Insurance uncertainties problematic


The election caused some employers to delay decisions about next year’s employee health benefits, but the waiting isn’t over yet. There’s still the Michigan health insurance exchange, which is under wraps until Nov. 16, when Gov. Rick Snyder has to submit it to the federal Health & Human Services agency in Washington, D.C., according to Robert Heintz of the Lighthouse Group.

“January 1 of 2014 is a key date,” said Heintz. That’s when the state health insurance exchanges and individual mandate components of the Patient Protection and Affordable Care Act are scheduled to take effect.

Heintz, a registered health underwriter, is a vice president at Lighthouse Group, a statewide insurance services firm with several offices in West Michigan. He heads up the employee benefits consulting services, which has more than 1,000 client companies.

Heintz said some employers have already been working with Lighthouse for the last six months trying to evaluate how PPACA will impact their future employee health benefit plans. Other companies had been holding off until the election.

The economic uncertainties over the last three years generally have left employers taking “a more conservative approach in how they look at their business in general, in expenditures and expansions,” he said.

As to a specific focus on possible changes in health benefits, Heintz said he thinks there has been a “big focus” on what he termed “consumer-driven health care products” such as HSAs and high-deductible plans, as well as wellness initiatives to keep employees healthier.

Will Lighthouse Group and its clients be interested in what Michigan files as its operating model for a health insurance exchange?

“Yes, we will,” said Heintz.

Some states are implementing their own health insurance exchanges as allowed by the federal PPACA, but states that try to ignore the exchange requirement will have the feds doing it in their place, whether they like it or not. Michigan House Republicans refused to approve the Senate bill to create a Michigan exchange, which forced Gov. Snyder to pursue a federal-state exchange partnership. Health insurance under that will become available in January 2014.

Belmont-based Innovative Benefit Services is one of the smaller employee benefits consulting firms in the region with just five employees, but president and founder David Lee Cobb expressed the same concerns about PPACA as the large consulting firms.

“I think it’s a very big concern,” he said.

The first concern regards “the unknowns” pertaining to options and benefits available, “as well as the pricing of those,” said Cobb.

A business owner could be faced with choosing to maintain his or her relationship with a private consultant, or moving that business to the exchange because of some kind of government credit.

“We don’t believe you are going to have — as we understand it — the same choices, the same service, the same value the agent provides on a daily basis (now),” he said.

He has heard there will be two exchanges: one where there is no agent and one where there is an agent.

“The question is, will it be a competitive market? Will agents want to work in that realm and will they be compensated fairly enough for their time and efforts?” said Cobb.

Cobb said the insurance industry in Michigan believes about 90 percent of the business is through Priority Health and Blue Cross-Blue Shield of Michigan. He said he understands those two companies have been approved or appointed to be part of the exchange and he has heard of no other carriers being involved.

“There’s only four or five other states worse than Michigan when it comes to health insurance, for being competitive” said Cobb. He said one hears that the national average increase for health insurance premiums is 7 or 8 percent — but not in Michigan.

“Our clients have been hammered with 24 to 25 percent increases for the last three years on their Priority Health plan,” he said. And when those same companies seek quotes from BCBSM, he said, nine out of 10 find out they are better off going with the Priority Health increases.

“We’ve seen them up 80 percent more than they’re currently paying” to Priority Health, he added.

As for PPACA, “the snowball, so to speak, is rolling down the hill,” said Cobb, especially in regard to mandates on what insurance companies must now cover, such as a policyholder’s children through age 25. He said a 25-year-old daughter married to a successful man with insurance could still be added to her parents’ employee health insurance coverage.

“I’m not sure how this will be a successful process or program,” said Cobb, “and I’m not suggesting that the system is not broke. We need something different.” But he added that “when government gets involved to this extent, and in control of it, it will never be anything more than an expensive proposition that many will pay for and the minority will benefit from,” he added.

Cobb has been consulting and advising businesses as well as individuals in employee benefits and estate planning in West Michigan since 1990. He is an Advanced Chartered Benefit Consultant, among many other credentials. He formed Innovative Benefit Services in 1999, and also operates Innovative Insurance Advisors and Innovative Capital Management.

Lighthouse Group has 32 employees in its employer benefits division. The company’s total employment is more than 200, with others assigned to its business lines of insurance, personal lines of insurance and title insurance. There are about two dozen Lighthouse offices, mostly throughout the western half of the Lower Peninsula but some in the Port Huron and Grand Blanc areas.

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