What Brokers Can Expect in 2017

The new year promises to bring ample changes to our healthcare system. While there are still uncertainties regarding the types of changes that President-elect Trump will make, during his first 100-days in office, this article will look at the ‘knowns’ and what brokers can expect in 2017.

 

QSEHRA sales

On Tuesday, December 13, 2016, President Barack Obama signed the 21st Century Cures Act into law. The law’s provisions, which will become effective after December 31, 2016, include the Small Business Healthcare Relief Act (SBHRA) or H.R. 5447, that is aimed at addressing small businesses’ concerns, by reviving their ability to make tax deductible contributions to employees  [1].

Through establishing a new type of health reimbursement arrangement, known as Qualified Small Employer Health Reimbursement Arrangements or QDEHRA, small businesses will soon be able to purchase low cost, higher deductible plans and extend any cost savings back to their employees  [1]. The law will also protect small businesses against penalties, including those issued by the IRS, as a result of providing this cost-sharing option to employees [1].

For brokers and small businesses, this is a win. While some benefit brokers have raised concerns that with a short amount of time until the close of open enrollment (January 31, 2017), QSEHRA sales could be limited, the overall ability to sell these HRAs to their consumers is a unique opportunity and one that is forecasted to get a plethora of attention by small businesses, nationally.

 

The brokers’ role will continue to evolve

With an ever-changing benefits landscape, the role of brokers is quickly evolving. As a result, brokers must alter traditional methods of conducting business and develop new, innovative approaches that deliver more value and cost savings.  From streamlining enrollment activities to providing real-time services, such as the ability to make payments, receive quotes, or update account information, technology plays a large role in this. It [technology] has and will continue to mold the expectations consumers have for their benefit brokers.

Apart from this, brokers are finding other unique ways of providing value and strengthening their client relationships. For some, hosting lunch and learn sessions for employees and employers has become a staple of reinforcing their commitment and expertise, while others have found that providing tailored recommendations can help businesses attract and retain talent. The takeaways here involve thinking outside of the box and understanding the importance of establishing creative communication and marketing tactics. (see more: Benefit Brokers Must Keep Up with Changing Expectations

 

Stable outlook

Fitch Ratings is predicting stability and growth for brokers and agents within the health insurance industry in 2017. The report, Fitch Ratings’ 2017 U.S. Insurance Broker Outlook report, noted that while brokers have faced pressures resulting from rate increases, they have achieved organic revenue growth.  This can be largely attributed to selling diverse products and services that have helped them achieve strong retention among their customers [2].

Fitch Rating’s Director, Gretchen Roetzer, cited that “in 2017, Fitch expects brokers will continue to supplement organic revenue growth through selective acquisitions, including diversification efforts in employee benefits and data analytics [2]

Over 110,000 of the 600,000 active brokers in the U.S. became certified to help consumers apply for financial assistance and enroll in coverage last year, and nearly half of all marketplace enrollments involved a broker or agents’ assistance, according to the Kaiser Family Foundation [3].

 

Technology is no longer optional

With the influx of newly emerging technologies, brokers have begun to shift their focus from manual administrative tasks to enrollment platforms that offer streamlined processes. Trading in stressful hours of paperwork for systems that can improve the once paper-driven processes has taken the broker industry by storm.

Most benefit administration platforms on the market today are merely front-end solutions that transfer data between brokers, employers, and employees – and this is simply not enough. What was once only achievable by joining a large brokerage is now in reach through adopting the proper tools and business models for operating in today’s market. The key is that you must insist on a benefit administration solution that allows you to build and scale your own business. (see more: Brokers Turn Focus to Technology)

Current broker technologies have also had a momentous impact on customer experiences and satisfaction. With access to the tools needed to best assist consumers at any time or location, broker platforms have significantly improved upon the experiences delivered to clients – thus allowing brokers to deliver seamless ‘customer journeys’.

 

Plan offerings will diversify

Each year brings new opportunities and challenges for brokers. According to projections set by Fitch Ratings and leading consulting firms, we can expect to observe a diversification in the types of benefits and services provided by benefit brokers in the coming year –  including benefit consultation services, data analytics, ancillary products, HRAs, and other benefits [2].

 

NAIC gets a new leader

Michael Consedine, a former insurance commissioner of Pennsylvania, will soon be the next CEO of the National Association of Insurance Commissioners (NAIC) [4]. NAIC is responsible for assisting state insurance regulators establish standards and best practices, execute peer reviews, and coordinate regulatory oversight [5].

Consedine will be based in NAIC’s Washington, D.C. office and will oversee all state and federal government affairs, in addition to activities conducted abroad [6]. He is expected to enter his new role in early 2017 [6].

 

[1] https://www.congress.gov/bill/114th-congress/house-bill/5447
[2] https://www.fitchratings.com/site/pr/1015687
[3] http://kff.org/health-reform/report/2016-survey-of-health-insurance-marketplace-assister-programs-and-brokers/
[4] http://www.lifehealthpro.com/2016/12/12/michael-consedine-to-lead-naic?ref=hp-news
[5] http://www.naic.org/index_about.htm
[6] http://www.naic.org/Releases/2016_docs/michael_consedine_named_new_naic_ceo.htm
The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon, Inc. (dba Welltheos).

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Yvonne Villante
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Yvonne Villante

Senior Research Manager, Healthcare Reform at Welltheos
As our Senior Research Manager, I work closely with our Solution Architect, Product Management, and Sales teams. My role centers around competitive and market analyses, constructing premium content (whitepapers, research briefs, infographics), curating stories for our newsletters, and blogging.

I earned my BAA from the State University of New York at Stony Brook and MBA in Healthcare Administration from the University of Ohio (Athens). I was born and raised on Long Island, NY and enjoy capturing what the island has to offer through photography.
Yvonne Villante
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