We have seen quite a bit of uncertainty in the health insurance industry over the past three years and by no means, has everything been decided at this point. On the other hand, we know that the “Affordable? Care Act” is the law of the land and we need to make sure we are prepared to implement it to the best of our abilities. There has been good news with some of the release of regulation as well as some very troubling points as well. Although I don’t have a crystal ball to foretell the future, some things are becoming more apparent as the days go by. As always, I will try to stay on the cutting edge and inform and educate as best I can. It may be best for me to place a disclaimer ahead of time that these are opinions of Chuck and do represent the opinions of OCI.
Let’s begin with good news. Everything so far indicates that the agent/broker will be instrumental in the delivery of health insurance even when purchased through the exchange. Nothing so far leads me to believe that compensation will change all that much. Although, with the volume expected to join the insured ranks, it may make sense that changes may be necessary at some point. Another item is the new products and services that are making their way to market. We are seeing new and innovative services that will tie in nicely with employee benefits. One in particular is very exciting to me. It will involve a new way of thinking for businesses and OCI will have the distribution responsibility. We will only allow a limited amount of our brokers to have this product and they will be required to get “certified”. OCI is already going to add it to our employee benefit package and I am pretty sure that most small businesses will want it also. Again, if you are a broker, you may want to discuss with me early so that you have it in your portfolio.
I also think the individual marketplace will blossom. With everything that is happening, it would not surprise me to see doubling or tripling of business in this area. OCI has always been a leader in production of individual products and with our rater, we make it simple for our brokers. We plan to expand this area as well as add additional products for our brokers including life, disability, and other individual products by teaming up with Financial Brokerage out of Des Moines. Each of our entities brings strength in our product bases that will allow both to grow.
Not everything will remain the same. I happen to believe that in 2014, we will no longer see the 2-50 small group market remain viable. What leads me to this thought process? Well, the regulations that are coming out will make it very difficult for small businesses to justify having a group plan. Pricing, age banding, and reporting will challenge even the most enlightened bookkeeper. Instead, I see this marketplace changing to allow each employee to go out and purchase an individual product. Hence the push by OCI of having private exchanges in place makes sense. Other products and services will replace the traditional group health plan. If you currently rely on small group health in your practice, you may want to visit about making changes in 2013.
Another thought about group insurance on those plans for businesses 51 and larger. I look for companies to keep 30 or less full time employees and hire part time employees to fill in as needed. Because of how the law is worded, the first 30 employees are exempted and since the part time employees are not eligible for coverage (even though they count in determining size of business), the company can escape any “tax”. Creative on business’s side but not exactly what was intended by ACA. This may lead to many people working at two part time jobs rather than finding one full time occupation. We will have to wait and see if this happens.
Even with all the changes we have seen, the one’s we will see in the next year, and the one’s yet to be determined, I am confident that those professional brokers who pay attention and make the necessary adjustments will not only survive, but thrive in the coming years. On the other hand, I do think that many “part timers” will exit the business and become part time employees at other places. My question to you is, “Which are YOU?”