Doing More for Less
On Jan. 1, 2014, Clark says his job “will change overnight.” Instead of selling insurance to a company, he will have to educate every employee so each will “become his own risk manager.” He fears that a lumberyard and building supply worker making $30,000 a year will simply select the cheapest of an exchange’s four mandated options without exploring whether it’s the right coverage for himself or his family.
But by the time the Act is in full effect, agents who might provide advice could be in shorter supply.
The Big I has stated that the part of the Act requiring insurers to spend no less than 80% of premiums collected on health care and rebates leaves less money for compensating agents and brokers. The Act also encourages Exchanges to sell policies online, further cutting into agents’ territory, although The Big I’s Young notes that the Department of Health and Human Services will allow agents to participate in enrolling people into Exchanges.
“At the very least, agents will be doing a lot more for less money,” Young predicts.
One of the unintended consequences of the Act could be that it presents a disincentive for smaller firms to employ more than 49 full-time workers. Indeed, three-quarters of businesses polled recently by the U.S. Chamber of Commerce thought the Act makes it harder for them to hire people. The White House agreed in early July to meet with retail leaders to discuss the implications of the Act, including how it defines full-time employees. Drug Store News reported that the Retail Industry Leaders Association called for a transition phase during which employers who offer coverage in good faith would be exempt from penalties. Employers want a more flexible approach to full-time status to prevent a possible “churn” effect between employer coverage and Exchange coverage for certain employees.
The Act will undoubtedly alter the relationship between dealers and workers, perhaps for the better if companies improve communications with associates and convert them “from being beneficiaries to participants,” says Vogt.
That effort, agents say, can start with a wellness program. Since last year, the Act has been offering five-year grants to small businesses to set up such programs, and allows employers to offer incentives up to 30% of premiums to employees who participate and meet certain health-related standards. The award limit can be increased to 50% at the discretion of the employer in 2014.
This summer, Capps Home Building Center was developing a wellness program that includes having a nurse come to its office to screen participating employees. The goal, says Shelton, is to “stair-step premiums” based on good employee behaviors, such as quitting smoking, eating healthier, and exercising more.
A wellness program could also become a platform for educating employees about what’s driving health care costs, and how their actions can accelerate or slow that momentum.
“You have to change the culture,” says Alan Nagel, president and agent for Minnesota Benefit Advisors. He wants companies to empower employees to at least question doctors about the need for expensive medical tests, and to use cost-saving services like online clinics whenever possible. And if an employee persists in behaving in ways that are detrimental to his health, companies need to impose penalties, like downgrading that worker’s insurance coverage but not his premium.
“We need employees to be smarter health care consumers,” says Nagel, “just as they are when the buy a car or a stereo.”
