In July, the Department of Labor and the Internal Revenue Service revealed a proposal that would significantly increase the reporting obligations for small employers by way of a new modernized Form 5500. If the proposal for revisions are passed, changes will go into effect as early as January 1, 2019.1

So what has changed?

Under the existing reporting regulations, small employer-sponsored group health plans (under 100 participants) that are either fully-insured or self-insured, aren’t required to file a Form 5500. However, under the new proposal, all employer-sponsored group health plans that are subject to ERISA (including grandfathered and retiree plans) must file a Form 5500 – regardless of a plan’s size.2

What exactly does that mean?

Simply put, small employers will now have the “privilege” of complying with the identical benefits-administrative system reporting requirements that are imposed on much larger employers. That means having to provide a tremendous amount of detail about enrollees, plan administrators, commissions, premiums and claims paid – just to name a few. This will also create a huge demand for yet even more detailed information required by tax laws. What this boils down to is that small employers and brokers alike will be held responsible for every one of these new regulatory requirements

Oh, and then there’s Schedule “J” …

In addition to the proposed change, Schedule J – a new requirement that will mandate group health plans to disclose a plethora of detailed information about their plans such as the number of participants, how many are being offered and receiving COBRA benefits, and if the plan includes coverage for not only the employee, but spouses, children, and retirees – as well as many other details.

So what exactly is your point, Lindsey?

That both of these changes are going to impose a hefty burden on all parties involved – the employer, administration, and yes, even the broker. The fact is, the 5500 filing has historically been a burden that larger employers working with better than 100+ employees have had to bear, requiring that most brokers prepare (or pay for the preparation of) the schedules required to be filed along with the employer’s return. To remain in compliance, smaller businesses will now be required to follow suit.

The bottom line is that if these new regulations come to fruition, they’ll undoubtedly create a demand for leveraging the technology capable of managing it all. The way I see it, this new regulation – and the work behind it – is going to cost employers a lot more than the mere $100 filing fee.

Without the right dose of applied technology to better manage benefits administration tasks, monthly audits that include identifying impacted accounts and participation information, will have to be assimilated manually. That means brokers who are slow to onboard technology and who continue to pencil out reports and enrollment forms on paper, should expect to spend a lot more time at the office. To learn more about how hCentive can support brokers with the right benefits technology, click here.

 

 

1 The ACA Times

2 LifeHealthPro.com

States have been waiting years to return to fixing how health care is delivered. But they got delayed in the process.

The ACA tasked every state with making major changes to Medicaid eligibility technology – a federally imposed mandate for all states, regardless of whether they chose to expand Medicaid. To comply with the ACA’s new eligibility rules and policies, some states attempted to build state marketplaces for private insurance plan shopping while retooling their separate Medicaid eligibility systems to accommodate the new rules for the under-65 population. This siloed approach often lead to cost overruns and lack of coordination between technology teams at each of the state marketplaces and their partner Medicaid agencies. Other states adopted marketplace systems that included an integrated “single door” for providing eligibility determinations for all state health care programs and benefits, while another set of states – the majority— wound up on HealthCare.gov.

Every state regardless of their decisions on marketplace implementation were forced to divert resources and expertise away from reforming health care and instead focusing on the changing ACA eligibility rules and associated IT systems. This often meant delaying planned work to transform how public programs like Medicaid pay for health care – one of the long-envisioned successes of health reform that hasn’t succeed on a large scale or in the private sector.

Last month, health care and hospital executives told a Washington, D.C. panel event hosted by POLITICO about their organizations’ work to return to the longer-term goal for transforming how health care is paid for and provided to patients. For example, a leader at one of New York City’s major hospital systems told the panel that his group ties almost all its patient care with value – including use of electronic medical records and emphasis on care coordination and outcomes and lowering costs. As expected, New York policy makers embraced the ACA and the state runs its own state marketplace with a single door eligibility system.

California and Massachusetts also run state based marketplaces – and similar to New York, Massachusetts has embraced an integrated single door to health coverage eligibility determinations for both private coverage and Medicaid. With state marketplaces, states retain local control over enrollment and policy decisions and their relationships with carriers and provider groups, allowing the states coordinate with these key stakeholders to influence the design and provision of health benefits and health coverage.

When states closely link health coverage with patient care, the full set of the ACA’s goals can be accomplished in ways that meet states’ unique needs, on their own terms.

When you’re talking to your fellow broker friends about exchange technology and current market trends, what’s the one thing you all have in common? Money. Everyone needs to make more of it and everyone needs a better way to control it.

On March 29 hCentive co-hosted with the Institute of Healthcare Consumerism part one of a webinar series, The Digital Revolution: How Brokers Can Win. During the webinar the Director of Health and Co-Operator of the Cypress Exchange, Robert Ledman, talks to brokers about money. Even more, he gives explicit examples about why brokers find themselves in a losing situation when they’re not “attached to the sale/case” and what it means to use technology that streamlines the day-to-day workload—decreasing time spent on calls, meetings, and managing paperwork.

Click here to access Robert’s 5 minute segment in the webinar and hear real facts from a real broker, actively using a built-out benefits marketplace.

Robert also highlights:

  • How they use a benefits marketplace for agent recruiting
  • How Cypress is planning to use an full-service platform for long-term growth and success
  • Why using a full-service platform can help brokers get over a “production hump”
  • Why he believes the broker isn’t going away

If you like what you hear, then we invite you to join us for part two of the series where we’ll be discussing how brokers can make the transition over to digital business. We’ll have the President of Insurance Marketing Center talking about how he transitioned his brokers over, best practices for making the transition, and lessons learned from an early adopter.



Register for part two, The Digital Revolution: How Brokers Can Transition to Digital Business here

The Cypress Exchange is a joint business venture between Elite marketing and the Copeland group servicing more than 9,000 agents in Houston, Texas. Prior to the ACA law, they joined forces to create a company that would specifically focus on the health care market. They knew volume and strength would be key to one of their first big projects—implementing an online platform that would support their agent’s efforts in writing new business. They started with addressing the individual market and will be rolling out the group side of their platform this April.

With the deluge of changes in the functioning of the market and the new role of benefit marketplaces (aka private exchanges), most brokers feel they are stuck between a rock and a hard place. They know that they want to make the shift to exchanges, but are not yet certain how the move will benefit them. Moreover, brokers are concerned about differentiating themselves in an increasingly competitive private exchange market. Are you facing a similar challenge? We have an answer for you.

During our hCentive xChange conference, broker attendees participated in a roundtable discussion on how they collectively planned to achieve differentiation on the marketplace, and this is what we learned.

1)    Almost all brokers are harrowed by the benefit marketplace experience – For most brokers, moving to an exchange is disastrous. Almost all of their peers are suffering from early jitters of transition, but at the same time, they are very optimistic about the move to the platform. Most brokers felt that the change in marketplace is similar to the Medicare Part D ruckus, in the sense that it will get better with time.

2)    Individual Market will be more competitive compared to Group Market – Compared to the group market, the individual market will be more challenging and rewarding for brokers. More choice would mean more customers, and a larger chance for brokers to differentiate from their competition and tailor offerings that get them a bigger share of market.

3)    Benefit Marketplaces will be influenced by the performance of Public Exchanges – Over time, public exchanges will be laying the path for benefit marketplaces to tread upon. Currently, public exchanges have a higher share of enrollments, but benefit marketplaces are expected to take over by 2018. Public exchanges are the torchbearers for the market, and they are expected to ease the enrollment process for everyone and ensure that the risk pools are maintained in the private exchange market.



4)    Brokers will have a continuing role in shaping the private exchange market – Continuing in the footsteps of public exchanges, private exchanges will thrive and grab their share. In this environment, brokers will have a role to play, and contrary to the fear, will not fade away or become obsolete. In fact, brokers will have a bigger role to play, especially in educating their buyers and helping them make the perfect decision by sifting through available plans and finding ones that best meet their family’s needs. From a knowledge standpoint, a broker’s role in inimitable and irreplaceable.

 5)    Communication and Engagement will be key – As private exchanges prevail, brokers will have to rethink their strategy and phase it around communication and customer engagement. Follow ups and engagement tools will hold primary importance as customers will be expecting next-level interaction with their brokers.

6)    Adaption will be imperative to success in private exchange market – Almost all participating brokers agreed that adapting would be crucial if brokers do not want to be rendered useless in the private exchange market. Brokers don’t need to worry about cuts in their commission, but should rather focus on providing new lines of products and more choice to their customers. Communication and engagement will supplement their new offerings and changing stance toward customers.

The key to differentiation, as concluded in our breakout session, lies in mutating with the private exchange setup and supplementing broker offerings through value adding tools. In a final note, brokers have a great role to play in the future of private exchanges and to have a piece of that cake, evolution of their services and technology will be the answer.

Sophos, the renowned security firm, recently reported in its survey of data encryption: “The Sophos survey of IT decision makers in six countries reveals that there are some misconceptions about encryption, and some disconnects between what companies say they are concerned about – and what they’re doing about it.”

The article does not talk about misconceptions, but should!  Probably the biggest misconception is that your data is safe from hackers when you adopt an encryption technology.

In further analysis of the Sophos survey for Healthcare firms, Sara Heath writes:

Those organizations that do not encrypt their data – and even some that do – are seeing some gaps in data protection. Nearly one-quarter of customer information and customer financial information falls through the encryption cracks, leaving it liable to a data breach.

This is especially alarming when put into the context of the healthcare industry. Because patients are the customers in the healthcare industry, it is important that all of their PHI be fully protected via encryption to keep that valuable information from falling into malicious hands.

While encryption is great and everybody seems to be advocating it, does it really thwart a determined hacker?

Malicious hackers routinely steal information from private databases. It is a widespread fallacy that by encrypting the data in these databases, data will be safe. Regulators, compliance authorities and industry standards insist on encrypting sensitive information such as SSNs, credit card numbers, and health information.



However, unless the encryption is one-way – once encrypted, the data can no longer be recovered – encrypted data used by database-backed websites is usually as insecure as unencrypted data.

The encrypted data, to be usable, is obviously decrypted by some applications and processes within the system or on the network. Those applications and processes need to access the sensitive data, usually quite frequently, and have access to the decryption keys. The decryption keys are made available to these applications either by trusting their user-id, or their process filename, the computer’s IP address, or a similar factor.

To understand why data encryption might provide a false sense of comfort, let us make some rather formidable assumptions against our adversary, the hacker.

Let us assume that:
(a) the application logs are encrypted
(b) the application is encrypting its “heap” memory
(c) the application is enforcing data privacy in its interfaces to other components
(d) the decryption keys are stored in an ultra-secure (digital) vault

These assumptions are very hard to implement correctly. But let’s assume that they are true.

The fact that a hacker is able to access data, even if in encrypted form, in a database clearly indicates that the hacker has breached the various security perimeters and gained unauthorized access to an internal system. In normal course, the hacker should have not been able to access the raw database at all. Once the hacker is inside the network and has been able to access the database, it is a fair assumption that the hacker is able to assume the identity of the application or the web-server itself. In fact, once inside a system, it is not that hard for a hacker to just try and become the superuser of that system and then masquerade as a specific user.

Once that happens, all bets are off. If the hacker’s access to the database cannot be distinguished from the application’s access, encryption does not help at all. Once a hacker is inside your network and is able to access your encrypted data, it is usually only a matter of time before he figures out how to access the required keys, and then to decrypt the data.

Bruce Schneier, the famous crypto-expert, highlighted this way back in a blog article from 2010:

Let’s take a concrete example: credit card databases associated with websites. Those databases are not encrypted because it doesn’t make any sense. The whole point of storing credit card numbers on a website is so it’s accessible — so each time I buy something, I don’t have to type it in again. The website needs to dynamically query the database and retrieve the numbers, millions of times a day. If the database were encrypted, the website would need the key. But if the key were on the same network as the data, what would be the point of encrypting it? Access to the website equals access to the database in either case. Security is achieved by good access control on the website and database, not by encrypting the data.

We re-iterate the last sentence: Security is achieved by good access control on the website and database, not by encrypting the data.

To be sure, encryption is useful for carrying around sensitive information. But for data “at rest”, mere encryption offers but an illusion of safety.

As the third open enrollment period comes to a close, I’m reflecting back on the 2016 season and what did and did not work well for brokers.

One component of the enrollment process that really stood apart for me was the ability to seamlessly connect to HealthCare.gov (FFM) for quick and easy subsidy qualifications and enrollments.  Web Broker Entities refer to this process as the “Double Redirect” and is required by CMS for enrolling individuals online, regardless if they choose to self-service or leverage a broker’s assistance. As a licensed broker employed by hCentive that works on Federal and State Exchanges regularly, I can’t stress enough the importance of having online broker benefits tools that are CMS compliant. If your online enrollment platform provider is not CMS compliant, you’re putting your book of business at risk with sudden changes in the way clients enroll, or worse, not being able to conduct business.

Brokers are required to participate in annual training with CMS if they wish to sell on HeathCare.gov. During your training and/or certification process CMS clearly states there are two ways for a broker to enroll an individual:

  1. a broker may assist a client directly while they log into HealthCare.gov with their individual account, or
  2. by logging into HeathCare.gov as a broker, using a Web Broker Entity’s (WBE) direct enrollment process.
    [WBE Process]: When working with a client using a WBE, an agent or broker is securely redirected from the QHP issuer’s or Web Broker’s website to HealthCare.gov.  Once the broker is on HealthCare.gov they can complete the eligibility application with the consumer, using the agent or broker’s HealthCare.gov user ID. After the application is completed on HealthCare.gov, the agent returns to complete the enrollment on the Web Broker Entity’s site.

See: Resources for Agents and Brokers in the Health Insurance Marketplace

Reflecting on the above, is number one or number two consistent with what you, the broker, have been doing during the last few months of OEP? Or did you have to modify the way you were helping your clients due to a change in the way your current technology platform was working? If number one and/or number two above follows your process, then your technology partner has been conscious of their product design and eliminated any compliance risk for you and your clients.

For more information on working with a technology partner that offers brokers a CMS compliant platform to manage group and individual business, end-to-end management of quoting, enrollment, and administration and more.

These days everyone looks to technology, particularly apps, for consumer information and purchasing. Considering this and the exploding technology space for HR and benefits enrollment technology, I’m asking—can technology replace the role of the health insurance broker in assisting individuals and employer groups with their insurance purchasing decisions? In an Employee Benefits News article Ray Mara, SVP of Group Products at Guardian says “Employers rely on their benefit brokers not only to advise them on plan offerings and design, but increasingly on the service administration of those programs.” Keeping this in mind, let’s do a quick review on the value of using a broker to make insurance and benefit purchasing decisions:

  • Tailored Recommendations – Brokers work with their clients to make specific recommendations tailored to meet the client’s needs. For an individual client, they will discuss budget, goals, ACA requirements (potential subsidies available), and any specific family needs. For an employer client, they will review the organizational culture, approach to benefits, budget, compliance requirements, etc. Coupled with their industry knowledge they are well positioned to make a best-fit recommendation.
  • Market Intelligence – A broker understands their geographic market and the insurance carrier offerings. They can sit with their clients (or instruct them online) on comparing carriers, coverage details, and costs. They can easily point out the differences, identify problematic or beneficial areas, and help their clients analyze these differences, leading to stronger recommendations.
  • Relevancy – A broker with an existing client relationship has the ability to periodically review plan designs and cost to ensure their recommendations remain relevant to their clients’ situation.
  • Client Advocate – When a broker has relationships with their clients, they become a natural advocate for when issues may arise with insurance companies.
  • Enrollment Support – Additionally, for employer clients, the broker can take an active role in communicating benefits to employees and supporting the employees during Open Enrollment or throughout the year.

Considering the above, do we actually believe it’s possible for technology to replace the broker relationship? I think not.



Health insurance plans, and other insurance-related products are complex and it is ever increasingly important to make the right choices. Sure, decision support tools can be built into technology platforms to assist with filtering a multitude of plans for a consumer to choose. However, the personal relationship with a broker and their knowledge of carrier products and the marketplace cannot be replaced.

Ideally we’d like to see technology products that promote a partnership with brokers. In a technology-supported partnership, the broker and their clients benefit from the efficiencies of an online insurance marketplace and enrollment system. Imagine having the expertise of a seasoned insurance broker aligned with a single technology platform that allows brokers and their clients to view plans, make choices, enroll, and review on an on-going basis. Brokers are here to stay and the technology to support them, and their clients, will continue to grow as an important part of the consumer purchasing process.

Relevancy, value addition, and guidance – these are keywords being used in the evolving broker market at existing broker businesses. The role of brokers is changing due to the onset of a benefits marketplace approach in individual as well as employer business. At hCentive, we have been at the helm of the change rocking the broker market, and we have been participating in discussions with our broker clients, and this is what we have arrived at.

Die Out or Mutate, but Decide Soon

Out of our roundtable discussion at our past hCentive xChange Customer Conference, this was the prime sentiment echoing across our participating broker clients – brokers are in a dire need to evolve with the market or face extinction. With the new benefits marketplace exchange strategy making inroads, the traditional role of brokers is losing its charm and brokers need to evolve with the role to present better value to customers.
To compound the challenge, brokers need to adapt to the market’s speed, and that means adjusting with market change velocity. Die out or mutate, but take a quick decision to stay competitive in the market.

Right Engagement is Key to Retention

On the engagement front, brokers have made strong headway, but almost all our clients agreed that things could be improved here. Currently, the majority of a broker’s focus is on engagement, but only a few brokers are doing things right. The focus needs to move away from regular, low-value stuff, such as sending birthday cards, to high-value engagement, such as guiding customers with knowledge about their insurance health plans and shopping over marketplaces. Brokers need to realign their automated engagement touch points to present value to their audience.
At the same time, brokers need to strategize their automated touch points in a way that they are not the default authority whenever their clients have questions or issues. The strategy needs to be a combination of self-service and engagement during enrollment and renewal processes.



Leverage Knowledge and Exchange Familiarity

With exchanges and carriers, brokers have an advantage that is unprecedented – their knowledge base and exchange familiarity. From this standpoint, brokers will have a continued, renewed role to play, given that they sustain their knowledge and deliver it through all their engagement channels.
In this task, exchange familiarity will give them another advantage, and all of this will ultimately come together for their benefits marketplace strategy.

Rely on Multiple Product Lines for Continued Payout

With exchanges running the show, brokers cannot distinguish against their competition through offerings or price. The exchanges have taken over that role, and brokers need to up their game for continued payout from the market. Combining their knowledge vantage point with multiple product lines, brokers can arrive at a solid strategy that lets them establish new value in the evolved market without sacrificing too much of their commission. In short, if you want to continue being competitive in the market, you need to rely on multiple product channels and use your vantage point for lasting growth in the market.

About 6 million members enrolled in their benefits on a private health insurance exchange for the 2015 plan year, continuing an adoption trend with more than 100 percent annual growth since 2013. The mid-size employer segment of 100 to 2,500 employees is driving initial growth, which is projected to double again in 2016 to 12 million employees (source: Accenture analysis). The promise of choice, cost savings and customer experience dominate the trend-lines on private exchanges but innovation really holds the key to sustained adoption and growth.

Fidelity Investments® today announced the launch of Fidelity Health MarketplaceSM, which offers one-stop access to integrated health, wellness and financial benefits to small and midsized businesses and their employees (source: Fidelity press release). Fidelity Health Marketplace offers employers the ability to choose from an extensive network of national and regional medical, dental, vision, and life benefits in addition to tax-savings options and access to wellness tools and programs. The Marketplace uses hCentive’s WebInsure™ Benefits private exchange technology platform, which offers an integrated enrollment experience and pre-configured connections to a network of insurance carriers and a range of health and other ancillary benefits.

Integrating financial solutions with health and wellness offerings through a private exchange delivers a real “health & wealth” proposition. More importantly, it exemplifies continuous product innovation and expansion with both insurance and non-insurance products to meet the unique and specific needs of employers and employees. For example, hCentive recently added a socially responsible credit program that offers low-cost employee loans with 0% financing. Previously, employees would not have had access to such a program with payroll deductions, but our private exchange solution easily allows them to bundle the product if they need to manage high or sudden medical costs.

Innovation, coupled with digital footprint, branded storefront and sophisticated decision support tools for employees will bolster brokerages and financial services firms’ ability to differentiate from established competitors and emerging tech upstarts; provide employees with intuitive user interface and experience to shop, select and enroll in benefits; and, simplify and standardize onboarding of carriers and benefits products. That is what will really drive demand for private exchange solutions from employers in 2016 and beyond. Tell us what you think.

Experience the new Fidelity Health Marketplace at https://www.fidelityhealthmarketplace.com/.

Learn about hCentive’s WebInsure Benefits platform at https://www.hcentive.com/products/benefits/. Contact us to see what hCentive can do for you!

The federal government became states’ technology vendor when it enticed four states to use HealthCare.gov by initially offering it for free, while underpricing HealthCare.gov compared to its actual costs for another 34 states.

Four states including Oregon and Nevada tried to stand up their own health insurance exchanges, hiring technology vendors that pushed for expensive custom builds with no proven track record for success. When those vendors failed to deliver functional exchange technology, the four states ditched their faulty software and began using HealthCare.gov – which at the time was offered to them free of charge. By offering HealthCare.gov to those states as a replacement technology solution, the federal government effectively became their technology vendor – enticing states to join with a two-year free trial period.

As the four states used HealthCare.gov at no cost, another 34 states paid federal technology use fees that were intentionally underpriced compared to HealthCare.gov’s actual costs. The federal government intends to continue underpricing HealthCare.gov in these 34 states through December 2017 – even though the Affordable Care Act required all exchanges to be self-sustaining by January 2015. As long as HealthCare.gov continues to be underpricing its services compared to their actual costs, states can’t benefit from private sector vendors who can compete favorably with HealthCare.gov to provide states better functionality and a pricing structure that encourages enrollment success. But this situation is changing in four states.

States faced with HealthCare.gov’s actual costs are given a fair opportunity to consider financially sustainable alternatives for their state marketplaces.

In November 2015, the federal government announced that HealthCare.gov intends to charge new federal technology use fees in Oregon, Nevada, New Mexico and Hawaii that are “reflective of [HealthCare.gov’s] actual costs.” Faced with the full costs of using the federal exchange, Oregon began a procurement for a more affordable state marketplace solution. Nevada is in the same situation and is considering a plan to replace HealthCare.gov with a proven technology vendor whose pricing structure is aligned with enrollments rather than health plan premiums.

Faced with HealthCare.gov’s actual costs, Oregon, Nevada and New Mexico reacted in similar ways by asking for a phase-in of the new federal technology fees and a fairer method for determining fees owed to allow for financial stability for the marketplace and carriers. Nevada asked that HealthCare.gov – because it is now collecting vendor fees – act more like a private technology company than a government agency. Nevada rightly expects HealthCare.gov to partner with states to ensure marketplaces have accurate and up-to-date enrollment information, and that it serve as a single source of truth for all of the marketplace’s health plan enrollments.


Everybody wins when HealthCare.gov is priced for all states at its full and accurate cost.

While the four states facing HealthCare.gov’s actual costs prepare to pay the new technology fees or avoid them by switching vendors, the outcome for the remaining 34 HealthCare.gov states is less certain. HealthCare.gov continues underpricing its technology fees in those states, and they can’t be certain how long this will continue under the next administration. Taking action now will allow all states to ensure their citizens can access affordable health coverage for years to come. Because HealthCare.gov must obtain permission from the White House’s budget office each year it wants to continue underpricing for its services in those 34 states, a new administration may be less amenable to continuing the budget shortfalls associated with HealthCare.gov – which amount to $621 million in 2016 alone.

The state exchange market has matured since those technology vendors failed to deliver functional and sustainable technology in Oregon, Nevada, New Mexico and Hawaii. Private sector alternatives to HealthCare.gov are available and can be a significant cost benefit to states. Moreover, these private vendors can work with a state to configure the exchange in ways that increase enrollments by recognizing that states each have unique needs and programs.

Now that Commercial-off-the-Shelf (COTS) products support the exchanges that are operating smoothly and effectively in states including Massachusetts and Arkansas, states should be allowed to benefit from private sector vendors such as hCentive competing with HealthCare.gov on a level playing field – in every state. Tell us what you think.

Read hCentive’s comments on the federal government’s plans to continue undercharging for HealthCare.gov in 34 states.