Michael Lujan is trying to help local agents and brokers compete against the giants.
Lujan is the chief strategy officer at Limelight Health, a San Francisco company that develops employee benefits quoting tools.
Limelight offers quoting tools aimed at benefits market players of all sizes. It recently introduced QuotePad 2.0, a system that can pull in an employer’s census data; provide quotes for medical, dental, vision and life products; and show how much the employer and the employees might actually pay.
Lujan, (photo, right) the current president of the California Association of Health Underwriters (CAHU) and founder of the small-group plan division at the Covered California public health insurance exchange, has been out promoting the new Limelight product and talking about how he sees the benefits market evolving.
Lujan said in an interview with LifeHealthPro.com that he sees traditional agents and brokers hungering for the same kinds of integrated benefit plan quotation and enrollment systems that the giant players have had for years.
For the smaller players, “there hasn’t been a universal platform,” Lujan said.
In addition to needing the ability to feed the same data used to get a quote into the enrollment system, a benefits advisor now needs the ability to connect with human resources and payroll systems, Lujan said.
Just a few years ago, some big management consulting firms were predicting that the Patient Protection and Affordable Care Act (PPACA) exchange system would suck the life force out of small employers’ group health plans, and that the small-group health market would lose up to 40 percent of its covered lives to the exchange system.
Now, “I think there’s optimism,” Lujan said.
Insurers may be putting about as much pressure on commissions as state law permits, but the public exchange system seems likely to attract only about 12 percent to 15 percent of the small-group business any time soon, Lujan said.
Employer use of formal private health insurance exchange systems seems to be growing more slowly than some had expected.
But Lujan said the concept behind the private exchange movement — the idea that consumers should help choose and manage their own benefits, rather than sitting back and letting the employer make all the decisions — is a powerful concept, and that the concept is starting to surround and penetrate the entire group benefits market.
“I think that’s a big change,” Lujan said.
Lujan said he sees improving the employees’ understanding of their coverage as one of the major business opportunities.
One recent survey showed that three-quarters of employees thought they understood their health benefits, but that only about 20 percent knew what “coinsurance” is, Lujan said.
The lack of understanding “is actually a barrier to care,” Lujan said.
Some well-covered employees end up in emergency rooms simply because they are not sure how to find suitable in-network care, he said.
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