreme Court upheld these regulations as a valid exercise of power under the Trump administration.

FAQ Guidance
The FAQ indicates that the Departments intend to issue regulations within six months to amend the 2018 final regulations. The FAQ does not provide any additional detail or specify the types of changes that may be made.

Business/Commercial Lines

CAL Insurance designs insurance solutions for businesses, schools, nonprofits, real estate investors & successful families from Coast to Coast. Several challenges exist across the insurance board here in the United States but the positive news is that the workers compensation remains favorable to employers. Historically California has had one of the highest worker compensations costs in the United States but the burden has eased for many employers over the last 7 years with base rates steadily declining across most class codes. This reduction in rate does not look to be changing course anytime soon even with COVID claims. Many workers compensation underwriters are still battling for best in class business with aggressive final net rate offerings. Of course the market will change at some point in the future and the most important thing a business can do to prepare is to have a robust safety culture within their business. This means creating safety committees, having regular training outside of just onboarding job safety discussions, partnering with your workers compensation provider around risk management/loss control, the timely reporting of claims, and the management of the claim itself (for CAL clients that is also a partnership with ESM – ask us about this)!

The insurance lines most challenged right now are specific property insurance risks, cyber insurance, directors & officers liability and some professional liability (E&O) segments. The directors & officers market is not just challenging here in the United States but across the globe.   Our wholesale partner, RT Specialty, cites “A prolonged soft market drove pricing down for over a decade.  Some Lloyd’s syndicates and domestic carriers failed to make an underwriting profit for several years.  The result is rate increases and more disciplined underwriting…. claims causes carriers to reduce exposure on individual risks resulting in lower limits, increasing pricing, conditional renewals and non-renewals for many classes of business.”   This same reasoning can be used for the hardened property insurance market where RT reports “Weather-related losses increased; hurricanes, tornadoes, hailstorms, wildfires and other natural disasters created multiple catastrophic loss events.”

The insurance market is complex. The insurance policies are complex. The underwriting can be complex. We at CAL understand the complexity of it all as we live this day in and day out. We also understand our clients do not. We know our clients must run their businesses, their schools, their nonprofits, manage their real estate investments & their own lives without the complexities of insurance burying them. We at CAL look to simplify this for our clients. This lead me to share CAL’s new purpose statement: Complexity, Simplified.

As mentioned, insurance can be complex, complicated, and difficult to understand. When experiencing such a level of difficulty, it’s not uncommon to put it off, ignore it, or will it away. But we know it’s too critical for a business or a family to let that happen. There’s too much at stake to ignore it or to accept a cheap solution just because it’s quick and seemingly easy.

At CAL, we also make it easy for the client, but we create comprehensive solutions that provide them all the protection they need. We break down the complex into a simplified program, educating the client and ensuring they both understand and get the greatest value from their investment.  We listen to what they say, as well as what they don’t say, and we tailor solutions to their individual needs. When we treat clients with this level of service and respect, it leads to quantifiable client loyalty.

Private Client Services

CA homeowners continue to face an uphill battle when it comes to insurance for homes in wildfire prone areas. The Private Client Services team connects with a variety of insurance markets to help find coverage solutions for these homes. Unfortunately, in some cases, the CA Fair Plan is the only available market. This week did bring some good news.

On Monday, Insurance Commissioner Ricardo Lara announced moratoriums for many zip codes. These moratoriums prohibit the insurance company from non-renewing homes simply based on proximity to a previous wildfire. Follow this link to read more and to determine if your home is in a protected zip code. Again, this is only for one year, but at least it provides some additional time for homeowners to find coverage and for the market to stabilize.

Press Release: Commissioner Lara protects insurance coverage for 325,000 Northern California wildfire survivors

Our Private Client Services team at CAL continues to grow and we added two more advisors in July. Breana McConnell joins us with several years of experience with both an independent agency and Allstate Insurance. Breana is leading our marketing efforts and helping to find the best coverage at the lowest price for our clients. Clarice Lawrence also joined the team in July with a wealth of knowledge in personal insurance. Clarice has taken over management of many of our existing client accounts and is providing guidance on policy changes, new purchases and coverage inquiries. We are thrilled to have these two experienced advisors as part of our Private Client Services team!