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Sunday, 31 March 2013 22:00

Insurance agents see more integrated role with clients

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Just about everything in health care is changing, but insurance agents see their role as becoming increasingly important given the sheer complexity of the Patient Protection and Affordable Care Act.

Employers, even if they opt to buy coverage directly through a new health exchange, will still need someone who “keeps their eyes open as the world changes and evolves” in health care, said Krista Davis, an agent with Williams & Co. in Grandville and president of the West Michigan Association of Health Underwriters.

“The demands on the agents will continue to grow because the environment is getting more complex,” Davis said. “Everything we hear, agents will provide the valuable role that we do today.”

And perhaps more so, she and others say. Even a major shift in how employers execute a transaction for health coverage won’t diminish that role but rather transform it into more of a consultancy.

As public and private health exchanges emerge in the market, agents and benefits consultants will remain on the frontline of helping employers understand their options and decide what to do with their health benefits, said Joel Ario, managing director of Washington, D.C.-based Manatt Health Solutions.

“When they make that final decision, they still want an expert to help them with that final decision,” said Ario, the former director of the Office of Health Insurance Exchanges at the U.S. Department of Health & Human Services who spoke at a recent event sponsored by the West Michigan Association of Health Underwriters.

At the Grand Rapids office of benefits consulting firm Mercer, business is picking up, said E.J. Pearson, a principal in Grand Rapids for the company. Employers who haven’t already done so are looking for help to figure out whether they comply with the law, he said.

They also are thinking longer term about how they manage their health benefits and the costs in an era of reform.

Much of the work insurance agents and benefits consultants do today focuses on helping clients analyze whether they meet the federal reform law’s affordability test and whether to use a private health exchange to buy benefits. Other companies are weighing whether they should drop health benefits altogether, pay a penalty and let employees buy individual coverage on a public health exchange.

“It’s a tremendous opportunity,” Pearson said.

“We are seeing more employers reaching out to us and ask about assistance, or at least talk about some of the changes going on, whether it’s about health care reform or private exchanges,” Pearson said. “Instead of just saying, ‘Well, maybe we can just increase a deductible or a co-pay or increase our employee contributions by 10 percent,’ now we’re looking at much more strategic ways of controlling costs and different ways of delivering benefits.”

Some employers are already looking at whether their benefit packages will fall under an excise tax that starts in 2018, and they are trying to determine what it may cost them, Pearson said. They also need some assistance in how they communicate all of the changes to employees, he said.

With less than nine months to go before key provisions of the Affordable Care Act kick in — including the requirement that all Americans have health insurance — agents and benefits consultants say much of what they do now is connected to health reform.

“We have to walk them through the maze and give clients a way through it,” said Bob Hughes of Advantage Benefits Group in Grand Rapids.

That’s a continual process, Hughes said, as the federal agencies issue new rules employers have to meet in implementing the Affordable Care Act.

“Stuff just keeps popping up. There’s just so much and everytime they turn the corner, they get whacked in the face,” he said. “We just took the compliance issue for employers and gave it a steroid or two.”

As the law heightens the role of agents and benefits advisers, health plans are ratcheting up their expectations of those agents as well.

Priority Health in December said it planned to implement a new standard for group agents that begins Sept. 1, just in time for 2014 policy renewals. Priority Health wants all of its agents to have at least 20 group coverage contracts that consist of at least 20 employees in each group. The idea is that having agents handle a minimum amount of group business creates a better environment for them to learn as much as they can about reform and how it affects their clients.

“Our intent is to ensure that our agent network was really invested in the market, that they understood the market and it was full-time for them, and that they understood health care reform and the challenges and complexities coming in 2014,” said Scott Norman, Priority Health’s vice president of sales.

“It was really a way for us to make sure we had a strong agent distribution network so that when groups and individuals came to Priority Health, they knew that the agent they were working with really understood what was coming in 2014,” Norman said. “The days of just being able to deliver a renewal and say, ‘I’ll see you next year,’ are gone, especially with 2014 coming.”

Priority Health has about 3,000 agents statewide. Norman said the network of agents may shrink this year and that the new standard may potentially affect 1,000 agents.

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