Brokers and the ACA
As health care exchanges struggle to get more people covered under the Patient Protection and Affordable Care Act, at least one state is making a concerted push to enlist brokers to help.
While both the federal and state exchanges allow brokers to help individuals enroll in insurance policies since they opened for business in October, the Maryland Health Benefit Exchange last month launched a more formal initiative.
The Producer Referral Program is designed to boost sagging enrollment on the state’s exchange. About 55 brokers have volunteered thus far to help assist consumers in navigating the website, Maryland Health Connection, or enroll individuals directly with carriers.
As of Jan. 25, 26,832 people have enrolled through the website for private coverage, though the exchange did not say how many of those actually made their first policy payment.
To recruit more brokers to volunteer, the state exchange is working with three trade groups, National Association of Insurance & Financial Advisors of Maryland, the Maryland Association of Health Underwriters, and the Insurance Agents & Brokers Service Group.
“The people who will use this service are people who are determined to get insurance, but have been unsuccessful getting it on the exchange website,” said Bryson Popham, a partner in the Annapolis law firm, Popham & Andryszak, P.A. who represents brokers.
He said that one of the fundamental reasons trade group members are volunteering to help is their belief that uninsured individuals deserve access to health insurance.
Diane Boyle, vice president of federal government relations for the National Association of Insurance & Financial Advisors in Washington, D.C., said that its Maryland affiliate is on the forefront of formalizing a broker assistance program, but that other state affiliates are considering similar moves.
The decision for individual brokers to help consumers enroll on the health care exchanges depends a good deal on their own client make-up, Boyle said.
“If they have clients that are eligible for subsidies, they need to enroll through the exchanges, and that is really the only way that decision is going to make sense,” she said. “But if their client base is not eligible for subsidies, they can purchase policies outside the exchange. It really depends on who the broker wants to serve in their community.”
Many brokers, however, are shying away from helping consumers enroll through the exchanges, said Anne Sperling, employee benefits manager at Daniels Insurance Inc. in Santa Fe, N.M.
Sperling ticked off a number of reasons why she made “a professional decision” not to aid in the application process, including the lack of security associated with the healthcare.gov website, which she believes jeopardizes consumers’ protected health information and private financial information.
“I don’t want the communication liability … It could be construed as an error and omission, which obviously doesn’t help my practice; it hurts in a huge way.” —Anne Sperling, employee benefits manager, Daniels Insurance Inc.
She also noted that the labor-intensive application process is cost-prohibitive, as brokers do not receive commissions when they aid individuals to enroll via the public exchange; and that she is concerned the federal tax credit process will be improperly handled — to the point that she fears patients will be denied care should the carriers not receive their share of the government premium. All the premiums must be collected to put the policy in force, she said.
“Lastly, the public doesn’t understand that the tax credits are based on a last year tax return, which ultimately may be miscalculated and could result with the insured owing the government,” Sperling said.
“I don’t want the communication liability of all these points. It could be construed as an error and omission, which obviously doesn’t help my practice; it hurts in a huge way,” she said.
Sperling was one of the founders and the first executive director of the NM Health Insurance Alliance, a small group high-risk pool program for businesses with 50 or fewer employees, which was replaced by the NM Health Insurance Exchange. That exchange is accessed through the federal healthcare.gov website.
In Maryland, officials have given brokers permission to enroll individuals directly with carriers, if they have trouble completing enrollment applications on the state’s website, Popham said. However, only two of the four carriers on the Maryland exchange currently have the capability to allow for direct enrollment.
Moreover, individuals won’t receive federal subsidies to offset the cost of the health care policies unless they enroll through the exchange.
The Maryland Health Benefit Exchange also announced that, beginning in April, brokers can help eligible small businesses establish small group health insurance plans certified by the Small Business Health Options Program (SHOP) Exchange, as well as help them sign up for the corresponding federal tax credits.
Maryland is doing this because the state’s SHOP exchange is again being delayed until January 2015, in line with the delay of the federal SHOP exchange. Small businesses in Maryland can also establish such plans and apply for tax credits directly through carriers or third-party administrators.
A recent court decision provides some privacy protection for insurance brokers in their communications with clients.
The decision of the New York Supreme Court in TC Ravenswood LLC vs. National Union Fire Insurance, provides “useful guidance for policyholders who rely on brokers during litigation about insurance coverage,” wrote John Nevius, a New York-based Anderson Kill attorney who represented TC Ravenswood, a New York City unit of TransCanada Corp.
Nevius’ analysis appeared in an article in Insurance Coverage Law Report.
In the case, the court denied the insurance company’s motion to compel TC Ravenwood’s broker, Marsh Canada Ltd., to produce communications with TransCanada Energy USA Inc., Nevius wrote.
The court held that the broker “was specifically hired by TransCanada and its counsel to explain the complex insurance policies at issue for TransCanada and its counsel” and therefore had “a reasonable expectation of privacy.”
Thus, communications between Marsh and TransCanada were protected by the attorney-client privilege, the court determined.
Additionally, communications between the broker and TransCanada’s counsel were also protected, as were communications between TransCanada and its counsel that were forwarded to the broker, and instances where the broker was copied on original communications, Nevius wrote.
Moreover, communications between non-attorney employees of either the broker or TransCanada, which involved requests for information and advice from counsel, were also protected.
“It is also helpful when asserting privileges if the policyholder has retained the broker for its expertise in a particular area, as the courts have been more receptive to the policyholder’s claim of privilege where the broker’s particular expertise proved valuable or necessary,” Nevius wrote.
For example, the Southern District of New York ruled in ECDC Environmental vs. N.Y. General Insurance Co., that the broker was retained specifically for its expertise in maritime insurance, and as such, its communications were privileged.
“Whether a policyholder’s communications with a broker are privileged is a fact-intensive question which typically hinges on whether the policyholder retained the broker, at least in part, as its agent to help with claim adjustment or the formulation of litigation or settlement strategy,” Nevius wrote.
However, Louis A. Chiafullo, a partner at McCarter & English in Newark, N.J., noted that the New York ruling is not the absolute law of the land.
While an insurance broker can be an “incredibly helpful ally” when clients submit and negotiate claims with an insurance carrier, it’s important that in-house and coverage counsel be cognizant that in many jurisdictions, their conversations and communications with their insurance brokers may not be protected from disclosure if a coverage lawsuit develops.
“As a general rule, policyholder counsel should not share freely with their brokers any work product or legal analysis, even if the broker also happens to be a lawyer,” Chiafullo said.
“Where counsel for the policyholder feels that such conversations need to take place, counsel would be wise to enter into a confidentiality agreement with the broker and make clear in any communications relating to the disputed claim that the discussion falls under the attorney-client privilege.”
Passionate About Technology
If you overheard the passion and enthusiasm that Brit Waters uses to describe his most important business technology, you would immediately assume it was the latest smartphone or tablet. But it’s not Apple or Google that generates so much enthusiasm, it’s the Riskonnect risk management platform.
“Riskonnect revolutionized how our department does business. This system changed the way we gather, analyze and communicate information. It’s made us more efficient, effective and reliable,” said Waters, Manager, Risk Management at Avery Dennison Corporation. “These are not bandages, but complete solutions.”
Avery Dennison is a multinational company offering labeling and packaging materials and solutions whose applications and technologies are an integral part of products used in every major market and industry. The company operates in more than 50 countries with over 26,000 employees and $6 billion in revenues in 2013.
“Riskonnect revolutionized how our department does business. This system changed the way we gather, analyze and communicate information. It’s made us more efficient, effective and reliable. These are not bandages, but complete solutions.”
– Brit Waters, Manager, Risk Management, Avery Dennison Corporation
The company partnered with Riskonnect, the provider of premier, enterprise-class technology platforms. In just 18 months, the system not only revolutionized the department but also delivered wide-ranging value for plenty of other parts of the organization. Those departments utilize the system to manage financial assets, keep track of vehicles and will soon oversee facilities requests.
‘The Simplicity is Unreal’
For global property insurance renewals, Riskonnect changed the way Avery Dennison collects data on its 300 manufacturing facilities, warehouses and other properties around the world. Gone are the days of sorting through hundreds of separate emails with information about the properties and merging hundreds of separate spreadsheets into one.
Not only was the old process cumbersome, it left lots of room for error.
With Riskonnect, the process is automated. It sends emails to the more than 100 individual contacts and the users insert the information into the Riskonnect portal themselves — something that makes Waters’ life a whole lot easier.
“I hit a button once and it runs the report for me. The simplicity is unreal,” he said. “Plus, it gives us better information that we can communicate to our insurance carriers, and gives them increased confidence about the risks they’re insuring.”
Waters said it’s a big time-saver. “Before, the process could take up to three months, and now we get it done in less than a month.”
One thing he’s particularly excited about is the configurability of the portal. If he wants to customize it, he can easily do so without going through a computer programmer or contacting an account executive.
“It gives you the power to set up the system as you need it, not as someone else envisions you need it,” said Waters.
The Riskonnect portal is also the primary source for reporting workers’ compensation claims. Again, the Riskonnect system simplified the process. Before, employees had to call a 1-800 number or fill out a long form and fax it to the Third Party Claims Administrator (TPA). Now they just log on and use the claims reporting portal, which is equipped with drop-down menus and other efficiencies that help expedite the process.
“We take the guessing game out of their hands,” said Waters. “In a matter of minutes, they get a confirmation email that the claim has been submitted to the TPA.”
Through the Riskonnect dashboard tools, Waters and his department can learn a lot about trends in workers’ comp claims. The system tracks claims year-to-date, costs, causes of injury and even the top body parts that are hurt. Then risk management communicates that information to local managers to make sure that safety-and-prevention programs are appropriate and will help reduce the amount of claims and their costs.
“The Riskonnect dashboards layout all this valuable information in easy-to-use tables and charts, making it simple for us to study the data and implement necessary safety changes,” said Waters.
ROI on a Values Collection Module
At the start of the process, Waters never imagined just how many other departments would use the tool. The finance department uses the system for asset management. The fleet administrator uses it to have drivers sign off on its manuals. Even the facilities department is jumping on board, using the Riskonnect system to identify when properties need repairs to big-ticket items like roofs or windows.
The company is also looking to report global property claims, transit claims and employers’ liability claims through the platform. It’s even evaluating if it can use it on the shop floor with health-and-safety team members having easy access to the system via iPads.
”The Riskonnect platform can help many different departments with a wide variety of tasks,” said Waters. “It’s really making risk management a much more strategic contributor to the company.”
“I hit a button once and it runs the report for me. The simplicity is unreal,” Waters said. “Plus, it gives us better information that we can communicate to our insurance carriers, and gives them increased confidence about the risks they’re insuring. Before, the process could take up to three months, and now we get it done in less than a month.”
Waters’ enthusiasm for the product is clear, but he’s not alone. End-users are raving about how easy, intuitive and customizable it is. For example, training end-users used to consist of holding approximately 15 different webinars to walk everyone through the process. Now, it’s accomplished in one easy-to-understand mass communication through the Riskonnect portal.
The end users even helped Waters and the Avery Dennison team add efficiencies that improve the entire process. On the property reporting side, they suggested adding an attachment tool for adding spreadsheets – so the information is easy to find the following year.
“It’s amazing when you give the end users a product and you see how they come back to you with advice that you never even thought of,” said Waters. “That speaks volumes for the system.”
In just 18 months, Riskonnect changed the way Avery Dennison does business — something Waters can’t hide his enthusiasm about.
“I don’t consider them just a vendor,” said Waters. “I consider them a long-term strategic partner.”