Best practices for navigating premium increases for small group employers
The state of the health insurance marketplace is making headlines again, due to repeal of the Affordable Care Act individual mandate at the end of last year, which is set to be implemented in 2019. The mandate was originally intended to encourage young, healthy Americans to pay in to mitigate the costs of the sick and elderly. After its proposed removal, uncertainty still plagues the market and premiums continue to rise, with many forecasting double-digit individual market increases for 2019.
That said, brokers who work with small groups have an opportunity to set themselves up for success, while bolstering business opportunities.
Even though individual health premiums, theoretically, have little impact on small group premiums, changes in how young, healthy people access health insurance benefits does affect overall pricing. In fact, PwC’s Health Research Institute projects medical costs in the employer insurance market will rise by 6.5%. This has the potential to make navigating rising benefits costs for small businesses more challenging.
Employee benefits brokers who are proactive and begin planning how to address future premium increases are poised to become more valuable client counselors. Here are four best practices to keep in mind:
1. Explore multiple contribution scenarios: Small businesses are familiar with rate increases at renewal for employer-sponsored health insurance. Resourceful brokers recognize that offering clients options helps everyone. Now is a great time to work with clients to explore contribution scenarios to help them get the most out of their health insurance budget. While an employer might be happy with current plan offerings and want to keep things the same at renewal, it could make sense for them to work with a broker who can deliver access to tools that provide multiple budget options. Brokers who take a preemptive approach and work with clients to investigate other options sooner, rather than later, will help usher in a smoother open enrollment experience for all parties.
2. Shop the market: the sheer number of health insurance options — coupled with the vast, often confusing healthcare environment — can give anyone a headache. The “one size fits all” approach for health insurance no longer works. In these multigenerational times where employees have differing healthcare needs, wants, and budgets, a multi-carrier health exchange is a great option. It offers employees more choices without overwhelming employers with a lot of administration. By providing clients with expert guidance and service, brokers empower employers and workers to hone in on the best range of plans, resulting in happy, more loyal business owners.
3. Investigate different networks: Employees want to keep their doctors and medical facilities close to home. As carriers continue to finesse their networks, employees could be concerned about maintaining their physician relationship if there’s a plan change by their employer at renewal. The good news is that the hospitals and healthcare professionals clients want can likely be accessed via smaller, limited networks. This presents a huge opportunity for brokers to educate business owners about alternative networks and their benefits, such as reduced annual premiums while still providing access to employees’ preferred doctors and hospitals.
4. Deliver regular client updates: It’s important for brokers to keep a close eye on plan updates connected to price, provider access, value-adds and more. Service-oriented professionals who embrace transparency and regularly provide plan and pricing updates are invaluable — and they are bound to earn referrals and increase retention in the short- and long-term.
Health insurance cost increases will continue. Exploration of multiple contribution scenarios, shopping the market, network flexibility and transparency will prepare small business owners looking to chart a path through increasing costs.
Proactive personalized service is key in maintaining and growing business — leading benefits professionals to identify and take advantage of new opportunities.