Friday, August 7, 2015

If Small Group Business Goes Away…Where Will It Go?


By Steve Davis - August 4, 2015

It might not disappear entirely, but the small-group market is changing due, in large part, to the Affordable Care Act (ACA). To help retain clients, some health insurers have launched administrative services only (ASO) products designed for increasingly smaller employers. Not long ago, few employers outside of the FORTUNE 1000 were self-insured.

Next month, Blue Cross Blue Shield of Kansas City will roll out an ASO product aimed at businesses with as few as 25 workers. The company also restructured its sales department in response to the changing market. Over the past two years, almost 5,000 small-group members have moved to individual plans, the vice president of sales told me during a recent phone interview. Self-insuring lets employers sidestep the ACA’s essential health benefits requirement and could be less costly than fully insured plans. But self-insurance won’t work for all businesses. A company with a young and healthy population might see lower costs, but a couple of catastrophic illnesses or accidents could erode any savings.

Since July 2015, sales staff in the small-group market has been split up into areas of expertise, such as ASO products or the individual market. When a broker needs more information about ASOs, for example, there is someone to ask. Under the new structure, small-group and individual markets are merged and are serviced by one of two sales teams. Rather than paying commissions to some internal reps for sales and others for renewals, commissions are now based on their entire block of business.
http://aishealth.com/blog/health-plan-business/if-small-group-business-goes-awaywhere-will-it-go?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=79471213

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