Brokers design health plans to weather health reform uncertainty

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The latest effort to repeal and replace the Affordable Care Act has failed; but regardless of the Graham-Cassidy bill failure, brokers are still prepping their clients for healthcare change, some since Donald Trump took office in January.

At a March client summit Bob Gearhart Jr., partner at DCW Group out of Boardman, Ohio, discussed the budget reconciliation process in the Senate and what could be impacted through that process. Through this meeting with his clients, Gearhart explains how healthcare change would occur, in the event repeal and replace legislation succeeds. Still, he is surprised at how little has happened. “Essentially where we are at today, I did not think there would be this much resistance along the way,” Gearhart says.

Gearhart refers to the resistance of previous repeal and replace bills from some of the republican senators such as John McCain (R-AZ) and Rand Paul (R-KY) that halted the removal of the ACA.

DCW Group’s clients continue to come together on a quarterly basis to discuss changes within the benefits space and how to prepare for future changes in regulation. Being able to communicate with all clients in one place, Gearhart says, creates a better chance of everyone receiving the information. Regulation updates through email or other electronic means can be less reliable, he says.

“When it comes to our communication, especially on these more technical aspects, that is our preferred route of communication,” Gearhart says. “So much can get lost in translation via email because one person may read and interpret it one way while another may interpret the information another way.”

Of the 80 commercial clients DCW Group currently has, Gearhart says at least 60 clients participate in the quarterly meetings. "Many clients have become personal friends and everyone looks forward to seeing each other and collaborating," he says.

Proactive steps
To ensure clients have a health plan in place that can be flexible with future legislative change, Brian Tolbert, benefits practice leader at Bernard Health out of Nashville, Tenn.; and Mick Rodgers, principal and managing partner for Axial Benefits Group out of Concord, Mass., have taken steps to move their health plans into defined contribution plans or coalition models in order to maintain a level of compliance flexibility, should healthcare take a drastic turn.

“In the last 24 months, we have helped our clients move to a defined contribution strategy where they have to define a dollar amount that they will contribute toward the cost of the health plan,” Tolbert says.

Rather than paying the costs to provide a specific group health plan benefit, employers fix their costs on a monthly basis by establishing a defined contribution health plan. Tolbert says these plans can be an affordable alternative to employer-sponsored group health insurance plans.

“Our clients are offering four or five different plan options incase new healthcare legislation passes. [Healthcare change] will not happen overnight, but we will not need to adjust from where we are.”

Because Tolbert’s clients are set up to offer multiple health plans to employees, if and when healthcare legislation changes, the decision clients will need to make will not be around what type of health plan to offer employees, but rather to determine how much they are willing to spend on coverage.

“It is easier for them to say they contribute $300 a month toward the employees’ health insurance and then in 12 months, when they get to renewal, they can look at their profit and loss statement and determine whether they want to increase or decrease contributions,” Tolbert says.

Despite uncertainty over reform efforts in Washington, advisers need to help clients prepare for next year now.
June 15

Similar to the defined contribution plans Tolbert has moved his clients to, Rodgers is encouraging clients to enter into a healthcare coalition model: a collaborative network of healthcare organizations and their public and private sector partners that serve as multi-agency coordinating groups to assist with preparedness, response, recovery and mitigation activities related to healthcare.

“One of the things that [expanded the popularity] of my coalitions is the ACA, because they are flexible enough to figure out how to affordably put someone into compliance,” Rodgers says.

One of his biggest coalitions is for the staffing industry, as it eases the process of providing all temporary employees with healthcare coverage options, as required by the ACA.

“We have figured out a way to do this at the lowest cost we think there is in the marketplace,” Rodgers says. “If the ACA, all of the sudden, stopped requiring [coverage to temp employees], we still have the lowest cost comprehensive coverage that clients would not drop.”

In order to stay ahead of future healthcare change, Rodgers says every broker needs to have a strategy in place that is flexible enough to bend with the laws put in place. Otherwise, clients could drop health plans on their employees due to cost, coverage or compliance. “[Regulation] could come fast and furious, and brokers need to have strategic contingencies in place,” he says.

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