president of The Benecon Group Inc. and ConnectCare3
Q: How did you become involved with The Benecon Group?
A: I previously had my own company and was working as consultant to The Benecon Group. In 2008, the founder, chairman and CEO of the company, Samuel Lombardo, asked me to join the company.
What are your company’s primary service areas? What service is in greatest demand, and what factors are driving that?
The Benecon Group serves as a general agent to major (insurance) carriers in Central Pennsylvania. We are a general agent for Highmark, Capital BlueCross, UnitedHealthcare, Health America and other carriers.
In addition, we have a significant self-funded health consortium business, whereby we develop and administer self-funded health benefit consortiums for a broad range of employer groups in both the public sector and private sector.
The reason for rapid growth in the consortium business is the macro movement from employers who had been fully insured to exploring the self-funded marketplace. The Benecon financing model has proven an attractive option for those employers.
The foundation of the consortium business, which dates back to 1991, was the public sector. Today we run 13 self-funded health benefit consortiums, which are split about 50/50 between the public and private sector.
We run public programs in all of Pennsylvania and Maryland. Our primary markets in the commercial space are across Pennsylvania, but we do have employers in consortiums all across the country from California to Maryland. The majority are in the same footprint (as the public programs).
Cost control is very important to everyone, especially businesses. How often do you recommend that employers benchmark their benefit plans?
In the fully insured marketplace, typically an employer would purchase a plan from a carrier and send in a monthly check. In the self-funded marketplace, the self-funded mechanism provides transparency to the employer on how much they are actually paying to provide health coverage to their employees.
For those employers large enough to self fund, they need to find a self-funding mechanism. We believe it is our aggregated consortium model, which allows them to have transparency to see where they are actually spending their dollars, and that transparency will allow them to take control of actual health care spending year to year.
How has health care reform changed the way your company works, and how are you preparing for future adjustments in the law?
There are a number of macro forces at work causing historic change in the health care market. The (Affordable Care Act) is certainly a chief cause of much of the most recent change. Many of the provisions of the law have already taken effect, such as dependent children coverage up to age 26 and elimination of lifetime maximum.
The endurance of these and other provisions, including the individual mandate, hinge on the coming U.S. Supreme Court’s decision on the constitutionality of the individual mandate itself and, more broadly, the severability of the remaining portions of ACA from that individual mandate.
In any event, the regulatory environment of health care is going to become increasingly complex from both a federal and state regulatory perspective. There will be a market need for sophisticated consultative and administrative services, and Benecon is well-propositioned to deliver these services to employers.
Finally, the coalescence of market powers and government intervention in the health care marketplace will cause more employers to explore self-funding of their health care plans. Benecon’s long history and experience developing and administering self-funded health benefit aggregations provides such employers with the ability to migrate to the self-funded environment in order to take control of their health care spend.
Beyond the legislative landscape, there are general business trends. The year-in/year-out increases employers have received to their health care premium are not sustainable. As a result, I think you will see (a migration) from the pay-for-procedure type model to a quality of care model or episodic care model, which links payment to the outcomes more than just the procedure itself.
What does the immediate and/or long-term future hold for the insurance industry?
Much of what happens at the Supreme Court (level) will certainly determine the direction in the short term. If (the court) upholds the (health care reform) law, you will see the advancement of (health insurance) exchanges under ACA.
I think there will be a significant number of employers, (primarily) those with 50 or less employees, who will migrate to the exchanges. Larger employers, those not self funded, will explore them as a way to control their costs. In either event, I don’t think the onset of these exchanges is going to eliminate the need of employers to have assistance in delivering their health benefit programs.
From a long-term perspective, there obviously is an aging population dynamic, regardless of what mechanisms are in place. The nation as a whole is going to have to deal with an aging population; as a result there will be increased utilization of the health care system.
About Matthew Kirk
In August, Matthew Kirk was named president of The Benecon Group, a 70-employee benefit solutions firm in Manheim Township, Lancaster County. He also is president of a sister company, ConnectCare3, a nurse navigation and patient advocacy firm with 10 employees.
Before assuming the title of president, he was senior executive vice president for about 2 1/2 years. Prior to that, Kirk owned a financial consulting business for 13 years.
The 43-year-old graduated in 1991 from the University of Connecticut with a bachelor’s degree in political science. In 1995, he earned a master’s degree in government administration from the University of Pennsylvania.
Kirk lives in Manheim Township with his wife, Deborah, and their four children, ages 8 to 14. He enjoys spending time with his kids, golfing, reading and writing.