y the time the next renewal season rolls around, many employers may be missing the “good old days” of double-digit premium increases. The
B
pandemic, though not officially over, is in what Dr. Anthony Fauci has dubbed a “transition phase,” wherein nationwide lockdowns and mask mandates are moot. But it will be a while before we see the complete fallout of the past few years, which will likely include supply chain issues, disruptions of Americans’ lives, and the full impact of inflation.
As we stop to survey the damage, the latest BenefitsPRO Health Care Survey shows an industry that remains slow to change, though we expect the next year could tell a different story. This year’s survey included nearly 300 respondents, representing a mix of broker owners (15%), broker employees (13%), general agents (19%), consultants (23%), carriers (6%) and others. Their experience ranges from small groups to national accounts, and their agency size runs the gamut from small (35% have between 1 and 5 employees) all the way to behemoth (21% have more than 1,000 employees).
Let’s take a look at some of the key takeaways from this year’s survey.
2022 Health Care Survey
The results of this year’s Health Care Survey show a system still holding strong despite years of turmoil. But will the weaknesses soon be exposed?
By Emily Payne
Design by Chris Nicholls
A stagnant system
Many of the consistencies found in this year’s survey are the result of concerted efforts to stabilize the health care system. Uninsured rates have been holding fairly steady since the start of the pandemic, though where individuals get coverage has changed, with many shifting to ACA or marketplace coverage in response to government incentives.
Regulations over the past couple of years have been intended to improve the system, but according to our respondents, the result has been underwhelming. Individual coverage health reimbursement arrangements (ICHRAs) and the American Rescue Plan Act received the highest marks for helpfulness among our respondents, while the Consolidated Appropriations Act and Broker Compensation Rule have had little to no effect. These regulations may just need more time to be impactful, but more than a year after its unveiling, the majority of respondents (75%) say the price transparency rule has still had no impact on their business.
One positive area becoming less of a concern: 41% of respondents say the pandemic will have little to no impact on their business going forward, while 13% say it will have a significant impact. Last year, 17% feared a significant impact and just 24% expected minimal impact.
How have the following recent regulatory changes to health care affected your business?
Significantly helped Helped a little No effect
Hurt a little Significantly hurt
Association
health plans
Broker Compensation
Disclosure Rule
Individual-coverage health reimbursement accounts
Price Transparency Rule
American Rescue Plan
Consolidated Appropriations Act
What is your opinion of the broker compensation disclosure rule so far?
How has the rule impacted your business and clients so far?
Business as usual
Meanwhile, half of brokers expect no changes in their business in the next five years, whereas 25% will be eyeing retiring agents to acquire a book of business and just 6% anticipate they will leave the business.
The vast majority of brokers did not experience a significant drop in coverage among their accounts, though small groups saw the biggest hit to health insurance in 2021, with 45% of respondents saying between 1%–24% of their small-group accounts dropped coverage. In 2022, the majority of respondents (60%) expect coverage levels to stay the same, while 20% expect to see a small increase and 12% a decrease.
While the health care industry itself may be slow to reform, benefits advisors have shown much more flexibility to adapt to the changing world—when they need to. When it comes to selecting vendors and products for their clients, brokers have it down to a science. When choosing a health insurance carrier, network breadth and strength are once again the top factor, followed by price and service.
And after an abrupt and severe disruption, the process of enrolling employees seems to have settled into a new post-pandemic normal, with online electronic enrollment tools topping the list. Surprisingly, just 54% of respondents say that more than half of their clients are using enrollment technology.
As for how they operate their own businesses, brokers are feeling pretty good. A quarter of respondents in this year’s survey say that more than half of their compensation currently comes from fees, and 33% expect that will increase in the coming year. What’s more, 42% expect their average compensation to increase this year.
Which of the following would you say is likely to happen over the next five years?
My organization will acquire or merge with another broker/agent organization
My organization will buy out the book of business of a retiring broker or agent
My organization will be acquired by another broker/agent
My organization will exit the health insurance brokerage business
None of the Above
20%
26%
12%
6%
50%
With unemployment levels hovering at historically low levels, employers are unable to take the same cost-cutting measures they might once have utilized to combat increasing health care costs. Instead, they’re taking a closer look at their benefits to see which are most impactful.
Nearly three-quarters of respondents (74%) see an opportunity to grow ancillary insurance products this year (a small uptick from last year’s 70%). What’s more, 58% of respondents either somewhat or strongly agree that they have positioned voluntary benefits more prominently in their presentations.
The usual suspects—dental, vision, life and critical illness—continue to dominate business, but student loan benefits, pet insurance and fertility benefits all saw significant increases year over year. The latter two attest to a growing focus on family—though the definition of family may be different for many employees.
When selecting ancillary services, price is the top priority, followed by a hassle-free broker experience and breadth of product options. This is a bit of a departure from last year, when a hassle-free experience topped the list, followed by price.
Voluntary expansion
Increasingly, employers are turning to new solutions to combat rising health care costs, including self-funding options. Just 2% of respondents expect a decrease in self-funding in the coming years, while half expect some level of increase and 46% expect it to hold steady. Respondents with no self-funded business are on the decline—just 20% of this year’s respondents say they have no self-funded accounts compared to 25% last year.
While they’re not all fans of government regulation or the Biden administration, respondents have a much more positive view of many health care innovations, including telehealth, data transparency and direct primary care.
Positive growth
One key area we’ll be watching in the coming months and years is mental health benefits. That option was added this year for respondents to select as an area of increased focus and jumped to the top of the list, with 55% of respondents selecting it. More than half of respondents (56%) say they currently offer mental and behavioral health services and expect to increase focus in the coming year.
A mental roadblock
Though this year’s survey results paint a picture of an industry that’s surprisingly stable in the face of chaos, we’re also getting a glimpse of cracks and points of weakness that may portend a tougher year ahead. One thing we can be sure of, though: Benefits professionals and their partners will be ready to minimize the impact with their years of experience and an ever-growing list of new tools and techniques.
On the brink?