The Affordable Care Act (ACA) presents opportunities, and uncertainties, to health insurance agents and brokers. Yet as the ACA continues to roll out, it's becoming clear that health insurance brokers are needed to help consumers and small businesses navigate the changing regulations, health plan choices, and enrollment process.
Here are six reasons health insurance brokers stand to become even more important to consumers and small businesses in 2014.
1. A lot more individuals will be buying coverage - for the first time
With the individual mandate, the individual health insurance tax credits, and the new individual health insurance marketplaces, a lot more people are buying individual coverage. And a lot more people are talking about health insurance. Proof point - When was the last time a US President tweeted about adding health insurance to the table conversation at Thanksgiving?
So where do brokers fit in? Currently, studies estimate that only 36% of individuals work with a health insurance broker to purchase individual health insurance (whereas 68% of small businesses do). And yet looking at 2014 consumer enrollment numbers, there is a disconnect between uninsured Americans who look up health insurance information and those who successfully enroll (see NY Times graph below).
Bottom line: For many of these new health insurance consumers, it's their first time in the driver's seat. Health insurance brokers are needed to help consumers understand options and help give them tools and knowledge to make a decision.
2. Some current health plans are being extended
In November, the Obama administration announced they would allow some current health plans to be extended an extra year (see this article). Depending on the state and insurer consumers may be able to keep their current individual health insurance plan.
This adds another spoke into the decision-making process for consumers, and another area where health insurance brokers can be very helpful. Can I now keep my current plan? How does my current plan compare with an ACA plan? What is the cost comparison (with and without the tax credits)? What are the different doctor networks?
Bottom line: Health insurance brokers are even more important to consumers as health reform regulations are a moving target. Health insurance brokers can help consumers find the best plan for their needs, at the best price.
3. A lot more small businesses will be buying health benefits for the first time, too
Health insurance brokers become more important in the small group market as well. For one, in 2014 small businesses can only purchase SHOP coverage through a broker (see #4 below). Second, small businesses are relying on brokers to evaluate new options for coverage. Small businesses (with fewer than 50 employees) are not mandated by the ACA to offer traditional health insurance by 2015, or pay the "employer shared responsibility fees". So many small businesses are turning to brokers to explore more affordable alternatives to traditional health insurance such as a "pure" defined contribution health plan (ie health insurance allowances).
And it's not just anecdotal. A recent study found that health insurance brokers are associated with more, cheaper health coverage.
Bottom line: Health insurance brokers who have a variety of options for small businesses, and an expertise in health reform, will gain and retain the business of small groups in 2014.
4. SHOP enrollment is only through health insurance brokers in 2014
As mentioned in #3, for 2014 small businesses can only enroll in SHOP exchange plans directly through a health insurance broker (see announcement here). This ACA delay makes health insurance brokers more central in the SHOP exchange, and the process is similar to how businesses purchase small group coverage today.
Bottom line: Health insurance brokers will play a more important role with the SHOP exchanges in 2014.
5. Small businesses need (and want) help navigating health reform
Health insurance brokers who can help businesses navigate health reform will thrive in 2014. A recent survey of 5,500 nationwide companies found that employers look for these top five features when selecting an employee benefits broker:
Managing health care costs
Keeping in compliance and up to date on changing legislation, including health care reform
Benefits administration and employee benefits education
Keeping up to date on regulatory changes
Controlling workers’ compensation costs and managing exposures
Bottom line: Businesses need a health reform expert to navigate regulations. Many brokers are filling this role as a consultant - and billing for it.
6. Health insurance brokers (generally) have more experience than "navigators"
Navigators are people and organizations hired by the public health insurance exchanges to help consumers learn about exchange health plans and enroll in coverage. However, the navigator programs are under the spotlight this week, with news of navigator program scandals.
Bottom line: Health insurance brokers are generally licensed, experienced professionals. Enough said.
Do you think the role of health insurance brokers becomes more important in 2014? If so, is there enough compensation incentive for brokers in 2014? Leave a comment and join the discussion.
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