As Chris Peck visits small businesses considering their insurance options under federal health reform, like all brokers he is beset with questions on the best strategies to lower premiums.
Call it open season on open enrollment.
For many companies, October marks the start of open enrollment periods when employees can alter their benefits package ”“ and learn first-hand from human resources personnel and benefits brokers what changes are in store for their health plans. For health insurance brokers like Creative Benefit Planning, they are fanning out into workplaces before federal and state reforms have taken their final shape.
Less than a third of employees said their human resources staff effectively brought them up to speed on their plans last year, according to a survey by Harris Interactive, and brokers are steeling themselves for a torrent of questions, concerns and criticism on the eve of federal health reform, with many blaming insurance carriers for hiking rates as a hedge against future costs.
Rate increases typically 15 percent
For the 2010 tax year, the Internal Revenue Service calculates an average premium in Connecticut of more than $5,400 for individuals and nearly $13,500 for families, among the highest in the nation. Peck, a partner at Creative Benefit Planning, says he is regularly seeing rate increases of 15 percent for 2011 ”“ one retail client suffered a punishing 89 percent hike due to an unfavorable claims record.
On the expectation some small brokers will be unable to keep up with the lightning changes spawned by the Patient Protection and Affordable Care Act, Stamford-based company Creative Benefit Planning is considering acquiring one or more of those brokers to bolster its capabilities.
“I would say that the biggest headache is clarifying what happens when,” Peck said. “I think it gives us more of an opportunity to show our value for our clients. ”¦ You are seeing people who are scrambling for any options.”
With business owners nervously eyeing another round of double-digit increases in health insurance, many are more open than ever to having employees pick up additional costs ”“ most notably in higher deductibles or coinsurance payments for specialty medical procedures.
Complicating things still further, however, are “grandfathering” clauses in the new health reform laws that will strip 100 percent coverage of preventative health services at companies that increase costs on employees, such as raising deductibles or coinsurance payments.
In August, the National Association of Insurance Commissioners backed that viewpoint in a resolution adopted by the Connecticut Insurance Department, saying such agents are a critical cog as health reform pushes toward a full implementation date of 2014.
“Significant changes for health plans under (health reform) precipitate the need for clarity and guidance by licensed, specially trained insurance professionals,” said Jane Cline, NAIC president, in a prepared statement. “The continuing role of producers in the health insurance transaction is an essential part of protecting consumers during this transition.”
Reform changes range in size
Some changes wrought by federal health reform are comparatively mild ”“ for instance, over-the-counter drugs can no longer be charged to flexible spending accounts without a doctor”™s prescription in hand.
Others could have a significant impact on families ”“ parents can have their children on their health plans through age 26 (with children allowed to rejoin if they have been covered under another plan), and lifetime limits on medical expenses have been removed.
In a survey published in August by the National Business Group on Health, while just over half of employers surveyed indicated they were pushing ahead with planned changes, the rest were either scaling back planned changes as a result of the grandfathering rules, or waiting on regulations before making a decision.
