By Wayne Sakamoto
What is a private health insurance exchange? This has been a hot topic in the health insurance market but, despite the amount of media coverage surrounding it, a single definition of a private health insurance exchange has not really been established.
Most of the coverage has been focused on private exchanges being offered by benefit consultants like Aon Hewitt, Mercer and Towers Watson that support the large employer-based health community – primarily by using a single major medical carrier solution. Then you have multi-carrier offerings with the ancillary and voluntary benefit offerings such as dental, vision, life and disability. Some of the players in this market include Liazon, Ebix, Array Health and hCentive. And then you have benefit administrators such as BenefitFocus, Benefit Connect and others who offer private health insurance exchange platforms for large and small employers. In general, these firms are focused in the very competitive large group health market.
Private health insurance exchanges also can be used to serve a membership-based market, such as Sam’s Club and Costco, by offering individual health insurance to its members. But associations are another growing market for private exchanges. In this scenario, the association offers its members access to its branded private health insurance exchange for members who do not have access to an employer-based health plan. This scenario also applies to small companies which recently dropped their employer-sponsored health insurance or who did not offer such coverage to begin with. And it is in this scenario that insurance agents are finding opportunities to work with affinity groups while staying within the confines of the individual health market. These individual private health exchanges can be customized for any specific group or association. There has been a rush to build many of these client-specific private exchanges for the 2016 annual open enrollment period.
Health insurance agents marketing individual health insurance coverage have been offering their client base access to their private health insurance exchanges using technology solutions offered by companies such as Norvax and Quotit. These vendors have been developing “quote engines” for their agent and agency clients offering both on-exchange and off-exchange health plans for consumers.
Agents have several vendors to consider in building and marketing private exchanges for their group, association or individual clientele. One example is Health Plan Services which offers a private exchange solution for agents who wish to have a dedicated call center where they can direct their clients and prospects, and take over servicing the agency’s individual market. HPS integrates a full service exchange – merging both technology and human element of customer service, the perfect extension of what most agents are looking for.
After an exchange solution is selected, agents will need to move that solution to a mobile compliant environment. Google changed their algorithm earlier this year to launch a new mobile Web crawler to improve the rankings of websites that are mobile friendly. If your website and private exchange offer a platform which can be accessed via smart phones and tablets, then your overall organic search rankings will improve, especially for those health insurance clients who are “Googling” you on their mobile devices. In fact, many of vendors who offer group and individual private exchange solutions also offer mobile-compliant enrollment systems for agents and their clients. So this is good news.
The final advice here is to work with a vendor offering both on-exchange and off-exchange plan offerings on one single consumer platform system to simplify your consumer’s online shopping and purchasing experience. This mainly applies to federally-facilitated exchanges in states that did not set up their own state-based exchanges. One such system generating attention this past year is HealthSherpa, which offered a tool for agents to assist subsidy-eligible clients who were looking for health insurance coverage on the exchange. And this year the new buzz is about Rabbitt App. This Web-based enrollment solution is set up for agents to allow their clients and prospects to identify both which on-exchange and off-exchange plans are available in their market and best suit their needs.
The 2016 open enrollment period is coming soon – it begins Nov. 1. This is the time for agents and brokers to get their game plan squared away with their favorite vendors, while providing a seamless and simple way of processing their client’s applications through the initial 45-day window of the open enrollment. Remember the deadline for submitting an individual health insurance application will be Dec. 15 for a Jan. 1, 2016, effective date. For all other consumers, they have through Jan. 31, 2016, which is the last day of the annual open enrollment period to obtain individual health insurance. This is the last day to submit an application while avoiding the individual mandate penalty.
You can build and offer a private health insurance exchange for your individual health clients. This is a great opportunity for all agents or agencies in the individual health insurance space. It also is something to consider for those who haven’t yet recognized the opportunities offered through a private exchange. Don’t forget to offer your ancillary benefit offerings – dental, vision, accident, cancer plans – as well. Medicare products also may be offered on your private exchange.
Wayne Sakamoto is the president of Health Insurance Interactive, based in Naples, Fla., and is a member of the National Association of Health Underwriters. Wayne may be contacted at wayne.sakamoto@innfeedback.com.
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