As Health Insurance Evolves, Traditional Brokers Claim They Still Have a Role
Are traditional health insurance brokers — the trusted, chatty advisers who are quick to show up at your door at the hint of a problem — becoming obsolete? In a recent post, we reported that Zenefits, a software company and online brokerage firm that claims to have automated much of what brokers do, seems to have alarmed enough insurance agents that last month, the insurance commissioner in Utah banned Zenefits from serving as a broker in the state. Meanwhile, embedded in the Affordable Care Act is the idea that health insurance plans ought to be standardized enough that ordinary people can choose among them on their own. What, then, is left for a broker to do? founder and chief executive of Zenefits, who says his clients lose nothing by signing up with his company. “The only thing that you give up is that we will not come in person. No golf, no steak dinners,” Mr. Conrad said. “We’ll run an open enrolment meeting for your employees, but we’re going to do that over video. What you get on the other side is that everything moves online, so there’s no more paperwork, there’s no more faxing; it’s all done via the system. Employees can make changes themselves.” Companies with at least 20 employees get a dedicated account manager at Zenefits; smaller businesses don’t. When it comes to finding a health plan, Zenefits will quote a price, instantly, for every plan available in the state. “A broker, it’s like work for them to go generate quotes,” Mr. Conrad said. “So probably, particularly if you’re a small company, they’re not going to go quote you everything. They’re going to go quote you five or six pretty standard options.” But is that winnowing such a bad thing? “If they’re providing 150 or 200 quotes, how is a client supposed to sift through all those without the experience of having been down that road? That’s where the broker comes in,” said Ryan Thorn, an agent in Jordan, Utah, and the president of the National Association of Health Underwriters, a trade association for insurance agents. Mr. Conrad said that a Zenefits account representative goes through the list over the phone to help the client choose a plan, but Mr. Thorn said that “would take hours and hours, and a client doesn’t have that much time.” Moreover, he added, “I know which of those carriers are strong right now and which have some glitches or some issues. Each quote has its own unique benefits. There are still some nuances between each plan, that you need people to guide you through.” Mr. Thorn said that he did not oppose Zenefits and that the Utah insurance commissioner, Todd E. Kiser, started his investigation on his own initiative, not at the behest of the industry. There is a place for Zenefits, Mr. Thorn said: “There are probably companies out there that really don’t care” about
having a personal relationship with a broker. “But what happens when there’s a claims issue that they cannot resolve? Is there somebody that they can trust locally to get that issue resolved for them?” A spokesman for Zenefits said that its customer support agents are trained to help clients with a variety of problems, including disputed claims. David Chase, health care policy director for the Small Business Majority, an organization that began as an advocate for health care law and now operates outreach programs to small businesses on behalf of several state exchanges, said that businesses trust brokers to make sense of the complexity surrounding health insurance. “It’s complex picking insurance for yourself and your family,” Mr. Chase said. “It’s even more complex for a business. A business has to take into account its budget, for one thing, you’ve got to be aware of all the different tax laws when you look at employer coverage, and then you’ve got to factor in the needs of all your employees and your dependents.” “If you’re a small-business owner, you know how to provide your product or service,” he continued. “But when it comes to health insurance, it’s a very foreign concept for them. They’re out of their element” — while brokers “do this for a living.” The health insurance landscape for small businesses is undeniably changing, in no small part because of the Affordable Care Act. Most obviously, the small-business health insurance, or SHOP, exchanges established by the health law could be seen as an effort, or opportunity, to supplant brokers: The exchanges were intended to allow businesses to compare plans from different insurers and then purchase a plan, or several plans. In theory, an exchange makes a broker irrelevant. [Source: http://boss.blogs.nytimes.com/2014/12/18/as-health-insurance-evolves-traditionalbrokers-claim-they-still-have-a-role/?_r=1]