Sep 06, 2024
Navigating Compliance, Healthcare Costs, and the Role of AI
Optavise HR 2024 Benefits Broker Report Reveals Insights
For health insurance brokers, staying ahead of industry trends is key to maintaining relevance and offering value to their employer clients. The 2024 Benefits Broker Report from Optavise HR provides critical insights into the evolving landscape for brokers, highlighting the increasing focus on compliance, cost management, and emerging technologies like artificial intelligence (AI).
Optavise surveyed 70 U.S.-based health insurance brokers, representing the top 15 brokerage firms and discovered healthcare costs are no longer the leading market force driving brokers to add services and products. Instead, compliance now seems to be top of mind for most employers.
Let’s dive into the most important findings and how you can apply them to your brokerage practice.
Compliance Takes Center Stage
Traditionally, the rising cost of healthcare has been the top concern for employers. However, the 2024 Benefits Broker Report reveals a shift: compliance is now the dominant market force. As federal and state regulations around employee benefits continue to expand, employers are turning to brokers to help navigate these complex rules.
This is good news for you! And a heads up to be well versed on compliance requirements!
Why the shift? Non-compliance can lead to steep fines, penalties, and even lawsuits. It also impacts employee engagement and satisfaction, making it a critical concern for employers. In recent years, mandates like prescription drug data reporting and eligibility requirements have increased, prompting brokers to offer new solutions that address these regulatory challenges.
Key Stats:
- 69% of brokers say ever-changing federal and state mandates drive them to add new services.
- 94% of brokers report that their clients heavily rely on them for compliance support.
Takeaway: Offering compliance solutions is no longer optional—it’s essential. Consider bolstering your compliance-related services, such as helping clients stay up to date with reporting requirements or offering tools that streamline compliance processes.
Cost Control: A Continued Focus
Despite the shift toward compliance, cost management remains a significant concern. Employers still need help containing rising healthcare costs, especially in a world where many feel they’ve exhausted traditional solutions. Programs like prescription drug management, self-insured plans, and clinical advocacy services are popular cost-containment strategies. These programs help employees become better healthcare consumers, reducing overall spending.
Key Cost-Control Measures in Demand:
- Prescription drug management (77%)
- Shifting to/from self-insured coverage (68%)
- Clinical advocacy/navigation services (73%)
Interestingly, some cost-control measures like high-deductible health plans (HDHPs) have fallen out of favor, with only 19% of brokers reporting client interest in adopting HDHP-only options.
Takeaway: Focus on innovative cost-management solutions that align with client needs. Offer programs like prescription drug management or clinical advocacy to demonstrate value beyond traditional healthcare offerings.
Voluntary Benefits: A Growth Area
Voluntary benefits continue to grow in popularity, with 73% of brokers reporting that employers are adding voluntary products to their portfolios, up from 64% in 2023. These benefits allow employers to offer additional coverage options without shouldering the full cost.
Top Voluntary Benefits Added in 2024:
- Accident insurance (65%)
- Critical illness (63%)
- Hospital indemnity (49%)
Voluntary benefits not only offer flexibility but also help differentiate your services. Clients increasingly value products like pet insurance and identity theft protection, with rising interest in long-term care insurance due to the aging population.
Takeaway: Offering a diverse range of voluntary benefits can help you meet client needs while also expanding your revenue streams.
The Role of AI in Benefits Management
Artificial intelligence is making waves across industries, and health insurance is no exception. While AI isn’t replacing brokers anytime soon, it’s increasingly being used to streamline administrative tasks and provide more in-depth insights into healthcare spending.
According to the report:
- 70% of brokers believe AI will help identify cost-effective healthcare options for employees.
- 64% see AI assisting with deeper healthcare spending analysis.
- 62% expect AI to be useful in compliance audits.
Although AI is still in its early stages for benefits management, it has the potential to assist HR teams in making better decisions, simplifying compliance, and improving employee engagement through data-driven insights.
Takeaway: Stay ahead of the curve by exploring AI tools that can complement your services. While AI won’t replace personal client interactions, it can enhance the value you provide through efficiency and better data analysis.
Expanding Total Rewards Packages
Employers are also expanding their total rewards packages to stay competitive, with 59% of brokers citing mental health support as the top addition employers are considering. Other popular benefits include chronic condition support, wellness resources, and flexible spending accounts (FSAs).
As the workforce becomes more diverse and employee needs evolve, offering a well-rounded benefits package that includes mental health support, family planning, and wellness resources can help employers retain top talent.
Takeaway: Brokers should proactively recommend enhancements to clients’ total rewards packages, particularly in areas like mental health and wellness, where employee demand is high.
Adapting to a Changing Landscape
The Optavise HR 2024 Benefits Broker Report paints a clear picture: compliance is now a top priority for employers, while cost management and voluntary benefits remain crucial areas where brokers can add value. Additionally, AI offers exciting potential to enhance service offerings, but it’s not a replacement for the personal touch brokers provide.
As a health insurance broker, your ability to adapt to these trends will set you apart in a competitive marketplace. Emphasizing compliance, leveraging new cost-control strategies, expanding voluntary benefits, and exploring AI tools will allow you to better meet the needs of your clients and grow your business.
In this ever-changing environment, the key to success lies in staying informed, proactive, and flexible.
Amwins Connect is your dedicated partner, here to keep you informed, and equipped with benefits and services to help you prosper. Reach out to your Amwins Connect Regional Sales Rep today.
