exchanges - Blog - Global Risk Community2024-03-29T09:24:50Zhttps://globalriskcommunity.com/profiles/blogs/feed/tag/exchangesHOW TO CONQUER PPACA/OBAMACARE - A BATTLE PLAN FOR BROKERS, EMPLOYERS AND CARRIERS - PART 1https://globalriskcommunity.com/profiles/blogs/how-to-conquer-ppaca-obamacare-a-battle-plan-for-brokers2012-11-18T20:46:24.000Z2012-11-18T20:46:24.000ZPhilip Eidehttps://globalriskcommunity.com/members/PhilipEide<div><p><b>This Post is the first in a set of two Posts looking at PPACA - Sometimes referred to as Obamcare or ACA. </b></p><p>1) <b>This first Post</b> is to provide background on PPACA with Links to valuable information to answer questions for Brokers, Employers and Carriers.</p><p>2) <b>The second Post</b> will provide a Workable, Efficient, and Cost-Effective Strategy for Brokers and Employers to deal with PPACA/Obamacare for the 2013 Plan Year and Beyond. <b>The time to get started is now!</b> This will be Posted on <b>Friday</b> after your Thanksgiving! <b>We wish you a Happy and Joy Filled Thanksgiving!</b></p><p><b>A Little PPACA History </b>-- Since March 3, 2010 when President Obama signed PPACA, the Patient Protection and Affordability Care Act, also known as Obamacare - there has been a significant <i>disruption change</i> to the Group and Individual Health Insurance Markets! The Supreme Court Ruling of June 28, 2012 further fueled the concerns about <i>disruptive change</i> to the Industry for Carriers, Brokers, and Employers.</p><p><font><font face="Arial, Helvetica, sans-serif"><i>Wikipedia</i> provides the following -- "PPACA is aimed primarily at decreasing</font><font face="sans-serif"> </font></font>the number of uninsured Americans<font face="sans-serif"> and reducing the overall costs of health care. It provides a number of mechanisms—including </font>mandates<font face="sans-serif">, </font>subsidies<font face="sans-serif">, and </font>tax credits<font face="sans-serif">—to employers and individuals in order to increase the cverage rate.</font><font face="sans-serif"> Additional reforms are aimed at improving healthcare outcomes and streamlining the delivery of health care. PPACA requires insurance companies to </font>cover all applicants<font face="sans-serif"> and </font>offer the same rates<font face="sans-serif"> regardless of </font>pre-existing conditions<font face="sans-serif"> or gender.</font><font face="sans-serif"> The </font>Congressional Budget Office<font face="sans-serif"> projected that PPACA will lower both future deficits</font><font face="sans-serif"> and </font>Medicare<font face="sans-serif"> spending."</font></p><p>With the re-election of President Obama, the changes are now inevitable! For many reasons, most Carriers, Brokers, Consultants, and Employers had been reluctant to prepare - or implement strategies based on the lengthy PPACA legislation that did not provide many details. Now there is no waiting! Recently the Fed. - utilizing <i>healthcare.gov</i> - <a href="http://www.healthcare.gov/law/timeline/"><b>published a timeline</b></a> for the implementation of PPACA from 2010 - 2015. This is a graphically rich resource for gaining a better understanding of what needs to be done when!</p><p><b>Where We Are Today with PPACA</b> -- A great deal of time, energy, and money has been spent by the Insurance and Benefits Industries trying to defeat PPACA! Unfortunately, there were only a limited number individuals and Organizations dedicating creative time, energy, expertise, and money on dealing with the realities of implementing PPACA. The focus has not been on creating compliant strategies coordinated with a set of integrated Benefit/Insurance Plans.</p><p>The good news is that some specialists focused on their specific Market Sectors, ie. Individual Plans, Voluntary Plans, Technology, Enrollment, Administration, etc. They were active creating Plans, Programs, and/or Services to take advantage of PPACA.</p><p>Healthcare Reform put a focus on only one part of the overall Benefits and Insurance needs of Employees and Individuals - the Health Insurance Component. This focus was a major set-back for Strategic Benefit Planning. A number of constituencies were directly impacted - They included:</p><ul><li><b>Carriers</b> - Were forced to expend their time and energies in deciding whether or not to produce PPACA compliant Health Plans for Groups and Individuals.</li><li><b>Carriers</b> - Were forced to focus on the new Medical Loss Ratios (MLRs). The following is a <a href="http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html"><b>Link to Federal MLR Guidelines</b></a>. </li><li><b>Brokers</b> - Were forced to abandon or restructure their business plans as Health Insurance Carriers dramatically reduced commissions on traditional Group Health Plans to assist in compliance with MLR. An <b><a href="http://aishealth.com/archive/nhpw090511-02">AISHealth/Health Plan Week Article</a></b> analyzed this trend. An article In Life Health Pro by Allison Bell on June 15, 2012 about Brokers and PPACA was titled "<i><b><a href="http://www.lifehealthpro.com/2012/06/15/kaiser-73-of-brokers-dislike-ppaca-20-like-it">Kaiser: 73% of Brokers Dislike; 20% Like It</a></b></i>"!</li><li><b>Brokers</b> - Were forced to continually take a "Wait and See" position for the Supreme Court Ruling and then the Election in making recommendations to their Employer Groups and Individuals. While Brokers hoped to avoid the <i>disruptive changes</i> caused by PPACA, most new it was inevitable. The dilemma was simple - What to do? <i>Employee Benefit Advisor</i> described this dilemma in an article by Nelson Griswold on September 1, 2012 titled "<a href="http://eba.benefitnews.com/news/obamacare-ppaca-2014-brokerage-ready-griswold-reinvent-2727135-1.html"><b><i>2014: Will your agency be ready?</i></b></a>" </li><li><b>Smaller Employers</b> - Became reluctant to offer Health Insurance to their Employees or started to consider dropping their exiting plans. With the details of PPACA unclear - and with a threat of additional plan costs - Employers saw offering Benefits as a threat to staying in business. <i>Health Reform.com</i> addressed these issues in a study titled "<i><a href="http://www.healthreform.gov/reports/helpbottomline/"><b>Helping The Bottom Line - Health Reform And Small Business</b></a></i>". </li><li><b>Smaller Employers</b> - The original PPACA provided limited details on Exchanges, Tax Credits, and Penalties applying to a Small Business grappling with offering Health Insurance Plans to their Employees. <i>Healthcare.gov</i> in a news release titled "<a href="http://www.healthcare.gov/news/factsheets/2011/08/small-business.html"><b><i>Small Business and the Affordable Care Act</i></b></a>" provides details on how "<font color="#111111" face="Helvetica, Arial, Verdana, Tahoma, san-serif">The health care law provides tax credits and soon - the ability to shop for insurance in Exchanges...".</font></li><li><b>Larger Employers</b> - Became equally confused about the ramifications of continuing to offer Health Insurance Benefits to Employees. The law firm of Michael Best &amp; Friedrich LLP published a lengthy outline about the effects of PPACA titled "<a href="http://www.michaelbest.com/files/Uploads/Documents/Publications/A3831600.PDF"><b><i>Summary of Changes Affecting Employers Under the PPACA - Amended</i></b></a>". While helpful - this outline demonstrates the need for a Strategic Benefit Plan. </li><li><b>Larger Employers</b> - Who prefer longer-term Strategic Benefit Plans were confused by the potential penalties under PPACA with its lack of details. The <i>Congressional Research Service</i> provided the following clarifications titled "<i><a href="http://www.ltgov.ri.gov/smallbusiness/employerprovisions.pdf"><b>Summary of Potential Employer Penalties Under PPACA (P.L. 111-148</b></a></i>". </li></ul><p><b>What's Next?</b> -- It's time for Carriers, Brokers, and Employers to take action! Our next Post - "<b>PART 2 - HOW TO CONQUER PPACA/OBAMACARE - A BATTLE PLAN FOR BROKERS, EMPLOYERS AND CARRIERS</b>" will outline Workable, Efficient, and Cost-Effective Strategies for Brokers and Employers to deal with PPACA/Obamacare for the 2013 Plan Year and Beyond. These Strategies that can be <u>integrated</u> or stand alone include:</p><ul><li><b><a href="http://www.benefitplace.biz/private-exchanges.php">Private Exchanges</a></b> - For offering Core, Voluntary/Worksite, and Ancillary Plans, Programs, and Services!</li><li><b><a href="http://www.benefitplace.biz/defined-contribution.php">Defined Contribution</a></b> - For providing: Employers budgetary controls; Employees valued choices to meet their Needs and Price-Points; Brokers positioning as "Trusted Advisors" and new needed revenues; and Carriers enhanced Distribution Channels! </li><li><a href="http://www.benefitplace.biz/integrated-benefit-brokers.php"><b>Integrated Benefit Choices</b></a> - For providing Employees the capacity to meet their Individual and Family Needs and Price-Points working with qualified Brokers - Choices including: Core, Voluntary/Worksite, and Ancillary Benefits! </li><li><b><a href="http://www.benefitplace.biz/integrated-benefits-technology.php">Integrated Support Technologies</a></b> - For Employee Education, Communication, Enrollment and Data Distribution Management!</li><li><b><a href="http://www.benefitplace.biz/inbound-vs-outbound.php">Inbound Marketing</a></b> - For Shortening Selling Cycles, Reducing Marketing Costs, and Driving Revenues for Carriers, Brokers, and Service Companies leveraging the Power of the Internet, Search Engines, Social/Business Media and SEO! </li></ul><p><b>Working with <u>Strategic Partners</u></b> we have developed this Integrated Five Component Strategy. Each of the above parts can be utilized on a stand alone basis or integrated to maximize the opportunities. <a href="http://www.benefitplace.biz/private-exchanges-chart.php"><b>Visit our Introductory Chart</b></a> to see how the above components fit together and what we will be discussing in Part 2 next Friday!</p><p>If you would like to discuss becoming a <b>Strategic Partner </b>by assisting in providing one of the above components, please contact <b><a href="mailto:phil@benefitplace.biz">phil@benefitplace.biz</a>. </b></p><p>If you have Questions, Suggestions, or Comments please Email - <a href="mailto:max@benefitplace.biz"><b>max@benefitplace.biz</b></a> or <b>Call 216.577.5579</b>. We invite you to Join our Linkedin Groups, <a href="http://linkedin.com/groups?about=&gid=2762200"><b>Insurance Forum</b></a>, for more discussions. </p></div>SURVIVAL - FOR H&L BROKERS AND CARRIERS IN 2013 AND BEYOND!https://globalriskcommunity.com/profiles/blogs/survival-for-h-l-brokers-and-carriers-in-2013-and-beyond2012-10-30T02:31:20.000Z2012-10-30T02:31:20.000ZPhilip Eidehttps://globalriskcommunity.com/members/PhilipEide<div><p><b>The days of slowly and reluctantly accepting change are over for Brokers and Carriers in the Health, Life, and Voluntary Benefit Markets. Forces that are out of their control have taken over! </b></p><p>For decades the Health and Life (H&amp;L) Insurance Markets - Including the Insurance Carriers, Brokers/Agents, and Service Providers - have reluctantly accepted change on an Evolutionary Basis. While competition was stiff, most parties were enjoying a stable and profitable marketplace utilizing the same basic: Plans, Programs and Services; Product Designs; and Marketing Strategies. Their <i>Target Markets</i> - Employers, Employees, and Individuals - were relatively complacent and satisfied with the limited information they were provided through <i>Carrier's Media Promotions</i> and the <i>Brokers and Agents Knocking at their Doors.</i></p><p>Here is a sample of the Evolutionary changes that were reluctantly accepted by the Carriers and Brokers/Agents over the years:</p><ul><li><b>HMOs - </b>Originally focused on promoting early detection and wellness.</li><li><b>Cafeteria Plans</b> - Employers offering Employees workplace Benefit Choices.</li><li><b>Voluntary/Worksite Benefit Choices</b> - Providing Employees the freedom of "Choice" at the own Discretion and Cost on a Payroll Deducted Basis.</li><li><b>Section 125 of the IRSC</b> - Pre-Taxing Qualified Benefits making the Plans more affordable by reducing the bite of Income and Payroll Taxes.<i> </i></li><li><b>Reimbursement Accounts</b> - Medical, Dependent Care, and Transportation/Parking Plans that assist in reducing the cost of essential Plans, Products and Services for Employees. These are tax-advantaged plans.</li><li><b>Consumer Driven Heath Plans (CDHPs) </b>- Health Insurance Plans that Promote and Support Employees and Individuals in becoming better "Consumers" of Health Care.</li><li><b>HRAs and HSAs</b> - To Implement with the HDHPs providing a savings component to promote Consumerism.</li><li><b>HDHPs</b> - High Deductible Health Plans that support the HSAs and HRAs.</li><li><b>Gap Plans</b> - To assist in off-setting the Risk of High Deductible Health Plans.</li><li><b>Ancillary Benefits</b> - Non-Insurance Based Employee Benefits that provide additional Employee "Choices" and often Reduce the Costs of Goods and Services for the Employees. </li><li><b>Wellness Plans</b> - That benefit the Employers and Employees by improving Individual Health and in Reducing Health Care Costs.</li></ul><p>For a number of reasons the days of <i>Evolutionary Change</i> are giving way to <i>Revolutionary Upheaval</i>! These include:</p><div><p> <b>></b> <b>Skyrocketing Costs for Health Care</b>!</p></div><div><p> <b>></b> <b>Skyrocketing Increases in Health Insurance Plan Premiums</b> for Employers,</p><p> Employees, and Individuals! </p></div><div><p><b> ></b> <b>Disruptive Change </b>promoted by Entrepreneurs and a Competitive</p><p> Marketplace! </p></div><div><p> <b>></b> <b>The Internet and Search Engines </b>providing Employers, Employees,</p><p> and Individuals expanded access to Plans, Programs, and Services - as well as</p><p> their Providers - on a more competitive basis. </p></div><div><p> <b>></b> <b>Social/Business Media</b> <b>Driven by the Internet</b> is being utilized by Brokers and</p><p> Carriers to cost-effectively reach Employers, Employees, and Individuals with</p><p> information about and access to their Plans, Programs, and Services. </p></div><div><p> <b>></b> <b>Federal and State intervention with Reform</b> - including PPACA, MLRs, etc.</p></div><div><p> <b>></b> <b>Public Demand for Change!</b></p></div><div><p><b> </b>What are the <i><b>Revolutionary and Disruptive Changes</b> being faced by Brokers and Carriers</i>?</p></div><div><ol><li><b>Insurance and Benefits Industry Reform by Government</b> - Federal and State intervention in the Insurance and Benefits Industries! Whether Obamacare or Romneycare - as they are amended - regulations are inevitable and will be extremely Disruptive!</li><li><b>MLR (Medical Loss Ratios)</b> - in one form or another - will negatively impact on the compensation package for Brokers to hypothetically reduce the Premium Costs.</li><li><b>State and the Federal Exchanges</b> - will become the access point for millions of U.S. Citizens for accessing Health Insurance Coverage.</li><li><b>Health Care Coverage <i>Navigators</i></b> - Internet Portals, Individuals, and/or Organizations providing information about the Exchange based Plans - with some method of compensation (probably not commission based). Navigators will provide the guidance required by Individuals, Employers, and Employees to make their Health Plan Coverage decisions.</li><li><b>Insurance Carriers, Brokers, Large Employers, and Third Parties</b> <b>will develop Private Exchanges</b> including: Mandated Plans; Innovative Plan Designs; Self-Funded Plans; HDHPs; HRAs; HSAs; Gap Plans; Voluntary/Worksite Plans; Ancillary Plans; and more - all on a <b>Defined Contribution (DC) Platform</b>. </li><li><b>Technology Companies Providing Platforms for Private Exchanges and Defined Contribution Models</b> will become the hub for Carriers, Brokers, Employers and Employees for providing and accessing Plans, Programs, and Services. </li><li><b>Companies Providing Education, Communication, Enrollment, and Data Management Capacities</b> will integrate with the Technology Companies to better accommodate <b>Private Exchanges</b> and <b>Defined Contribution</b>. </li><li><b>Insurance Carriers will "Mass Customize" Plans and Programs</b> - that are in compliance with the Federal or State Mandated "<i>Base Plans</i>" that will provide additional coverage for those who desire and can afford a more robust Health Insurance Plan.</li><li><b>Voluntary Benefits and Ancillary Benefits</b> - will continue to dominate the Insurance Markets as all Benefits and Insurance Plans become Voluntary within Private Exchanges within a Defined Contribution Strategy.</li><li><b>Broker Commissions </b>- will continue to be reduced by Carriers for the Health Insurance Plans based on MLRs.</li><li><b>The Internet</b> - will become the Distribution Channel of Choice for Carriers attempting to replace Brokers as the direct contact with Clients and Potential Clients.</li><li><b>Social/Business Media</b> - will continue to grow in importance as the interface between Carriers and Brokers with potential Markets - Employers, Employees, and Individuals.</li><li><b>Brokers Compensation Models Will Change </b>- they will be forced into "<i><b>Fee Based</b></i>" Compensation replacing the traditional "<b>Commission Based</b>" Models. Employers, Employees, and Individuals who need assistance in making decisions about Insurance and Non-Insurance Based Plans, Programs, and Services will pay Fees to Brokers for their assistance. </li><li><b>Employer's Participation in offering Benefits</b> - will utilize Private Exchanges and Defined Contribution (DC) Strategies to continue to offer Employee Benefits and remain Competitive.</li><li><b>Brokers Will Leave or Change Their Industry Focus</b> - many experienced Health Insurance Brokers will not be willing to accept change or have the flexibility required to survive - they will retire or go out-of-business. </li><li><b>Consolidation of Mid-Sized and Larger Brokers</b> - as Brokers shift from Traditional Norms to delivering Benefit Packages based on Private Exchanges, Defined Contribution (DC), and a Fee Based Compensation Model, many Organizations will Partner, Acquire, or be Acquired to remain Competitive.</li><li><b>Consolidation of Insurance and Benefits Carriers </b>-<b> </b>as<b> </b>they seek to leverage their Assets, Merge Client Bases, Reduce Marketing and Advertising Costs, and Strengthen Balance Sheets they will Merge.</li><li><b>Employers, Employees, and Individuals will Gain Control </b>- they<b> </b>will<b> </b>be more demanding of Carriers and Brokers to provide Plans, Programs, and Services to meet their needs within a framework of Private Exchanges and Defined Contribution Strategies. </li><li><b>Government Entities at the Federal and State Levels</b> - will continue to increase their control of, and participation in, the Insurance and Benefits Industries.</li><li><b>A Single Payor System and Nationalize Healthcare</b> - will continue to be the ultimate goal of the Congress and Federal Agencies. </li></ol><div><p><b>As the above outlines, Brokers and Carriers no longer can keep their heads in the sand hoping that these <i>Revolutionary Pressures and Changes</i> will subside and go away - That their will be a return to the <i>Good Old Days</i>!</b> Surviving for Brokers and Carriers in 2013 and Beyond will be based on their willingness to abandon old Strategies and Models. It will be essential for them to Embrace Change. Brokers and Carriers must become creatively involved in building new Plans, Programs and Services - as well as Delivery systems to accommodate the above changes. <b>2013 Is Almost Here - Will You Be?</b></p></div></div><div><p><b>We invite you to Comment and add to the Discussion: Join our Linkedin Group, <a href="http://linkedin.com/groups?about=&gid=2762200">Insurance Forum</a>; Visit our Website - <a href="http://www.benefitplace.biz/">Benefitplace.biz</a> or Email - <a>max@benefitplace.biz</a>. </b></p></div></div>