For many agents, things were a complete mess at first — for you as well as for your clients. However, as the program has gotten up and running, things have started to improve for insurance buyers and agents.
Today, a lot of agents are finding that insurance in the post-Affordable-Care-Act world isn’t all bad. It isn’t all great either. But there’s plenty of opportunity both for individual sales commissions as well as more lucrative small business clients.
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If you’re not sure what to make of this colossal new government program or how it could be an opportunity for your insurance sales business, read on — this post is for you.
Obamacare and Insurance Agents
Some people wondered if insurance agents would go the way of travel agents. With customers able to shop and compare prices and options, would agents still have anything to do.
Obviously, that thinking doesn’t take into account how complicated choosing the right insurance can be. It’s a more long-term purchase than choosing an airline or picking a bed and breakfast.
Add to the complexity of the choices the regulations, new marketplaces, and technical glitches and insurance agents suddenly became very popular. There’s definitely a place for agents to help new clients choose the best coverage, whether that’s through Obamacare or private insurance.
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How to Make the Most of Open Enrollment in 2016
The Health Insurance Marketplace open enrollment for 2016 opens November 1st. That’s not tomorrow, but it’s not long off either. Now is a good time to start thinking about how you’ll make the most of that three-month open enrollment period. By January 31st, the regular signup window for 2016 will be over.
People who aren’t already covered are going to want coverage for next year. The fee for an individual mandate gets real in 2016, amounting to:
- 2.5% of your household income, or
- $695 per person (plus $347.50 for each child under 18), whichever is greater.
That’s a huge jump up from 2015’s penalty fee, which was capped at 2% of household income or $325 per person ($162.50 per kid), whichever was greater.
For those who could afford insurance, but didn’t buy it and don’t qualify for an exception, it’s going to get harder to justify paying a fee rather than buying the coverage. Uninsured individuals aren’t the only ones who might be shopping for coverage in 2016.
What to Do in the Off-Season: SHOP
Open enrollment isn’t the only part of the year you’ll be able to assist Obamacare-seeking clients, however. In the off-season, many business owners will be considering their SHOP options.
By SHOP, I don’t mean that it’s time to grab your wallet and head to your nearest strip mall. Obamacare’s Small Business Health Options Program (SHOP) has open enrollment all year long. Businesses are still being phased into this program.
This year, it’s small businesses with 50 to 99 employees. Those businesses will be required to provide coverage to their full-time workers in 2016 or face so-called “employer responsibility payments.” These businesses account for nearly 2 percent of all employers in the country.
Most businesses with more than 100 workers already offer some form of coverage to some of their employees, but in 2016, the federal requirement jumps from mandated coverage of 75% of full-time employees to 95% of those full-time employees. These businesses, which account for another 2% of all U.S. employers, also face a penalty if they don’t provide that coverage.
So not only do individuals who’ve been putting it off have a good reason to get coverage this year, but 4% of businesses also need to up their coverage for eligible employees or face financial consequences.
Referrals Are Still an Opportunity
Beyond your regular insurance business, you have an opportunity to pick up new business through referrals for individuals and businesses needing that coverage to satisfy the ACA mandates. You might even find yourself fielding unexpected questions and referrals from you current customers or even your neighbors.
In some ways, health insurance is more difficult to purchase post-Obamacare than before. ACA sites, such as eHealthInsurance.com and GetInsured.com, have added to customers’ choices. But making coverage decisions has gotten complicated for individuals.
Businesses have it even worse — composite rates for an entire workforce are out. Instead, businesses have to deal with individual rates for each employee, what amounts to an administrative nightmare.
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Even the smartest insurance shoppers don’t want to navigate such complexities alone. They’re actively seeking out the advice of insurance professionals who can help sort through all the options and choose coverage that’s the best fit.
Obamacare Isn’t Amazon for Insurance
Another panicked worry I’ve heard: Moving insurance buying online could be like what happened to video rentals and booksellers. Not so.
Insurance sales have been online for years. Some parts of the transaction may have only recently moved online, but agents and brokers aren’t newbies when it comes to plying their trade online.
Video rental corporate behemoths and mom-and-pop bookstores lost out to digital rentals and online sales because they weren’t online, weren’t interested in getting online, in short, they weren’t interested in change.
Every insurance professional knows there are plenty of ways to generate leads and close sales online. We’ve been doing that for years. Plus, insurance professionals are no stranger to change. Our industry changes every year, sometimes several times a year. If you don’t adapt, your business doesn’t survive. But we’re survivors, we’re ready, willing, and able to adapt to keep our businesses growing.
Obamacare is certainly a change to the way customers buy insurance, but it doesn’t have to be a negative for agents. There’s always an opportunity to sell if you’re able to learn and adapt to the new playing field.
How about you? What other changes has Obamacare brought to your insurance business?