Top trends in the benefits industry in 2014
December 29, 2014 9:27 AM
ACA changes
Benefit advisers and their employer clients have spent much of the year trying to inform themselves about the rules, requirements and looming deadlines of the Affordable Care Act ; a task made more difficult by further deadline delays and rule changes announced by the Obama administration in 2014. Most notably, President Obama announced in February that employers with fewer than 100 employees will not be required to provide health insurance to their employees until 2016. The benefit broker/agent industry is constantly in a state of change. Every day were expected to morph into whatever is necessary to accept the change the alphabet soup of federal agencies and the ACA throws at us, says Ronnell Nolan, president and CEO of Health Agents for America Inc.
Employers embracing wellness
As health care costs continue to increase, employers are increasingly turning to wellness programs to target some of the high-cost claims that hurt their bottom line. Innovative ways to approach wellness have continued to gain popularity in 2014. Wellness programs are also moving away from limited incentives in favor of more targeted incentive programs designed to support long-term lifestyle changes that lead to a real return on investment. I really believe the successful wellness programs are not going to be the status quo, well reimburse you for smoking cessation, well reimburse you for three months of a gym membership. Its going to be like, what are we actually doing with biometrics? What are we doing to make people healthy and actually change the claim curve? Thats where I think wellness is going to go and I think were getting there, says Vinnie Daboul, a partner with Sage Benefit Advisers.
The trusted adviser vs. benefit broker
The complicated ACA reporting requirements and threat of hefty fines for violating the health care reform law has employers concerned; a worry that has forced benefit brokers and agents to act less like an insurance salesman and more like a trusted adviser. This new world of benefits is requiring the broker to be more of a consultant and keep employers up to date with all of the changes, says Hyatt Erstad, president of the Boise, Idaho-based insurance company Erstad and Company, adding that those brokers who dont make the transition to trusted adviser will be passed up very quickly by employer clients.
Streamlined approach to benefits administration
Employers are looking for benefit advisers and brokerages to provide solutions to a growing list of benefit and HR concerns that go well beyond the traditional pitch for health insurance or retirement plans. To match employer needs, benefit advisers in 2014 have seen a rise in the popularity of benefit administration systems and new business models for brokers and agents that include a list of services previously reserved for internal HR departments. Employers are using a more integrated health strategy and using one vendor for all benefits, says Beena Thomas, vice president of health and wellness at Optum. Affordability still continues to remain paramount for employers, she adds.
Private exchanges
A streamlined approach to benefits enrollment and administration has also prompted employers, brokers and brokerages, and even insurance carriers in 2014 to continue evaluating the possible pros and cons of private exchanges. Their popularity continues to rise, as evidenced by the November purchase of HIX operator bswift by the insurance giant Aetna. Joe Markland, in a blog for EBA, said the purchase is one benefit brokers should pay close attention to. Some may think this is an acquisition of a benefits enrollment platform by Aetna. But I see this as another step by Aetna to execute on a plan to compete effectively in a new health care world. A world where consumers are in more control. He adds, In a not-so-obvious way the health care world is changing in a way that most brokers are not recognizing. Consumer-centric; mobile; doctors as wellness facilitators; employers out of the risk business? Maybe. So get ready.
Decreased plan flexibility
New requirements under the ACA that mandate a minimum value for health plans and limit out-of-pocket expenses for individuals have limited the amount of flexibility employers have in setting up health care plans for their workforce, says Hyatt Erstad, president of the Boise, Idaho-based insurance company Erstad and Company. That trend is something many benefit advisers have had to learn to work around in 2014. Les McPhearson CEO of UBA adds, As I look at 2014 from the highest level perspective it will obviously be the first full year of the individual mandate, court opinions around federal subsidies, and minimum value plans.
