With more than 32 years of experience as an employee benefit specialist, Suzy K. Johnson understands benefits better than most. She is president and owner of Employee Benefit Advisors of the Carolinas. I had a chance to speak with Suzy and ask her about her thoughts on the industry and where we are headed.
Rick Ramos: Suzy, you’ve qualified for the NAHU Soaring Eagle agency recognition award each year since its inception in 2010. What’s changed most in the benefits space in the last seven years?
Suzy K. Johnson: The better questions is, “What hasn’t changed?” We used to primarily do small groups under 100 employees and now we only prospect groups with more than 50 employees. Our average new case used to be 35 lives and now we average around 115 employee lives.
We used to educate about how small groups under 50 employees were rated based on their risk factor, but now it is only ACA community rates or level-funding with underwriting questions for groups of 25 or more in North Carolina.
In 2008, we received a lucrative percentage of commissions along with handsome volume overrides from carriers. This meant we had an automatic increase in annual revenue, even if our new production wasn’t what we targeted. Now we are paid a per employee per month (PEPM) fee for group health of all sizes. Now when employers lay off workers, our revenue decreases. As a result, we must continuously sell new consulting work to grow revenue and the company.
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I’m not saying some of the change hasn’t been good. It has forced us to grow and develop professionally and adopt new strategies to help our clients bend the ever increasing cost curve. Our value proposition to our clients has increased and we are more valuable to the right client than ever. We spend a lot more time searching for the right client profile where we can be paid for the value we bring.
It dawned on me a few years ago that good brokers and advisors were in a unique position to drive change so that our clients were not so helpless in their ability to control costs. As Mark Gaunya likes to say, “Health insurance is expensive because health care is expensive;” and sadly, the ACA missed the opportunity to address the real problems.
Five years ago, I would not have predicted that brokers would be the ones driving change and bringing solutions such as direct primary care and health insurance captives. I didn’t think the group market would go away like many did; but at the same time, I also didn’t see the role we would play in driving change.
You’ve been active in introducing level-funded plans to mid-market clients. What’s the biggest misconception about level-funded plans?
The biggest misconception is that these plans can work well for groups that have an inherently sick population, who utilize benefits a lot, without changing anything else. Level-funding provides a similar level of protection to fully-insured plans, with the client having the ability to walk away if the rate increase is too high -- but the company is still left with high costs if nothing else changes.
When a level-funded plan is introduced, the client needs to get involved in adopting a consumer driven plan, educating employees and providing tools with access to efficient telemedicine and concierge services, information about benefits, and direction to lower cost facilities for care. Sixty percent of today’s health care costs are outpatient services, and much of this cost can be impacted by better transparency information when the employee has skin in the game to save their own dollars. There is a lot of room to save employees and the plan dollars by providing more transparency and cost comparison data. And the potential for lowering prescription spend is enormous as well, through the use of concierge assistance and better information.
Containing costs and reducing claims is important for all employers, especially self- and level-funded plans. What’s your approach to tackling this problem?
As I mentioned previously, the plan needs to be designed in such a way that the employee has “skin in the game.” They need to be making choices about spending their own money, rather than someone else’s. This will incentivize them to make a phone call or engage a mobile app to find out the best, lowest cost facilities and prescriptions, because they are spending money that they can keep if they make wise choices.
I am a big believer in HDHPs with health savings accounts funded by employers and employees for this reason. It is possible to design a very rich plan and still build in incentives and tools to help employees find the best price for their services. This is the future and it can’t come quick enough, in my opinion.
And finally, we believe strongly in employers adopting data analytics tools that uncover anonymized health information about their employee population. They can then better manage health risks by identifying gaps in care and doing outreach to improve the care and services employees receive.
What do you see as the most exciting trends today in health benefits (alternative funding options, voluntary, etc.)?
By far, the most exciting trends all revolve around technology solutions. Whether it’s improved employee online enrollment, improved access to data, improved education and concierge tools for the employee, or better health outcomes at lower cost, the common thread is technology solutions that didn’t exist five years ago.
When the employee has a concierge service to call that can help them obtain the care they need at the best place for the best cost, the game changes. Employers suddenly aren’t helpless in efforts to try to control claims spending…something they have never been able to impact before.
We love helping employers design their non-medical benefits such as group life, voluntary life, group dental, group vision, group short- and long-term disability and worksite products such as critical illness, accident and hospital indemnity. These are all very important parts of the entire package provided. A Fortune 500 benefit package is within reach for all businesses, large and small.
However, the most significant value a great advisor provides is related to managing the health plan costs. When an employer is able to level the growth of the health benefit plan spend, they are accomplishing what many believe is impossible. For the consultant, it is difficult but rewarding work, especially since we must first convince the client that the impossible is in reach. They just have to let go of the status quo.
This interview has been edited and condensed for clarity.Rick Ramos is the CMO at HealthJoy, a cost containment healthcare platform that uses an A.I.-powered virtual assistant to proactively engage employees to make better decisions. He is also the author of the best-selling book “Content Marketing.” Connect with him on LinkedIn or Twitter @ricktramos.