3 benefits trends for brokers to watch
What does the benefits industry have in store for the coming year? While the pace of policy changes has slowed in recent years, the industry is as dynamic as ever. With skyrocketing costs still top of mind for the nation’s employers, forward-thinking brokers continue to find new opportunities to take advantage of market changes and build better benefits for their clients.
Here are a few trends that will shape the benefits industry in 2019.
New options for the small group market
Traditionally, small employers have faced limited choices when it comes to group health plans. For years, these groups were typically stuck with increasingly expensive fully-insured health plans with few strategic options to address costs.
But over the last few years, the market has evolved, and carriers are embracing new products for groups with fewer than 50 employees.
UnitedHealthcare is one example, though there are others. The carrier has expanded its level-funded product for small groups since its initial launch in 2013, giving these organizations the opportunity to self-fund and access savings in low-claim years. The carrier also launched a statewide Association Health Plan in Texas this year, taking advantage of changing regulations implemented by President Donald Trump’s administration.
These, and other new self-insuring options, give small employers the ability to have more flexibility and control over their benefits spend in 2019, something the large group market has been able to do for years.
Pharma deals made a lot of headlines this year, and brokers can expect continued industry change in 2019. One disruptive force is Amazon, and its much-anticipated entrance into the drug supply chain via its PillPack acquisition.
The mail-order pharmacy provides pre-sorted medications, home delivery and refill and renewal coordination, and many expect other pharmacies will have to evolve their customer service to compete.
Other deals include the CVS/Aetna merger, which created a new kind of healthcare company combining a pharmacy, health insurer and pharmacy benefits manager. These types of deals may become more common — Humana and Walgreens are reportedly also in talks to partner.
Another pharma trend on the horizon is the possibility of legislation to address high costs. The costs of prescription drugs is one of the few bipartisan healthcare issues, but also one of the most stubborn. President Trump’s administration has proposed a number of policy solutions to address the issue, and these may get renewed attention in 2019.
Washington loses appetite for health reform
While the Trump administration has made some health policy adjustments, including cutting the tax penalty associated with the individual mandate and expanding short-term and association health plans, largely, the Affordable Care Act remains untouched.
With every year that passes, landmark health reform policy becomes increasingly embedded in the industry. No longer the political lightning rod it once was, Obamacare played a smaller role in the recent midterm elections than it ever has. By the next election, it will have been the law of the land for a decade, and legislators seem to be losing their appetite to repeal, replace or reform the law.
What this means for brokers is that benefits strategy is more important than ever when it comes to helping employers solve the healthcare challenges they face, and strategic advice provided by advisers will continue to play a key role in client success in 2019.