By Len Strazewski

Where do we go? What do we do? Who can help us make health insurance decisions? Who can help us comply with the growing list of laws and regulations?

Employers and their employees have a slew of questions to ask about health benefits under the new rules of the Patient Protection and Affordable Care Act (ACA), and a continuing need for information about compliance with other laws, such as FMLA, COBRA and OSHA, says Lew Kachulis, CPCU, CIC, CWCA, president of Gilbert's Risk Solutions in Sharon, Pennsylvania.

For the past 20 years, as employment-related government regulation has exploded, employers have been progressively turning to their local commercial agents and brokers for guidance and education, he notes.

"While the agency has provided employee benefits services for nearly 50 years, the demand has been accelerating since the 1990s," he explains. The latest and most complicated of government regulation, the 3,000-plus pages of the ACA and the 20,000-plus pages of guidelines, have multiplied the demand, creating new challenges for employers and opportunities for agents that have prepared themselves for the new era.

As regulatory compliance issues have grown and costs have continued to increase, employers have been struggling to achieve a balance between human resource goals such as recruiting and retaining high-level workforce talent and financial goals of controlling the costs of human resources and their employee benefits, Kachulis says.

ACA adds a new level of decision-making as employers grapple with new options, including whether or not to direct employees to government exchanges to purchase individual health insurance or to redesign group benefits for greater self-funding and management control.

"It's difficult to say where the health system will wind up. In five to 10 years, will we have more employers asking employees to shop the exchanges? Maybe."

Even though employees may not need trained and experienced agents and brokers to buy health insurance from government exchanges, employers and their employees may need their advisers more than ever to make strategic decisions about business and personal health insurance, Kachulis says.

Gilbert's has been a cornerstone of the region's business community for 160 years, but its services are not rooted in the past. The agency promotes a contemporary approach to risk management with a strategic approach called "the Risk Shield."

The approach, built on close analysis of employer risks and financial strength, was originally designed for property/casualty risks such as workers compensation, but is inclusive of employee benefits risk, executives say.

"After several years of working for the agency in a health management capacity, and working with benefit professionals, I saw great potential for growth and professional opportunity." -Connie Gerba, R.N., RHU, REBC, ChHC Employee Benefits Manager

The contemporary approach has made employee benefits the agency's second largest division, accounting for about 20% of total revenues. Growth, Kachulis says, has been consistent with other agency lines of business, reflecting a strong market position for the firm. The benefits division has three full-time employees and one part-time among a total workforce of about 25.

Leading health plans in the Pennsylvania region include Highmark BlueCross/Blue Shield, Coventry Health Care (a new division of Aetna), UnitedHealthCare and UPMC Health Plan, Inc. Leading insurers in Ohio include Anthem BlueCross/BlueShield, Coventry, UnitedHealthCare, and Medical Mutual of Ohio.

Employee benefits manager Connie Gerba, R.N., RHU, REBC, ChHC, a health professional with 30 years of experience, joined the agency in 2000 and was promoted to head of the benefits division eight years ago.

"After several years of working for the agency in a health management capacity, and working with benefit professionals, I saw great potential for growth and professional opportunity," she says.

The agency's modern risk-based approach was part of the attraction, she adds. The Risk Shield approach allows the benefits services professionals to work with property/casualty producers as a team to identify the nature of an employer's risks and their strategic goals.

"Benefits producers are now benefits consultants," she says. "We have an extended conversation with the client and identify where they want to be in three years, five years or later," she says. "Costs are the driving force and all employers are looking to find ways to contain their increasing health care costs. But compliance has become a powerful driver as well."

The agency consultants project costs and spending out for a minimum of five years, an exercise that "is really eye-opening for our clients." Long-term solutions can include new plan designs with high deductible health plans, Health Savings Accounts and wellness programs that can provide a return on investment in three to five years.

ACA "is a moving target" and the most complicated of all of the compliance issues, she says, though laws of long-standing such as COBRA and FMLA continue to plague human resources professionals with their arcane requirements.

As a result, education has become a critical agency activity. Gilbert's sponsors regular seminars and monthly "Lunch and Learn" programs for employees, clients and prospective clients. Recent topics include: Employment Law, Health Care Reform, OSHA and Alternative Risk Funding.
The ACA has also been a powerful catalyst for change within the agency, executives say. Since its passage, Gilbert's has added expertise in two service areas that track with possible changes in their clients' approach to benefits.

"It is important to get to know your clients and their long-term goals. We try to find out their perceived needs and how we can provide for those needs with various funding options." -Chuck Kier Benefits Consultant

A year ago, the agency added new depth of expertise in benefits self-funding and captive insurance company techniques. Chuck Kier, a claims expert with more than 27 years of experience in benefits self-funding as a third-party administrator, joined the agency to provide custom self-funding approaches for agency clients.

Employers, Kier says, are looking for creative solutions to their health benefits problems, and the agency works within ACA guidelines to craft individual programs for each client. While many employers were convinced that the ACA programs designed to facilitate individual health insurance programs would replace group benefits, the opposite has been true.

Instead of abandoning group coverage, employers are more interested in retaining a group benefits structure with better control over their benefits delivery system and the related costs.

He agrees with Gerba on the value of the Gilbert's sophisticated approach to risk and long-term strategic management. "It is important to get to know your clients and their long-term goals. We try to find out their perceived needs and how we can provide for those needs with various funding options."
Self-funding, he says "has taken a giant step" and the options have increased, even within ACA guidelines. He says employers are more interested than ever in alternative risk funding designs, for smaller and smaller employers.

For example, pure self-insurance and captive insurance companies used to be choices for only the largest employers, but are now available to organizations with as few as 25 employees with protection from expanding stop-loss insurance markets, Kier says. Other alternatives, supported by the ACA, include "level funded" policies insured by health plans but funded on a cash-flow basis by employers and "reference" programs that mimic Medicare Cost Plus coverage.

These alternatives fit in well with other support programs, including employee wellness programs and disease management that can provide quick improvements in health care spending.

Lisa Saltsgiver, benefits account manager, also joined the agency two years ago to provide the employees of Gilbert's clients with expert assistance in choosing individual health benefits purchased through ACA-enabled exchanges or traditional individual health insurance markets.

Saltsgiver also oversees worksite-sold voluntary benefits products and employee group and individual enrollment programs.

Saltsgiver agrees that Gilbert's benefits executives have not found many employers abandoning group health insurance programs so far. However, some small employers are considering leaving their group health benefits programs and directing their employees to take advantage of subsidies and tax credits by purchasing individual health insurance, Saltsgiver notes. The decision may make economic sense for some workers

"Workers who are shopping the individual health insurance market have serious decisions to make about individual health insurance models and any related voluntary coverage." -Lisa Saltsgiver Benefits Account Manager

Under the ACA, the SHOP (Small Business Health Options Program) will allow employers to contain their health care costs by switching to a defined contribution program model for benefits spending. The defined contribution model allows employers to provide a set budget amount to their employees, which can be used to purchase individual health insurance and voluntary benefits that might meet unique family needs.

Saltsgiver says the approach creates a demand for expertise and education that is not provided directly by public or private exchanges. "Workers who are shopping the individual health insurance market have serious decisions to make about individual health insurance models and any related voluntary coverage," she explains.

While the ACA created a new category of adviser-the Navigators-who received training in structures created by the new law, the Navigators are generally not licensed agents with broad market expertise, she notes.

"The Navigators have been trained primarily in helping people use the government websites and understand the process of using the access created by the law", she says. "But they generally have not been trained to understand and advise about the products offered directly by the insurance industry or coverage that may be available from private exchanges funded by a defined contribution plan."

ACA has created growth in the individual insurance marketplace, she notes and several insurers, including Highmark, UPMC and HealthAmerica have recently become active in Gilbert's region.

In addition, voluntary benefits are booming, she says. Cincinnati Life Insurance Co. is one of the carriers that has entered the market with a broad range of life insurance products, including term, whole life and universal life insurance and a 20-year return of premium option, short-term disability insurance, long-term disability insurance and accidental death and dismemberment insurance.

The author
Len Strazewski is a Chicago-based writer, editor and educator specializing in marketing, management and technology topics. In addition to contributing to Rough Notes, he has written on insurance for Business Insurance, Risk & Insurance, the Chicago Tribune and Human Resource Executive, among other publications.