If you are a group health agent, here is a relatively easy way to (A) Meet new employer prospects (B) Rescue them from unnecessary cost and risk and (C) Look smarter than your competitors
Obamacare, the undisputed law of the land
Now that we are seeing a stabilization in the efforts to undermined and replace the Affordable Care Act, it is time to address the identification and replacement of certain ACA solutions, particularly those aimed at large group service sector employers (hourly workforce)
The next time you are speaking with a new prospect, ask the following questions:
1. Do you employ more than 100 hourly or part-time employees working between, 30 – 40 hours per week? Do you currently offer these hourly workers a limited medical plan, MEC (Minimum Essential Coverage) or MVP (Minimum Value Plan)? Note: Self-funded MEC satisfies the A (highest tax consequence for individual and employer) while self-funded Minimum Value addresses the so-called B penalty (less tax consequence)
2. Do your MEC plans include a supplementary indemnity benefit? Or are they MEC only? (Note: Try to determine if they pay more than $50 per member per month for a MEC only option)
3. Does your MVP plan have any enrolled employees? If yes, this is a red flag for follow-up
4. Does your MEC plan return unused claims surplus to you? Another red flag
5. Have you experienced unusually poor administrative service from the carrier or TPA sponsoring your MEC or MVP programs? Likely you will find that most service has been anywhere from poor to horrible
Comments/Analysis on the Above Questions
Q – 1. You want to identify employers who employ hourly workers and are using *“skinny options” to comply with the employer mandate requirement under ACA. If they say no, this begs the question, “what exactly are you doing to comply with ACA employer mandate requirements?“
*Any solution using limited medical or MEC only coverage
You may also want to determine whether this employer is using a MEC, MEC plus indemnity, or MVP plans. We know, for example, that MVP plans are likely **not necessary and carry with them an unacceptable amount of risk to the employer. This should be an opening for you to discuss eliminating the MVP and retaining a MEC plus replacement.
**The reasoning for this is that fewer than 1% of typical hourly employees exercise their rights to subsidized health plans on the exchange. Simply put, the penalty for not meeting Minimum Value is less than the cost (and potential risk to the employer for high claims) of implementing a Minimum Value solution.
Q – 2. If your prospect is offering a MEC ONLY option, chances are it is grossly overpriced. Example: Claims typically run no more than $12 to $15 per covered employee per month. Most MEC Only plans charge an exorbitant administrative fee, compared to the actual claims being paid. This is another opportunity to make the incumbent broker look bad and you look good. The strategy here is to replace the MEC only, with a MEC plus insured indemnity for only a few dollars more.
Q – 4. Many, if not most of the MEC plans that we encounter, do not return unused claims dollars to the employer. Due to the predictability and relatively minimal risk, these plans are almost always overfunded. In some cases, no pre-funding is required, so the employer is required to fund claims on “on-call” basis, this can affect cash flow and is disruptive to budgeting and cash flow.
Q – 5. Many of the TPAs sponsoring MEC/MVP plans have done an exceedingly poor job of handling billing administration. In some cases, we have found that they do not even answer the phone. Many employers assume that poor service comes with the territory in this market segment, this is absolutely not true and is unacceptable. Often, this simple question, “how has your service been” creates an opening to discuss improvement in the plan as well as provider services.
We Can Assist You
If you need any assistance with follow-up on the results of your surveys, please feel free to reach out to me, as this is what we do all day and every day.
Take This 30-second survey (does this apply to you?) https://www.surveymonkey.com/r/NVDPW5G