When those in the know don't know
Benefits firms face questions about health insurance reform
Massachusetts health insurance reform may be confusing to business owners, but insurance agencies that help manage plans for businesses surely have a handle on what's going on, right?
Well, not really.
One of the problems, said Matt Hollister, president of Clinton-based Hollister Insurance Brokerage Inc., is that the new rules aimed at making sure all Massachusetts residents have health insurance apply differently to different companies. For example, businesses with fewer than 10 employees are affected in ways companies with 11 or more aren't, and the differences aren't always clear.
"The law hits on so many different areas, it's hard to figure out how it affects [any one] company when every single company is a little different," Hollister said.
What's going on?
Adding to the difficulty is the fact that even some Massachusetts insurance experts aren't yet familiar with the lengthy new set of rules. Even with the Commonwealth Choice enrollment period open as of May 1, Hollister said, many people he deals with are still in the dark about the nuts and bolts of the practical side of health care reform.
"Every time I meet with my carriers, I ask ‘What's going on? What are you doing?'" he said. "Most of the time, they don't know. They're just getting training or scheduling training."
The gray areas in the reform law mean that insurance agencies in the region are scrambling to find answers for their clients, and find the best ways to communicate those answers.
Worcester-based Advantage Benefits Group turned to a blog – called The Benefit Watch at www.thebenfitwatch.com as a way to provide small business owners with answers.
"Today, small business owners are struggling with rising insurance premiums," Vanessa Costa, a principal with Advantage Benefits, said. "Plus, with all the changes, they need to have a partner – someone on their side – to help them navigate and assure they can effectively communicate with their employees."
As some of the new regulations' most important deadlines near, employers seem to have a lot of partners. Across the financial services spectrum, advisers are struggling to get their often-overwhelmed clients the best information in time to ensure compliance.
"A lot of employers we have come across are not compliant," said Michael Hanley, the president and CEO of Worcester-based FMG Financial Services Inc. "If they're not in line to do that, that's going to be a problem for them. I think they're just overwhelmed with what's involved with this. [They're wondering] how is this going to work?"
Signed into law last April by then Gov. Mitt Romney, the mandatory health insurance program is truly coming to a head more than a year later. The Commonwealth Choice program, designed to cover largely self-employed individuals with incomes of more than $29,412, was launched on May 1 and will go into effect July 1.
Pressing concerns
In the meantime, consumers are trying to match themselves with one of the seven health insurers approved by the state's Commonwealth Connector, and business owners are scrambling to ensure compliance with the new regulations.
Most pressing for small business owners at the moment is the need
for a HIRD (Health Insurance Responsibility Disclosure) form (essentially a fact sheet for companies with more than 10 employees) and the implementation of a Section 125 plan, which allows employees to buy insurance from state-approved brokers with pretax dollars. But some employers don't yet have Section 125 in place, some know it by a different name and some think they're compliant, but aren't.
Hanley's FMG Financial Services is offering to prepare clients' Section 125 forms at no charge. He said some companies are charging as much as $1,000 for the "very simple" process.
Hollister has taken to sending out periodic e-mails to clients when new information becomes available. Few employers, he said, are capable of simply reading the new regulations and interpreting them for themselves.
"What I found is that it's necessary to actually go and meet with each company to tell it specifically what they need to do and how it might affect them," Hollister said. "It's very difficult for someone to just read it. Even if they understand the legal issues, they might not fully understand the ramifications to their health plan."
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