Agents Push Ahead With Health Enrollment

By Allison Bell

Benefits brokers and other benefits experts say the fall enrollment season is going about as well as they could have expected, under the circumstances.

“There’s nothing unique or special about it,” says Arnold Katz, president of Brokerage Concepts Inc., Prince of Prussia, Pa., a large East Coast benefits broker.

The agents and brokers who belong to the National Association of Health Underwriters, Arlington, Va., have been giving the enrollment season similar reviews, according to Janet Trautwein, a former health insurance agent who serves as the group’s director of state government affairs.

“So far, it’s going pretty normally,” Trautwein says. Employers “are proceeding with business as usual. I haven’t heard of any mass dropping out of plans.”

Although re-enrollment seems to be holding steady, Trautwein says “relief” would be the wrong word to use to describe NAHU members’ attitude: she’s still hearing plenty of concern about the future.

“We don’t really know what’s going to happen,” Trautwein says.

Health insurers, health maintenance organizations and the companies that run self-funded health plans sign up new customers and re-enroll members of existing plans year-round, Trautwein says.

But many employers still run their plans on a calendar-year basis, and many let employees switch between plan options during a fall open enrollment season.

Agents were already worrying about the fall enrollment season last spring, because of signs that the economy was weakening and medical costs were continuing to rise rapidly.

Now, the economy has clearly weakened, and figures from Andersen, Chicago, a consulting firm, show carriers are assuming underlying medical costs will increase 12% in 2002 for HMOs, 14% for preferred provider organization plans, and 15% for indemnity plans.

The Sept. 11 terrorist attacks have disrupted some employers’ operations, and Katz says they have also affected employers’ attitudes.

“What Sept. 11 has caused is inertia,” Katz says.

In spite of the economic uncertainty, the political uncertainty and the rate increases, most employers are trying to keep their existing health plans, disability plans and other benefits plans, producers report.

“I don’t see any dropping of these programs,” says William Mehus, chief executive officer of Corporate Benefit Resources Group Inc./OutSource Inc., Minneapolis, a benefits broker and administrator.

Mehus says he has found that many employers are struggling to hold benefits costs down by using technology–and outsourcing companies like his own–to reduce administrative costs.

“More and more people are doing Web enrollment,” Mehus says.

Employers can also hold down benefits costs by using cheaper plans with smaller provider networks and tighter restrictions on access to care.

Katz says he’s seen carriers introduce two new HMOs, but he says he has detected little evidence of a move back to more restrictive plans.

Mehus says his customers are still migrating toward PPOs and traditional indemnity plans.

Producers say use of another highly publicized strategy, the “defined contribution” health plan, varies from region to region.

An employer that sets up a defined contribution health plan contributes a fixed amount for each employee, then helps the employee use the cash to buy health coverage.

In Minneapolis, defined contribution programs have been popular for years, and they’re even more popular this year, Mehus says.

On the East Coast, consultants are talking about defined contribution plans, but employers have been slow to try them, Katz says.

For now, producers say, most employers are turning to employees for help with keeping flexible defined benefit health plans in place.

“I would say there’s definitely cost-shifting going on,” Mehus says.

Employers are shifting costs by increasing employees’ share of premium payments, co-payments for prescription drugs, and deductibles, producers say.

More employers are buying plans with $1,000 deductibles, Mehus says.

WellPoint Health Networks Inc., Thousand Oaks, Calif., a large managed care company, recently catered to the cost-shifting market by introducing plans with flexible deductible and benefits level.

Most employers want to hear about options for “benefits buy-downs,” Leonard Schaeffer, chairman of WellPoint, said during a recent news conference that was aired on the Web.

Buy-downs help lower costs through one or a series of efforts that can include co-pays, higher deductibles and other cost-saving techniques.

But Schaeffer speculated that employers may rethink the buy-down strategy as a result of the Sept. 11 attacks.

“We may begin to see people taking another look and maybe sticking with higher benefits,” Schaeffer said.