Just a couple of years ago, the mere mention of the Affordable Care Act could stir brokers’ fears and sometimes even panic about the future role of the benefit adviser in this new marketplace. A few years into the ACA’s implementation, however, brokers are beginning to see opportunities opened up by health care reform — and successful brokers are embracing them, experts say.
“There was a lot of uncertainty two or three or four years ago about the ACA and how changes would affect brokers. There were some that believed it would negatively impact them and opportunities would decrease,” says Dan Lebish, executive vice president, chief operating officer at Aflac, adding that in fact brokers “have found just the opposite.”
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More than half of brokers who took part in the 2015 Aflac WorkForces Report (AWR) survey now say they are confident about the future of their firms and their industry. The uptick in confidence is noteworthy, the study says, as it reflects a 12% increase over the 2014 AWR results and a 14% increase over the 2013 AWR survey.
Four in 10 brokers (41%) agree that health care reform represents an opportunity for their businesses, which is up 14% over 2014.
Health care reform, Lebish says, “has given them opportunities they hadn’t thought about before. It has created both new revenue sources, as well as a new way to think about how benefits need to be offered and what benefits need to be offered.”
It has also created new opportunities in roles around communication and education and helping both employers and employees navigate their way through the system,
The message is: “If you’re a broker who is really thinking about how you ought to put your benefits together and really thinking about what your employer groups are facing, there’s lots of opportunity in the market.”
Exchange help
One of those opportunities is helping individuals and employees enroll on the public exchanges created under the ACA.
Sixty percent of brokers say they helped up to 50 marketplace consumers during the 2015 ACA open enrollment period, while 20% of brokers helped more than 100, according to the 2015 Kaiser Foundation Survey of Health Insurance Marketplace Assister Programs and Brokers. On average, brokers report helping about 140 consumers, both in and outside of the marketplace, with eligibility and enrollment during the second open enrollment period, according to the survey.
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“Every day that health insurance becomes more complicated; the value of what we do for or customers becomes more valuable,” says Kelly Fristoe, president and CEO of employee benefit brokerage Financial Partners in Wichita Falls, Texas.
Experts say the establishment of the ACA exchanges has completely changed the business of selling non-group health coverage for benefit brokers.
Brokers say the time involved in selling a private policy has increased relative to pre-ACA days and revenue earned per policy has decreased (57%); but most also say they sell more non-group policies overall than they did pre-ACA (60%), according to the Kaiser Foundation survey.
Fristoe agrees, saying his agency has definitely sold more individual plans in the past few years than it did previously.
Benefit offerings
The AFW survey also found brokers increasingly offering more comprehensive benefit packages that include supplemental benefits that fill gaps in coverage created by rising high deductibles and increasing co-insurance found under the ACA.
“If a broker understands how to utilize the benefits that are available and doesn’t just think about voluntary benefits as a revenue source, but offers them as an integral part of a comprehensive benefit package, it provides them a great opportunity,” Lebish says.
While brokers previously may have understood the products, such as critical illness, hospital indemnity, etc., Lebish says they are beginning to recognize more so now than ever how these benefits can fill the gaps in coverage seen in employee health care coverage under the ACA.
Nearly six in 10 brokers (58%) report they plan to increase the amount of revenue from voluntary benefits at their firms over the next 12 months, a 9% increase over 2014 and a 14% uptick compared to 2013.
