Seventy-two percent of surveyed members of LIMRA's Employee Benefits Advisor Panel predict that health care reform will have a negative impact on sales of group medical insurance.
While that prediction alone is not surprising, size of the employer can make a difference on perceived impact. Advisors who represent small employers (fewer than 50 employees) are far more concerned by the impact of Obamacare (with 77 percent saying it will have a negative impact) than advisors who represent larger employers (50 or more employees), only 62 percent of whom felt the new health care law would have a negative impact on group benefits.
Members of the employee benefits advisor panel were surveyed in the fourth quarter of 2013 on their predictions and opinions on a number of issues including the Affordable Care Act (ACA) and its implications. Other findings from the survey include:
- Fifty-five percent of all surveyed advisors say it's likely or very likely that fewer employers will offer medical benefits in the future. Broken down by client group size, 60 percent of advisors who sell in the small group market think that fewer employers will offer medical benefits, while just 48 percent of advisors who sell in the larger market say that is a likely outcome.
- Employee benefits advisors anticipate that about 20 percent of their employer clients will shift to health care exchanges, as will 40 percent of their individual clients.
- Four in five advisors believe young adults, commonly referred to as the "Young Invincibles" would rather pay a fine than purchase health insurance.
- Three-fourths of advisors believe that as a result of health care reform, more employers will make any non-medical benefits they offer 100 percent voluntary in the future.
While employee benefits advisors were negative about group sales of medical insurance, they were more evenly split on individual medical insurance with 42 percent of advisors citing a potentially positive effect on sales and 45 percent citing a negative impact on sales.
The survey also covered the impact of the Internet and social media on shopping for insurance. A separate LIMRA study of Gen X and Y consumers found that many expect to have the option to purchase financial products how and where they want — including online. Employee benefits advisors are clearly aware of this trend with nearly two thirds believing more simple, lower-cost insurance policies will be offered to consumers who prefer to shop online.