I'm trying something new this year: doing my taxes on time. And by "on time" I mean before April 15. Yes, I'm one of those people you see on the news waiting in line at the post office the day that they're due.
In preparation, I was flipping through the 174-page instruction booklet for IRS Form 1040 and ran across a table showing the estimated time for completing the form. It can be found on page 98, immediately following the section about the Paperwork Reduction Act.
- Recordkeeping: 10.2 hours
- Tax Planning: 2.1 hours
- Form Completion: 5.2 hours
- Form Submission: 1.0 hours
- All Other: 2.9 hours
- Total: 21.4 hours at an average cost of $280
Wow. It's a good thing the government isn't in charge of our health care - can you imagine what the enrollment form would look like? Fortunately for the consumer, insurance carriers make things a lot easier to understand - or do they?
The first step in buying health coverage, of course, is getting a quote. Easier said than done. Every insurance company has its own format, and none of them make any sense - the quotes definitely aren't designed for the end user. Why not? Would it really be that difficult for a carrier to spit out a quote that the agent could just print and show to the client - a proposal that includes simple plan summaries, organized in a logical fashion, with the proposed rates and a list of reasons to do business with them?
But that's not the way it works. Instead, the carrier leaves it up to the agent to interpret the quote, translate it into English, and put it in a format the client can understand. In other words, every broker out there is forced to re-invent the wheel. In my opinion, this is a huge waste of time and the biggest marketing blunder an insurance company can make. Carriers have a golden opportunity to generate a true proposal - one that helps the client make a decision - but it seems that every single one is missing the boat.
After the client sorts through the quotes and makes a plan decision, it's time to fill out the paperwork - again, easier said than done. That's because each carrier has a unique enrollment form. Sure, part of the reason for this is because they all take a different approach to underwriting, asking the questions they need answered in order to properly rate the risk - and that's fine. But much of the information the carriers gather is the same - including demographic data and prior coverage info.
This can make it difficult for small employers to switch plans, particularly if they receive a last-minute rate-up and want to try another carrier. Wouldn't it be easier if the demographic portion of the enrollment forms was standardized so employees wouldn't have to start over from scratch?
Some states have actually taken this approach, creating a universal application for small groups. In other states, third-party vendors are simplifying the process by allowing employees to complete their forms electronically. These companies gather all the information required by every carrier in the marketplace and then map the data to the various carrier apps - a big time-saver for agents who can afford the system and for their clients with internet access. The majority of groups, however, are still signing up the old-fashioned way.
No, there isn't really an Insurance Paperwork Reduction Act - I made that up. Of course, it probably wouldn't do any good anyway - asking the government to solve a problem rarely makes it better. The good news, though, is that we don't need an Act of Congress to simplify the quoting and enrollment process - carriers could do it on their own without being told.
One final thought: If quotes were simplified, employers could make better and quicker decisions; if the enrollment process was simplified, there would be more time to educate employees; and if both happened, agents would have more time to sell more business.
