This October finds a whole new take on open season as employers peer at the new health insurance exchanges and pepper their health insurance advisors with questions about whether they should steer their workers there.
“A big question is: will the marketplace be a viable option?” said Joseph “Joey” Giangola of Giangola Insurance in Ashtabula, Ohio. With the establishment of the health care marketplaces, or exchanges, under ACA, many fear that companies will shift their employees to the exchange for coverage. “For companies in the 5-10-15 employee range, in a lot of cases they are figuring out whether to keep their plan or whether to put their employees into the marketplace,” he added.
This fall’s open enrollment season brings with it a whole new set of anxieties and challenges because the start of open enrollment coincides with the Oct. 1 launch of the health insurance exchanges as part of the Affordable Care Act (ACA). But along with these anxieties and challenges are opportunities for advisors who are able to position themselves as a valued partner with their group business clients.
Advisors said that working with their clients to find the best coverage at the best rates, and positioning themselves as a resource for their clients are the best ways to guide their clients through the open enrollment season and retain their business.
“Brokers need to approach it from a positive mode. Look for ways to add value to your client. Partner with TPAs (third party administrators) and self-insured carriers that can be nimble and think outside the box,” said Susan Rider with Gregory & Appel, a regional broker based in Indianapolis. “Diversify what you’re able to offer to your clients. In our business, we are seeing that the mid-size market is needing additional human resources assistance because the HR departments are getting slimmer and ACA has put more requirements on HR departments. We are rolling out an HR unit to help provide support to our clients. You need to tell your employer clients that they need to work with someone who can partner with them and work strategically with them over the next five years.”
Shar Sparano, president of Benefits Advisory Service of Forest Hills, N.Y., echoed the need for advisors to provide HR assistance to clients who may need it. “Employers need to get their records up to spec and we can give them assistance with that,” she said. “All clients are different but they all have to comply with the new law.”
David Capo, who is a senior account executive in Sparano’s firm, said that ACA has forced advisors to “be more strategic in working with clients.”
“We are planning not just for their renewal in three months but for the renewals coming up in the next year, three years, five years,” he said.
Health insurance advisors report that this year’s open enrollment season is bringing more questions than ever from clients, more information to convey to clients and more changes to brush up on in order to serve those clients.
“Everybody wants to know what to expect. Everybody has questions. They need help!” Sparano said. “We are doing a lot of work on our existing groups. Our existing clients need more of our attention than ever before. Rates are high, increases are substantial. Clients are looking at alternatives.”
Training and outreach are among the major activities advisors are conducting in preparing for open enrollment season. “There are three people in my office and we are spending a lot of time going to meetings and doing outreach,” Rider said. With more than half of the 32 people in broker’s benefits department having completed ACA training, the company has been able to get information about the changes that are coming and share that information with their clients in a timely fashion, Rider added. In addition, her company serves as an exchange educator in each of the states in which it conducts business.
“Now, more than ever, our clients are really engaged. The CEOs and CFOs are more engaged because of the extreme financial impact that health care has on their company’s bottom line,” she added. “Health care is a major business decision for them now.”
“Right now, it’s a wait-and-see kind of game until the big show starts,” Giangola said. “We are approaching our clients on an individual, case-by-case basis to discuss their needs and their options. Each of our clients is different and we need to concentrate on what each one needs.”
Giangola noted that many of the insurance carriers that his company represents are offering early renewal options to their group customers. This enables the customer to lock in a rate prior to Dec. 1, 2013, instead of the normal date of Jan. 1, 2014.
Even though employers were given an extra year to comply with ACA-mandated requirements, advisors have been busy answering their questions and preparing them for what lies ahead.
One question that Rider said many of her small to mid-sized group clients is asking is whether a self-funded health plan is a more economical option than a fully-insured plan because of tax considerations.
“There are a lot of compliance issues involved. It’s a matter of letting our clients know what’s out there and what they need to do in regard to compliance (with the law),” Capo said.
Sparano added that “The No. 1 thing is to sit down and discuss what’s compliant and what they can expect down the road. There is a timetable for all the regulations that are coming down. Review the timetable with them. Just because they get an extra year to comply, they will need to be working on it now.”
Since ACA was passed in 2010, policy experts have debated whether 2014 will mark the beginning of the end for employer-sponsored health insurance as we know it. Researchers at the University of Michigan released a study in September predicting a relatively small decline in employer-sponsored coverage as a result of health care reform. Their paper, published in the September issue of Health Affairs, predicted a change in the percentage of employers offering coverage from a 1.8 decline to a 2.9 percent increase.
“The response of employers to health reform is important for several reasons,” said Helen Levy, a co-author of the study. “First, a reduction in employer coverage could increase federal outlays if more workers receive premium tax credits in the exchanges or enroll in Medicaid.”
Second, if the employers who drop coverage have relatively less healthy workers, this worsens the exchange risk pool, driving up average premiums. And lastly, the ACA was presented to the American public as a reform that would not seriously disrupt existing employer-sponsored coverage, she said.
“To the approximately 160 million Americans who have such coverage and are for the most part quite satisfied with it, large-scale employer dropping of coverage would be an unwelcome surprise,” Levy said.
Another co-author, Colleen Carey, notes that since the employer penalty for not offering coverage will not take effect until 2015, it may be several years before the true effects of these policies become evident.
Giangola said that despite some of the uncertainty in the ACA world, advisors still must be ready to serve their clients.
“Don’t be afraid to jump in head-first. Don’t treat (ACA) like it’s Armageddon. Learn as much about this as you can because you gotta be ready to answer your clients’ questions,” he said.