The Affordable Care Act (ACA) has accelerated change and confusion in the health insurance marketplace and businesses and individuals are counting on their insurance agents and brokers to help them understand the nitty-gritty of the ACA requirements. For many property/casualty agencies that also sell health insurance, meeting the challenge has meant investing in new technology, adapting new agency strategies, and bringing in additional resources to wade through all of the regulations and jargon.
While implementing the ACA is an expensive and exhausting undertaking for all, it isn’t necessarily a bad thing, according to two firms that help employers and insurance agencies get answers to many of their questions.
The two also say the recent delay until 2015 of penalties on employers not offering affordable coverage is an opportunity for employers and agencies who want more time to educate themselves and develop their strategies.
“Whether you love it or hate it, [ACA] was a catalyst for ideas,” says Mike Sullivan, executive vice president and chief marketing officer for Digital Benefits Advisors (DBA), a nationwide employee benefits-only agency. “For us, it was as much about breaking free from the status quo and allowing new ideas, relationships and partnerships to take place in the marketplace.”
The Atlanta-based agency concentrates on helping middle-market and small businesses in 15 states build employee benefit programs. In June, it launched a new exchange platform called Digital Benefits Marketplace to help employers of all sizes comply with the ACA employer mandate.
The Digital Benefits Marketplace provides an online platform for employers to provide to their employees so they can make their own healthcare choices. Digital Benefits has been rolling out the marketplace in select states and expects it to be in all of the states it operates in by Feb. 1, 2014.
Sullivan says the Marketplace gives employees the ability to customize their benefit plans based on preselected options made by the employer.
“The way I think about the marketplace is it really is a migration from an assigned benefit plan to an assigned defined strategy,” says Sullivan. “The online marketplace is built around the employer but creates a much greater level of choice of customization to the families and individuals.”
Sullivan says DBA’s parent company, Digital Insurance, currently has about 300 broker partners around the country and they are working on granting Marketplace access to them as well. P/C firms can also become a partner and DBA will work with them on managing their employee benefits divisions through the Marketplace to more effectively assist their clients.
“There are hundreds and hundreds of P/C agencies around the country that have small benefit divisions and it will be harder for them to deal with all of this so we want to help them with that,” he says.
California-based Barney & Barney, an agency that sells all lines of insurance nationwide including health, has also developed an employer tool called ATLAS to help employers address changes in their employee benefits.
According to Shawn Pynes, principal with Barney & Barney’s Employee Benefits Division, ATLAS provides a diagnostic tool that was developed by Barney & Barney’s actuarial team to help clients “dive in” and look at what the financial impact of healthcare reform will be to their business through 2020. It also helps them design and implement the best and most cost-effective strategy for meeting ACA requirements.
“When the bill was passed, there were over 2,000 pages and thousands more pages have come out since then,” says Pynes. “It is a nightmare and major compliance challenge. We looked at what are those things we need to do to make sure clients are in compliance and help them with regulatory issues.”
Pynes says large employers have been preparing for the last couple years to become compliant with the ACA’s employer mandate and reporting requirements, so the delay of penalties until 2015 announced by the Obama Administration last month will not change the course for those companies that have begun to implement new systems.
The government said it will postpone enforcement of the so-called employer mandate until 2015. Under the provision, companies with 50 or more workers face a fine of as much as $3,000 per employee if they don’t offer affordable insurance.
If anything, Pynes says, the delay should be seen as an opportunity for employers.
“The Treasury promises to streamline and simplify requirements, which we welcome. We are encouraging clients to use this time to refine and build-out their strategies,” he says.
Sullivan says the delay will not affect Digital Benefit Advisor’s rollout of its Marketplace or other new product plans, and businesses can still join now and get started. He agrees the delay should be seen as good news, especially for large businesses.
“The deadline extension provides employers more time to devise a benefits strategy that ensures compliancy with the legislation,” says Sullivan. “For some, the shared responsibility mandate presents a major financial impact and could, as a result, drive changes in the way their business and workforce are structured.”
Pynes and Sullivan also agree that agents and brokers can and should play a vital role in helping businesses navigate the ACA requirements. Sullivan says agents should look at each state on an individual level to find out if there is an opportunity for them to be an advisor to businesses in that area.
“Certain states will be better to be an advisor in than others, so agents should continue to understand what the political and regulatory management is of a state and can they build an advisory capability there,” says Sullivan. “Anyone in our position needs to look at what is going on in the state and is it acceptive and receptive to the role of the advisor.”
The delay also gives agents and brokers some breathing room and time to better educate themselves on the legislation and find new ways to work with their clients.
“Use the reprieve to refine your strategy and build-out whatever you are planning on doing,” says Pynes. “Agents and brokers have to continue to morph and this reprieve may give an opportunity to some who hadn’t spent a lot of time developing their own strategy and what they are going to do going forward.”