Insights from Large Group Experts





Compiled by Thora Madden

Cal Broker reached out to a couple of industry pros for insight on the state of large group. The message is clear: take a step back, ask the right questions, listen, then deliver creative solutions. California employers are embracing innovation and the conversation centers on transformation of the traditional access model in bold new ways. Those who can articulate the changing landscape will be of real value to their clients.

CB: What are the most important trends affecting large groups in California? For example, do you believe the Association Health Plans (AHP) rule will have an impact on the large group market, particularly in California?

Michael Wolff, managing partner, Dickerson Insurance Services:

The most important trend that continues to affect large groups is the cost of healthcare products and services, particularly pharmacy. With regard to the AHP rule, I don’t think this will have any impact in California because the state will not permit establishment of AHPs at this time.

Rob Carnaroli, VP of Sales, Health Plan Products, Sutter Health:

California still enjoys some of the lowest average premiums in the country; however, with premium levels continuing to rise, consumer expectations for quality, value and convenience are trending high. The pressure is on carriers to deliver a greater value for the healthcare dollar, which is why we are seeing a shift to value-based care models. HMOs have never been more popular and the plans offering a seamless, integrated delivery platform are well positioned. Healthcare organizations are also ramping up investments in technology to enhance the member experience. Partnerships with innovative start-ups have the potential to completely flip the way healthcare is delivered in the near future. Additionally, we know there are many reasons why healthcare and Rx costs keep going up. A reliance on big data is gaining momentum for carriers to more effectively manage high-cost enrollees. Health plans have been slow to tap into data analytics, and I think it’s a smart way for carriers to strategically manage their resources.

Specifically, regarding the question about AHPs, currently California law does not allow large group plans to be sold to individuals or small employers through an AHP, so I don’t see AHPs making an impact on the large group market anytime soon in California.

 CB: We’ve heard from some producers that they are directly linking some groups to healthcare providers, in effect focusing on bringing healthcare to consumers rather than bringing health insurance to consumers (their words). Is this on your radar and what do you think about it?

Michael Wolff:

This has been going on for quite some time. It is just becoming more prevalent of late. Yes, we see that some direct-payment programs are beginning to take shape among very large employers. However, the very largest employers are not necessarily going to negotiate lower prices in a direct contracting arrangement because the carriers still have more

purchasing clout. California carriers also have been very successful with the Accountable Care Organization (ACO) model, bringing independent entities (carriers, hospitals and medical groups) together to share data and risk in an effort to lower costs. However, we do see a trend that some employers are circumventing traditional PPO arrangements in favor of direct-contracting using a metric-based or reference-based pricing schedule.

Rob Carnaroli:

In California, we have seen some employers experimenting with direct partnerships with health systems. Although I am not sure the benefits outweigh the massive effort it takes to implement this model of care, the concept again centers around the practice of value-based healthcare, and keeping the insurance company out of the equation. This type of partnership may allow an employer to gain more control of how their healthcare spend is allocated.

The industry is embracing integrated care. The inclusive process of sharing data and making healthcare decisions directly with healthcare providers is part of what these large employers are working to accomplish.

 CB: What are the most effective ways to sell to large groups in California right now?

Michael Wolff:

Agent-client relationships that are a true business consultancy, combined with service excellence, will help gain and retain customers. Asking the right questions, knowing a client’s priorities and challenges, and delivering creative solutions are all part of a successful large group sales and service model. Agents should look beyond traditional products when

proposing changes in coverage. Reviews and analyses of existing plans/services is a great first step to a final proposal of a new funding arrangement or vendor partnership. If an agent is not an expert in an area of focus for the client, he or she might consider partnering with someone who is. Finally, data is king when it comes to understanding and managing a

client’s utilization trends and costs. If data is available to the client, it should be used to help shape benefit program designs.

Rob Carnaroli:

As we head into the fall open enrollment season, it’s important for brokers to take a step back and examine the current marketplace with their clients in mind. Northern California, the center of technology and innovation, is changing the game in terms of how consumers shop for and view healthcare. The conversation with large employers is around the transformation of the traditional access model in bold new ways.

The demand for innovation is here and modern entry points are emerging—like neighborhood retail clinics, walk-in care locations and same-day pharmacy delivery. Video visits and virtual-first primary care, specifically with in-network physicians, are no longer just for early adopters. The next wave of consumer interest in virtual care is connectedness to a consumer’s own medical system, and not a third-party panel of physicians. This allows for better coordination through shared electronic health records—from virtual visits to follow-up care. Finally, using artificial intelligence through virtual assistants is becoming prevalent as well. Triaging symptoms ahead of a physician’s visit may help the office visit be more productive, and it reflects today’s trend in performing online research as a first step in getting answers.

California employers are embracing innovation, and a distribution channel that understands and can articulate the changing landscape can demonstrate real value to their clients.

Michael Wolff is a managing partner, along with Tony Lee, of Dickerson Insurance Services, an Alera Group company. Wolff studied law in Germany, France and Russia and served in the Foreign Service in Paris, Bangladesh, San Francisco and Los Angeles. He brought his international experience to Dickerson Insurance 15 years ago, in 2004. Founded in 1965 by Carl Dickerson, the company partners with agents across the United States and internationally to offer employee benefits and property and casualty products and services to individuals and groups of all sizes. He can be reached at 800-457-6116.


Rob Carnaroli serves as VP of sales for Sutter Health Plus. Prior to joining the health plan in November 2014, Carnaroli served as Health Net’s Northern California director of sales and Health Net’s Western Region director of major accounts for Arizona, California, Oregon and Washington. He can be reached at