The Affordable Care Act (ACA) has introduced many benefits to the individual health insurance market. At first, the ACA presented some uncertainties to health insurance agents and brokers. While the individual health insurance Marketplaces have made it easier to compare health insurance options, many employees are not comfortable selecting a plan on their own. As open enrollment for 2015 approaches, it has become more apparent that employees and small businesses need the assistance of brokers for health insurance advice.
Here is a look at why health insurance brokers are going to become even more vital to employees and small businesses in 2015.
Most Employees Are Inexperienced with Buying Coverage
While the individual shared responsibility provision influenced a lot of previously uninsured Americans to purchase health insurance coverage for the first time, the Congressional Budget Office estimated that there are still 30 million uninsured Americans. Many Americans will be purchasing coverage for the first time, or will replace their plan for one that better suits their needs.
As the Marketplace enters the second year of operation, more major health insurance carriers are entering the Marketplace or expanding their presence in the Marketplaces. For employees, this news means more individual health plans to choose from and more competition in many of the state Marketplaces. While this increased competition is great for health insurance rates, the plethora of options can be overwhelming for employees.
Even with the ACA in full effect, a majority of Americans are misinformed or uninformed about what the changes mean. A July KFF tracking poll revealed that over a quarter (26 percent) of the public thought that the individuals newly enrolled in policies through the ACA were enrolled in a single government plan. They were unaware that individuals had a choice between individual health insurance plans, making it readily apparent that employees need some significant guidance through the health insurance Marketplaces.
Small Businesses Need Guidance Through the ACA Changes
A Kaiser Family Foundation survey found that 68 percent of small businesses and 36 percent of people purchasing individual health insurance reported using a health insurance agent or broker to assist them. While 68 percent of small businesses reported using an agent or broker, an astounding 94 percent of small businesses reported needing an advisor to help them manage healthcare benefits in a survey conducted by LIMRA. The survey revealed that 84 percent of small businesses sought an advisor to review plans to ensure competitive rates and current services.
Since small businesses (with fewer than 50 full-time employees) are not subject to the employer shared responsibility fee, many small businesses are relying on brokers to evaluate new options for coverage. Many small businesses are considering adopting a premium reimbursement plan to offer health benefits to recruit and retain top talent.
By implementing a premium reimbursement plan, employers reimburse employees tax-free for individual health insurance policies. Since individual health insurance costs up to 60 percent less than group health insurance, premium reimbursement is a cost effective solution for employers who wish to cut down on healthcare costs for their employees.
A health insurance broker can help both the employer and employees in these situations. A broker can help the employer, by finding a credible premium reimbursement software provider, and help the employees, through assisting in the navigation of the individual health insurance Marketplaces.
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