Benefits brokers/consultants are offering employers and their workforces an increasing number of health insurance choices. That's one of the findings of the United Benefit Advisors (UBA) 2015 Health Plan Survey. It reports that 28.7% of employers offer two separate plans to their workforce, and 17.6% offer three or more. The three-or-more-plan firms have grown by 28% over the past five years.

"More and more, employers are offering expanded choices to employees, either through private exchange solutions or by simply adding high-, medium- and low-cost options," a trend UBA partners believe will continue, the survey report notes. The survey data is derived from 10,804 employers sponsoring 18,186 health plans nationwide, clients of UBA partner firms.

UBA is a network of 141 independently owned employee benefits advisory firms operating more than 200 offices throughout the United States and in Canada and the United Kingdom. Their customer base includes approximately 36,000 employer clients representing more than 5 million employee lives. Slightly more than half of the UBA partner firms write property/casualty business in addition to employee benefits.
The survey, which has been performed annually since 2005, reports health plan features and costs by employer size, industry and region, enabling brokers to benchmark their clients against these norms. In one striking regional variance, the Southeast saw a nearly 23% increase in CDHP enrollment from 2014, while the North Central U.S. experienced a 23.5% decline in CDHP enrollments.

UBA provides administrative support services and research for its partners through offices in ??Chicago and Indianapolis. Its on-staff professionals include actuaries, attorneys, communications professionals, HR consultants, physicians, nurses, pharmacists, underwriters and wellness specialists.

CEO Les McPhearson joined UBA a year-and-a-half ago after a 20-year-career with major health insurance providers. He says part of the reason for the expanded health plan choices in the market today can be traced to the early days of high-deductible health plans about 10 years ago.

"Employees weren't ready for the dramatic shift to HDHPs all at once. So they would offer an HDHP side-by-side with a more traditional plan. It's been a multi-year process of employee education to migrate from a high premium, low deductible HMO to a high deductible, broad network program."

McPhearson says the expansion of product choices-both employer-paid and voluntary-and the changes brought about by the Affordable Care Act present opportunities for brokers. But responding to these changes requires brokers to play a more consultative role with their clients.
"In the past, brokers could focus on product, spread sheeting and cost. Today the best brokers, and certainly UBA brokers, have realized that to be successful they must transform to sophisticated advising and consulting with their clients and clients' employees. For most companies below 500 to 1,000 employees, the level of complexity over the last four years has outpaced the employers' ability to keep up.
"Whether it's regulatory matters, compliance or administration, employers are looking for help. Brokers who are able to provide that help-and that's what UBA brokers do-are finding that four to five years into healthcare reform there will always be a place for a consultative broker," says McPhearson.

This kind of proactive approach to a changing market has paid dividends for Horan, a Cincinnati-based employee benefits consulting firm and UBA member. Since 2009 Horan, which also has life insurance, disability and wealth management divisions, has grown from 70 employees to more than 120 while opening new offices in Dayton, Ohio, and Fort Mitchell, Kentucky.

"We looked at healthcare reform as an opportunity because there was going to be so much uncertainty," says Jill McCarthy, Horan's group sales operations manager. "Clients wondered what legislation was going to stay, what legislation might be revoked, how to deal with reporting and measuring.

"We used the opportunity to show our expertise in compliance. We've done that by sending out various communications pieces. We've had multiple seminars, and we've recently created compliance blogs."

Horan's client education outreach goes well beyond ACA regulations. McCarthy notes, "The DOL is stepping up interest in auditing companies, both on the health benefits side and the 401(k) side. Last year we conducted two educational seminars for clients on Department of Labor audits. We want to make sure that when our clients are audited, they have the infrastructure in place to do well with them."

The firm also has three other education seminars scheduled for early this year-one on wellness (with more than 300 people registered), one on international benefits, and on-site clinics.

As a UBA partner, Horan has access to UBA's staff and resources in benefits compliance and labor laws. It also stays ahead of the curve by tapping into the wisdom of other UBA partner brokers at regular member meetings and by trading on-site visits with individual members.
McCarthy says meeting with other UBA-affiliated firms "is a fuel injector for us. We're able to draw on the resources of strategic partners, to act quickly on ideas, and to customize them for our specific region and for our clients.

"The shared wisdom is one of the foundations of what makes UBA so attractive," she adds. "Because of its size, UBA allows its independent partner firms to speak with one another freely and share insights about what's going on in the market or within their own organization. At least once a year, besides going to the regularly scheduled conferences, we visit the offices of other partner firms, or they visit us, to share ideas."

"Three times a year we put on meetings for our partners," McPhearson explains. "It's a big investment for an independently owned business to get away from their office, but it's so important for them to be with their peers and colleagues and be able to compare notes and collaborate. Everyone comes with ideas they want to share but also with questions they want to ask, and they know that they're going to get information from the best and the brightest."

Reaching smaller groups

UBA's Health Plan Survey notes that self-funded plans rose by almost 11% in 2015 over 2014. Self-funding accounts for 12.2% of all plans measured. And it isn't only the larger plans where self-funding is taking hold, the study points out. "We're seeing growth in self-funded plans in the smaller size groups primarily as a result of looking to avoid the cost and compliance issues stemming from healthcare reform," says McPhearson.

The UBA report states that it is important to measure the smallest firms (25 or fewer employees) because U.S. Census data shows there are more than 5 million under-25 employee firms, compared to approximately 600,000 companies with more than 25 employees. The UBA Health Plan Survey shows that the under-25 groups experienced the largest rate increases of any size employer group.

Horan, whose "sweet spot" of employer size is between 50 and 2,000 employees, maintains a dedicated team to service under-25 employee groups, its Small Business Solutions Team, as well as a team to service individual coverage. "We take the same approach that we do with the larger clients," McCarthy explains. "We provide them with education materials and keep them well informed about what's going on with the ACA changes."

This kind of educational approach tailored to a client's needs is what McPhearson is talking about when he sums up why UBA partners are growing.

"As our partner firms have become better and more impactful at providing consultation and advisory services to individual clients, it is certainly opening doors for growth within those clients-new products and services. It also enables them to build a reputation among other potential clients. And it opens up other opportunities-perhaps in HR consulting, technology or administrative solutions. Once clients see the broker as a trusted advisor, they look to consolidate their business with that broker," says McPhearson.

The author
Thomas A. McCoy, CLU, retired in 2013 as editor-in-chief of Rough Notes magazine.