Topic: Quoting

By Matt Leonard, Ideon’s Vice President of Carrier Relations

In recent years, brokers have flocked to third-party services to quote health insurance plans from multiple carriers. As a result, most carriers wanted to immediately tap into this new, growing distribution channel. They were quick to share rates and product information with external partners, making the downstream quoting process easy and accurate for brokers assembling employer proposals.

But not all carriers bought in. Holdouts chose to keep rates in-house, forcing brokers to obtain quotes directly from them. Their chief concern: a perceived black hole of visibility and analytics. Specifically, carriers worried they’d lose access to valuable information typically gleaned when brokers quoted plans via carrier websites and portals—e.g., which brokers sold what products (and where), what employer groups were shopping for new policies, etc.

Today, with a majority of health insurance carriers having made their plans and rates available to third-party quoting platforms, we can now see whether those early fears were justified.

Short answer: Carriers that embraced the “platform revolution” are being rewarded with a stream of high-quality data that can drive advanced analytics and turbocharge sales operations. In fact, their visibility into quoting activity on platforms is not all that different compared to if quotes are prepared on carrier websites. It’s truly a win-win—i.e., modern distribution combined with valuable insights.

Meanwhile, carriers that are not distributing their rates continue to miss out in two ways: limited distribution to digital sales channels and zero visibility into how—and if—their products are being quoted externally.

To understand why, let’s examine two scenarios.

1. Carrier relies entirely on in-house website or portal for quoting
   
   In the past, brokers logged on to each carrier’s website to get the quotes they needed to assemble a client proposal. That’s a lot of busy work for the broker, but it gave the carrier critical information. Location data, insights on which brokers are quoting which plans, and information about group sizes and quote-to-close ratios are all part of the typical carrier analytics package. And when they see quotes generated for potentially lucrative accounts, the carriers can assign sales representatives to help brokers to win the business.
   
   This may seem like an appealing option to carriers that want full control over where their products are quoted. And, understandably, they crave these in-depth analytics. But this mindset—control over distribution—is built upon a false premise. Third-party quoting platforms still add the plan and rate information of non-participating carriers, mainly by tracking down public filings and other sources.
   
   The difference? The data could well be incomplete or out-of-date, risking the possibility of inaccurate quotes appearing on client proposals. And carriers receive no information at all about how well their products are doing on downstream platforms and no leads on deals in progress.
   
   
2. Carrier engages with today’s platform ecosystem
   
   Today, nearly all brokers use quoting platforms to save time compiling rates from multiple carriers and building proposals. Most carriers understand this reality and have reacted accordingly. These carriers distribute their product information to quoting platforms to ensure rates and plans are represented accurately.
   
   At the same time, the participating carriers have access to a precise record of every quote issued, often specifying the individual broker, the employer group, and more.
   
   Carriers can use this data to build sophisticated analytics that can help optimize the effectiveness of their marketing campaigns and commission programs. For example, they can calculate the quote-to-close ratio across different brokers, client types, geographic areas, and commission rates. Carriers are also feeding the data they get from quoting platforms directly into their CRM systems. That way their sales team can monitor how well they are being represented by each broker in the market and react quickly to opportunities.

 

Today, most carriers clearly see the two main advantages in working with platforms: distribution and visibility. The good news for those only now seeing the light is that they can catch up quickly, i.e., they need not build relationships with platforms from scratch. Middleware vendors, like Ideon, act as one-to-many distribution partners for carriers, accepting their plan data in any format and sharing it throughout today’s modern quoting ecosystem. And because a middleware partner pulls in quote activity and analytics from many downstream platforms, carriers get all the visibility they need to make informed decisions.

What are the opportunities that non-participating carriers are missing? Consider the recent experience of one new Ideon customer, a major health plan in the South, that recently started using our solutions to publish their plan information to quoting platforms. Until then, this carrier had assumed that most brokers were looking up their rates on their website. They were shocked when they looked at the analytics we delivered to find that brokers, using third-party platforms, were quoting their plans 600+ times per month. Before Ideon, the carrier had zero insight into these potential new business opportunities.

Now that’s a black hole to be concerned about. Contact us to learn more!

New to ICHRAs? Download our primer for health insurance executives.

Individual Coverage Health Reimbursement Arrangements (ICHRAs) burst onto the employee benefits scene on Jan. 1, 2020, spawning a new paradigm in group health insurance that shifts the plan shopping and administration responsibility from employer to employee. Now, more than one year into ICHRA’s arrival, insurance carriers are increasingly interested in capitalizing on ICHRA.

To that end, Ideon recently hosted two webinars aimed at helping health insurers in both the group and individual markets understand how they, too, can join the ICHRA revolution. While most carriers are aware of ICHRA’s existence and the legislation behind it, we found that there are still several topics on which carriers have critical questions. In this blog post, we’re sharing, and answering, the most common questions we heard during our webinars.

Is ICHRA adoption among small groups more prevalent in certain geographic areas?
Yes, ICHRA adoption varies by state, and even by county. ICHRAs work best in areas with robust individual markets, affordable plans from name-brand carriers, network options similar to what employees find in the group market, and competitive pricing between individual premiums and their group-plan equivalents. Where’s the next ICHRA hot spot? Check out our interactive map to find rate-favorable states for small groups to shift to ICHRAs.

If the contribution is deemed unaffordable for the employee, can they go to the ACA exchange and receive a subsidy?
A key facet of ICHRAs is affordability. Specifically, large employers (typically those with 50 or more employees) must offer an “affordable” ICHRA or face penalties. Small employers, on the other hand, can offer either an affordable ICHRA or an “unaffordable” version. According to ICHRA legislation, an employer contribution is “affordable” if the remaining amount an employee has to pay for a self-only silver plan on the Exchange is less than 9.83% of the employee’s household income.

The ability to offer an unaffordable ICHRA is an opportunity for small employers. When a small-group ICHRA is “affordable,” employees are not eligible for government subsidies. If small employers offer “unaffordable” ICHRAs, employees can “opt out” and go to the exchange to get their premium tax credit, more commonly known as a subsidy.

How do you address the fact that individual plans do not generally have the same broad networks as group plans do?
One of the benefits of an ICHRA is that employees now have the expanded choice associated with the individual market, where they have more opportunity to find a carrier, plan, and network in which their preferred doctors and providers participate. Provider-centric plan shopping is an essential part of the employee decision process: about 70 percent of consumers, according to Ideon’s internal data, add their doctors as search criteria. When transitioning an employee to an ICHRA, it’s not necessarily about finding the broadest network, it’s about selecting the plan and network that best meets each individual’s needs.

How will ICHRA impact the role of the broker?
Group brokers have a critical role in the ICHRA process, from helping employers evaluate whether ICHRA is the best option for their company, to guiding employees through the individual plan shopping experience. Their role as essential advisors, trusted and valued for their industry expertise, will not change with ICHRA.  

Smaller groups already struggle to understand benefits. Are there tools to help them do the calculations around tax credits and ICHRA affordability?
Yes. Several digital platforms and exchanges have built innovative tools to help employers, brokers, and employees determine whether ICHRA is right for them. From digital affordability calculators to instant subsidy estimates, tech-driven decision-support tools are simplifying the decision process in year two of ICHRA. As an example, our partners Flyte HCM, Gravie, Savvy, and Take Command Health are platforms with ICHRA functionality.

Contact us to learn how Ideon helps carriers navigate the shift toward ICHRAs and provides access to new distribution channels via one central connection.