It was not all smooth sailing as Savannah, Ga.-based TMX Finance, whose holdings include TitleMax and EquityAuto Loan, among other companies, made its transition to a private benefit exchange. There were bumps along the road and three broker changes, too, explained Lauren Thomas, the company’ senior vice president of human resources and administration, at a conference Wednesday.
In 2011, the company had to change its benefit offerings to become Affordable Care Act compliant. Prior to that it was giving its nearly 5,000 employees a stipend to purchase coverage. The company settled on moving to a private exchange, which, at the end of the day, needs to be able to have employees enroll through it, send files to carriers and get payroll files back, Thomas said at the conference sponsored by World Congress in Tysons, Va.
The move to a private exchange saw TMX move through three brokers. The first broker the company used was very “paternalistic [and] old school.” That broker handed TMX’s CEO some prices that didn’t have benefit administration support. Knowing a private exchange was the right move, the company moved to a second broker, who sold them a private exchange, “that sounded very good,” Thomas said.
However, the broker, whom Thomas declined to name, and TMX quickly began clashing over control and how commissions — particularly on voluntary products — would be handled.
The company finally moved to a broker with USI Insurance Services who used a white-labeled exchange from private exchange technology provider Liazon. “I went [to Liazon] and said, ‘This is a competitive situation, let me see what you can do,’” Thomas said. “We need to make sure [the exchange] works and definitely looked to our broker to help keep them honest, too.”
It is part of the evolution of the broker model, moving to more of a consultative model, added Paul Wingle, executive director, individual business and public exchange operations at Aetna, who chaired the conference. “Employers [are] going to figure out what the best [model] is for them and who they can rely on,” he explained.
In talking about their second broker, Thomas explained that she and TMX’s CFO “learned the hard way that you need to know what questions to ask brokers about customization and cost.” Thomas, who is a lawyer, kept records of all the communication with her second broker and broke the contract with that broker due to breach of contract clause.
Although the move has been an overall success, it did not come without challenges. “One thing we have consistently had is a challenge [over] choice and simplicity at the same time,” Thomas said. “Employees want choice but [they] want it turnkey, simple and to not put much thought into it.”
The first challenge was that many employees, particularly customer service representatives — who make less than $30,000 annually — were selecting high-premium health plans and reducing their paychecks to single digits.
“It is troubling from an education standpoint because we have to balance cost and simplicity,” Thomas said. “How to communicate our … plans.” One challenge was that the premiums needed to be explained in the same way to a C-suite executive as to the person who might only have a high school education.
“It is really hard to explain insurance,” she added. To overcome that challenge, the company is repackaging the same information and presenting the same information via multiple outlets.
The second challenge was that initially the exchange’s decision support tools only gave feedback on health plans and not on voluntary products, causing employees to overbuy. “Our average age is 36 and we are 52% female with incomes ranging from $25,000 to $500,000,” Thomas said. “Trying to meld all those things together is tough — there is not a single right answer, but knowing your employee population is critical.”
The final barrier was in language. While many of the company’s employees are bilingual, often the spouse is not, and the spouse is the person talking with doctors and making healthcare decisions. As a result, TMX made sure its exchange call center was fully bilingual.
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