The dialogue in the industry is that it is inevitable; a public health care system is coming. Many in the GOP are fighting health care reform, and it's true that it may be revised from the originally proposed—and passed—plan. But, overall, the consensus is that some level of reform is here to stay.
Changes in health care have been underway for years, regardless of formal reform. Few would argue that the current health care system is broken in many respects—from being highly expensive and inefficient to not including certain services and excluding individuals with preexisting conditions. New options are emerging to address companies' needs to reduce out-of-pocket costs, while also providing greater perceived value to employees.
It may not have been happening fast enough for some, but elements of health care were being "reformed" even before the term officially entered the picture.
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With President Obama's plan, an exchange offering will be developed that will enable employers to opt out of providing employees with insurance for a fee. The debate about the number of employers that will do this remains controversial, but according to Lockton, a privately owned, independent insurance broker, one in five employers say they'll consider it. Employees, in turn, will need to directly access and purchase coverage themselves. Some speculate that in the future marketplace, whill will enable consumers to go direct to the carrier, brokers could become obsolete.
A recent survey of large companies by the National Business Group on Health found that employers estimate their health care-benefit costs will increase by an average of 8.9 percent in 2011, compared with an average increase of 6.9 percent in 2010. According to HR and outsourcing consulting firm Aon Hewitt, the average total health care premium per employee for large companies will be $9,821 in 2011, up from $9,028 in 2010 and double what they paid in 2001.
Increasing premiums have long been forcing new decisions by employers, as we have witnessed with the emergence of creative options such as self-funded plans. These plans have experienced a 6,000 percent increase in the last 12 years, according to the Society of Professional Benefits Administrators.
Many employers have embraced wellness plans to promote employee health in the hopes of reducing claims and premiums. Others are going with higher deductibles and passing on some of the rising costs to employees through greater employee contributions or are reducing employer-paid benefits completely.
Employees have adopted new plans to put pretax money away to pay their growing portion of health-related expenses. High-deductible health plans with flexible spending accounts that enable employees to do exactly this grew by nearly 1.5 million this year alone, according to America's Health Insurance Plans.
Group health care providers are expanding voluntary benefits options to help augment employers' offerings. And, most recently, technology providers are giving consumers the ability to purchase individual offerings alongside enrolling in employer-sponsored plans online.
The evolution has been long coming. Perhaps the bigger question is, what are brokers doing about it?
Some downplay the role of brokers in the evolving benefits industry. Others say, the growing complexity of plans and options makes brokers' jobs all the more important. A recent survey of CFOs from Tatum, the nation's largest executive services firm, says few CFOs of middle-market companies have made assessing the impact of changes associated with health care reform a priority.
As advisors with access to a wealth of knowledge and information critical to helping corporations make decisions about the plans and options that are best for them, brokers may be in a better position than some predict. But that does not mean they should stand idly by. Brokers need to be a resource on what is being required, how things are changing, and where things are headed.
As the independent "experts," brokers can help employers address rising costs through wellness, cost-containment, and voluntary benefits strategies. And with technology in place, brokers can monitor real-time employee information and elections, instrumental in making employer and employee contributions go the farthest. In a world of rapidly changing benefits options, access to information and advisors that have coveted knowledge on how to make the best decisions will be more important than ever.
Today's brokers need to ask: how can I make it easier for HR clients and corporations to make sense of the evolving benefits landscape and make the best decisions?
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