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Are you looking to provide even more value for your group clients?
By now most of you are familiar with a Summary Plan Description (SPD) issued for your clients’ medical plan. The SPD is one of the most important documents participants are entitled to automatically receive. This document must be provided and maintained by the plan administrator (typically the employer) and should be distributed automatically to all plan participants no later than 30 days after a written request. It outlines specific details of the health plan, such as a description of the employee benefits that are covered through the plan, participation rules, annual limits, election procedures, eligibility, employer contributions, and the plan year. It also summarizes claim filing procedures and plan sponsorship and administration.
Herein lies the issue. The Employee Retirement Income Security Act (ERISA) requires that the majority of health plans hold a Summary Plan Description. Only three exemptions exist in this ERISA regulation: 1) Indian Tribal Governments, 2) Church Plans, and 3) Governmental Entities subject to the Public Health Service Act. Chances are that the majority of your clients must comply.
Since ERISA not only applies to the medical insurance plan but to surgical, hospital, accident, HRA, FSA, dental, Rx, vision, life and AD&D, disability plans, and many voluntary plans, the health plan SPD does not cover all ERISA requirements for these additional benefits often written through various insurance companies. A written contract of insurance with an insurance company does not normally contain all of the rules required by ERISA and therefore is not a plan document. Estimates from the Department of Labor (who hold authority over employers offering these group benefit plans) show that three out of four plans audited have an ERISA violation. 70 percent of those audits result in monetary fines, many of which are significant, up to $110 per day, per affected individual for failure to comply.
Because most SPDs do not fully comply with ERISA, a wrap SPD is necessary. It is designed to “wrap” around all existing certificates of insurance and benefit plan booklets for each fully insured or self-funded plan and provides the information necessary to comply with ERISA’s reporting and disclosure requirements, HIPAA, and other federal laws. The wrap supplements the SPD with any additional ERISA required documentation, while also combining multiple benefits into a single plan for filing purposes. When a wrap document is used, the insurance policy or contract remains part of the plan document.
Therefore, the wrap and the insurance policy or contract together comprise the complete plan document and consequently meet the requirements of an ERISA plan document.
Various sources are available to prepare these wrap documents with prices ranging from $600 to $1,500. Contact your Cornerstone representative for more information.
If your clients do not currently have a wrap document in place, you have a chance to provide real value by keeping them compliant. Contact us today! Your E & O carrier will appreciate it!
The Trump Administration and the United States Department of Labor (DOL) announced new rules for Association Health Plans (AHP). The new rules allow insurance carriers to expand access to the market for fully insured plans beginning September 1, 2018, and on January 1, 2019, for self-funded plans.
What are AHPs?
AHPs are group health plans that employer groups and associations offer to provide health coverage for employees. These plans exist today, and existing plans may continue after the new rule takes effect. The new AHP rule brings additional plans into the market, allowing more small businesses and sole proprietors to join together to create an AHP by either purchasing large group or self-insuring coverage. Business owners with no employees and small businesses that have employees will have access to these plans, and AHPs will now be able to cross state lines. Many AHPs will most likely choose to self-insure, which further reduces regulatory burden since self-insured plans are not subject to state insurance regulations.
A small group is defined in Ohio as having less than 50 employees. Local business groups and industry groups nationally will be able to band together, which will allow the insurance risk to be spread out over a larger group. Spreading out the risk over larger pools gives small businesses access to health coverage at a lower premium, which was only afforded to large groups in the past.
Large group plan underwriting guidelines are much less restrictive than the small group and individual plan rules. Less restrictive coverage would likely attract healthier people and the combination of reduced benefits, healthier enrollment, and administrative costs being spread across a larger group would generally result in lower premiums for an AHP. AHPs as a large group will have better leverage to negotiate premiums as compared to small group and individuals that are set by the insurance industry.
AHP rules available to small groups:
The new rule would give small businesses access to coverage as an alternative to the ACA market.
Number of Businesses and Associations
According to the 2016 U.S. Census Bureau’s Annual Survey of Entrepreneurs, there were 5.6 million employer firms. Employer firms with less than 20 employees made up five million firms and there were 24.8 million non-employer firms. The number of non-employer firms added to the firms with less than 20 employees equals nearly 30 million firms.
In January of 2015 The Power of Associations states, “In 2013, there were 66,985,501 organizations on file with the IRS. This subsection includes chambers of commerce and the majority of the trade associations and professional societies operating in the United States today. Associations are found in every state and territory in the country.”
Considering the number of small firms along with the number of associations that exist in the U.S., the expansion of AHPs has the potential to impact a large number of people.
New Rules/Pre-Existing Conditions
The Affordable Care Act (ACA) requires AHPs that sell health insurance plans to small employers and individuals and small employers must meet the same standards that the ACA applied to these respective markets. The ACA outlined certain essential benefits that have to be included in health insurance plans, including preventive care, ambulatory services, emergency services, hospitalization, mental health services, maternity care, prescription drugs, rehabilitation, laboratory services, and pediatric care. AHPs are exempt from these regulations and may not cover some of these services.
AHP new rules:
Providing health insurance as a small business owner can be costly when balancing between growing their business and attracting new talent. The new rules and expansion of AHPs provide small businesses with the opportunity to offer health insurance at lower premiums, giving them the same kind of flexibility that large companies have when selecting a health insurance plan. AHPs can lower health insurance premiums because they are exempt from covering the 10 essential health benefits required by the ACA and the law allows for more flexibility in the way AHP premiums are set. Even though AHPs will most likely have lower premiums, it is important to remember the benefits plan options may not be the same as those in other more expensive health plans. With many small businesses facing rising premiums, having access to a more affordable coverage alternative in AHPs is a viable solution
It is important to research and understand the options before purchasing any health insurance plan, including an AHP. Even though the selection process can be time consuming, the investment is worthwhile to ensure the right health insurance plan is placed. Working with an experienced health insurance broker or consultant can be beneficial, saving both time and money when navigating the selection process.
If you need additional information about AHPs, the experts at Cornerstone can help. We have extensive experience working with AHPs and with understanding the positive impact of the new rules. Please ask your local Cornerstone representative about the available AHP plans offered through our contracted health insurance carriers.
It can’t be said enough: Referrals are one of the most important components of a successful inbound sales strategy. Nothing opens a door to a new prospect like a strong recommendation from a friend or relative. When a client thinks their broker is making a meaningful effort to serve their insurance needs, there is a strong likelihood they will share that experience with others.
Here are three ways you can generate referrals from a loyal client base:
Correspondence. Birthday cards, gifts, holiday cards, reminder emails, and other forms of intermittent correspondence with your clients can go a long way. Handwritten notes or well-written emails project a positive identity and foster goodwill. You can also add in a quick line at the end of your communications that says, “Do you know anyone who may benefit from my services? Here is my contact information…”
Private Events/Invitation Only. Ask prominent prospects and clients to a high-end venue like a country cub or the luxury box at a sporting event. By inviting both clients and prospects, you’ll even see your best clients begin to do your selling for you.
Take it one more step and use a little teamwork. These events are a great chance to ask everyone in your network for introductions to people who might get value out of your event. You’ll quickly find that people love the opportunity to get invitations for their friends and colleagues to an exclusive event.
The Point Of Sale. Every sales person has the objective of closing a sale when they enter a meeting. They should also make it a goal of obtaining at least one referral.
If you are hesitant about the process of asking for a referral, here are some opening lines to get you over that hurdle:
Asking for a referral need not be an arduous and uncomfortable task. With the right approach, you can take advantage of your best sales ally: the referral.
At Cornerstone, we are advocates for your success. Contact us for additional guidance about the art of asking for a referral. Also, if you are not already using our Agency Services Program, learn more about how you never have to say no to a client!
Updated October 5, 2018.
Purchasing individual health insurance comes with many pressures. Those seeking coverage are often strapped with additional stressors such as loss of a job, loss of employer coverage, divorce, or other strains that negatively affect financial well being, leading to increased physical and emotional health risks. Many confusing questions go through a buyer’s mind: “Can I afford it?” “Does it cover my needs?” “I just don’t understand my buying options.”
Consumer studies have indicated that as a population, we are becoming better about making health care decisions. This may be because we have a greater stake in the game, higher premiums, higher deductibles, smaller networks, and fewer options. Though most of us receive health insurance benefits from our employers, there are still many who fall outside that category:
A more affordable option for these circumstances may be short-term health insurance. In 2017, the average short-term premium was just $79 per month for a 30 year old. Also in 2017, individual medical plan rates rose at a national average of 21 percent. Short-term plans may fill a temporary gap in coverage and provide a more cost-effective option for those in these situations.
In October of 2017, President Trump signed an executive order directing federal agencies to draft regulations aimed at rolling back the former short-term medical restrictions. On February 20, 2018, Health and Human Services proposed the new rules and the final rule was issued on August 1, 2018. These new laws take place on October 2, 2018, but may be limited by final State rulings.
New federal regulations now allow up to 364-day short-term health insurance plans with the option to renew for up to 36 months. Many states have proposed their own limits to these federal regulations. Ohio and Kentucky, for example, allow up to 360 days, while Indiana allows up to 184 days and Kansas and Montana only up to 123 days. Each state has adopted varying levels on what they will allow and many states have yet to propose their own limits. This will be a state-by-state approach and it is important to understand the guidance and regulations based upon the state in which you reside. Individual plan buyers who are unable or unwilling to buy ACA compliant plans may soon be able to purchase longer-term plans with greater duration of coverage. Considering tax penalties will no longer be enforced for 2019, short-term plans are a viable option.
Short-term plans also offer financial advantages for brokers. These plans are not just an open enrollment period sale like the distant relatives in ACA. You can sell and receive commissions year round.
Be aware: These plans are not required to comply with the ACA, include the use of underwriting (pre-existing conditions are not covered and applicants may be declined), may not cover certain medical expenses, and may impose annual/lifetime maximums/limits. Additionally, termination of a short-term plan will not trigger a special enrollment period in the individual market and today short-term plans are not considered minimum essential coverage under ACA.
Many short-term plans come with additional perks and benefits such as wellness, telemedicine, etc.
Helping people during difficult times or transitions in their lives is a win-win situation. Providing options for those who formerly have had very limited choices is much appreciated by those in need. If you are looking for solutions and your clients fall into these categories, call Cornerstone today. We have several options to assist you in finding affordable solutions for your clients.
It’s about that time again. Another fourth quarter is right around the corner and your clients may be quite tired of the same old story: Another increase, another change in benefits, another quoting season, and the expectation of bad news. What if you could provide hope, grow your book of business, and add unique value to help your small business clients save money all at the same time? The implementation of the Affordable Care Act (ACA) has been both challenging and confusing for many employers. ACA community rating has benefited a few traditionally “less healthy” groups, however the rating methodology, compliance hurdles, and cost (at least in Ohio) have kept most groups in steadily shrinking transitional plans.
As in any challenging situation, creative minds rise to the occasion. In this case, newer-to-market level-funded health plans are an intriguing alternative to ACA plans for small businesses.
Level-funded products are designed to give clients the benefits and advantages of self-funding, while limiting the disadvantages by offering a “pre-packaged” hybrid of self-insurance for small employers (down to five enrolled locally). Historically, small businesses did not have the opportunity to self-insure their health coverage. Healthy groups continued to absorb increases of the pools of business, which became sicker over time. Today, many commercial carriers are offering level-funded plans that curtail claim volatility through fixed monthly premiums with the added bonus of a potential refund if claim costs are less than expected. These plans allow the small business to see the financial benefits that self-funded plans traditionally offered only to large groups.
So, why consider level-funded plans?
Level-funded plans are a great option for many employers, but they are complex. Brokers who serve small-group clients need to be trained on their structure, underwriting methodology, costs, and implementation to be well versed in their approach.
Cornerstone offers the training, guidance, and tools to make you an expert. Let us add value to your agency today. Call one of our A+ professionals to get started.
As consumers, we are presented with ancillary options every day. Coffee shops supplement coffee revenue by selling travel mugs and snack foods. Airlines offer in-flight services for purchase, from food and beverages to movies and internet connection. Package delivery services add income by having readily available packing materials like boxes, bubble wrap, and tape in their storefronts.
Add-on products or ancillary sales can account for as much as twenty percent of additional business revenue.
However, ancillary insurance product sales are a largely disregarded opportunity. Whether it’s complacency or contentment with a medical sale and the occasional dental and vision add-on, by not demonstrating the benefits of ancillary coverage, you may be doing a disservice to both yourself and to your client.
Take the time to discuss the benefits of dental, vision, and hearing plans that are designed to meet everyday needs and budgets. Understand your client’s medical history and present options like critical illness plans and cancer policies. For older clients, consider information about hospital indemnity plans and final expense coverage. Be ready to compare traditional individual medical with short-term plan options in the right situations and the value of securing a good accident plan. Consumers like choices and ancillary insurance give them options to fill in gaps that they may not even know exist in their coverage.
The average consumer thinks about their insurance coverage once a year and, typically, they automatically renew coverage if circumstances have not changed. Bringing ancillary products to the table at client meetings is the perfect opportunity to let them know about any auxiliary lines of coverage you represent in addition to your main line of business. Share your value with the client to open the door for higher retention, increased referrals, and more reasons for regular client contact throughout the year.
Connect with your Cornerstone representative if you’re interested in learning more about how to sell or become appointed to sell ancillary products.
The title of one of my favorite movies, Back to the Future, seems apropos when compared to today’s individual health insurance market. With the Affordable Care Act (ACA) being anything but affordable, many consumers are looking for alternative options to cover themselves and their families. Monthly ACA insurance premiums can cost more than an average mortgage payment so other options have to rise up from the grave to give consumers access to “affordable” health insurance.
Before ACA, we had medical underwriting, we had prescreens, we had limited coverage for maternity, and we had waiting periods on pre-ex. These are many of the reasons the ACA was created—to eliminate screening questions that were seen as unfair to a consumer with medical conditions. Granted, pre-ACA coverage was not the best either, but it was a fraction of the cost of current ACA coverage. Pre-ACA, networks were also much more extensive, with the majority of options today consisting of very limited HMO or EPO choices.
On April 2, 2018, the great state of Iowa made national news in their attempt to create Individual association-style plan offerings. The Iowa Farm Bureau is looking to recreate coverage options that consumers had before the ACA. However, according to a recent Washington Post article, such plans “sponsored by a nonprofit agricultural organization…shall be deemed not to be insurance.” Rates and coverage options have not yet been approved, but it is difficult to believe that there will not be some limitations that will make these plans available only to those on the healthier end of the spectrum.
The Back to the Future opportunity is twofold. On one hand, short-term plans are beginning to resemble pre-ACA coverage. If the laws change and allow short-term back to a nearly annual, renewable contract, this market will explode for the young, invincible, and healthy population.
However, there are tradeoffs with coverage options. Most short-term plans have PPO networks, which are significantly larger than what can be found with ACA plans. On the flip side, the coverage on the short-term plans is not as extensive as one might find in the ACA. Benefits are not as rich from a copay or medication standpoint and short-term plans do not usually cover maternity, which can be an issue for younger families. Anyone with medical conditions or significant health care needs may not qualify for short-term plan offerings, while ACA plans are guarantee issue.
Let’s look at a couple illustrations that show sample price comparisons for 21, 43, and 64-year-old non-smokers with short-term versus ACA options, using Franklin County (Columbus, OH) as the test case. These are the lowest prices available in which the out-of-pocket costs are closely aligned.
|21||$ 84.73||$ 355.47|
|43||$ 106.16||$ 482.38|
|64||$ 284.53||$ 1,066.41|
|*$2500 Deductible, 20% Co-Insurance, $7500 MOOP|
|**$2400 Deductible, 20% Co-Insurance, $7350 MOOP|
A 21-year-old “invincible” can purchase a middle-of-the-road short-term plan for less than their monthly cell phone bill. A similar plan offering in the ACA would compare more closely to their monthly rent or car payment. The ACA plans are averaging four times more costly than short-term coverage options in nearly all age ranges. When you annualize the premium savings for a 64-year-old consumer, you see savings of over $9,000. For those on a fixed or limited income, this is necessary money in their pocket.
When looking at sample family rates of 35, 33, 6, and 4 year olds, the price difference is even more dramatic. ACA rates, without a subsidy, are approaching, and possibly even exceeding, what a family of four would pay for their monthly mortgage and escrow payment. The rate is almost five times more expensive for ACA versus short term.
|35, 33, 6, 4||$ 333.00||$ 1,592.04|
|*$4000 Family Deductible, 20% Co-Insurance, $12,000 Family MOOP|
|**$4000 Family Deductible, 20% Co-Insurance, $14,700 Family MOOP|
With all things being equal, it is difficult to pass up the significant monthly savings of $1,259 dollars for the family of four. Annualized savings amount to more than $15,000.
With short-term medical and association-style options potentially becoming en vogue again, one has to wonder what will become of the ACA. With many national carriers having exited the Marketplace in a majority of states, and many states with only one or two carrier options, it appears the death spiral for ACA is in full effect. Limited competition creates higher rates; higher rates drive the healthy population into alternative options. When the healthy leave the Marketplace, all that remains are those with medical conditions or those who are receiving a substantial subsidy that offsets the majority of their ACA premium.
Consumers will make health care decisions based on how it impacts them the most: their pocket book. If they can qualify medically and achieve premium savings like what is outlined in the above illustrations, more and more will flock to short-term or association-style options, like those being proposed in Iowa and potentially other states in the near future.
Like the late, great Yankee’s catcher Yogi Berra once said, “It’s like deja vu all over again.”
Questions about short-term plans? Contact your Cornerstone representative today to learn more.
More than ever, health insurance legislation has limited choices and flexibility when it comes to coverage offerings. What was seen as complicated ten years ago, seems simple today. If you are at all involved in the sales and/or service of small group insurance products, you have likely encountered MEWAs or been asked to advise on the pros and cons of such an arrangement.
Multiple Employer Welfare Arrangement, otherwise known as MEWA, is defined by ERISA as “an employee welfare benefit plan, or any other arrangement which is established or maintained for the purpose of offering or providing medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services to the employees of two or more employers (including one or more self-employed individuals), or to their beneficiaries.”
Historically, MEWAs were made up of related industry groups, associations, etc. and may now include chamber associations. Small employers combine to share in the overall claims risk of the established trust. For these small employers, grouping together may provide a means of purchasing employee health coverage that takes advantage of economies of scale. A group of small employers may be able to negotiate lower premiums and better coverage than what a small employer can negotiate on its own with today’s limited plan offerings.
Some highlights of a MEWA:
This alternative self-funded solution may be a good fit for your small group clients. Cornerstone offers several MEWA options for your small groups. Call us today to see if you and/or your clients may be eligible.
According to Ryan Hanley, author of Content Warfare, the goal of content marketing is to “create, publish, and distribute media content to acquire targeted, profitable customers and repeat buyers.”
It is no secret that social media has ruled the digital landscape over the past several years. With social media sites continually rising from the ground, it is difficult to keep up with all of the changes. While Facebook once dominated the stage, Instagram, Snapchat, Twitter, and more have now taken the digital space by storm. It can feel overwhelming to even consider getting your business started in this scene, but, by determining which social network platforms your clients are most likely to use and how to use these platforms to your advantage, you can create a simple social media strategy that facilitates your business’s growth and augments your communication with customers.
Social media is a series of websites and applications that are designed for content sharing and communication. Though built for personal use, businesses began to recognize the strength of a social media following and its purpose: to build connections.
Businesses big and small began using social media to drive targeted traffic to their site and establish meaningful connections with their audience. Larger brands like GE and Net-A-Porter have built an impressive following on social media over the years, increasing traffic to their sites and cultivating their brand identities through a landscape on which traditional marketing is unable to capitalize. But even small businesses have success on social media. Coconut Bliss, an Oregon-based ice cream company, uses social media to represent their brand’s authenticity and transparency. As a result, they have garnered more than 17,500 followers on their Twitter account and more than 31,000 followers on their Facebook page—an impressive feat for a small business.
The insurance world has responded to these metrics in kind with agencies and carriers also finding success through various social channels including Facebook, Twitter, YouTube, and even Instagram. For example, UnitedHealthcare has amassed nearly 160,000 Facebook followers, more than 44,000 Twitter followers, 1,500 Instagram followers, and a strong YouTube subscription base at 14,000. But this analysis does not stop at the carrier level because even smaller agencies like Sarasota, Florida-based American Insurance Agencies Direct have reached a Facebook audience of more than 400 and a LinkedIn following of 97.
It is worth noting that these followers come from a variety of backgrounds. Social media is no longer just a pathway for a specific demographic. Though Facebook was originally designed as a medium through which the college-aged youth could communicate, it has since evolved to include a much more impressive following. Data from Statista’s January 2018 examination of the distribution of Facebook users in the United States suggests that most users are in a large margin between the ages of 18 and 65. Additional research from the Pew Research Center indicates that the number of seniors/all adults who go online increased from 14 percent in 2000 to 59 percent in 2013, and this number is expected to continue growing. Yes, even the older generations have a foot in the door—and a large one at that.
It is important to note that social media, above all else, is NOT a sales tool. This is not the right venue to promote your products and services, and it is also not a welcome home for religious and political posts because of their divisive nature. Rather, it is the platform to promote you. This is the network you can use to establish yourself as an “expert” in the industry that stays ahead of the game with research on the latest market news.
But social media is more than just a platform to connect with your clients. Websites like LinkedIn and Facebook are a great medium for promoting and building your brand identity and awareness. Your social media profile and the posts that you share represent your company’s vision and voice. What is it that you want to communicate in these posts? What do you want to say that will engage, influence, and motivate your audience?
Use social media as a key to staying in touch with existing and prospective clients. The social media king himself, Mark Zuckerberg, once said, “Nothing influences people more than a recommendation from a trusted friend.” Become that trusted friend to your client base. Share industry news on your social media sites to show that you stay up to date on the latest trends, and include your own two cents on the piece. Respond to comments on your posts. Engage with your clients and community. Encourage new and existing clients to follow your social media. Start and be a part of the conversation so you can make a lasting impression on your clientele.
Start with one or two platforms (we suggest LinkedIn and Facebook), and begin sharing posts every couple days about news in the industry, and be sure to connect with your audience with “likes,” “shares,” and “comments.” You can also post health tips and educational resources that will help your clients, as well as testimonials from loyal clients, success stories, and inspiring quotes.
Not sure how to get started? Here are a number of different resources that you can use to get your social media off the ground:
Social media is here to stay and it is easier to use and maintain than you might think. Stay ahead of the game and find out what social media strategies work best for you and your business. Don’t shy away from social media—it may be the most important and economic digital marketing tool that you use.