Spotlight on Large Group With 3 Industry Experts

The good, the bad and the ugly effects of COVID-19, upcoming legislation and more










California Broker magazine tapped the expertise of three large group pros to weigh in on the current state of affairs. Thank you to the following for answering our probing questions:

1. What is the fall-out from the pandemic as far as large group health in California?
Jason Bleau, VP and General Manager, Core Accounts and Small Group, Blue Shield of CA
The impact has varied by business. Most large groups adapted to the effects of COVID-19 over time, but we did see some companies reduce in-force business. We recognized early on that our customers would need help across the healthcare spectrum to deal with the pandemic, particularly in supporting the return of their employees to the work site safely. We created an online resource center for brokers, employers and members that offers a listing of vaccination locations, FAQs about testing and vaccines, and how to get care if you think you have COVID-19.

One of the positive aspects of the pandemic was the increase in utilization of virtual and telemedicine services, especially for behavioral health. Based on our claims data, telehealth usage in 2021 is on track to meet or exceed 2020 levels, which were up nearly 2,100 percent from 2019. Blue Shield of California has supported this convenient way of accessing care for years, but the pandemic created the opportunity for innovation through emerging technologies that enabled physicians and patients to directly engage through digitized health care. It was wonderful to see the adoption rates go up. That tells us we’re accelerating access to care where and when people need it.

Speaking of behavioral health, earlier this year, we launched our MyStrength app, a self-service treatment tool that empowers our members to support their physical and spiritual health with engaging wellness resources. The app gives our members personalized pathways to address challenges like depression, stress, substance abuse and other serious health issues. It also combines a range of evidence-based models, like cognitive behavioral therapy, to improve and maintain resilience and well-being.

Cindy Jones, SVP/Department Head, Benefits Consulting, Dickerson Insurance Services – An Alera Group Company
One of the key effects of the pandemic on large employers, particularly those in the hospitality industry, has been the loss of revenue and the subsequent need to furlough or lay off employees. While we have seen many of these employers bring back staff in recent months, these unfortunate events created an administrative burden for the employers at a time when many were struggling to keep the doors open.

Many employers also have downsized and are no longer considered large groups by the carriers. They are now faced with a new and unfamiliar rating methodology as well as new plan designs and decreased flexibility coupled with higher rates in many cases. Again, this comes at a time when tough financial decisions are being made while employers are competing for top talent.

Rob Carnaroli, VP of Sales, Sutter Health Plus
The increased uncertainty on future costs is a concern facing many health plans today. It is challenging for health plans to forecast future trends with 2020 data. We are all grappling with questions around whether costs will return to pre-pandemic levels, what legislative or regulatory changes may take place with testing and vaccinations, and if we will see further workforce changes and shifts in employer populations, to name just a few. We are carefully monitoring the situation to see what, if any, changes may be reversed or if they are here for the long-term.

2. What are the most effectiveways to sell to large groups in California right now? Are there particular benefits or other aspects that brokers are honing in on?
Jason Bleau, Blue Shield of CA
Over the past few years, choice and flexibility have always stood out, but the most critical factor today is providing value. Products that combine strong provider relationships with significant cost savings and coordinated care offer the greatest value for members.

For instance, our Trio HMO and Tandem PPO products provide members with exceptional value through accountable care with independent physician associates and facilities. We also offer high-performance networks to our customers who have employees outside of California. We have the largest national network with 1.7 million providers contracted, which equates to extensive provider choice, access to high-quality care, and better care delivery — all at lower total cost for customers and their employees.

“Products that combine strong provider relationships with significant cost savings and coordinated care offer the greatest value for members.”
—Jason Bleau, Blue Shield of CA

Larger Blue Shield customers can leverage our Connect and Engagement Point tools for clinical and member engagement — a single point of access to all their benefits, coverage and claims information. Higher engagement through technology is the key; our ability to integrate with our clients’ other health service vendors in one mobile application is not only convenient but more effective. For example, when our members use Connect through the Engagement Point portal, we see up to four times more engagement in their care management — which converts directly into access to high-quality care and cost savings for employer groups.

Cindy Jones, Dickerson
The top of mind question among large employers is, “How will COVID-19 impact my rates?” While we have yet to see the full impact of the pandemic on premiums, actuarial analysis using proven models and practices can help with formulating projections for large groups that have access to claims data. This is true of both fully insured and self-insured employers. Heightened emphasis on employee wellbeing has sparked strong interest among employers in wellness programs, that when properly designed, can have a direct impact on premiums for experience-rated groups.

Rob Carnaroli, Sutter
Employers today want real value in the health care benefits they are purchasing. Astute brokers are keenly aware that carriers often unveil “new” features and benefits that on the surface appear effective, but they amount to little more than the latest marketing ploy.

Actual integrated health care that draws from resources inside a health system are far more effective than quilting together a myriad of vendors in an attempt to offer a better member experience, improve quality of care, and reduce healthcare cost. For example, in today’s environment we are all well aware that there is a renewed demand for telehealth and virtual primary care and most carriers now offer some version of this service.

However, many of these carriers contract with remote physicians who are far removed from the local needs of their patients. Employers — and their employees — will get more value from a health plan that’s more connected with its provider network which gives it more control in the patient experience and the ability to ensure real accountability. The same discipline should be applied to other in-demand benefits such as real-time scheduling, online communication apps, walk-in-care, urgent care, symptom checkers and pharmacy delivery services.

3. Is self-insurance or direct contracting impacting large group now?
Jason Bleau, Blue Shield of CA
No. We expect more and more companies will turn to self-funding
as an option, especially as they grow more comfortable with risk. We’ve developed a number of self-insurance solutions for our customers, such as our Intelligent Health platform and our Connect and Engagement Point tools. With our Intelligent Health reporting tool, for example, employers can leverage the largest database of health data nationally to get a quick, comprehensive view of their healthcare spending.

More than 90% of the standard reports are generated in under a minute, and the reports are delivered in natural language with visuals that are easy to understand. That makes it easy for brokers to summarize information and present recommendations to their clients.

Cindy Jones, Dickerson
Self-Insurance is continuing to gain ground in the large group market (defined as 200+ employees) and picking up speed in the mid-sized market (50-199 employees). The 2020 Health Benefit Survey conducted by the Kaiser Family Foundation shows steady numbers among very large employers and large employers with well over 70% offering a self-funded benefit plan.

For mid-sized employers the number is steadily increasing as carriers have developed new products and services for this market including level-funding and benefit captive programs.

“While we have yet to
see the full impact of the pandemic on premiums, actuarial analysis using proven models and practices can help with formulating projections for large groups that have access to claims data.”
—Cindy Jones, Dickerson

As for direct contracting and the large group market, it is only being done by very large employers, while most of the mid-sized and large employers still use PPO networks. We do see some impact from the use of reference-based pricing arrangements for larger employers with strong employee concentrations in key areas.

Rob Carnaroli, Sutter
Brokers and large employers will always be interested in self-insurance options; however, it remains the seldom used solution in our geography for smaller employers and many in the mid-market space. The fiercely competitive Northern California landscape allows fully insured carriers to be very competitive on pricing, network options, and plan benefits in order to attract and retain business. Similarly, the direct contracting efforts by large employers with health systems has largely faded away, but there remains a small contingent of sophisticated national employers who still pursue these arrangements.

4. Is there anything on the horizon legislatively with large group health that concerns you?
Jason Bleau, Blue Shield of CA
There are a few things on our radar. For example, the Consolidated Appropriations Act (CAA) and Transparency in Coverage Final Rule
(TCFR) are legislative items we are actively responding to and closely monitoring to determine how they drive changes within health care overall, not just large group.

We’re also following discussions in the Senate Appropriations Committee about AB 570, state legislation that allows adults to add their elderly parents as dependents to their benefit plans, which could have an impact in the future. Speaking of legislation, Blue Shield of California was one of the proponents of the state’s new health insurance exchange mandate, part of the 2021-22 budget, which was passed recently by the California state legislature and signed into law by Gov. Newsom. The new requirement for California’s healthcare providers and payers to securely exchange health information in real time will increase efficiency, reduce cost, and improve care coordination.

Cindy Jones, Dickerson
There are a couple of items we are paying close attention to. In 2022, all plans will have pharmacy transparency reporting due in December. This will be a heavy lift particularly for self-funded plans. We anticipate further regulatory guidance on this in early 2022. relation to Non-Quantitative Treatment Limit (NQTL) testing on mental health parity benefits. Self-funded employers should consider what their action plan will be on this testing. Will they do it on their own annually (with a cost of $10k-$20k) as the rules say they should? Or will they have a vendor ready to do the testing quickly in the event they receive an audit letter? (Some audit letters have already started going out).

Self-funded employers also should ensure they understand their plan designs as it relates to Section 1557 of the ACA as these rules continue to be in flux.

Rob Carnaroli, Sutter

“Actual integrated health care that draws from resources inside a health system are far more effective than quilting together a myriad of vendors in an attempt to offer a better member experience, improve quality of care, and reduce healthcare cost. ”
—Rob Carnaroli, Sutter

At the state level, many proposed legislative bills have been delayed,
so the immediate impact is yet to be understood. At the federal level, we continue to monitor the requirements and changing deadlines for the No Surprises Act and Transparency in Coverage final rule. [See related article in this issue].

Most health plans are concerned with the significant infrastructure build needed to comply, while also competing with existing internal priorities. It is a significant logistical task to mobilize all the teams needed for implementation: Compliance, Legal, Information Technology, Operations, Communications, etc.