Recent transparency legislation has completely changed the health care landscape, creating an opportunity for benefits advisors to assist self-funded employers with navigating the plan sponsor's role as a fiduciary. This new responsibility is explicitly laid out in the 2020 Consolidated Appropriations Act (CAA). Within that legislation, the government mandated that all gag clauses that limit access and utilization to data must be removed. For the first time in history, hospital and payer transparency (HPT) makes it possible for a plan sponsor, working with a knowledgeable consultant, to evaluate their networks, hospitals and providers based on negotiated cost and quality measures.

Cynics in the health care advisory community remain skeptical, saying they have heard that new legislation will turn the industry on its head time and time again. Yet historically, meaningful change has seldom materialized. However, with the passage of CAA and hospital and payer transparency laws, we are seeing swift action based on the newly available data. Hospital and payer transparency has started to produce actionable changes in the health care delivery system and advisors need to ready their plan sponsor clients for what is to come. The advisors who prepare and plan for this new health insurance landscape will set themselves apart and be in the best position to benefit from these changes.

There is a historical precedent for this wide-reaching transformation of the health insurance industry. Two decades ago, this same shift happened in the retirement industry. Extensive regulations governing defined contribution plans like (401k)s, 403(b)s and 457(b)s, mandated transparency. Overhead costs and financial excesses that had previously been part of the package for employers had to be weeded out. This was a whole new world for retirement advisors and their clients. The early adopters, those advisors who leveraged transparency in structuring retirement plans for their clients, were able to grow and fully own the market. Conversely, the advisors who were hesitant to see the advantages of the new laws were unable to catch up and thrive in the changing industry. In fact, the retirement industry precedent shows that as the tides turned towards a fiduciary standard, more than 67% of employers changed their broker over a two-year period.

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