By Shandon Fowler
Here we are, approaching the third open enrollment season under the Affordable Care Act (ACA). We were never certain that there would be three open enrollments post-ACA. However, the landmark legislation not only survived numerous legal and other challenges but has reshaped the benefits business in ways that nobody could have predicted, as well as in some ways that we did predict.
We knew that the individual market would grow, but who could have predicted the boom in private exchanges and new options for brokers to extend health care consumerism to their customers? Who would have known that private exchanges, combined with the growing ranks of individual coverage, would reshape the benefits business and the brokers who have served it for decades?
The coalescence of legislative action and new technologies is driving change like we’ve never seen in the benefits business. As we embark on another open enrollment season, it is important to recognize this change and the challenges it may bring. It’s equally important to know that with every challenge, there is opportunity.
Here are some hot topics for this year’s open enrollment and how to make the most of the brave new benefits world.
Understanding the Options for You and Your Client
Today, dozens of private exchange options are available, all of them claiming to be the only exchange you need. Some tout a model that will control costs above all else. Others accentuate consumer choice. Still others are pretty straightforward about preserving a broker’s commission.
How do you determine which choice is right for your clients? The same way you always have: Determine what is most important to them. Is it saving money, taking care of their employees or being on the cutting edge of benefits strategy? Now you have options and you can help guide your clients to what’s right for them.
However, be wary of platforms that are underdeveloped or simply trying to buy your business. Private exchange platforms that are untested or financially unstable may be able to earn you more money for one or two open enrollment cycles. However, if they are unable to mature their platform or provide quality administration in addition to a shopping experience, what could seem like a good strategy in the short run could end up alienating your clients over time.
Benefits Are Good for Everyone
Private exchange technology, combined with broker expertise, seems to be having a positive impact on sales beyond health coverage. Voluntary benefits sales have, by some estimates, increased by as much as 25 percent within the employer sales channel over the past two years.
What was once a manual, paper-form process of selling voluntary benefits is now integrated into platforms that allow employees to see all of their benefits in one place online. Plan adoption has increased on the platforms that have figured out the interconnectedness between core and voluntary benefits. So as you work with your clients to plan out benefits programs, think of voluntary benefits in a different, mutually beneficial light.
Consider the Whole Workforce
The Congressional Budget Office has projected that employer-based coverage could decline by as many as 5 million people by 2020, potentially eroding employer-based brokers’ business. Yet, a funny and unexpected thing has happened in the individual market. Individual market brokers, thought to be going extinct because of new technology and the ACA’s navigator program, are experiencing a renaissance of sorts because of problems with the Healthcare.gov website and the navigator programs. In other words, brokers appear to be more important than ever in the individual space.
As you look at employer-based coverage, don’t rule out that the best coverage for your clients’ employees may be a subsidized public exchange plan combined with voluntary benefits through the employer. Resourceful brokers may be able to increase the business in both the employer and individual space by considering their clients’ entire workforce.
Data and Cost Transparency Are Fundamental
In spite of all these new factors, some things remain foundational. For employers, choosing the right mix of health plans is essential for controlling costs. It requires analyzing claims data, workforce demographics, industry trends and more to determine the best path moving forward.
Online environments have made it possible to bring together behavioral science principles and the wealth of data to create guided shopping experiences that provide consumers with a higher level of cost transparency and decision support. And as your chosen platform increases that transparency, consumers become more likely to trust you as a partner.
Personalized Communications and Options Support Good Choices
Today’s workforce is more diverse than ever, spanning four generations. As noted previously, employers are recognizing that they can no longer expect to offer the same one or two health plan options and stay competitive. With more choice come more challenges. How will employees know their eligibility status? What can employers do to steer their workers in the right direction? How do employers expand benefits packages with shrinking budgets?
Tailoring the message to a specific audience is another way to connect directly with consumers. Delivering relevant content at the right times in a consumable format will be key for building trust and engagement. This will require looking at data — demographics, member profiles, usage, etc. — to create campaigns that fit the audience well before open enrollment begins so that clients can be prepared to make the decisions that lie ahead.
Flexibility and Interoperability Are Paramount
The ACA has brought about some changes to the benefits landscape while contributing to its unpredictable nature. Some employers are shifting to a defined contribution funding model for cost stability while others are providing a defined contribution for specific populations such as retirees.
As part of being flexible, systems should operate together to ensure efficient, accurate and secure delivery across the multiple systems required to manage benefits data. This means connecting with the various workforce management systems and voluntary benefit providers employers may be using. Serving the modern-day benefits landscape takes flexibility. Other industries have adopted flexible platforms, and now the benefits business has as well.
Service Means More
With private and public exchanges providing viable alternatives to traditional benefits enrollment, carriers need to consider the entire customer experience in order to keep members coming back. In fact, a recent Accenture study found that in 2014, more than half of U.S. consumers switched companies they do business with because of a poor experience.
Employers and their workers are looking for the best bang for their buck, but customer service and experience play a more critical role. This will require insurance carriers to place a greater emphasis on direct consumer engagement in addition to their traditional relationship management with employer groups.
We’re All B2C
It was thought that perhaps brokers would face elimination because of the ACA. Although that challenge is ever-present, as the ACA has rolled out and its complexity has hit home with employers, the role of the broker as a consultant and advisor has become more important than ever. A business — health insurance — that already was complex has become even more so. Plus, millions of people who have never had health coverage have entered the market — and they need people who understand health insurance and can help them make choices.
Add it all up and you get a business that needs expertise and service. You must be ready to serve customers’ needs for education, decision support, plan navigation and so on. In the end, you’re serving consumers, and those consumers need you. Luckily, technology is advancing at a rapid pace and can help brokers and consumers alike as they navigate this complex benefits landscape to get to something better for everyone.
Shandon Fowler is director of product management for marketplaces at Benefitfocus. Shandon may be contacted at [email protected].