The people spoke, their responses are tabulated, and the results are official.

No, it's not November's presidential election (although it turns out that brokers have a strong preference about that…). It's time for the results of the BenefitsPRO annual health care survey for 2016. More than 400 brokers offered their opinions on the current state of the industry; identified trends they are expecting for the rest of 2016 and beyond; and cited the threats and opportunities they must navigate to thrive in a fast-changing marketplace.

ACA

Since the 2015 survey was released, businesses and consumers have had a full year to wrestle with the provisions of the Affordable Care Act, negotiate federally mandated exchanges and enroll in exchange-based health plans. It's no secret that some state exchanges have struggled. More than 46 percent of respondents said those struggles have had no effect on their business; 38 percent reported it has hurt a little or significantly; and 15 percent said it has helped them a little or significantly.

When the creation of public exchanges was announced, some brokers anticipated a possible opportunity to expand their services by helping individuals enroll. Today, opinions are evenly divided about whether that opportunity materialized: 41 percent said demand has been somewhat or very strong, while 44 percent report weak or moderate demand. (The other responding brokers do not work with individuals.)

Regardless of demand, brokers overwhelmingly believe enrolling individuals on public exchanges is more trouble than it's worth. More than 70 percent said it is not worth the effort, based on compensation received versus effort expended.

As might be expected, small groups were the most likely to drop insurance coverage last year. Sixty-two percent of brokers said that between 1 percent and 24 percent of their small group clients dropped coverage. This compares with 23 percent of mid-market groups, 12 percent of large groups, and 6 percent of small groups.

Brokers have little experience with private exchanges. Sixty percent said they do not work with a preferred private exchange (enrollment and benefits administration), while only 12 percent have invested in developing their own proprietary private exchange technology.

 

Tackling technology

Conducting a highly personal business in a high-tech age remains an ongoing challenge. On one hand, many transactions are done face to face, just as they always have been.

Respondents were asked to rank the two primary ways their clients' employees select and enroll in benefits. The two most popular, by significant margins, were meeting with a worksite enroller or broker in a group setting (51 percent) and meeting with a worksite enroller or broker one-on-one (46 percent). Despite the relentless advance of technology, only 30 percent cited independent online enrollment tools, while fewer still (12 percent) mentioned call centers or other self-serve options.

On the other hand, brokers are doing their best to sort out the implications of technology to learn what works best for them and their clients while maximizing profitability. Several survey questions got to the heart of technology.

FIRST, brokers said most of their accounts currently use some type of online enrollment tool. The largest group (43 percent) reported that between 1 percent and 24 percent currently enroll online. Only 3 percent said all of their clients do so, while 17 percent said none of them do.

SECOND, brokers understand that clients expect them to embrace the latest technology. Sixty-four percent agreed or agreed strongly with the statement that, “Offering enrollment/benefits administration technology and/or online solution to my clients is a critical component of my value proposition.” Less than 8 percent disagreed.

THIRD, brokers look at technology as a double-edged sword and are keeping a wary eye on the new wave of disruptive companies entering the industry. Sixty percent found disruptors somewhat concerning, while 12 percent saw them as a grave threat. Another 12 percent, however, viewed disruptive companies as “a much-needed wake-up call.”

Survey results showed that brokers plan to put a lot of eggs in the ancillary market basket. Sixty-three percent expect total compensation for ancillary or bundled products sales to increase slightly through the remainder of 2016, and another 19 percent expect a significant increase. Only 18 percent foresee no change or a decrease in revenue.

How do your clients' employees primarily select and enroll in employee benefits? Please select the two most common options.

Voluntary Vitality

Brokers are well aware of the need to expand their product offerings, both to meet emerging client demand and to find additional revenue streams. Two appealing options are increased sales of voluntary or ancillary benefits, and offering a broader array of non-insurance services to clients.

When asked to rank what it will take for them or their employer clients to offer more voluntary (primarily employee-paid) benefits in the future, the top responses were lower prices (39 percent); simpler and more-convenient enrollment options (27 percent); increased member and employer education (17 percent); consumer life-stage bundles (12 percent); and carriers with better brands (12 percent).

Enterprising carriers can grow their own businesses by expanding the products and services they make available through brokers. Among the items on broker wish lists are optional benefits; long-term care plans; bundled purchasing tools included with carrier products to carve out lower-level utilization; more plan and carrier choices; payroll; better individual dental plans; and small-business group insurance models.

In summary, 84 percent of brokers intend to increase promotion of ancillary insurance coverage; 62 percent plan to promote health plan consumer engagement and health/wellness programs; and 42 percent said they would promote third-party (non-carrier) consumer engagement and health/wellness programs.

Future

Prognostication prowess

As important as it is to review the past and analyze the present, brokers are only as good as their next sale. BenefitsPRO asked them to look at what may be on the horizon for the remainder of 2016 and beyond. What do they see in the crystal ball?

Coverage retention will remain about the same in 2016. Sixty-two percent of brokers expect the percentage of groups retaining coverage to stay the same. Twenty-four percent expect the number of companies that drop coverage to increase a little or a lot, and 14 percent expect that number to decrease.

More groups will move to defined contribution approaches by the end of 2016. Brokers expect growth of between 1 percent and 24 percent across all group sizes: small, 30 percent; mid-market, 44 percent; large, 69 percent; and national, 82 percent.

The percentage of accounts using defined contribution funding will increase slightly. Forty-six percent of brokers predict a small increase and 6 percent expect a large increase, while 42 percent believe it will remain the same.

Commissions for writing health insurance will decrease slightly through 2016. Thirty percent of brokers expect commissions to increase, but 64 percent look for them to remain flat or decline. Their predictions for 2017 are similar, with 29 percent predicting increased commissions.

The survey also asked brokers to look several years into the future. Here is what they predict.

Several innovations will affect the brokerage business. Survey respondents rated the following as having a somewhat positive or very positive impact during the next three years:

  • Enrollment and benefits ad

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.