Health Sales for Agents !A Future outlook
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Transcript of Health Sales for Agents !A Future outlook
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HEALTH SALES FOR AGENTS!A FUTURE OUTLOOK
Clay Peek of Peek Performance, With Mark Peacock & Josh Hilgers of HPA present:
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CONTACT INFO:“INSURANCE EXCHANGE LINK”HTTP://PRIVATEEXCHANGEBROKERBLUEPRINT.COM/PEEK-PERFORMANCE-INSURANCE/
OUR WEBSITE:WWW.PEEKPERFORMANCEINSURANCE.COM
864-228-2635 [email protected]
Clay Peek of Peek Performance,
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Guest Speaker
Josh HilgersPresident, Health Partners America
As seen in:Employee Benefits AdviserBenefits Selling MagazineCDHC Solutions
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Things to watch for the next few months HHS Regulations
Exchange Rules Essential Benefits ER Rules Medicaid Expansion
Exchanges and Subsidies Running behind
MLR Commissions
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How American’s GetHealth Insurance Now
Group ER Personal Policies
Medicare Medicaid
Uninsured
1. Group Employer – 145 million (incl. dependents)
2. Personal Policies – 40 million (up from 12 million in 2002)
3. Medicare – 47 million (incl. 12 million in MA)
4. Medicaid – 45 million (incl. 8 million over 65 or disabled)
5. Uninsured – 40 million (PC #, closer to 10 million)
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Shifting Roles - Employer
• Health plan important component in attracting and retaining employees
• Selecting plan for employees
• Collecting money and paying carrier
• Concern over funding and participation requirements
• No plan or Defined Contribution platform important component in attracting and retaining employees
• Choosing contribution and platform to offer
• Reimbursing premiums in coordination with payroll
• No minimum contribution or participation requirements
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New law could shift employee health benefits to private market
The Supreme Court's endorsement of the federal healthcare law this week could spur more employers across the nation to relinquish their long-standing role as chief healthcare buyer for their workers.
This shift has already begun among some big employers shedding their role in providing retiree health benefits, and experts say the court's decision this week could eventually lead companies to pursue a similar approach with current workers.
With the Affordable Care Act still on track to offer numerous new benefits, such as guaranteed coverage for all adults starting in 2014, some companies may want to stop providing health coverage and instead give workers money to buy their own….
Chad Terhune 6/30/12
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Shifting Roles - Employee
• No say in Employer plan – take it or leave it
• Employer deducts premium contributions and pays carrier
• Few Consumer Driven options
• Health plan not always paired with ancillary and supplemental for optimal planning
• Choice of any plan from any carrier available in state
• Pay the carrier directly – Employer reimburses
• Education and guidance on HDHPs
• Complete insurance planning to maximize every dollar
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Shifting Roles - Broker
• Majority of time spent on product specific issues: Quoting, Comparing, Communicating, Servicing
• Commissions from one product make up majority of revenue
• Limit to how many clients before capacity is reached
• Focus can be shifted to sharpening sales and relational skills, bring new strategies to attract and retain employees
• Multiple revenue sources from every case
• Scalability achieved through efficiencies in system remove all limits to what you can handle
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How American’s Will Get Health Insurance 2015
Group ER Personal Policies
Medicare Medicaid
Uninsured
2. Personal Policies – 185 million (more with GOP plans)
3. Medicare – 47 million (incl. 12 million in MA)
4. Medicaid – 45 million (less with GOP plans)
1. Group Employer – 20 million (incl. dependents)
Lose 125M here
5. Uninsured –20 million Lose 20m
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How American’s Will Get Health Insurance 2015
Group ER Personal Policies
Medicare Medicaid
Uninsured
1. Group Employer – 20 million (incl. dependents)
2. Personal Policies – 185 million (more with GOP plans)
3. Medicare – 47 million (incl. 12 million in MA)
4. Medicaid – 45 million (less with GOP plans)
5. Uninsured –20 million
From 28 million1 to 125 million2
consumers will change how and where they get their insurance in
2014
Sources: 1Congressional Budget Office, 2McKinsey Consulting
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We Have Seen This Trend Before
Increased Cost Sharing
HDHP/Consumer
Driven
Individual Purchase Defined
Contribution
Pension Plan
401 K Defined Contribu
tion
30-40 years to happen
3-5 years to happen
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ACA’s Impact on Individuals
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New law could shift employee health benefits to private market
The Supreme Court's endorsement of the federal healthcare law this week could spur more employers across the nation to relinquish their long-standing role as chief healthcare buyer for their workers.
This shift has already begun among some big employers shedding their role in providing retiree health benefits, and experts say the court's decision this week could eventually lead companies to pursue a similar approach with current workers.
With the Affordable Care Act still on track to offer numerous new benefits, such as guaranteed coverage for all adults starting in 2014, some companies may want to stop providing health coverage and instead give workers money to buy their own….
Chad Terhune 6/30/12
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How are employers reacting?
1. Reducing work force
2. Reducing hours to < 28hrs/week
3. Dropping Coverage
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Big Question for 2014Do I offer group insurance or not?
Factors will be:1. Size of group2. Average income of employees3. Costs – group premium vs. penalty etc…
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ACA’s Impact on EmployersSome things to think about
1. ER’s with <50 FTE EE’s have no 3k/2k penalty2. ER’s with no employee’s accessing a subsidy
face no penalty3. ER’s offering qualified and affordable coverage
can actually be hurting their employees
Example
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Example: Family of 4 making $55k a year premium of $14,556. Single premium $5400
Employer Contribution
Employee Contribution
Government Contribution
Minimum contribution from
ER (9.5% AGI) $175 $14,381 $0
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Example: Family of 4 making $55k a year premium of $14,556. Single premium $5400
Employer Contribution
Employee Contribution
Government Contribution
Minimum contribution from
ER (9.5% AGI) $175 $14,381 $0
50% of single $2,800 $11,756 $0
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Example: Family of 4 making $55k a year premium of $14,556. Single premium $5400
Employer Contribution
Employee Contribution
Government Contribution
Minimum contribution from
ER (9.5% AGI) $175 $14,381 $0
50% of single $2,800 $11,756 $0
100% of single $5,400 $9,156 $0
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Example: Family of 4 making $55k a year premium of $14,556. Single premium $5400
Employer Contribution
Employee Contribution
Government Contribution
Minimum contribution from
ER (9.5% AGI) $175 $14,381 $0
50% of single $2,800 $11,756 $0
100% of single $5,400 $9,156 $0
50% of family $7,278 $7,278 $0
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Example: Family of 4 making $55k a year premium of $14,556. Single premium $5400
Employer Contribution
Employee Contribution
Government Contribution
Minimum contribution from
ER (9.5% AGI) $175 $14,381 $0
50% of single $2,800 $11,756 $0
100% of single $5,400 $9,156 $0
50% of family $7,278 $7,278 $0
Offer no coverage $0/2k $4,135 $10,421
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ACA’s Impact on EmployersIf ER didn’t offer coverage - ER would pay $0, $3k, or $2k (depending on size of group and how many ee’s qualify for subsidy)EE would only be responsible for $4,135 and Gov. subsidy would cover the other $10,421
healthreform.kff.org/subsidycalculator
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Paying the penalty -
http://www.nrf.com
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Paying the penalty -
http://www.nrf.com
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Paying the penalty -
http://www.nrf.com
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MARKET TRENDS AND STUDIES
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“Exchanges are going to be a permanent, significant part of the healthcare world going forward because they are a powerful, adaptable way of meeting a variety of employer needs.” Oliver Wyman
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The Exchange Opportunity
AON Hewitt survey of 562 U.S. Employers, Nov 2011
23%
69%
77%
31%CHANGERising CostsReformExchanges
New/OtherBenefitModels
TraditionalGroup
Benefits
20152012
Disruptive SolutionsDynamic Marketplace
OPPORTUNITY
72% - Planning on ExchangesWhat Models?86% - Reduce costs45% - Improve access to quality plans43% - Enhance wellness programs43% - Increase healthcare choicesWhy?
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HOW DO YOU CAPTURE ALL THIS OPPORTUNITY?
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Why This Is Important To You
• Be the Go-to Service Provider– Become the market leader and choice service provider in
this space
• Increase Revenue– Additional product offerings– Additional revenue opportunities from non-insurance
products
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Defined Contribution Health Plan or Premium Reimbursement Platform will help increase sales and Participation
Defining Defined Contribution• Group• Individual – (most likely to grow)– ERISA concerns will be gone
DC/PRA Opportunity
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Defined Contribution Health Plan or Premium Reimbursement Platform will help increase sales and Participation by:• Incentivizing the employer• Creating tax savings for Employer to
contribute or sponsor a product or plan• Creating tax savings to allow Employee to
afford more coverage or other products they need
DC/PRA Opportunity
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Questions still outstanding
• Will stand alone HRA qualify as “coverage” allowing groups who may be subject to penalty to avoid it?
• Will individuals/families purchasing coverage with help from a subsidy be able to pay for their portion of premium with HRA/PRA?
• Which premium payment method will carriers and employers prefer or adopt?
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THE NEXT 12 MONTHS
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DC / PRA – using personal policiesHigh Level Overview of Defined Contribution Plans or Premium Reimbursement Arrangements (PRA)
• Selling individual products in a group setting on a pre-tax basis
• Marketing to groups that are underserved – No small group insurance offered
• 60% of employers with 50 or fewer employees offer no benefits
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Keys to a Proper PRA Plan with Personal Policies
Employees pay premiums out of
their own checking account
Employer not a part of the
decision making process
Employer does NOT offer small group insurance
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Tax Savings IllustrationsHuge Tax Savings for members and their companies
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• Companies with no health plan in place• Companies losing group coverage due to cost or
participation• Companies with employees who are not eligible for
the group plan• Companies with employees in multiple states• Many more companies will find this the ideal
solution for ALL employees in 2014 but also great for non-participating and non-eligible employees now
Who This Solution is For
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2014 AND BEYOND
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• Companies shift health burden to exchanges – offer
defined contribution amount for ancillary benefits
• Companies shift health burden to exchanges for
some ee’s offer DC amount for health to others
• Companies shift entire workforce to DC allowance for
health and all other benefits
Shift to DC/PRA
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