Nancy Lombaer sees slow, steady collisions between health care costs and budget constraints changing how large employers run their health plans.
Lombaer, a partner on the Midwest region benefits team at Chicago-based HUB International Ltd., works mainly with employers with more than 500 employees. She said last week in an interview that the overall state of the large-group market looks pretty good.
“Sales and renewals for 2017 and the pipeline for 2018 are strong, yet increasingly competitive,” Lombaer said. “Clients [and] prospects continue to look for more creative solutions to beat the trend curve.”
But more of the plan members have huge bills.
“We’re seeing more claims for more than $1 million,” Lombaer said.
Most of Lombaer’s clients have large self-insured plans. Some other benefits specialists have suggested that the Affordable Care Act ban on annual and lifetime benefits limits at non-grandfathered major medical plans might be creating a surge in jumbo claims, by encouraging doctors and hospitals to submit bigger bills.
For HUB clients, Lombaer said, the increase in jumbo claims seems to be the result of less dramatic, less easily fixed problems: the fact that some plan members, such as premature babies, happen to need a large amount of very expensive, high-tech care.
Self-insured plans can use stop-loss insurance, or insurance for health plans, to protect themselves against jumbo claims.
A few years ago, many large employers hoped to save on stop-loss charges by handling the jumbo claims themselves. Stop-loss issuers that had been hoping the ACA ban on annual benefits limits would lead to a flood of new business were disappointed.
Today, however, “the employers without stop-loss are putting it in,” Lombaer said.
Marathon runner market
Other large-group benefits market sectors also seem to be rewarding the brokers and consultants who can handle slow, steady budget-trimming marathons over those who need the excitement of new-cases-setup sprints.
In the area of group disability insurance and group life insurance, for example, some benefits brokers and insurers have hoped that falling unemployment levels and rising wages might translate into a swing back toward traditional employer-paid group plans.
Lombaer has not noticed any significant increase in sales of employer-paid group plans. Clients with group plans may be more likely to stick with the existing group plans, but employers that want to add benefits, or increase the amount of coverage available through existing benefits programs, are looking at voluntary and worksite options, she said.
In the voluntary and worksite markets, identity theft plans and student loan assistance programs are selling well.
Pet insurance cooled off for a few years, but now employees want to hear about it.
“Their pets are part of their family,” she said.
In the supplemental health area, critical illness insurance and hospital indemnity insurance are popular.
A few years ago, Lombaer said, one concern about supplemental health products was the low ratio of claims paid to premium revenue.
Today, thanks to efforts to move the supplemental health products to a group chassis, “it’s a better situation than it was five or 10 years ago,” she said.
For her, one good sign is the lack of time she is spending on supplemental health claim problems. “There’s not a lot of noise,” Lombaer said.
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