By Candace McAfee on Feb 18, 2016 11:20:08 AM
When the Affordable Care Act was unveiled in 2010, the insurance industry was aflutter with concerns over how the reform would affect brokers. Would there still be a role for these professionals to fill? As we begin 2016, it has become clear that although their roles have evolved, brokers are still an asset in the changing world of health insurance, particularly in the private exchange marketplace. Watch out for these three private exchange trends in 2016.
- More broker involvement with employer healthcare selections, as well as consumers
The switch to a private exchange marketplace means more choice for consumers. However, with an increase in choice, there is also an increase in the need to be fully informed. Many employers and individuals purchasing health insurance plans are unaware of the true meaning of the options detailed by providers in the marketplace. The industry jargon offered by many online resources and white papers can leave an applicant feeling lost and more confused than when they first began researching. In enters the broker, who can provide a wealth of information on which plan would fit their client’s needs the best while also staying within their budget! Brokers around the country have begun to offer their services through the insurance provider themselves, or individually to consumers, mitigating the headache of navigating the marketplace and assisting their customers with obtaining a tailored healthcare plan. These services also extend to online assistance, which brings us to the second trend…
- Technology continues to grow as an essential tool for the marketplace
More small businesses are exploring private exchanges as an option for their employees. The administrative and compliance burden on human resources is lifted, as the enrollment, compliance reporting and support is dealt with online rather than by more traditional, paper-based means. The large variety and lower cost per plan also allows employees greater flexibility, while avoiding “one size fits all” group plans keeps the insurer from doling out cash for benefits that may go unused. This creates a need for insurance professionals who can help them navigate the online exchange marketplace and fully understand which plans are best for them. Not only does technology offer consumers fast, at-their-fingertips service, it also allows brokers more ease in communicating with their clients. As you may already know, social media is one of the best ways to sell your services as a broker, or explore a new role as a consultant. Using these outlets will garner you more visibility, while also increasing the number of direct communication channels with potential customers. By offering insight on health plans, voluntary coverage, cost sharing and potential tax credits, brokers are a much needed resources for consumers.
- Rise of the CDHP (Consumer Directed Health Plan)
The percentage of larger companies offering CDHPs is expected to grow, over the next five years, from 59% to 75%. These consumer directed health plans are categorized as having a lower premium with a higher deductible. This reduces company spending and transfers more financial responsibility to the employee, so it is easy to see why the option is so attractive. These plans are increasingly supported by voluntary insurance to help combat the high out of pocket expenses that consumers may face with a serious injury or hospitalization. To temper the pricey deductible, these employers also may offer a health spending allowance that is to be used toward the payment of expensive medical bills, as well as wellness initiatives to promote preventive care. This shift in responsibility requires employees to take complete control over their health insurance needs, which brings us back to the issue of consumer awareness. These programs, while offering flexibility and transparency, also requires a thorough knowledge of the marketplace. However, where there is a problem, you can be the solution! By partnering with a benefits consultant or broker, companies who choose to implement CDHP can offer employees the tools they need to complete their enrollment, while making the most informed decision possible.
While most companies are still offering traditional health plans to their employees, there is no question that the marketplace is evolving to suit consumers’ ever-changing needs. As a broker, make the most of this transition and get ahead of the competition in 2016!