Price is a top priority when employers contact benefits brokers. Health care reform legislation brings even more questions.
- How can I avoid the 40 percent tax on “Cadillac” health insurance plans?
- Should we drop our health insurance?
- What do I have to do to be compliant today and several years from now?
These questions make the benefits market more complex, but that information also makes the benefits consultant even more valuable to employers and individuals looking for insurance coverage. That complexity could lead to more business as the industry continues to evolve.
The Loomis Co., a Wyomissing insurance agency, is hiring up to 100 customer-service and claims-adjustment positions to its workforce of 280. Company President James R. Loomis is contemplating a similar round of hiring next year.
“I think it’s going to grow dramatically,” he said. “The next years are going to be the telling time for us.”
Since the Affordable Care Act was signed into law in 2010, some provisions have gone into effect and others have been postponed several times. Small businesses with fewer than 50 employees aren’t required to offer health insurance under the Affordable Care Act. But their employees and all individuals were required to have health insurance in January. Larger businesses need to provide insurance to full-time workers in 2015 or 2016, depending on the size of the company.
“It’s challenging because the law constantly is being revisited or revoked or changed,” said Rhonda Mayer, account executive of Tompkins Insurance.
The Spring Township company’s largest segment of business is employee benefits, most of which are employer group plans. These clients work with Tompkins to make sure they’re compliant with today’s laws and prepared for tomorrow’s.
For example, companies are looking at the “Cadillac” tax on high cost health plans. The tax has been delayed until 2018, but companies already are looking at ways to not pay the tax, Mayer said.
Clients also are asking if they should drop their plans.
“Our value comes into play in that on the surface, it may seem desirable to drop the plan, but once you delve into the consequences of doing that, you realize that isn’t the right way to go,” Mayer said.
The small-group market in particular is in chaos right now, said Scott Radcliffe, executive vice president Engle-Hambright & Davies Advisory Services, Lancaster. Many companies who took early renewals are now presented with “keep what you have” policies as well as ACA-compliant plans.
“This is incredibly confusing to groups and they need help understanding their options,” he said.
Small businesses are also turning to benefit consultants to weigh both public and private exchanges.
At Loomis, business is evenly split between employee benefits and property/casualty business. Part of the benefits business comes from acting as a third-party administrator processing large self-funded insurance plans.
That side of the business is increasing as companies switch from fully insured to self-funded plans to lower rate increases.
Self-funded plans also allow businesses to see information about employees and work with Loomis to manage the benefits. For example, if a lot of employees are visiting emergency rooms, which are costly, the plan can offer lower copays for less-expensive urgent care facilities, Loomis said.
That information can cut costs for employers.
In addition, Loomis staff can share information about the evolving federal rules and penalties.
“Everybody is so confused about what Obamacare is, and we try to clarify what that is,” Loomis said.
Rothenberger Insurance Services LLC focuses on property and casualty insurance, but the West Reading agency has some small business and individual clients who recently explored options, said Ron Rothenberger, owner and agent.
In addition, the firm’s partner, West Reading-based Wenrich Associates, recently hired a contractor who is trained to work with customers on the health insurance marketplace. Businesses soon will have to make big decisions about benefits.
“I certainly see it as an opportunity to grow and gain more clients,” Rothenberger said. n
Contact Erin Negley: 610-371-5047 or firstname.lastname@example.org. ___