Health plan renewals go well, but quandaries remain
Political caterwauling aside, the first round of health benefit policy renewals under the Obama administration’s reform legislation seems to have gone reasonably well.
Uncertainties abound, however.
“It’s a very interesting time to be in the business,” says Oak Park attorney Larry Grudzien. “Everybody is in a quandary about what to do.”
Part of the quandary is that what to do may or may not change, depending on the eventual result of court challenges to health care reform and the next election — perhaps whichever comes first.
Insurance brokers have had to face some of the earliest decisions, primarily because “insurance companies are cutting back on commissions,” says Grudzien. His practice is heavily weighted toward brokers.
Commission reductions apparently are part of the insurance industry’s response to new rules that require insurers to spend at least 80 percent of premium dollars on care-related costs. For brokers, reduced commission income has forced a different approach to the marketplace: Less price-based selling, though price still matters, and more focus on fee-based consulting, often with an emphasis on health benefits as an investment in a company’s employees.
That’s an adjustment for business owners, too.
“We’ve haven’t changed our health insurance, but we have changed our approach,” says the human resources manager at an Elgin-area manufacturer whose owners prefer to remain unnamed. “We’ve become very strategic. We’ve looked at our overall goals, what works for employees and what works for our company.
“Our concern is down the line. What will happen to costs when they decide how to interpret the legislation? It’s going to be harder to have a package employees can afford.”
Planning for what’s down the line is difficult. For one thing, “Implementing regulations are coming more slowly than I expected,” Grudzien says.
Illinois’ new civil union law is another complication. The law, Grudzien says, treats same-sex partners as spouses for employment-related health insurance purposes. Currently, offering coverage to partners is optional.
Despite the uncertainties, many small businesses are into the health benefit strategic review process.
“We’re more in control of the situation,” explains Tim TeBockhorst, a partner in the Oak Brook office of CPA firm Gray Hunter Stenn, LLP. “We wanted to be more strategic and proactive. We know what we’re getting, and we know how to communicate (the benefits) to employees.”
Pending decisions to be made by the courts and Congress, the next contentious decision period in the long implementation of health care reform likely will come in the run-up to 2014. That’s when establishment of state-based insurance exchange mechanisms intended to offer small businesses and their employees health coverage choices that mimic those enjoyed by members of Congress kicks in.
Ÿ Contact Jim Kendall at JKendall@121MarketingResources.com.
© 2011 121 Marketing Resources, Inc.