February 6, 2013
February 6, 2013
Contrary to every thing you have read or heard these past three years, many believe that there is a very real and logical possibility that the uninsured population in California may increase as the Affordable Care Act (ACA) is implemented in 2014. I know that many of those, that dutifully support the ACA, have been convinced that come 2014 there will be somewhere between 20 million and 40 million US citizens lined up to apply for coverage. But a growing list of facts and variables suggests that there may be a lot of shoppers but not many buys.
I think the estimates of millions of newly covered Americans are wrong because on main street where people really live and work the math does not add up to more covered Americans.
One could fill a book with the specifics behind my statement but the facts boil down to two simple reasons:
- Cost
- Human Nature
1. Cost:
- Everyone projects premium in 2014 to be much higher than 2012 and 2013. In fact, many carriers have been increasing their premiums already, in preparation for the ACA, much to the chagrin of regulators. You have heard the facts behind the projections on higher premiums – 3-to-1 rating slope, mandated benefits including vision and dental for kids, all of the new fees intended to “level the playing field” and affects from Medical Loss Ratios (MLRs) on pricing, just to name a few.
- The fact is employers and employees can’t afford the current premiums being charged; so how will they afford higher premiums next year? The result may be that many employers will no longer sponsor or pay for their employee’s health plans. Employers will be forced to let employees buy their own coverage through the Exchange.
2. Human Nature: Here are several examples
- Let’s look at the current uninsured population for starters. Many could afford and acquire coverage now but choose not to. What makes anyone think that they will suddenly have a change of mind and then enroll in a plan that is higher priced than the plans they don’t buy today.
- Many uninsured are uninformed or not interested in buying their own insurance. Nothing in 2013 or 2014 will change their perspective.
- It is predicted that many employers will discontinue the current plan they offer and tell their employees to buy their insurance from the Exchange. These newly uninsured folks have not shopped or purchased insurance on their own before because their employer always provided it. Now these members will be forced to shop on their own which many will choose not to do.
- This newly uninsured population (formerly covered by employers) will also discover, for the first time, the actual cost of insurance. The “sticker shock” may/will prevent them from buying their own plans.
- Uninsured who do shop, want to enroll, and even qualify for subsidy will discover that the subsidy does not cover their entire premium and the remaining premium may be more than the citizen is willing to pay.
There are many more examples of “human nature” I could mention. For these reasons, I fear that sometime in 2014 we may hear reports that the number of uninsured is actually increasing. Those reports will drive the politicians supporting the ACA, who have their credibility on the line, to go looking for scapegoats. They will want to place blame and you know where it will be pointed.
They will point blame toward insurers, brokers, employers and providers.
So, let’s hope that in the few months remaining before 2014 plans are released that the HHS and its minions will make changes that encourage employers to stay in the game.
If we can make it easier and more affordable for employers to continue sponsoring their group health plans then we can make a dent in the uninsured population. HDHPs with integrated HRAs are one solution so watch for our announcements.
Unfortunately, I am a skeptic trapped in an optimist body and therefore I fear we should prepare for a higher number of uninsured, while working hard to provide solutions and make a difference.
Let me know what you think,
Mark Reynolds, RHU
Posted in General | 3 Comments »
January 16, 2013
January 16, 2013
Beginning just after the façade known as the “fiscal cliff” lost its media luster the national media began its blitz of stories concerning health insurance carrier’s request for rate actions across the US. Actions that are needed, by the way, as the american health insurance carriers prepare for 2014 and the final stages of ACA implementation. As I say above, do not be fooled by this.
This is the media’s collusive effort, with supportive Democrats, to demonize the insurance carriers and thus push our citizens into giving state legislators and state insurance commissioners absolute rate authority. Media stories will criticize insurance carriers as being greedy and try to make the case that the premiums asked for by carriers are not necessary.
What other industry on the planet is told what to produce, how to offer it, what must be covered including experimental treatment, threatened about their product, then restricted to what the company needs to charge for the product. None. No other industry except the american health insurance company.
Two things to remember:
- Carriers are mandated to accept individuals guaranteed issue with no pre-existing condition limitation, with mandated benefits for maternity, preventive, and lifetime limits. But citizens are not forced to buy the product until they get sick and will then be willing to buy the coverage. No, I did not forget about the Mandate Tax Penalty but get real…is $95 per year tax going to encourage any person to buy insurance before they need it?
- Also, because of the massive mandated benefits, restrictive pricing, no underwriting, etc, the carriers really have few options to consider when pricing their product. They are not allowed to give too many options and of course if they misprice their product and run out of money then who will be there to bail out an “evil and now mismanaged” insurance carrier. Answer…NO ONE.
So, do not be fooled by the daily flow of news flashes coming across your email that paint a picture which makes the carriers look like they are being excessive. Also, just as in 2009, when the infamous Anthem increase of 39% pushed HCR forward, the news flashes are spotlighting carrier request for their individual products not group. The ACA restrictions on individual plans are the scariest to price because of what I said above regarding mandated benefits and people not forced to buy.
Group products will certainly see increases because the regulations and restrictions coming in 2014 force it but the media is trying to fool the American public into thinking the double digit increases about which it is reporting also pertain to group.
Don’t be fooled and don’t miss an opportunity to challenge what you read.
Finally, if given the slightest chance, we should defend the american health insurance companies which are being forced to do what no other industry in the world is forced to do.
The ACA is real and it is going to be implemented. But, that does not mean that the battle to do what is right is over. Don’t give up and don’t give in!
Thanks for listening.
Mark Reynolds, RHU
Tags: aca, affordable care act, broker, brokers of record, business, carrier, E-based, economy, employer driven health plan, employers, ERISA, fully insured, group health plan, group medical, healthcare consultants, healthcare reform, inappropriate actions, low cost plans, mark reynolds, opportunity, poor decisions, PPACA, SCOTUS, self funded, wellness
Posted in General | Leave a Comment »
January 16, 2013
January 9, 2013
HRAs are, and have been, misunderstood by many people for years and that continues to be the case regarding ACA’s $5.25 PEPM Reinsurance Fee. The point of this message is to inform you and confirm for you that HRAs integrated, or “wrapped” with a group health plan are not affected and will not pay this fee.
Background….
Many have not heard of the Three Rs (3Rs). The ACA established three risk-spreading programs (hence 3Rs) to provide payments to health insurance issuers that cover higher-risk populations. These three programs which will be effective in 2014 are:
- Transitional Reinsurance Program
- Temporary Risk corridor Program
- Risk Adjustment Program
These three programs, one of which is temporary, are intended to help spread the risk created by the ACA and the newly insured for the issuers of coverage.
This story hit the news a few weeks ago as another fee with in ACA. You may recall the headlines “ACA has hidden $63 per year fee for employers”.
Once again…
This $63/yr, $5.25/month per employee fee does not apply to HRAs that are integrated with a group health plan.
So, the employers providing their group health plan through BEN-E-LECT’s EDHP™ Plans do not need to worry about this fee.
However, there will be other fees to worry about so watch for that information throughout the coming weeks.
Mark Reynolds, RHU
Tags: aca, affordable care act, brokers of record, business, constitutionality, E-based, employer driven health plan, employers, ERISA, fully insured, group health plan, group medical, health plan, healthcare consultants, healthcare reform, inappropriate actions, low cost plans, mark reynolds, PPACA, risk adjustment, risk corridor, SCOTUS, self funded, solutions, summary of benefits, transitional reinsurance
Posted in General | 1 Comment »
January 16, 2013
January 3, 2013
In my opinion, one of the biggest issues to face brokers and employers in 2013 will be ACA’s rule that employers must give members at least 60 day written notice of any material plan modification. We say this because this rule is unknown to many, misunderstood by most, and interpreted differently by some.
First, let’s clarify that this 60 day rule does not apply to modifications made at time of renewal on the group’s plan anniversary.
So, having clarified that it applies to mid-year mods only, let’s bullet a couple items.
- Material mods include both increases and decreases in benefits
- Change in premium is a material mod
- Small employers may be impacted more than large employers
- Changing from one carrier to another mid year is a material mod
- Some carriers are defining a mid-year carrier change differently than others
We state that this will be a big issue because history tells us that people, and by that I mean employers, particularly small employers, don’t usually make their health plan decisions 75-90 days in advance of the desired affective date. I have heard many people state that small employers will just have to change their ways about making timely decisions. I agree but I am not sure that it will happen that way.
As brokers counsel small employers about new plans it may become common for brokers, carriers, and TPAs to let employers assume the responsibility and therefore liability of complying with this rule. Let’s face reality, if a small employer can comply with Essential Benefits and reduce its cost 25% by enrolling on one of BEN-E-LECT’s EDHPs™ how are brokers going to stop that.
BEN-E-LECT will comply with the carrier’s guidelines, as it always has, but do what the employer requests. The employer can simply sign BEN-E-LECT’s newly created enrollment form called the Statement of 60 day Notice Compliance and away the group goes.
One final note, this notice was/is intended to benefit our citizens who are usually uniformed or disinterested. So the result of this form actually makes it harder for employers to improve benefits and do the right and moral thing for their employees. Watch in the coming days for more information about how carriers are applying this 60 day rule. We have already witnessed two large carriers handle a mid-year new enrollment in a diametrically different way.
More to come, but don’t worry because we will keep you abreast of the goings and comings of these rules.
Mark Reynolds, RHU
Tags: 60 day notice, aca, affordable care act, broker, brokers of record, business, carrier, constitutionality, E-based, employer driven health plan, ERISA, fully insured, group health plan, group medical, healthcare consultants, healthcare reform, low cost plans, mark reynolds, material modification, PPACA, SCOTUS, self funded, summary of benefits, wellness, worksite wellness
Posted in General | Leave a Comment »
January 16, 2013
October 15, 2012
Summary of Coverage and Benefits (SBC): makes one feel so comfortable and informed, doesn’t it…It may be well intended but misses the target by a longshot for HRA or MERP plans.
If I told you that I would send you a federally regulated, PPACA required outline of what your benefit plan covered to be called your Summary of Benefits and Coverage, you might expect to receive a document which would clearly and easily inform you of the benefits provided by your medical plan. Well….upon receipt you would be sorely disappointed.
PPACA’s intent of providing a document to help members understand their benefits and compare against other plans was well intended. The fact is that this document does just the opposite. For a society that gets its information from “Live with Kelly and Regis” and “Entertainment Tonight” the SBC is to long and too confusing, and in most instances…inaccurate.
Members are used to seeing a two, possibly three page HRA/MERP Schedule of Benefits with three columns on it. First column identifies the benefit i.e.: Office Visit, the second column states what the member pays, and the third column states what the plan pays. There are variations, of course, and RX, out of pocket, and out of network may be illustrated differently but members can easily identify their benefits and what their costs might be if they use their plan.
Since October 1st, our office has created several thousand SBC formulas and distributed hundreds of finalized SBCs to our web portal, EMPOWR™, to help our clients meet their PPACA SBC requirements.
Members require an easy to read and understandable outline of their benefits, which is why BEN-E-LECT will continue to create and distribute our standard Schedule of Benefits in addition to the SBCs.
Our advice to our Broker Partners is: don’t use the SBCs to explain the member’s plan and encourage the employers to not use the SBC as well.
Health insurance and medical plans always have and always will confuse folks so, while being compliant, we all still need to do what we can do to help members understand and access the benefits their employer provides.
Mark
Tags: aca, affordable care act, broker, business, carrier, E-based, employer driven health plan, employers, ERISA, fully insured, group health plan, group medical, health plan, healthcare consultants, healthcare reform, low cost plans, PPACA, renewal, sbc, SCOTUS, self funded, solutions, summary of benefits, uniform glossary, wellness
Posted in General | Leave a Comment »
April 30, 2012
Is it time to discuss Repeal and Replace?
In the next six weeks, the discussions will once again return to the Supreme Court’s decision on PPACA. Therefore, we need to prepare now for what our industry’s realistic and common sense approach to SCOTUS’ decision can be. If the law is upheld we must go one direction but if it is struck down in all or in part then we must go another. Currently the media is focused on the GSA and Secret Service scandals; and therefore not giving healthcare much attention, but that will change.
Therefore let’s focus on “repeal & replace” for a moment, since that is the Republican motto, for now. One way or another during this coming summer and fall, we will need to address “repeal & replace” so let’s assume we must replace the law because the citizens will not stand for the status quo.
Here are 10 ideas to include in a bill to repeal and replace:
- Make health insurance premium tax deductible for anyone who pays it.
- Make all Fully-Insured plans Guarantee Issue to 1 EE Business with a reasonable Pre-ex period. Pre-ex period 6 months.
- Allow Carriers a reasonable corridor for Risk Adjustment Factors (30%).
- Tort reform: Loser Pays or Fixed Attorneys at 15%.
- Allow carriers and plans to sell across state lines.
- No new benefit mandates for 5 years.
- HRAs and MERPs to be permissible and available to implement on all plans.
- All providers and insurers to publish outcome statistics and experience data.
- Universal Enrollment forms for Employer/Employees, Individuals/Families.
- Health plan commission set at level 7% and does not increase as premium does.
I also think wellness, pooling for individuals and families, and a traditional approach to underwriting will be important. Certainly, if we want to bend the cost curve downward we must address behavior and expectations through real wellness and benefit structure.
I will expand on these ideas over the coming months but let’s make no mistake; the issue is access and affordability. The industry and those of us who make our living in it must drive this discussion. We can not sit back to let any Congress, Republican or Democrat, develop the solutions because that will provide no solutions.
I suggest that every carrier executive involved in plan design and pricing go to the field and meet with small employers. Just a few conversations will make it clear that employers are willing to provide their health plans in new and better ways if someone will just show them how.
We need to show them how. More about that later.
Some may think that I am premature in discussing this matter or that it will never come to pass. Well, that is what we, as an industry, did from 2002-2009 and look what happened.
This time, let’s plan to be ready!
Let me know what you think and give me your ideas to improve my Basic 10.
Tags: broker, brokers of record, business, carrier, constitutionality, current-events, E-based, economy, employer driven health plan, employers, ERISA, fully insured, government, group health plan, group medical, GSA scandal, health plan, healthcare consultants, healthcare reform, inappropriate actions, incumbent, low cost plans, mark reynolds, opportunity, politics, poor decisions, PPACA, premium, SCOTUS, self funded, solutions, wellness, worksite wellness
Posted in General | Leave a Comment »
April 2, 2012
First of all I want to declare that this is not a commercial for any particular carrier or health plan. This is simply an observation made over the past 6 months taken from dozens of meetings with employers both small and large. But the information below may be critical to your growth or your survival.
I want to talk about sales opportunities in the small group medical market.
I realize that as you read this, SCOTUS is listening to arguments concerning the constitutionality of PPACA. I also realize that the standard thinking of the day is that rates have flattened out so employer’s rate increases have leveled out so no one wants to move their health plan. But, let me assure you that I understand all that and that I have not lost my mind. Here’s why……..
Let’s review the facts. Employers have just lived through 7 years of double digit rate increases that were only slightly mitigated by benefit decreases. Any rate increase, even 1%, is an increase to an already bulging rate so there lies the first opportunity!!!
Incumbent brokers are feeling relief, after 7 years of delivering double digit increases, and are telling employers that finally their rates have stopped increasing and so this year we can leave the plan alone. Brokers of Record, everywhere, are consulting with their clients and telling the employer that this year the employer can just stay put. There lies the second opportunity!!!
No one should assume that any employer is currently satisfied with the cost or the benefits of their existing health plan. Whether the employer expresses this dissatisfaction or not one should assume that the employer is just waiting for a better idea for a health plan and in the back of their mind they know that one exists.
So, in walks a prospecting broker, hungry for new business and armed with Employer Driven Benefit Plans. This prospecting broker shows the dissatisfied employer that there is another way to finance their group health plan.
The prospecting broker explains to the employer that 50-70% of the employer’s employees hardly use the plan, if at all, so if the employer installs an Employer Driven Plan the employer can lower its premium and only pay for claims if they are incurred. The prospecting broker just became the incumbent!
Even if the employer does not enroll in this newly discovered Employer Driven Plan the employer will be impressed with the prospecting broker. So the employer will ask “Why didn’t my current broker show me this plan?”
If an employer asks that question then the employer will surely sign a BOR.
So, the point is that just because the market appears to be flat do not be fooled by it. Employers are fed up with the status quo; Employers are willing to finance their health plan in a new way if someone just shows them how.
Shouldn’t you be the broker to show them how?
As I stated upfront, this is not a commercial for EDHPs. Sell what you want but the advice is this; do not be fooled into thinking employers will not change plans during 2012. This could be a prospecting broker’s biggest year yet!
Tags: broker, brokers of record, carrier, constitutionality, employer driven health plan, ERISA, group medical, health plan, healthcare reform, incumbent, low cost plans, medical, opportunity, PPACA, relief, SCOTUS
Posted in General | Leave a Comment »
March 12, 2012
First of all, thank you to the many respondents to our first Blog effort and to all of you who signed up for more. It is interesting to see so many interested in another point of view and it’s encouraging to hear that so many agree that there are opportunities ahead.
I want to address ERISA based small group medical solutions and the underwriting needed to thrive within healthcare reform (HCR). You have heard me say and read from our many articles that ERISA ,or rather E-based small group plans will provide brokers and employers many solutions as we approach HCR. But, we need to address underwriting too as we look to this approach. The more casual underwriting practices of the past 7 years bear much of the responsibility for our current HCR situation so to approach E-based solutions without analyzing these mistakes would be fool hearty.
Research and opinion support the notion that 50-70% of small employers, those with 15 to 99 employees, could benefit from a properly administered E-base solution for their group health plan. But, how does one determine which employer unit would benefit and which one would not. The answer begins with practical solution based underwriting. Not every employer will or should qualify for the new E-based medical plan solutions. Groups with positive, supportive work environments and groups with worksite wellness or encouragement programs will benefit greatly from these new plans.
However, employers and brokers looking for low cost plans with no investment in its success will not find these E-based plans to be a suitable plan solution. Employers with a group history of shopping for the cheapest rate each renewal and not acknowledging characteristics within their own group will not find E-based plans to be a pricing panacea compared to the premium-based, guaranteed RAFs of the past 7 years.
Sound E-based plans will include a proper underwriting process to evaluate the appropriateness of the E-based setting for employers. Some employers will not find the results of this underwriting to be acceptable. Groups in this scenario may need to retain their fully insured traditional plan until efforts are made to alter the characteristics within the group. Real time goal oriented wellness and health encouragement plans may need to be employed to prepare these employers for the solutions available in the new E-based health plans of the future. We can address these ideas in future editions.
The casual premium-oriented underwriting of the past 7 years has led brokers and employers to be unprepared for the underwriting required, that is if employers want a chance to control their own plan destiny for benefits and premiums. It will take some effort to understand and promote the benefit of proper underwriting but the rewards from it will be worth the effort for every employer.
There are solutions available in the California market today that implement this strategy of proper underwriting and E-based solutions…so the future is now, as they say. Brokers should seek out TPAs and health plans willing to look beyond the next quick RAF fix to create a long term solution.
Remember, experts predict that 50-70% of the employers in the 15-99 market will qualify for these solutions and employers are definitely willing to make the effort needed to qualify; if someone will just show them how. Don’t those employers deserve the chance to see what an E-based solution looks like for their own group?
Tags: business, E-based, employers, encouragement programs, ERISA, fully insured, group health plan, healthcare reform, low cost plans, marketing, premium, renewal, self funded, solutions, suitable plan, wellness, work environments, worksite wellness
Posted in General | Leave a Comment »
February 23, 2012
Hello, and welcome to our little communiqué discussing healthcare reform as well as other issues within the financing of healthcare. It’s a guarantee that this year, 2012, will be as unsettling as the past few. But, one thing is for sure, we need to be discussing solutions not belly-aching about the issue. We need to be looking at HCR from a “solutions perspective” which addresses both cost and benefit for employers but also the role and future for healthcare consultants. That’s a broker to you and me.
For one’s initial offering at “blogging” I suppose I should be bold and flamboyant to gain attention and followers. Well, I won’t promise any thing like that but I will promise thought provoking ideas and insight about current happenings in the market as well as a few solution minded comments to stir the conversation.
A couple years ago we created a piece entitled “Ten Myths about Ben-e-lect” in which we de-bunked all of the so-called myths about Ben-e-lect and its Employer Driven Health Plans. Myth number ten stated that “Mark Reynolds is hard headed and will not work with carriers. I have tried to do better. Our staff even wanted to call an intervention to soften me a bit but I do promise that what you read in this blog will be unvarnished ideas and opinions that may wrinkle a few brows and even upset a few folks.
It is not my intent to ruffle feathers or egos in this blog. However, ten years of poor decisions and inappropriate actions by many within the insurance industry have led us to this abyss and we need straight talk to avoid the catastrophe that appears before us.
If we, as an industry of brokers, TPAs, and carriers are going to have input and make a difference then we need a little bit of truth delivered unvarnished and straight to the point.
For today, I just want to state, for the record, that Healthcare Reform is coming toCaliforniain one shape or another. If PPACA is diluted or stricken thenCalifornia’s brokers, carriers, employers, and TPAs will surely face reform from within our state. Either one is survivable but must be addressed. The point is that brokers are better off accepting this as fact so that they can plan accordingly. Denial or avoidance will not work.
HCR does not need to mean the end to a broker’s career. It simply means that you must find another way and another product to provide the health plan and services your clients need and deserve.
In the coming weeks we will explore those other means and speak candidly about what is and is not working for brokers inCalifornia.
Sticking one’s head in the sand or succumbing to the doom & gloom scenarios laid out in your monthly meetings will not get you the result you desire.
Our intend, in this blog, is to lay out solutions. Any knucklehead can outline all of the problems. We do not need that, so let’s be different and explore HCR from a perspective of solutions.
Talk to you soon.
Tags: healthcare consultants, healthcare reform, inappropriate actions, mark reynolds, poor decisions
Posted in General | 1 Comment »
