My dad has been a member of the PGA of America for years. When he was a young boy living in Salt Lake City, Utah, he would hunt for golf balls and sell them. He used the money he made from selling these golf balls to buy his first set of golf clubs. He worked at his game and became a great golfer, playing at both the college and pro levels. He was also the Director of Golf at the Desert Inn Country Club in Las Vegas, Nevada, and this is where I learned the game and grew to love it. My dad coached me along the way, and I hoped that someday I’d be as good as him. I remember one day I came in from a round of golf that I didn’t think was my best. My dad asked “How did it go today?” I started telling him all the negatives, the 3 putts, the missed greens, the shots out of bounds. He finally stopped me and said, “Davy, I don’t care about what you did bad today; I want to know what you did good.” That idea has stuck with me ever since then. No matter how bad we think things are around us, it is important that we look for the positive in every situation.
With the implementation of health care reform over the past several years, there have been a lot of changes and challenges for everyone, including individuals, large and small businesses, and the insurance industry. With these challenges, we can identify many positive outcomes. The following is a discussion of some of the positive outcomes we recognize have come from health care reform.
Positive Changes for Individuals
Health care reform has brought about a number of changes that are especially beneficial for individuals. People who were not able to obtain health insurance in the past can now have coverage. There are no exclusions for pre-existing medical conditions. Because all insurance plans now include coverage for preventative services at no cost to the individual, it is likely that more people will benefit from earlier diagnosis of serious medical conditions. In addition, parents are able to keep their children on their health plan until their children reach age 26.
There are a variety of options available, both in and out of the exchange, to meet the financial needs of different individuals and families. I recently worked with a gentleman who had been laid off and whose wife was expecting twins. The COBRA rates were very high, so we looked into other options for them and were able to find a plan they could afford that met their needs. As health insurance professionals, our goal is to help our clients find a plan they are comfortable with, and we have found that health care reform has resulted in more options for many situations.
Positive Changes for Businesses
One change that has positive effects for businesses (as well as individuals) is the implementation of medical loss ratio (MLR) requirements. This may seem like a complicated issue, but very simply, here is how it works: the Affordable Care Act requires health insurance issuers to spend at least 80% or 85% (depending on the size of the segment they insure) of premium dollars on medical care for their insureds. If they fail to meet these standards, they will be required to provide a rebate to their customers. For example, if an insurance company has an MLR of 70% but is required to have 80%, they will need to rebate the 10% difference to the insured. As an employer, if you pay 90% of the premium cost for your employees, you would keep 90% of the rebate and give 10% of the rebate to your employees who are enrolled in the health plan. The impact of the MLR translates into health insurers spending more of every premium dollar they receive on benefits and care for policyholders.
Another positive change that has occurred with health reform is that is has made businesses step back and consider why they offer benefits. Health care reform has really helped to define benefits and what they should be in the workplace. Identifying why you choose to offer benefits will help you determine what kind of plan to make available for your employees, and it will better align your benefits program with your corporate goals. As we have worked closely with employers, one thing has become very clear: companies who choose to offer benefits will generally spend less than those who fail to comply and have to pay the penalty. Keep in mind, just because you offer benefits does not mean all of your employees will choose to use them, and you only pay for the benefits for those who are enrolled.
We recognize that the health reform mandate has its challenges for both large and small businesses, but with those challenges there are solutions. Rather than becoming frustrated with the challenges, your employee benefits consultant can help you find solutions that fit within the parameters of health care reform and meet your needs.
Positive Changes for benefits resources
The good news is, by working with an employee benefits professional, you can access the information and assistance you need to develop a compliant benefits plan that works for your organization. For example, we provide our clients with the tools, resources, and professionals to help employers, organizations, and individuals understand health care and work through the process of compliance. In fact, one of our professionals is an ERISA attorney and compliance officer who has a very thorough understanding of health care reform and is constantly monitoring updates to keep our company and clients informed. We provide these updates and other important health care information on the Leavitt Group’s website: www.leavitt.com/healthcarereform. To stay informed, our clients can sign up for email notifications that are sent when new updates are available.
We have also increased our customer service support to help our clients with compliance. We work as partners with the insurance carriers to make sure our clients have the insurance solutions they need as well as the customer service to support these solutions, including help with enrollment and benefits communications.
Amidst the changes and challenges of health care reform, we are here to help you adjust accordingly and find solutions that work best for your individual circumstances. To learn more about health care reform, please contact your Leavitt Group advisor.
Dave Johnson is Vice President/Partner for the employee benefits division of the Leavitt Group’s Las Vegas office. He has 17 years of experience in the insurance industry. Dave’s broad knowledge of the insurance industry and his experience in group health benefits have provided invaluable experience for leading the Leavitt Group’s employee benefits services team in Las Vegas. Prior to joining the Leavitt Group, Dave was the owner of Johnson Insurance, a partner at Horito & Johnson, as well as a sales representative and account manager at Sierra Health Services. Dave graduated from the University of Nevada Las Vegas (UNLV) where he majored in communications and was a member of the UNLV golf team.