Richard Travers wasn’t in his Wall Street-area office the day that two planes crashed into the World Trade Center towers, killing almost 2,800 people. He walked there the next morning, escorted by uniformed officers of the New York City Fire Department, who met him at a Brooklyn subway stop and escorted him through the acrid smoke swirling over the Brooklyn Bridge to the site where 343 firefighters died. Eighty-eight of the fire officers who died the day before had taken out an optional life insurance policy through Travers, O’keefe, a group insurance and benefits broker, consultant and outsource service.
While firefighters are city employees and receive most of their health and other benefits through the City of New York, the unions offer additional plans, and almost all the 2,400 uniformed officers in the New York City Fire Department opted to sign up for an optional life insurance policy brokered by Travers, O’keefe. So on Sept. 12, 2001, Travers was at his desk--amazingly, the phones and power were on--calling Amalgamated Life, the company that carried the policies covering the lives of the fire officers. "We clearly have an issue here," Travers began. "We need to begin processing claims and make payments." The problem? There were no death certificates and at the time, no remains. Most people were all but vaporized in the infernos that turned into 110-story collapses.
"The first claim was paid that Friday," Travers says. "On my word, they made payments." To date, more than $25 million has been paid out in life insurance claims, mostly in amounts of $320,000. (Some beneficiaries delayed filing claims for tax reasons, and a few officers had policies for lesser amounts.)
"We could not have asked for anything more," says Kevin Sullivan, the administrator for the Uniformed Fire Officers Association’s family protection plan. While Travers had served as a benefits consultant to the UFOA for almost two decades, "Amalgamated had just taken us on in February," Sullivan notes. "It was an extremely difficult time, and they both really responded extremely well."
The UFOA presented Amalgamated with a commemorative plaque to thank the company for expediting the claims, and Travers now has a white fire helmet labeled Honorary Chief in his office that is dotted with American flags.
Travers’s work wasn’t over then. As the broker for the union’s property and casualty insurance, he also had to obtain immediate coverage for a giant "bereavement vehicle" donated to the union during the recovery effort. But Travers was told he could obtain insurance to cover only $100,000 of its $150,000 value. He was on the brink of sending a messenger to the company with a check for $50,000 "so you can give me paper for $100,000" when the company president finally relented and agreed to write a custom policy for $150,000.
Travers, O’keefe is a regional benefits consultant for all kinds of group insurance: flexible spending and tax-free commuter choice accounts, COBRA benefits, and health, life, property, casualty and directors’ insurance. Since September 11, Travers says, many companies have been surprised to see the heavy use made of "behavioral health" services such as employee-assistance services and psychological and psychiatric counseling, often around issues of bereavement, post-traumatic stress disorder and other panic and anxiety problems. "There had to be a lot of counseling given in order for people to feel safe. Some people flick on the light in the bathroom and relive the day every day," says Travers, adding that mental health benefits ought to be broadened.
"There had to be a lot of counseling given in order for people to feel safe. some people flick on the light in the bathroom and relive the day every day.
"Mental health has to be treated in a fashion much fairer than it is now. It’s a stepchild to other health benefits--but it’s also very easy to abuse." The abuse is in the form of too many people seeking therapy as a way to increase their "educational knowledge," Travers says. In the meantime, many people with serious mental illnesses are denied coverage for treatment. "Why would we treat someone with a serious mental-health problem any differently from someone with cancer?"
Managing and serving
Despite having lost many friends in the tragedy, Travers, 55, didn’t seek professional help himself. "I didn’t feel I needed it. I felt the pain would lessen over time. I had the distinct advantage of not seeing it myself."
As a large benefits consultancy that has grown since the mid-1980s to two offices and 42 employees, Travers O’keefe now represents a diverse group: the Tahari and JLO clothing companies, New York University School of Medicine, Weill Medical College, the Juilliard School of Music and Legal Services for New York City. The company is paid in either straight fees or commission, depending on the client arrangement. A benefits broker eases the complicated task of comparing different benefit packages. "I wouldn’t say we can’t do it ourselves, because we do it for other things, but candidly, you don’t get any better deal going outside," a broker to compare companies on your own, Sullivan says. "You don’t know the market, and a broker can identify all the companies" that satisfy underwriting criteria and meet desired specs.
"We literally act as a risk manager for our clientele," Travers says. "We try to set up a three- to five-year game plan, and alert them to new trends, new concepts, new ideas and new technologies." Increasingly, his business provides services directly. "We sell products to organizations and we’re also an employee benefits firm," hired to administer and adjudicate employee claims and enrollment chores that human resources once provided in-house.
In part, this outsourcing trend is driven by the Health Insurance Portability and Accountability Act, the new federal law governing patient privacy. "Because of these privacy laws, corporate America has had to build a fire wall around how they handle personal health information about individuals." Travers O’keefe has trained its claims handlers to wash down all personal information that could identify employees who used health services before sharing utilization data with employers.
Travers breaks into an "are you kidding?" smile when asked whether his employees ever get frustrated trying to get the insurance companies to deliver what they promise. "I have everything in writing," he says. "All the t’s are crossed and all the i’s are dotted." If a claims agent fails to reimburse a physician or patient according to contract, "we will go so high up in your company, your job will be at risk. We’re advocates every day. That’s what we do."
Contrary to what you may have experienced, Travers insists that "most insurance companies provide a very good level of service. But periodically, something happens in the claims office and it all falls apart." Usually, this is because someone who knew what they were doing left and an inept person took over. "They cycle. They all take their turns falling off at different periods of time," Travers says.
Companies tend to handle the stratospheric increases in health insurance costs--about 15 percent a year--in two ways, Travers says: Some continue to have a "cost-sharing relationship," absorbing a percentage of all increases themselves. But more and more often, employers spooked by unpredictably high bills are opting for "defined contribution: We’ll pay X amount of money on a monthly basis. They don’t have any other way to cap the spiraling cost of health insurance." At present, he notes, "we spend $5,380 per person--man, woman and child--on health care each year, whether they’re insured or not," with the vast bulk of the money being spent on the first and last years of life.
Those costs are in large part why Travers sees consumer-driven health care as "the next, most appropriate step" in managing the health-care crisis in the United States. Consumer-driven health plans usually allocate a set amount of money to employees that they can spend as they like, exempting elective procedures such as plastic surgery or laser vision correction. Then employees have to spend their own money until they reach another tier of spending, at which point an HMO or PPO plan kicks in again. While the consumer-driven model is attractive to some as a way of capping employer outlays, and for giving more control and responsibility to patients, critics say it does nothing to reduce the spiraling cost of all health care and prescriptions, shifts a greater portion of the payment burden onto employees and is no solution for the burgeoning ranks of people who lack health insurance. But Travers insists that educating and assisting consumers to make wise choices will reduce costs because employees will be motivated to get value for the dollars they spend and given a reason to keep themselves healthy.
"Health care in this country is viewed as a right and administered with a credit card," Travers says. "Users have no responsibility for what they use."
Travers, who is single, utilizes benefits himself in a somewhat unusual way. While he declines to specify which plan he uses personally (Travers, O’keefe offers several choices to its own employees), he does say that he pays for all his primary-care visits out of pocket since losing his own indemnity point-of-service plan eight years ago. "I’m not going to a doctor I haven’t chosen... I want my own doctor. I’m not an unwise purchaser of health insurance, but my doctor isn’t in the book." Similarly, Travers goes to his dentist every two months for a cleaning because he knows that oral health is important but refuses to floss.
What can companies do to make sure their employees are getting what they are paying for? "Audits!" Travers says. That’s to make sure the underwriter isn’t overcharging. For the first two or three years with an annual carrier, audits should be performed each year, and every two to three years after that, by an outside firm that specializes in auditing health insurance.
"The ones I use meet 99.5 percent accuracy" in proving that claims have been paid correctly, Travers says, "and I have all the reports to prove it."
Workforce Management, August 2003, pp. 71-73 -- Subscribe Now!