LIFE INSURANCE BENEFITS SURVEY
GENERAL AGENCY: VIEW FROM THE TOP COMPILED BY THORA MADDEN
1. What are the most important market trends that agents need to be aware of this year in small or large group? Jennifer Lisanti, director of Sales, Beere & Purves: Both segments have been very flat for several years now. As a result, in large group where there is more flexibility, carriers are becoming more aggressive, which is leading to more movement from one carrier to another than we have seen lately. The biggest change for 2020 is the Department of Managed Health Care (DMHC) ruling requiring fully-insured small businesses to use small group rates and benefits at their next renewal on or after July 2020. There are a lot of small groups that currently get their benefits through large group trusts, etc. that will be forced to move to the small group market. This will be the largest membership increase to the small group market that we have seen in years. This will create a lot of work for agents but also a great opportunity for them to increase their small group book of business. The DMHC ruling may or may not have an impact on large group, depending how the loss of the small groups in the trusts affect the pool as a whole. Andre Todd, district general agent, Colonial Life: Small employers currently have an increasing issue facing them with the cost of healthcare premiums rising combined with a tight labor market. Small businesses are looking at
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all options to attract employees, and benefits are one way to remain competitive. A high percentage of employees for both small and large group employers are comparing benefits when making an employment decision. Large employers will likely see an increase of around 5% in the 2020 year for healthcare premiums. However, they still face the struggle of offering newer and more attractive employee benefits. Considering retention when making decisions about what type of benefits to offer will help most employers stay competitive. Kristine Petrosyan, VP of Sales & Operations, Dickerson Employee Benefits: In small group, we are seeing a trend in which carriers price their products more closely to encourage the purchase of higher-cost products versus lower-cost plans. In the most recent renewal cycle, we saw carriers routinely institute doubledigit rate increases for Bronze and some Silver plans, while their increases for Gold and Platinum plans tended to be in the single-digit range. And this occurred despite out-of-pocket (OOP) limits in the Bronze and Silver markets continuing to increase steadily per ACA allowance. Even as premiums have gone up, we’ve noticed the minimizing of both HMO and PPO networks. Additionally, legislation continues to impact compliance standards for employers. Being aware of these changes creates opportunities to ensure clients stay ahead of the game and avoid penalties attached to evolving regulations.
- CalBrokerMag.com -
MARCH 2020
