Association Health Plans: The Lowdown from Our Legal Counsel
Scott Sinder, partner at Steptoe & Johnson and chief legal officer for The Council, breaks down what the new AHP regulation means at the federal and state levels by citing key items for brokers to understand, including:
- Elements of the final rule
- 12-state lawsuit on AHP eligibility
- Interplay of state and federal authority of AHPs
- AHP intrastate vs. interstate implementation considerations
While some insurers and small business owners are holding back due to regulatory and legal uncertainties, others are forging ahead. Click here for a look at a few recently announced AHP arrangements.
InsureTech Connect from the Broker’s Perspective
InsureTech Connect (ITC), the world’s largest gathering of insurance and technology innovators, took place October 1-3 in Las Vegas, and The Council was in attendance for the second year in a row. Check out our daily bytes from the conference here, here and here.
There were an amazing array of companies in attendance, creating a ton of kinetic energy. Over 6,000 attendees from approximately 1,700 companies attended ITC this year—doubling from 2017.
The breakdown? 36% insurtechs, 13% investors, 20% intermediaries (30+ Council member companies represented), 25% carriers and 7% consulting/research companies.
ITC is colorful and enlightening, but it’s necessary to cut through the noise. Here are a couple of key observations of interest to employee benefits brokers and consultants:
- ITC’s attendance and business program focus mostly on property/casualty versus health although companies such as Limelight Health, Flume Health and Vericred were notably participating.
- The commercial insurance conversations between attendees are heavily dominated by new and existing players attacking the small business opportunity via tech-enabled distribution platforms.
- The focus is two-fold: 1) provide small businesses an integrated shopping experience (e.g., seeing a renewed effort toward the “all-in-one” small business policy 2) reduce insurance providers’ cost of customer acquisition.
- AI, digital platforms and API usage were three common technology highlights by the carriers. Over the past year, there has been more of an accelerated effort to embed them in carrier processes than initially expected.
- It is evident that the dialogue around innovation is changing. As ITC Co-Founder and CEO Jay Weintraub put it, “the ship for disruption has sailed.” Instead, the emphasis is on partnerships and collaboration, which is a continuing trend from the 2017 ITC Conference.
The Struggle over Short-Term Health Plans
Earlier in October, Senate Democrats failed to garner enough support for a resolution to overturn the expansion of short-term health plans. Notably, the Trump administration threatened to veto the resolution.
The Council Perspective: According to the Urban Institute, approximately four million people may choose to enroll in short-term health plans, which do not have to comply with protections laid out by the ACA. That would increase the total number of people without minimum essential coverage to 39.6 million. Critics say that extending the initial contract term to 364 days will not benefit short-term plan participants in the long run despite their draw as a more affordable, flexible coverage option. Insurers can refuse to offer certain policies to individuals with pre-existing conditions, and some benefits, such as maternity and mental healthcare, may not be covered. In addition, 24 states plan to thwart the expansion of short-term health plans by lessening the contract term.
Kaiser Employer Health Benefits Survey Highlights
The Kaiser Family Foundation’s 2018 Employer Health Benefits Survey provides an annual update of the employer-sponsored benefits industry by interviewing HR and benefits managers at over 2,000 firms nationwide on health insurance, costs, enrollment, premium, prescription drug benefits, wellness benefits and more. Here are a few key findings:
- Eighty-five percent of individuals with employer-sponsored coverage have an annual deductible. Of those employees, 58 percent have a deductible of $1,000 or more for single coverage.
- Since 2008, deductibles have increased by 212 percent.
- Employees with single coverage pay an average of $1,200 in premiums each year. That is 65 percent more than what they paid 10 years ago.
- Over the past five years at large fully and self-insured firms, the average family premium has increased by approximately 20 percent.
- If you work at a large firm, you pay smaller out-of-pocket premiums.
- Forty-nine percent of covered employees are enrolled in PPOs, followed by HDHPs (29%), HMOs (16%), POS plans (6%) and conventional plans (<1%).
- Eighty percent of employers surveyed offer their employees only one type of health plan.
- Fifty-one percent of employers offer prescription drug benefits with four or more cost-sharing tiers compared to 44 percent in 2017.
- The average copay for fourth-tier drug, like a specialty medication, is $105 compared to $11 for a first-tier drug, such as a generic.
Tackling Price Transparency
According to Mark Galvin, CEO of MyMedicalShopper, if patients shop ahead for a service or treatment, they usually lower their costs by 50 to 90 percent. Healthcare consumers can better understand their treatment options if there is a higher level of pricing transparency.
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