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Key Group Benefit Packages from Group Health, Dental, Vision, Pensions & 401k Plans,
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Due to the recent decision by the Supreme Court to uphold the many of the changes
of the Affordable Care Act, employers need to know important mandates or face strict
repercussions and/or penalties. There are several mandates that have already passed
such as raising the dependent age to 26, eliminating pre-
Breaking News: Supreme Court Upholds Core of Affordable Care Act
U.S. Supreme Court Preserves Most of Affordable Care Act; What Does it Mean for Brokers?
June 28, 2012 -
Background Checks by Intellicorp
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Understanding the experience modification factor -
Health Care Reform & the Role of the Insurance Broker
Over the past few years, there have been many changes in our industry, primarily due to the Patient Protection and the Affordable Care Act. Due to these changes, there is much uncertainty with the future of our livelihoods and the health insurance industry. Many carriers have either sold their accounts to other companies or have pulled their business from our area. In the Greater New York area alone, we recently lost HealthNet, MDNY, Guardian large group, Cigna small group, and Horizon Blue Cross Blue Shield as carriers for group health insurance. HIP and GHI merged to form Emblem Health. Oxford Health Plans was purchased by United Healthcare and Empire and Anthem Blue Cross Blue Shield were taken over by Well Point. There has also been talks about commissions being reduced and the terminations of broker contracts for those that don’t meet production requirements.
Do the legislators that passed the Act really understand the brokers role?
One of the major concerns in our industry is that the broker’s commission will be included within the new medical loss ratio requirements (MLR). Essentially this means the carriers’ net income would be reduced by the amount of broker commission. The MLR requirements force the carriers to pay up to 85% of every dollar collected in premium to be paid out in claims. Therefore, as little as 15% is left to pay expenses such as payroll, rent, utilities, marketing, and our compensation.
So what is it that we do for our clients?
Besides marketing and writing new business, our office and other brokers like us
are actively engaged in servicing our accounts. We are typically the first point
of contact for the groups we write. If there are questions regarding claims, billing,
enrollment, terminations, COBRA, changes in legislation, and the list goes on–-
If our role is diminished by the recent legislation it will probably force the carriers to hire more employees or worse–outsource many aspects of the customer service elsewhere in order to maintain competitiveness. Shouldn’t the government encourage more competition and fair trade? Then why place restrictions, and increase regulation on an already heavily regulated industry? This seems to be driving the competition out of our industry and out of business.
Are we facing the same fate as travel agencies? I hope not. Please share your thoughts and join our blog.
Thank you, William F. Schaake, CIC, CRM
October 15th Deadline
Organizations that provide prescription drug benefits to Medicare Eligible Employees through their group health insurance plan must notify CMS and its employees if the coverage is credible. Read more >>
Employers with 50 or More Employees