To Joe Ellis, reports of the death of commercial health insurance seem highly exaggerated.
Ellis, a senior vice president at CBIZ, a company that provides accounting, tax, insurance and human resources services for midsize employers, says he sees strong insurer interest in CBIZ clients’ benefits business.
“It’s looking for me as if they’re looking for market share,” Ellis said today in an interview. “They’re trying to get as much share as they can.”
Insurers may be shying away from the Patient Protection and Affordable Care Act (PPACA) public exchange market because of the fear that there would be problems with understanding the risks involved, but, in the midsize group market, “the risk profiles are pretty much known,” Ellis said.
CBIZ publishes its own Small Business Employment Index. The index for February, which was based on data from 4,000 companies that employ 300 or fewer people, shows that a little more than half kept head counts the same. The other employers were about equally likely to increase or decrease their head counts. Company analysts speculated that uncertainty about oil market volatility, the global economy and interest rates were making small employers cautious about hiring.
In the benefits unit, Ellis has noticed improvements in the tools CBIZ and its clients can use to connect with insurers, but no big improvement or deterioration in other aspects of insurance administration, such as speed at processing midsize groups’ claims.
Some insurers have tried to break broker compensation out from other costs, by putting that figure on a line of its own, but, at this point, Ellis said, he has not seen the kind of pressure on compensation that agents in the individual market have seen.
Insurers “realize they can’t push the envelope too far,” he said.
Competition for ancillary and voluntary products is even tougher than the competition for major medical accounts, Ellis said.
The typical private exchange in the midsize employer market may offer a fairly short menu of plans, and the plans may all come from one carrier, but one strength is that many of the private exchange systems offer workers access to decision-support tools that can help them find and compare the benefits options, Ellis said.