By Robert C. Love
During the last several years, changing legislation has brought disruption and uncertainty to the marketplace. Carriers have exited, insurance rates have climbed exponentially, and employers are being forced to scale back employee benefits due to the rising costs of running a business. However, a new year brings a positive outlook and many opportunities to the market.
Industry Insight
In recent years, the Affordable Care Act has produced new legislation regarding healthcare offerings. This, in turn, has created, and sometimes forced, change for carriers, brokers and employers. These changes have caused an increase in the workload that brokers and employers face on a day-to-day basis.
As 2019 begins, we predict a decrease in the number of ACA legislative initiatives. As we’ve seen in previous years, carriers and providers were quickly exiting from the market and rate increases were fairly steep. Legislation passed in 2018 is combatting this problem. With the repeal of the individual mandate and the reduced federal role, an alternate insurance market has been created, making it easier for carriers to do business. The market is seeing an influx of carriers joining (or rejoining) the exchanges for 2019 and the average rate increases for medical are substantially less than what was reported in 2017 and 2018.
As we wrap-up the renewal season, rates are coming in lower than previous years. Throughout the country, brokers are seeing “tolerable” low, single digit renewal rate increases for employer groups. This significant improvement can be contributed to the fact that employers are now consistently staying with the same carrier for their company’s healthcare, whereas in previous years employers would often change to a new carrier.
Product Development and Expansion
Brokers have more opportunity to expand their product offerings to meet the needs of employer groups. Employers are now favoring more choices when it comes to the coverage options that they provide to employees. Voluntary benefits, sometimes referred to as supplemental benefits or worksite benefits, are an additional benefit option that an employer can offer to an employee. These benefits are paid solely by the employee and are offered in addition to the core benefits package. Voluntary benefits tend to fall into four categories: health, wealth, security and personal.
Health
- Vision
- Dental
- Accident
- Critical illness
- Hospital indemnity
Wealth
- Disability
- Legal
- Financial counseling
Security
- Life insurance
- Travel accident insurance
- Identity theft protection
Personal
- Discount on auto, homeowners, or pet insurance
- Student loan programs
- Concierge services
- Umbrella insurance
Offering voluntary benefits has several positive outcomes for employers. These include: low cost to the employer (usually only administrative costs), an alternate way to control rising healthcare costs, and attracting and retaining top talent. Voluntary benefits are a great way for companies to stand out and capture the best candidates in the workforce, as well as enrich the traditional benefits offering. Year after year, the market sees an increase in the demand for voluntary benefits. Why do employees continually request these benefits?
- Low-cost coverage
- Payroll deducted
- Quick claims turnaround
Voluntary benefits are a cost-effective solution to help offset the out-of-pocket medical expenses and fill the gaps created by high deductibles and rising copays.
The Digital Technology Evolution
With the ever-changing technology landscape, brokers and employers are leaning toward a more digital way to submit business and manage their company’s benefit offerings. Both brokers and employers value the convenience and consistency that online tools can provide.
Online tools can help brokers save time by eliminating paper forms, reducing the number of errors on submissions, and creating digital files for groups. Brokers are also using online tools as a way to foster and grow relationships with their clients by facilitating communications.
Brokers have always, and will continue to, place a heavy focus on being able to provide consultative advice to their clients. These various technology solutions allow brokers to optimize their sales, automate processes, and serve their clients better by improving the customer “shopping” experience. In 2019, broker technology will aim to deliver everything a broker needs to grow and service their book of business, which will allow them to save time, control costs, and maximize value.
For employers, benefits enrollment and benefits administration is a top priority. Online enrollment tools make benefits selection easy for employees by using side-by-side plan comparisons, e-signatures and real-time updates. Employers can use online tools to manage benefits and employee profiles, new hire and open enrollment capabilities, contribution amount management, in-depth reporting tools, flexible portal design and customizable interface, content management tools, and supplemental benefits, such as dental, vision, legal assistance, and veterinary discounts. The end-goal for employers is to find a solution to streamline the integration of all benefit offerings and administration.
This digital transformation has pushed employers and brokers to seek out the same thing: a single, integrated online source for benefits.
Brokers can support their client’s digital initiatives by actively seeking out partners in the market that support and specialize in technology-based solutions. The benefits technology revolution will help brokers grow and maintain their book of business, while also supporting their client’s needs. These new products streamline processes and helps connect carriers, brokers, and employers.
This year will bring growth opportunity for brokers who are willing and able to adapt to the changing needs of their employer groups. To provide the most value, a broker needs to listen to their clients and respond with solutions that create efficiencies and bring value.
Robert (Bob) Love joined BenefitMall in 2018 as president, Benefits Division, bringing with him more than 30 years of experience to the BenefitMall team. In his role as President, Benefits Division, Bob provides leadership and direction for all benefit sales and operations, in addition to leading strategic initiatives. His leadership at BenefitMall supports the organization’ ability to execute and implement new products and services to meet the evolving needs of brokers and their clients
Love brings experience leading sales and operations teams in all size markets segments on a national level. Love’s background includes leading group sales & service and group distribution on a national level for MetLife, Guardian and Prudential.