Benaissance's own Chief Strategy Officer Mark Waterstraat will be testifying before the Nebraska State Legislature this afternoon.  His appearance and testimony are in support of LB835 and LB838, both titled the "Adopt the Nebraska Health Benefit Exchange Act."  Mark has been tapped to provide critical insight, strategy, and industry expertise into the emerging world of state health exchanges.  Attached below is a copy of his testimony.

BenaissanceTestimony in Support of LB835 and LB838.docx (17.69 kb)

TripleTree Research just posted an interesting blog on the state of public health insurance exchanges.  This mandate as prescribed by the Affordable Care Act promises to be an important topic in the future of benefit administration.  The link is below to check out the article.

http://blog.triple-tree.com/2011/09/09/the-clock-is-ticking-for-public-health-insurance-exchanges/

McKinsey estimates as many as 35% of Americans could receive health insurance coverage through a state or federal Health Benefit Exchange as defined under PPACA.  The good news is this is not 100% (excluding Medicare  and Medicaid) of Americans.  This begs the question, where are the remaining 65% going to receive their health insurance coverage?  If you guessed, Employer Sponsored Group Insurance, you’d be correct.  It is our expectation that COBRA will remain an employer law and responsibility for Employer Sponsored Group Health Insurance plans.

We believe administrators who aggressively move ‘up market’ into the national or larger employer market (500+ employees) will be well positioned to maintain a viable and profitable continuation benefits administration business.  Those administrators who continue to only serve the small to medium sized employer are at the greatest risk to experience erosion in their revenue base due to a shift by small employers and consumers to individual health insurance plans through Health Benefit Exchanges.  Many studies are predicting that the majority of sub-100 life employers will dump to or move into their state exchange in 2014 or 2015.  If you run a COBRA administration business dominated by sub-100 life groups, it could be gone by the end of 2015 if you don’t take action now.

Also, those continuation benefits administration firms who pursue classic direct billing opportunities for pre- and post-65 retiree services are well positioned to weather health care reform.  It is not likely those employers who have benefit packages inside a collectively bargained agreement will be able to terminate their obligations simply due to PPACA.  Direct billing needs for employers with collectively bargained agreements will be present long after the last health care reform legislation has been implemented.  We probably don’t have to point out that you only find employer sponsored retiree health insurance plans among larger employers.

If you are an administrator whose revenue base is primarily derived from the small and medium sized employer market, redesigning your operations to pursue large employer business is a project you must undertake today.  Larger employers are represented by larger consulting and broker firms.  All are very experienced ‘buyers’ of COBRA and Direct Bill administration services.  To prepare, ask yourself these questions:

1. Is your entire operation SAS 70 Type II (SSAE 16) reviewed?
2. Do you have audited financials and a strong balance sheet?
3. Are your operations and those of your key partners fully HIPAA and HITECH compliant?
4. Do you have well documented, tested and reliable disaster mitigation, business continuity and disaster recovery plans?
5. Do you have the appropriate insurance coverage levels in place for professional liability, employee dishonesty, property and casualty and third party liability?
6. Are you represented by experienced professionals for tax, audit, legal and human resources?
7. Do you have a highly scalable operation that experiences a lower cost per transaction as volumes increase?
8. Do you have full web-based solutions for all key stakeholders in the benefits ecosystem?
9. Does your technology platform support both COBRA administration and individual direct bill (i..e retiree health insurance billing) administration in one integrated platform?
10. Does your technology platform cleanly and clearly track custodial cash with posted and adjusted remittances/disbursements so that your clients can always see “where their money is?”
11. Are your internal business intelligence systems in place to really know what your costs are and how to profitably price a large employer?
12. Is your company capable of complying with complex Service Level Agreements?
13. Do you have the right talent on staff to grow the business 10X?
14. Does your current call center and technology meet large employer expectations?
15. Are all your marketing materials, including your website updated to present a polished and professional image of a mature administration company?

When we ask our customers this question, we usually get a response like, “we provide COBRA compliance administration services for employers and their members.”  While this is a true statement, it is more of a description of a service provided, not the definition of their core competency. 

We actively engage customers in helping them rethink conventional thought and encourage them to look at their businesses from a different perspective.  In doing so, our customers usually see new opportunities, but I’ll get into that later.

Our customers run highly efficient, profitable, and scalable individual subscriber billing businesses.  This is the definition of their core competency for the business they run.  Currently, their operations and service teams are configured to administer a well-defined federal regulation called COBRA.  Stated differently, their individual subscriber billing businesses are configured to follow a discrete set of business rules dictated by federal regulations.  Changing these business rules does not greatly alter their core competency.  If we change the business rules slightly to perform pre- and post-65 retiree billing, state continuation, or health benefit exchange administration, the core competency of the business does not change.

A case study from one of our customers reveals the distinction between service provided and definition of their core competency.  Shortly after realizing their specialization in individual subscriber billing, this customer was able to sell a much broader range of innovative individual subscriber billing solutions.  They expanded their offerings to include car loan payments for a large auto dealership, church tithing to a local church, and association dues billing for a Community Association Board.  These three deals added more enrolled lives than their entire COBRA population.  The added new revenues were immediately accretive to the business and drove profitability to record levels.

Customers who realize they are individual subscriber billing specialists, powered by SPMpoint and HBEpoint, are able to diversify their current revenue streams, strengthen their relationships, and position themselves to take advantage of the evolving health care industry. 

One final thought.  Changing the mind-set of your company begins with you.  Only when you completely embrace the definition of your core competency as the description of our business, will your staff follow and your distribution channel will embrace your core competency.  Just in case you need another proof point before you’re convinced, take a look at Apple.  Apple was a maker of personal PCs.  They recognized their core competency was more than this alone and now they're in almost every home, with a market capitalization $100B more than Microsoft.

If your company has engaged one or more SaaS solutions to power your business, like COBRApoint, your firm’s most common and frequent visitor will be an existing client or member. 

It is time to recognize your site is no longer a single purpose marketing brochure, but rather a place where mission critical work is performed by your client and members.  Like any other client interaction, your firm’s value and services are being judged each time a client accesses your site. 

Here are some questions to ask your site:

*        Does your site have a modern feel and layout and is the content current and easily refreshed?

o   I am astonished by the number of websites in this industry which look like they were created by a high-school student using Microsoft FrontPage 98.

*        Are there any broken links or incomplete pages. 

o   One site I looked at had a 2007 copyright and a NEWS page that said ‘Coming Soon’…are you kidding me?

*        Does your site’s message reinforce and reengage the client relationship by demonstrating your expertise, service oriented culture, leadership position and desire to deliver value to your clients?

o   I love websites that speak directly to their existing clients and actively engages them in the delivery of their services.

*        Are the login pages prominent and easily accessible?

o   Most sites bury their client and member login links deep within the site.  This just proves to me the site does not have a well-defined client engagement strategy.

*        Does your website message promote cross-selling opportunities for clients to review?

o   Prospects are only legitimate if they have a need AND a budget.  Most sites do not clearly describe their solutions or services, their value statement and testimonials/case studies.  One site I reviewed does not even list all the services they offer. 

*        Are you tracking website traffic and usage in your site? 

o   We love Google Analytics and leverage this business intelligence to improve our site.

*        Are you considering how social media may benefit your client/member engagement and your marketing efforts?

o   Simply putting a Twitter logo on your site is worthless unless you actively use this tool to engage your stakeholders.

I would recommend taking time to review your site, ask your clients what they like and don’t like, look at other well designed corporate websites and make it a 2011 priority to redesign and rebrand your most important client engagement opportunity…your website.  We are!

If your company provides employer clients and their qualified beneficiaries’ COBRA or direct bill administration, you’ve been operating a health benefit exchange for many years now.  If you think about the services provided; the daily interactions you have with employers, members, carriers, brokers and government, you will see the service is nearly identical with the core operational requirements of Health Benefit Exchanges under the PPACA. 

In the COBRA world, an active employee is EXCHANGING their employer sponsored and subsidized group health coverage for individual insurance coverage.  When the individual obtains full time employment they exchange the COBRA continued coverage for employer sponsored insurance.  Often times, the individual drops their COBRA continued coverage and replaces it with either short term medical, individual health insurance, Medicare, Medicaid, CHIP or some high-risk pool coverage.  This churning of insurance coverage parallels the PPACA’s model for Health Benefit Exchanges.

Operationally, COBRA administrators receive information about an individual, communicate eligibility and enrollment information, receive and process elections, bill and process monthly payments, apply premium reduction subsidies, reconcile, remit and report to agency stakeholders. 

This entire process is built to profitably operate for less than 2.8% of monthly premium.    As a COBRA administrator operating at scale for many employers and thousands of individuals, your model is mature, tested, and sustainable.  Your team knows how to deliver quality service that complies with a strict set of federal regulations, handle complex client requirements, manage millions of dollars in custodial cash (including premium subsidies), disburse allocated premiums, and real time stakeholder reporting. 

Several media and government sources look to the Massachusetts Connector as the blue-print for building and managing a PPACA Health Benefit Exchange.  It is our contention that the better blue-print is the business you run and the service you provide clients and members each and every day.  Get out there and share your story and value with as many Directors of Insurance and elected officials as possible.  We sure are!

Below is a Benaissance produced graphical representation of how a COMPLETE EXCHANGE is configured utilizing our core technology for powering a state(s) operated Health Benefit Exchange.

HHS has established a new Center for Consumer Information and Insurance Oversight (CCIIO) within CMS to help implement health care reform’s requirements. The new office replaces HHS’s Office of Consumer Information and Insurance Oversight (OCIIO) and is responsible for ensuring compliance with the new insurance market rules (e.g., the prohibitions on rescissions and preexisting condition exclusions for children). Like OCIIO, CCIIO will oversee the new medical loss ratio rules, assist states in reviewing insurance rates, and provide guidance and oversight for the state-based insurance exchanges. It will also administer the temporary high-risk pool program (known as the Pre-existing Condition Insurance Plan) and the early retiree reinsurance program, and will compile and maintain data on insurance options.

EBIA Comment: The new CCIIO website will be another place to look for regulations, guidance, and other health care reform information from HHS. As part of the change, the OCIIO website is no longer being updated and has been archived. However, its content has been transferred to the CCIIO website. For detailed coverage of health care reform’s requirements for employer-sponsored health coverage, see EBIA’s Health Care Reform manual. You may also be interested in our recorded web seminars on health care reform topics (visit http://www.ebia.com/WebSeminars/HealthCareReform).

 Federal Register Statement

CCIIO Website

Silicon Prairie News follows up its recent article on Benaissance with an interview with our own V.P. of Sales, Mark Waterstraat.

 http://spne.ws/9Hu

Silicon Prairie News features Benaissance in today’s publication.  Co-founders, John and Mark, are interviewed about the history, current state and future plans for the company. 

http://bit.ly/fqz0vY

Meet the Chairman of our capital partner, Mike McCarthy of McCarthy Capital (www.mccarthycapital.com) in Omaha NE.  Mr. McCarthy was interviewed by Silicon Prairie News (www.siliconprairienews.com) in early 2010.

http://www.siliconprairienews.com/2010/03/traditional-business-skills-an-interview-with-mike-mccarthy