In working with numerous small businesses, I often see plan decision makers (i.e., business owners and CFOs), typically take a detailed look at their group benefit plans once a year, often only at renewal time. Their major concerns are how to make money, not spend it. During the evaluation, their eyes go straight to the premium increase and a quick decision is made, simply based on costs alone. Many employers only look at two features when reviewing a potential benefit plan — premiums and deductibles. And while these are important factors to consider, we as benefit professionals know that the bottom dollar does not always equal the bottom line.

Industry changes caused by implementation of the Affordable Care Act this year alone have already caused decision makers, especially those in small businesses, to jump to the overall costs, without scrutinizing benefit attributes and provider networks. Below are a few points I try to convey to decision-makers before a final decision is made:

  1. 1.    Renewing “as is” is a thing of the past …

The days of renewing “as is” are long gone. Employers are actually purchasing new plans, even as they stay with the same carrier. Unless the plan sponsor was one of the few who grandfathered their plan(s), most small businesses must select a new ACA-complaint plan in 2014. Brokers are now confronted with the challenge of communicating numerous differences that are buried in the fine print of plan descriptions, including but not limited to — new deductibles and copays for inpatient/outpatient services, alternate provider networks, formulary changes and dispensing rules.

  1. 2.    Changes in rate structures: Composite vs. community rating

Many small groups will be seeing age-banded rates for first time, causing rate tables to appear intimidating and overwhelming. The methodology is different and will take an extended amount of time to learn how to administer, let alone for the employer to become familiar with. Plan administrators will need guidance from us as how to best decide on appropriate employer/employee contributions. Older employees’ rates are bound to be higher, which will require plan administrators to communicate the differences to employees in a transparent and timely manner.  

  1. 3.    Can’t keep your plan — but what about your providers?

Making hasty benefit decisions and not clearly communicating the new plans to employees could cause plan selections that have different networks than employees are accustomed to. Carriers have increased the number of network offerings causing many people to be unaware of differences simply by a plan’s name or provider’s code. Members often don’t realize these differences until after they’ve received an explanation of benefits and claims were processed out-of-network.
Communication, clarity and proving as many details as possible when spreadsheeting or reviewing plan alternatives are key to client meetings now. Make sure to allow plenty of time for discussions with employers and encourage the decision maker to listen and understand the facts prior to the making of a final decision. Plan members are receiving very little communication from insurance carriers regarding the fine details of changes, as they are not noted in summaries of benefits and coverage.  

The simple option of just renewing is no longer on the table, making our value as consultants more prevalent than ever. Don’t just be your clients’ broker, be their benefits expert.

Rich Fahn is president of Excell Benefit Group, LLC in the Chicago area. He can be reached at

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