Last April at Benefits Selling Expo in San Diego, there was a lot of strategic talk about the looming employer mandate. Brokers were speculating that as much as a third of their employer groups would cease offering benefits altogether. With a projection of millions of uninsured individuals moving into 2014 with brand new coverage bought through the exchanges (and without agent assistance), I've heard a lot of "woe is me" talk. It seemed we were entering "The Bronze Age" of benefits, and brokers would be going the way of the woolly mammoth.
Of course, shortly after the expo, changes to the law began, starting with the employer mandate delay. Now several months into 2014, there have been a number of delays, extensions and changes to PPACA.
Allow me to speculate as to the rationale behind the PPACA at its inception. Legislators were attempting to provide health insurance coverage to some 26 million uninsured Americans. In theory, these people were uninsured due to:
- Lack of access — no plan offered by their employer, or
- Lack of access due to pre-existing conditions, or
- Lack of access due to unaffordable premiums.
So it would appear that PPACA should solve all of these problems through the employer mandate, prohibition against pre-existing conditions, and subsidies. And it would be reasonable — since "too expensive" was one of the major hurdles pre-PPACA, to expect that the bronze plans would be flying off the proverbial shelves. Yet, according to official numbers, only 19 percent of those who had obtained coverage as of the end of January had opted for bronze.
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Also read: Exchange plan breakdown
Bronze just isn't pretty. Not only do the bronze plans have high deductibles, most also carry very restrictive networks. And now there is talk of allowing an even uglier metal, copper, as a lower option.
However, there's a way that bronze can be turned into gold (plans). With the addition of a few well-designed supplements, consumers can protect some of their out-of-pocket risk. Hospital indemnity plans, gap plans, and even the newer, more flexible accident plans can add some sparkle to bronze plans.
And while these supplements may be a bit limited on the individual market, the group market is robust. This is the message that today's broker needs to bring to his employer clients.
While the exchange could (possibly) provide options for individuals to purchase medical insurance, the reality is that individuals who are a part of a group have exponentially more, and better, options.
Recently I visited with Andy Fernandez, president of South Florida Group Benefits. Andy is optimistic to say the least, and told me that he hears a lot of other brokers who are worried about their future role.
"I hear a lot of doom and gloom talk," Andy told me. "Well, we have only had one single case where the employer decided to stop offering benefits. One single case. And we have a lot of small group business."
Andy isn't worried about his future because he's taken steps to diversify his product lines, adding more services, and using a full complement of voluntary and supplemental products to round out his groups. "I'm diverse," he says. "In addition to the group supplemental products, I sell a lot of individual life. I know a lot of people say it's too hard and there's too much paperwork. But that business will always be there. I think the future will be just fine for us."
I share Andy's optimism. My company just completed its best year ever and I see no downturn in sight. The fact remains: People still prefer to buy their benefits through payroll deduction. Employers who offer a robust menu of benefits have an edge in the market and increased job satisfaction. And for the trusted advisor who brings this all together — the broker — the future looks just fine.
Peggy Hayes will be speaking at the Benefits Selling Expo in Colorado Springs, Colo. Don't miss her expo session, "Thriving in the Bronze Age," April 2 at 3 p.m.
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