Health Sales for Agents !A Future outlook

HEALTH SALES FOR AGENTS!A FUTURE OUTLOOK

Clay Peek of Peek Performance, With Mark Peacock & Josh Hilgers of HPA present:

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,

http://privateexchangebrokerblueprint.com/peek-performance-insurance/

http://privateexchangebrokerblueprint.com/peek-performance-insurance/

Guest Speaker

Josh HilgersPresident, Health Partners America

As seen in:Employee Benefits AdviserBenefits Selling MagazineCDHC Solutions

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

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)

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

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

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

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

How American’s Will Get Health Insurance 2015


Medicare Medicaid

Uninsured

2. Personal Policies – 185 million (more with GOP plans)


4. Medicaid – 45 million (less with GOP plans)


Lose 125M here

5. Uninsured –20 million Lose 20m

How American’s Will Get Health Insurance 2015


Medicare Medicaid

Uninsured


2. Personal Policies – 185 million (more with GOP plans)


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

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

ACA’s Impact on Individuals

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

How are employers reacting?

1. Reducing work force

2. Reducing hours to < 28hrs/week

3. Dropping Coverage

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…

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

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






ER (9.5% AGI) $175 $14,381 $0

50% of single $2,800 $11,756 $0






ER (9.5% AGI) $175 $14,381 $0

50% of single $2,800 $11,756 $0

100% of single $5,400 $9,156 $0






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






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

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

Paying the penalty -

http://www.nrf.com


http://www.nrf.com


http://www.nrf.com

MARKET TRENDS AND STUDIES

“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

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?

HOW DO YOU CAPTURE ALL THIS OPPORTUNITY?

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

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

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

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?

THE NEXT 12 MONTHS

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

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

Tax Savings IllustrationsHuge Tax Savings for members and their companies

• 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

2014 AND BEYOND

• 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

Documents

Health Sales for Agents !A Future outlook