Why All Businesses Need an Insurance Broker

“Why do I need a broker?” This is a question that surprisingly gets asked more than you would expect.  In today’s society of consumerism, the internet, and “do it yourself” mentality, tied with the desire to save money, this is a valid question. I would ask in turn – would you go to court without legal representation? Of course not.  It makes financial sense to use a broker as in most cases, you do not get charged for their services. Typically brokers are paid by the insurance carrier, the one that you jointly decide best meets your needs as an employer.  More importantly, brokers protect your best interests as an objective third party. There is no specific financial incentive for brokers to decide on one insurance provider over another.

An insurance broker acts as an intermediary between you and your insurer, lessening the administrative burden for you and negating the need for you to weed through complex policy jargon. We bring over 200 years of training and experience and our insurance know-how, and our goal is to always find a policy that best suits your coverage needs at the best possible price. Brokers do the shopping and analysis on your behalf, saving you the time of plodding through quotes from various carriers and trying to determine the optimal solution. We provide impartial advice based on the client’s unique situation.

Some of the benefits of using an insurance broker are as follows:

  • We review, listen, and understand to what you are trying to accomplish
  • We search the entire marketplace looking for the best coverage at the most affordable price
  • Once we find the ideal coverage, we review and discuss with you the cost, coverages, and exclusions in simple language so there are no misunderstandings
  • We walk you through the appropriate paperwork and submit it on your behalf to the insurance company
  • Once we have approval, we continually assist and advise you throughout the year to ensure you are getting the most from your plan
  • We assist with issues like billing and claims questions
  • We have compliance experts who will deal with issues like healthcare reform and COVID-19 regulations, ensuring your policies pivot as necessary
  • Come renewal time, we are there to negotiate for you and handle much of the legwork involved

These are very important considerations for you to take into account when deciding if a broker is right for you. The alternative is to spend a lot of your own time educating yourself, taking away valuable time from your day job and family. Insurance brokers go through strict educational and licensing requirements and have significant knowledge in the industry. Our deep understanding of your local market and the players involved ultimately yield enhanced, cost-effective coverage for you.

All that said, it’s important to note that not all brokers are the same. Some have specialized services and products or are focused on specific markets.  For example, there are brokers with expertise in the property and casualty or life insurance areas but that just dabble in health insurance. Today some payroll companies are even offering employee benefit services as well but again, their bread and butter is payroll, not benefits. To offer an analogy – you would not go to a foot doctor to address a heart condition, so make sure your broker’s core competencies are the ones you need.

In summary, your insurance needs are best met by a broker who works for you and not by an insurance company, who have their own interests to look out for. Brokers yield more choices, usually at a much lower cost to you and your business. Unless you happen to be an expert in insurance plans, why risk the headache and lose the resources needed to do it on your own? Further, a consultative broker like Spring will take the time to truly understand your business so we can constantly be on the lookout for new and innovative solutions that will align with your objectives.

People are typically the largest investment a company makes. Taking care of those people through employee benefits is a niche area of your business, and you need an insurance broker who has the training and expertise necessary in today’s complicated and competitive marketplace. Spring’s approach to brokerage is collaborative and strategic, but we ultimately remove the legwork for you and ensure you have the best plan options available.

Tufts & Harvard Pilgrim – Will They Really Merge, And What Happens If They Do?

As many of you now know, on August 14th, Harvard Pilgrim Health Care (Harvard Pilgrim) and Tufts Health Plan (Tufts) reached an agreement to combine into a single company that would serve nearly 2.4 million lives in New England. Since the announcement, our team as been working to collect as much information as possible on the pending merger. We did not want to rush to judgement the day of the announcement, and instead have done our due diligence, speaking to carriers and lawmakers alike to get a full picture of what this could mean for our clients and the industry at large. Here is what we’ve uncovered.

Tufts & Harvard Pilgrim merger

 

The Goal

First, what’s in it for the carriers? What are they trying to accomplish? Primarily, they are looking for increased market share and membership. Currently Blue Cross Blue Shield has over 40% of the commercial market in Massachusetts, with 2.8 million subscribers. Tufts and Harvard Pilgrim follow with 12.6% and 12.4% of the market, respectively. By joining forces, the two would still follow behind Blue Cross Blue Shield, but by a much smaller margin. Their new size could allow them greater influence over hospitals, doctors and drug companies.

By expanding its coverage network to five states (CT, MA, RI, NH, ME), Tufts and Harvard Pilgrim will also be in a better position to compete with national providers like Aetna and Humana. Further, Harvard Pilgrim has been experiencing decreased membership numbers over the past few years, and this is their latest attempt, following the proposed merger with Partners HealthCare in 2018, to boost their subscriber base.

The new group plans to offer employer-sponsored plans, Medicare and Medicaid. Tufts, already a big player in the Medicare market, can build upon its footprint in this area. The two carriers have also stated their plans to innovate and use new tools to improve population health quality.

The Patient Experience

CEO of Tufts Health Plan, Tom Croswell, who would lead the unnamed unified organization as CEO, noted four areas that health plan subscribers in New England are currently struggling with:

  1. Affordability
  2. Access
  3. Quality
  4. Continuity (or lackthereof)

Croswell stated that by combining resources, the two carriers will be able to tackle each of these issues.

Will it Pass?

This proposed merger is far from a done deal. While leaders from both Tufts and Harvard Pilgrim have spoken out about their intent to use this partnership to alleviate healthcare costs for consumers in New England, many worry it could have the opposite effect.

Harvard Business School research shows that insurance mergers typically lead to higher premiums, and we know that the Aetna and Prudential merger of 1999 did in fact just that. When it comes to Tufts and Harvard Pilgrim combining, there are major concerns that consumers would be negatively impacted both through costs and the choices offered, which could be lessened as a result of the merger.

Details of the merger must now go through review by the Massachusetts Attorney General, Maura Healey, the Massachusetts Division of Insurance, and federal regulators as well. The state departments will be assessing whether the merger will disrupt access to healthcare for consumers, among other things. Governor Charlie Baker has said that any healthcare merger should result in greater transparency, lower prices and better outcomes for patients, so we do expect regulators to be looking at the full patient experience when considering the deal. Financial terms of the agreement have not yet been released, but those will also be assessed.

I personally don’t see this as an easy approval process or a slam dunk, but if it does pass, here’s what you can expect.

Looking Ahead

I believe that more competition is better for the consumer and with a limited number of carriers that offer health insurance in Massachusetts already, I don’t see how having less options will offer more affordable health coverage for consumers and businesses in the Commonwealth of Massachusetts.  Consumers and businesses will have fewer overall choices of insurance plans and, more than likely, higher rates.  Further, this could result in lower reimbursements to insurance providers, which could reflect in higher costs passed on to the consumer. Also, with these consolidations, there is always a possibility of minor disruptions due to incompatible systems for claims payments and enrollments.

If Harvard Pilgrim and Tufts do go through with the merger, it will be following another major merger in the New England healthcare market – that of Beth Israel Deaconess Medical Center and Lahey Health – which closed in May. This trend toward centralization and rapid expansion is an indicator of healthcare at the national level, where smaller players are finding it nearly impossible to remain profitable. However, there is something to be said for having regional expertise, which Tufts and Harvard Pilgrim could still keep even if combined.

No matter which way things end up, you can be certain that the deal will take 18 to 24 months to be truly approved, finalized and implemented. You can also count on our team at Spring Insurance Group being there to help you every step of the way – deal or no deal – to ensure you still have the best coverage at the best rates available, with minimal interruptions to your business operations.