groupdividual: redefine your business and thrive in the age of healthcare reform harness the...
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GroupDividual:Redefine Your Business and
Thrive in the Age of Healthcare Reform
Harness the Purchasing Power
of the Individual
Scott E. Mardis
© 2011, National Association of Health Underwriters • www.nahu.org
Be Afraid….. Be VERY AfraidThey're coming for your commissions!
Don’t Be Frightened by Obamacare. Protect and increase your commissions with new payment strategies that empower individuals
© 2011, National Association of Health Underwriters • www.nahu.org
First Mover Advantage for Brokers – Health Care Reform Overload
Small Businesses Dropping Coverage
Seasonal/Temporary Workers
Retirees
Spouses
Unions
Contractors and Consultants
Individuals
Indv. Declining Group Coverage
Part-Timers
COBRA
Municipalities and Government Agencies
© 2011, National Association of Health Underwriters • www.nahu.org
Source: 2013: Health Partners America.
Leading Experts – Game Changer
© 2011, National Association of Health Underwriters • www.nahu.org
Source: 2013: Health Partners America.
Leading Experts – Game Changer
© 2011, National Association of Health Underwriters • www.nahu.org
Source: 2013: Health Partners America.
Leading Experts – Game Changer
© 2011, National Association of Health Underwriters • www.nahu.org
Exchanges May Draw 37 Million Already-Covered WorkersMillions of workers who are covered at work could instead choose insurance through state exchanges. How many millions? Roughly 37 million, according to Dr. Jay Bhattacharya of Stanford School of Medicine.
“The reason is that these workers would qualify for substantial subsidies to buy exchange insurance,”
In other words, the subsidized Obamacare premium will be less than what they pay for employer based insurance.
Leading Experts – Game Changer
© 2011, National Association of Health Underwriters • www.nahu.org
Source: 2013: Health Partners America.
Leading Experts – Game Changer
Here’s a prediction: By 2025, “fewer than 20 percent of workers in the private sector
will receive traditional employer-sponsored health insurance.” The source of this
claim? Dr. Ezekiel J. Emanuel, in his just-published book, “
Reinventing American Health Care.”
© 2011, National Association of Health Underwriters • www.nahu.org
Source: 2013: Health Partners America.
Leading Experts – Game Changer
Innovative technology is eliminating payroll deduction as the method of choice for
collecting WVB premium, sounding the death knell for payroll deduction. And it’s
creating a huge opportunity for brokers who want to preserve their group medical
commissions.Nelson Griswold
© 2011, National Association of Health Underwriters • www.nahu.org
Payroll Deduction Premium Persistency
55% of employees feel that payroll deductions for voluntary benefits help them to be more disciplined about saving. This discipline – coupled with the financial safety net the benefits provide, and an integrated education campaign – can translate into increased enrollment. MetLife Survey – 2013
Payroll deduction participation ranges between 25% and 45% for most products but on direct pay, the rates tend to be in the single digits. Eastbridge Consulting Group – June 2013
The Average American bounces 12.7 checks a year and which generates $9.4 billion in bank fees
Compilation American Banker 2012
The Average Pa. checking account balance is $3,100. This would be depleted in less than one year.
The Average savings account in Pa. is ONLY $6,100. Pitney Bowes 2012
Payroll Deduction
Persistency Drives
Participation
© 2011, National Association of Health Underwriters • www.nahu.org
“Every check a policyholder/customer has to write provides him or her another opportunity to reconsider the purchase decision.”
Joint Study Sponsored by LIMRA International and Society of Actuaries
© 2011, National Association of Health Underwriters • www.nahu.org
The Shift……..
• What We Know:• The Affordable Care Act (ACA) is here to stay
• Employers are becoming more aware of the potential subsidies
• Employers are asking their brokers for help transitioning their employees to the exchange
• Brokers are concerned about lower commissions (rightfully so) and their ability to enroll and engage individuals
• Brokers need to be able to drive new revenue from new business and from existing cases
© 2011, National Association of Health Underwriters • www.nahu.org
The Future?
• Overall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014.
• Among employers with a high awareness of reform, this proportion increases to more than 50 percent, and upward of 60 percent will pursue some alternative to traditional ESI.
• At least 30 percent of employers would gain economically from dropping coverage even if they completely compensated employees for the change through other benefit offerings or higher salaries.
• Contrary to what many employers assume, more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI, although about 60 percent would expect increased compensation.
McKinsey and Company – Private sector employer study
© 2011, National Association of Health Underwriters • www.nahu.org
The Shift……cont.
• What We Know Continued…….
• Employers and employees may no longer pre-tax individual policies on the public exchange (No HRA’s or PRA’s)
• Once employers send employees to the exchange, they may wash their hands of all administration – no more billing and administration which limits revenue (VB) opportunities
• Medical Insurance is becoming a “voluntary” program
© 2011, National Association of Health Underwriters • www.nahu.org
Follow The Money
The Subsidy Calculator
The ACA Calculator
© 2011, National Association of Health Underwriters • www.nahu.org
Illustrative Sample of a 60-Life Group Commission Opportunity
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$18,450 $4,613
$30,245
Broker Income Outlook under Obamacare
Group Broker Commissions Current Group Client
Group Broker Commissions as Employees Peel Off
Broker Commissions Indiviudal Process Existing Client or Another Group's Broker Account You Take Over
Income drops to this lower point as you lose commissions because employees leave the group.
Your income when you convert the group to individual coverages and you remain as the broker. You can also sell additional voluntary products
© 2011, National Association of Health Underwriters • www.nahu.org
This is the site your
employees will see on
the government’s
healthcare web site
Money the government contributes to the employee instead of the employer
Total the employee pays for SILVER (not Bronze) Family Coverage – $172/month
By the way, the Bronze Plan would be FREE for this family!
© 2011, National Association of Health Underwriters • www.nahu.org
What Does it Mean for the Employer?
© 2011, National Association of Health Underwriters • www.nahu.org
You’ve taken the Plunge – Now What??
• Either your client asks you to enroll their employees on the exchange
Or
• You proactively approached your client with these financial solutions and sold them on your strategy
Congratulations!
© 2011, National Association of Health Underwriters • www.nahu.org
Now oh god you actually have to sell the individuals and enroll it!!
HOW DO YOU DO THIS?
© 2011, National Association of Health Underwriters • www.nahu.org
What Do You Have To Make Decisions About?
1. PICK PRODUCTSWhat other products other than the individual medicalCritical Illness, Gap, Life, Pet, Dental, Telemedicine, ID Theft, Disability, Vision, name your product
2. PICK THE CARRIERS? How do you pick between them?
Transamerica, Humana, Aflac, Abacus, Colonial Life, Lincoln Financial, Trustmark, Allstate, Etc. Etc… Etc…
3. What Commission Schedule and what trips? You probably never know unless you do this all the time
© 2011, National Association of Health Underwriters • www.nahu.org
What Do You Have To Actually Do To Enroll The Case?
1. Are you equipped to enroll individual employees? Probably not, so find someone who can!(Hint: Who likes to enroll individuals one-on-one?)
2. Select and Train your enrollers? How do you pick between them?Who will meet with and enroll your client’s individual employees and
ensure you get paid commissions on the medical
3. Work with your client to provide your voluntary partner with access and working conditions – they meet with the employees sell the benefits
4. Sit back and collect your medical and voluntary commissions
© 2011, National Association of Health Underwriters • www.nahu.org
What About The Money?
How are employeesgoing to pay?
© 2011, National Association of Health Underwriters • www.nahu.org
A New Solution for Carriers, Brokers, Enrollment Companies
Payment system solutions and banking platform that:
Bills, collects, and remits payments from individuals directly to carriers
Provides Direct Access to sell employees even when an employer doesn’t offer, sponsor, or assist in providing supplemental benefits
This is not the current payroll deduction process or any existing bill consolidation approach!
Financial Wellness Strategies
The PDD Approach (Premium Direct Deposit)
© 2011, National Association of Health Underwriters • www.nahu.org
Current Employer ChallengesNew Payment Solutions
Current Challenges / Headaches Peace of Mind Solution with Premium Payment Aggregator Solutions
Premium reconciliation, escrow balance recordkeeping and balance sheet headaches
No More Reconciliations
E.R.I.S.A. Plan LiabilitiesSame benefits transforms ERISA plans to non-ERISA plans NO ERISA LIABILITY!
Lose productivity because one third of my employees are dealing with financial issues
Provides employees with budgeting tools and visibility to manage their payments and finances
Administrative tasks with helping employees with 401(k) hardship loans – currently 40% of employees request loan withdraws
This can be reduced when employees budget their money correctly.
HIPAA – Privacy Laws YOU KNOW WHAT EMPLOYEES PURCHASE – SHOULD YOU?
Similar to PayPal™, their purchases can be shielded from the employer.
© 2011, National Association of Health Underwriters • www.nahu.org
Employer Access Strategy in the New World?As Employees Turn Consumer
without Payroll Deduction Plans…
• Fact – Traditional group insurance and ESI are on the decline
• Question – How are you going to deal with this?
• Answer – Provide group-like coverage to individualso Engage Voluntary!o Maintain the same accesso Maintain the same retention when they don’t have payroll
deduction
• How? Engage a Premium Direct Deposit Provider (PDD)o Exchange Payment Methodso Voluntary Marketplace Place payment methods
© 2011, National Association of Health Underwriters • www.nahu.org
Keys To Success
• Follow the Money
• Engage Voluntary to enroll your new individuals
• Find new prospects and replace their broker!
• Sell More Cases
• Sell More to Existing Cases
• Help make practical the transition from group to individual
• Help maintain renewals of the individual product sales