In five days’ time a new era in healthcare will begin, when millions of people are expected to begin enrolling in public health insurance exchanges and applying for private insurance coverage online.

The web-based exchanges created by the Affordable Care Act are intended to make the process of buying health insurance much simpler and in many cases more affordable than it is today.

But what’s the role for benefit advisers and brokers in the post-exchange era?

First, let’s review the facts. According to a Kaiser Family Foundation report, under ACA:

  • People will be able to apply for federal premium tax credits to subsidize the cost of their insurance through the exchanges, as well as using a standard paper application or by dialing into a call center.
  • Plan options will be displayed based on where the consumer lives. A standard, short summary of coverage will be provided for all plans and will explain what benefits are covered and what costs—such as co-pays and deductibles—the consumer must bear.
  • Sample illustrations of how coverage would work for common medical events, such as having a baby, will also be provided. These summaries are intended to make it easier for consumers to sort through and compare plans based on the standard coverage elements they care most about.
  • For the most part, all insurers will be required to cover the same benefits, including some services such as maternity care and prescription drugs that are frequently limited or excluded from individual and family plans today.
  • Coverage will be standardized into tiers ranging from low-cost (bronze plans) to premium benefits (platinum plans). Deductibles and copays will vary from plan to plan, but all plans in a given tier will provide the same overall level of coverage.
  • In addition, the government has funded a small army of trained assisters, known as Navigators, to help consumers comparison shop and to answer their questions.

While all of this is exceedingly good news for individuals and families, what does it mean for benefit brokers? There are two schools of thought on this.
Some brokers have their doubts that the advent of the exchanges will bode well for them. In a widely publicized survey by Aflac this summer, 29% of the brokers responding indicated that they are “concerned about remaining relevant to their clients;” 45 percent said they are considering exiting the health insurance business altogether, and 51 percent are only “somewhat or not at all confident” about the future of their firm and their industry. 

But others, like Mark Gaunya, a principal at Methuen, Mass.-based Borislow Insurance, who blogged about the Aflac survey results last month for Employee Benefit Adviser, think the ACA presents important new opportunities for the brokerage industry. In his blog, he states, “The need for expert knowledge and insightful advice is increasing and 'Obamacare' is strengthening that need.”

Gaunya argues that “Employers need risk management advice and help engaging, educating and empowering employees about benefits so they can lower costs.” And also,” They need an expert in compliance and a partner who can keep them out of trouble with the law and all its requirements.” He concludes that “There is opportunity, you just have to know what it looks like and where to find it.”

Thom Magnan, CEO of United Benefit Advisors, an independent employee benefits advisory operating in 45 states, Canada and the United Kingdom, strongly agrees. “Given the complexity of ACA, the role of an advisor becomes even more valuable,” he says.

“However,” Magnan adds, “those brokers who don’t invest in their own education or resources surrounding compliance solutions will become extinct.” 

To learn more about what the ACA and the exchanges will mean for brokers and advisers, check out the following:  

A broker's new job under the ACA

Don't be the expert

Should brokers exit stage right?

 

 

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