Eric Gulko testifies to state legislators on behalf of small businesses and nonprofits

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Innovo’s founder, Eric Gulko, testified before the Massachusetts Division of Insurance, DOI. As Vice President of the Massachusetts Association of Health Underwriters, he represents the interests of benefits brokers in the Commonwealth, small business owners and nonprofits like our clients.

Oral Testimony of Eric Gulko of MassAHU

Re: Docket G2022-02: Proposed Amendments to Small Group Health Insurance Regulations, 211 CMR 66

On behalf of the Massachusetts Association of Health Underwriters (MassAHU) a membership organization representing licensed, professional health insurance brokers, consultants, agents, and employee benefits specialists, we would like to submit the follow comments on the Division’s proposed amendments to the Small Group Health Insurance regulations, 211 CMR 66.00, DOI Docket No. G2022-02.   

MassAHU represents the benefit brokers in Massachusetts who are on the front lines every day with the small and midsize businesses and nonprofits, and we help these organizations do the best they can to offer competitive, affordable health insurance to their employees. As benefits brokers, we are uniquely positioned in that we understand the nuances of health plan underwriting and management, yet we also stand with employers and employees every single day, helping them navigate the maze that is health insurance.

With that practical perspective, our comments and recommendations on the proposed rate filing timing as well as the public information sessions are as follows:

  1. we would like to see accurate, controlled, sustainable rates for small businesses,
  2. we would suggest that confirmed rates be delivered with enough time so our small clients can reasonably evaluate their options and implement any changes.

In regards to timing, currently, by the time quarterly rates are posted with the carriers, it can leave us 30-45 days before the renewal date. Working backwards, you have to submit employees’ new plan enrollment elections to the carrier at least 2 weeks ahead of the renewal date, which means we have approximately 2-4 weeks to evaluate all the carriers, look at all the plan design options, meet with our clients, make decisions, update enrollment/payroll systems, and educate all the employees and their families and push them to decide on what they want for the new year. It’s just too much, too fast. Big companies have 6 months to do all this. We have 2-4 weeks from start to finish. It hamstrings all of us and leads to rushed, poor decisions that cost more to employees and employers in the Commonwealth.

Now, moving to an annual filing on the surface seems to be a great idea; from a timing perspective, it puts small business on the same timeline as big business if not more, and it would allow us a lot of time to really carefully consider and implement any changes. However, we don’t want to end up with higher or non-sustainable rates in exchange for receiving them so early. If you are asking a carrier to price out in the Spring of 2022 insurance rates that cover end of plan years all the way to December 2024, that’s just a very long time. We are concerned that when underwriters have to look that far in advance, they will have to be more conservative, which in turn will lead to higher and/or inaccurate pricing. So, one they might just price too high, or if not and they price too low, we could then get hit harder the following year. We do not want inaccuracy or big swings, which can result from looking too far out.

Therefore, we would kindly ask for two things:

  1. Whatever deadlines the DOI creates, please ensure that small businesses receive their rates from the carriers posted at least 60 days ahead of each quarter start. It would give us net about 45 days to evaluate carrier options, design options, set up systems, educate employees and let those employees decide and enroll. To do this, we need the final, confirmed plan rates available to us at least 60 days ahead of each quarter.
  2. From there, we are open to creative solutions. Filing 4 rates for the year instead of one would allow for inflation differences for a January renewal vs. a December renewal. If material circumstances change, such as a new law is passed that adds costs to insurance, then the carriers should be able to adjust their rates ahead of a quarter. We would please ask to clearly define what a material circumstance would be so this isn’t triggered haphazardly, as we wouldn’t be able to present to clients until we know the rates are truly locked in. Notwithstanding, please ensure that small businesses get their rates delivered to them at least 60 days ahead of each quarter. It’s not six months like big companies, but 60 days is the bare minimum we need to make reasonable decisions.

Finally, as to the proposed public hearings, we at MassAHU welcome transparency. That said, we are not sure of the particular additional value of the public hearings regarding rates since there are public, written records of the rate filings. This stuff is pretty technical as we all know, and if individuals provide comments in the public process presenting subjective information and attacking the carriers, we are unsure if this is going to move the needle other than through political pressure.

The carriers must meet the state and federal minimum loss ratio requirements, so there is already a check on what they are charging. They receive 12% for admin and 88% go to doctors, hospitals, and prescriptions. Instead, we would like to see further discussion on the causes of why the 88% is going up so much. Let’s address the issue where some hospitals charge much higher amounts for the same services that are provided at much lower costs elsewhere. Let’s encourage even more transparency of those cost differences. Let’s leverage all the available cost savings of telehealth. It’s time for that. Let’s address the outrageous prescription drug costs and continue to address the overall decreasing mental health of our population. For the employer groups with 51-99 employees, we would love to see more transparency in the total claims paid on their behalf so we can understand the drivers and respond to it. These are all the things that are ultimately driving the cost of our health insurance, and these are the things that warrant all of our attention.

We applaud and support the effort of the DOI put forth in these proposed regulations, and we sincerely appreciate the opportunity to be able to comment. We would welcome rates we can reasonably rely on, and please request that we have at least 60 days to analyze options and implement any changes.

Thank you again for the opportunity to submit our written comments. We appreciate this transparent process, and please do not hesitate to reach out with any questions.


Eric P. Gulko, J.D.
Vice President, Legislative Chair
Massachusetts Association of Health Underwriters (MassAHU)