By MICHAEL O'BRIEN, staff writer at Human Resource ExecutiveŽ, sister publication of Risk & InsuranceŽ
James Klein has some advice for benefits consultants on the topic of where to focus their energy in the wake of recent federal healthcare reform: Don't look back.
"Healthcare reform is still the No. 1 issue, but I think the focus has changed somewhat," said Klein, who serves as president of the Washington, D.C.-based American Benefits Council. "We're moving away from immediate implementation issues--and there are still some of those--and toward looking further ahead to 2014 when the law is fully implemented and what the implications are for large employers."
He said 2014 has the potential to bring with it tremendous change in the healthcare arena for organizations, and the best consultants are already working on future solutions for their clients.
"Right now, there's a great deal of uncertainty about the future of the (healthcare reform) law, and no one knows what the legal rulings will be, but the most prudent advice is to proceed forward on the assumption that the law will go fully into effect in 2014 and not to wait until closer to the date, because it could be tough to scramble and catch up," he said.
This year's Top Employee Benefits Consultant contest applications provided a window into what consultants are doing to manage the roll-out of healthcare reform. Many of them are keeping a steady eye on the present while casting the other eye at least three years ahead.
Marcia Benshoof, president of benefits at IMA Financial Group in Denver, is one such forward-thinking broker. Her firm has been busy developing tools to help clients determine the answers to some vital questions around the upcoming changes.
"We see (healthcare reform) as a unique opportunity to create new and innovative products," she said, adding that they have developed some sophisticated tools for their clients to obtain answers to two of the biggest questions in the healthcare arena: Is grandfathering worthwhile for my organization, and should we "pay or play" in the exchange environment?
Benshoof said the tools were created to provide answers to those questions from financial, business-operations perspective and cultural perspective, because insurance brokers need to be conversant to their clients in exactly those terms.
"You better be able to talk business, not just insurance," she said. "And you better be able to talk about how you're going to use this asset (a company's workforce) and make it the most healthy and engaged workforce they have, because it's now a business imperative."
Helen Darling, president and CEO of the National Business Group
on Health, based in Washington, D.C., said such efforts by brokers are necessary in order to differentiate themselves from the pack.
"(The best benefit consultants) are innovative, with ideas that will combine rigorous quantitative analysis with programs that are evidence-based to be successful, and are strong on helping employers to not only develop strategies, but also to help execute that strategy," she said.
Brokers on the cutting edge of the market are also working to address the issue of poor overall health among workers, which Darling calls "a big problem."
"The best consultants are identifying ways to make sure they have a culture of health inside the company, and that they are essentially driving improvement through incentives and programs so that healthcare costs curves will be bent downward because people are becoming healthier," she said.
TALK TO ME
Communication is another area where brokers need to be on the ball, Darling said.
"Communication, as it is in every area, is the key to success. If you can't communicate effectively with your clients, you're not going to be successful. Communication has to drive change, and so it has to be very powerful."
Karen Daugherty, a partner for Mercer Health & Benefits in Kansas City, Mo., knows the importance of communication, even with a 30-year client.
That client, Butler, a steel-construction firm, was an early adopter of consumer-driven health plans, implementing a full replacement HRA a few years back.
"The communication effort in getting employees to understand this plan in a blue-collar environment was daunting, and the first year had many challenges," she said.
That same year, the company was purchased by an Australian steel company, BlueScope Steel.
"This was the first U.S. company that BlueScope (purchased), and they had much to learn about U.S. healthcare, let alone about the novel design--at that time--of a consumer-driven health plan with an HRA," she recalled. "(They) had to be sold and convinced that this was the right thing to do."
Since then, the cost savings in this plan have been very significant, and employees became very engaged in how to use the plan to maximize the benefits, so much so that when BlueScope purchased another building company in 2008, they replaced all of the traditional PPO plans with the consumer-driven health plans, Daugherty said.
Like many companies, she added, BlueScope is also integrating wellness strategies into their plans that complement the healthcare consumerism, including biometric screenings and health assessments.
J.D. Piro, a principal and national practice leader in the health law consulting group in Aon Hewitt's Norwalk, Conn., office--and a winner in our Private Healthcare category in the Top Employee Benefits Consultant contest--also knows the value of being able to pass on his knowledge of the industry to clients.
"Part of my job (is) to educate clients on the cost of getting out of healthcare versus the cost of staying in," he said. "For many clients, their first reaction was to 'Do the math'--look at the cost of staying in versus the cost of paying the penalty; some considered getting out and paying the lesser number."
But that employer penalty is really a floor, not a ceiling, he said. If too many employers get out of providing health insurance, Congress could step in and revise the $2,000 penalty upwards.
"That $2,000 penalty is only based on a static analysis," he said. "It's like comparing a snapshot to a DVD."
By showing employers that they face the prospect of no long-term savings and no future ability to manage healthcare costs, it has helped to refocus client discussions on other cost-savers, according to Piro.
As these examples demonstrate, while communication is a necessary tool in any broker's toolbox, keeping an eye on the bottom line is just as important.
"We're in a state of relative desperation," Darling said. "So having new ideas that control costs--but at the same time don't upset employees too much--is key, because if employers going forward aren't bending their own curve for costs, or even reducing them, then they're going to have even more serious problems."
"So, being able to call in or rely on (the best brokers) to help in these very serious ways is critical," she said, "now more than ever."
June 1, 2011
Copyright 2011© LRP Publications