The evolution of insuring small to mid size employers

We know the healthcare landscape has changed over the past decade. Employers face new challenges. Health plans have responded by overhauling product offerings. Benefits brokers and agents have brought expertise on the changes to employers. Managing these changes will help small-to-midsize employers better understand cost-effective coverage options for their employees.

Over the past decade, business owners have faced a myriad of changes. The workforce has been shifting; last year, millennials surpassed baby boomers as the nation’s largest living generation. Technology has been evolving quickly; today’s consumers are less likely to leave home without their mobile device than without their wallet. Employers are facing heightened consumer expectations; a more tech-savvy population is demanding anytime, anywhere engagement. While technology allows for increased service or faster response rates, it also brings added challenges, ranging from the need for better data management to increased competition and more.

The healthcare-related challenges employers face have also changed. More than a decade ago, health plan premiums were growing by leaps and bounds. Back-to-back, year-over-year increases of 30% or more were not uncommon. Small group employers, in particular, were struggling with how to compete by offering comprehensive benefits. To cope, some stopped providing dental and vision coverage. And many shifted more costs to employees.

All of this created an environment conducive to change. And in response, presidential candidates used their platform leading up to the 2008 elections to promote healthcare system overhaul. The passage of the Patient Protection and Affordable Care Act (ACA) two years later brought about sweeping changes in short order-changes that forever altered the health care landscape in the U.S. Employers today are still struggling to understand and interpret what the law means for their businesses.

The entire underwriting process changed too. Today more people than ever are able to find coverage through public exchanges and Medicaid. However, little, if any, cost relief has been realized. As the market landscape changed, carriers exited markets, and mergers and acquisitions reduced the number of players, leading to fewer choices for buyers. Products have evolved to meet changing regulatory requirements. Through it all, employers continue to struggle with offering the right benefit packages to attract and retain talent.

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