Health Care Reform

Brokers Expect More ACA Business

The recent Supreme Court ruling has lifted some doubts for employers.
By: | July 21, 2015 • 3 min read

Now that the Supreme Court has cleared up a major question regarding federal subsidies permitted under the Affordable Care Act in its King vs. Burwell decision, some brokers and employee benefits consultants are expecting employers to seek more strategic advice.

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“It provides absolute clarity that these are the federal rules we will be living under for the foreseeable future at least,” said Sean Waggoner, executive vice president, Alliant Insurance Services.

“We’ve gone from a [pre-ACA] environment where we brokered and placed insurance contracts,” he said. “Now, we are spending a lot more time consulting with clients on operational changes to their businesses based on this.”

Karin Landry, managing partner, Spring Consulting, said the ACA offers “an opportunity for the broker/consultant that wants to change and evolve and become an ACA expert, but it’s probably less business for those that don’t want to change and evolve.”

Karin Landry, managing partner, Spring Consulting

Karin Landry, managing partner, Spring Consulting

Some brokers, she said, are seeking to minimize their involvement with health care because of the law’s complexity. Others are selling their businesses or merging with another organization that offers the expertise.

As for employers, larger organizations have been prepared to comply with all of the law’s requirements, while some smaller and mid-size companies “have been taking more of a wait-and-see attitude. … I think most people feel like it’s here to stay and they have to deal with it and move forward and develop their strategies accordingly.”

“The mid-size employers who have not had a strong broker/consulting relationship,” she said, “will now need one for sure.”

Jim Winkler, chief innovation officer, Aon Health, said the “uncertainty as we awaited the Supreme Court ruling meant employers did not make significant changes to their plans for the last year or two. We now anticipate that we will see those types of changes.”

“The most immediate and pressing need, for many employers, is to come up with a more compelling strategy for their non-Medicare-eligible retirees.”
— Jim Winkler,  chief innovation officer, Aon Health

Winkler said the “most immediate and pressing need for many employers is to come up with a more compelling strategy for their non-Medicare-eligible retirees.”

For employers that provide health care benefits to retirees under the age of 65, they must account for the future value of such benefits on their balance sheet, he said. With the High Court upholding the constitutionality of subsidies available via marketplace exchanges in the states, employers may opt to change from a defined-benefit medical plan to a defined-contribution plan.

Offering a set monetary amount to be used for health care on the exchange instead of offering an employer-based plan provides more plan choices for former employees — and possibly at a lower cost than their contribution to their current employer plan, Winkler said.

It also allows employers to cap their spending at a designated amount each year, Winkler said.

“I’ve worked on several of those projects already,” Alliant’s Waggoner agreed. “It creates pretty significant bottom line results for the client.”

He said the ACA’s prohibition on pre-existing condition exclusions and flattened rating table makes it easier for older adults to purchase health care plans, especially with the help of federal subsidies.

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Doug Luick, area senior vice president, health and welfare consulting, Arthur J. Gallagher & Co., said that one utility electric cooperative recently made the decision to sunset its early retiree medical provision, which was “almost a handcuff around them,” as it resulted in high claims exposure, limited benefit plans and ever-increasing costs.

As of 2016, he said, the organization will fund health reimbursement accounts (HRAs) for retirees instead, allowing them to purchase their own health care benefits via the exchanges.

Winkler noted that with the assurance that subsidies are available, employers may begin to help part-time or seasonal employees access the public exchanges to access health benefits.

“Those employees have been living outside the insurance system,” he said.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]