In 2017, that old Chinese curse “May you live in interesting times” could cause brokers and HR executives to wonder about their sins in past lives, as the benefits industry is once again upended by a federal government that declares itself here to help.

Although many brokers, employers, and HR executives had issues with the changes brought on by the Affordable Care Act, the system had been rolled out relatively slowly, tested in the courts, and was starting to see results — record low numbers of uninsured Americans, fewer people having trouble paying their medical bills, and a healthier financial situation for health care providers — though not for insurers, who continue to struggle with the older, sicker population that the ACA was bringing in as enrollees.

Employers likewise had their ups and downs with the new system, but most were in compliance with the new mandates and regulations.

Donald Trump's election as president promises to change the system all over again. Trump made repeal and replacement of the ACA, or Obamacare, one of his main campaign themes in 2016. And he wasted no time announcing picks for Health and Human Services and the Centers for Medicare and Medicaid Services who support radical changes to the status quo.

The good news, perhaps, is that the uncertainty and change brought by the ACA years has forced both buyers and sellers of health insurance to become more flexible and creative. Innovations to address out-of-pocket costs, changing demographics, rapidly evolving technology tools, and new regulatory regimes have forced the insurance and benefits industries to become more nimble and open to new ideas. Which is probably fortunate, because change again seems certain to be the one constant in 2017.

ACA repeal: the undiscovered country

Visions of ACA repeal remain elusive and in flux. There is no doubt the incoming Trump administration and congressional Republicans want to repeal the law. But health insurance experts are dubious about the entire law being wiped off the books.

“People have been talking about repealing Obamacare since the day it started,” says Lance Shnider, president of Voluntary Benefits Agency. “But now we have what many consider an entitlement program — a program like Medicare or Social Security. I don't understand how you take that away from people. To talk about ending Obamacare on Jan. 21 is just extremely unrealistic.”

Shnider says there are many obstacles to completely repealing the ACA. He predicts that it may be 2019 before major changes are put into place. And he suspects that many elements, such as protections for people with pre-existing conditions and the ability to retain coverage for enrollees' children up to age 26, will remain the law of the land. President-elect Trump himself has said providing coverage for all Americans is a priority.

Shnider expects changes, but sees more of an evolution than a revolution. “Maybe it won't be called Obamacare or ACA anymore, but at the end of the day, some version of it will still exist,” he says.

James Slotnick, assistant vice president of broker education at Sun Life Financial, notes that the talk of repeal in 2017 is causing uncertainty for employers and brokers. “We're getting questions: 'Do I have to do compliance?' We're telling brokers and clients to follow every rule to the letter today,” he says, adding that the speculation about the future of the law is just creating more confusion. “We're concerned about the distraction.”

Shnider agrees that employers can't just assume the ACA will disappear quickly. “That's a big roll of the dice, to assume the rules will change just because a politician said he's going to do something,” he says. “Even if it is changed, it's not going to happen overnight.”

Employers' tax exclusion: an old idea renewed

One idea that could dramatically affect employer-sponsored health insurance benefits is the concept of changing the tax exemption for employer-sponsored insurance, which allows tax savings for both employers and employees on company plans.

The man nominated by Trump to head the U.S. Department of Health and Human Services, U.S. Rep. Tom Price, has suggested capping this exclusion, which could raise billions for the government. Presumably, this would be used to help with coverage costs of any new system. It could, however, mean higher tax bills for companies and at least some of their employees.

“It makes sense,” Slotnick says. “That's the largest exclusion in our tax code. “They're going to need to get revenue from someplace, and the easiest place to go after that revenue is the employer tax exclusion.”

The idea isn't new — John McCain had a similar plan as part of his health care reform platform when he ran for president in 2008. According to Slotnick, the bottom line effect of capping the tax exemption would be similar to the Cadillac tax of the ACA—it would likely push employees toward high-deductible plans, which create incentives for enrollees to be smarter consumers of health care.

A changing system, a changing role for brokers

One thing is clear: No matter what political developments occur in 2017, those who sell employee benefits should be prepared to innovate. “Agents are going to have to be creative,” says Reid Rasmussen, founder of freshbenies. “Today, we're in an environment where most brokers are saying we need new ideas.”

What are those innovations? Rasmussen's venture sells complementary benefit products such as telemedicine or patient advocacy services. Some health plans are experimenting with narrow provider networks as a way of negotiating lower health care costs. New online platforms continue to spring up, and new technology around wellness continues to evolve. Workers themselves are demanding new approaches to work benefits, including paid leave and more flexibility in work hours.

Regardless of what comes down the road, brokers are going to have to be there for employers, says Kevin Trokey, founding partner of Q4intelligence, a benefits and insurance consulting firm. The confusion created by replacing a 2,000-page law will no doubt have many employers extremely anxious for guidance. And brokers will be the resource they will turn to.

“A lot of brokers think they're in the products business, but they're actually in the advice and consulting business,” Trokey says. “Brokers need to understand that their fundamental value proposition is the advice they give. Not just helping with insurance needs, but with things like employee engagement and compliance.”

Shnider notes that his role as a broker has evolved many times in his career, and he expects it to continue doing so. He agrees that brokers are educators as much as they are salespeople. “We've become consultants,” he says. “Just as I lean on my financial advisor or property insurance agent, employers rely heavily on brokers for things like compliance.”

Slotnick says good communication skills are more important than ever during a time of change. But he also cautions against expecting the industry to turn on a dime. “Whatever you think is going to happen, follow the rules as they are written today, because no one is really sure what's going to happen next,” he says. “We just don't know.”

Instant Insights /

2017 will leave brokers and employers scrambling to keep up

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