2020 has been a rough year, and unfortunately the first part of 2021 could be pretty similar. The coronavirus pandemic has done significant damage to the economy, making it difficult for some of our clients to maintain their health insurance coverage. At the same time, there’s a dangerous virus out there, so people certainly recognize the need for health insurance. Demand is up, even if our clients’ ability to pay is less certain.
Of course, not everybody is hurting. In times of turmoil, some people struggle, but others find opportunities. There are a number of industries that have seen their business boom as a result of COVID-19, and those sorts of companies may be in the market for group health coverage as they compete for employees. If you sell coverage in the group market, this could be an opportunity.
For agents who sell individual coverage, though, there’s a different opportunity: to sell coverage to those who have recently lost their jobs and their group health coverage.
While some companies are doing well during the pandemic, many more have seen their business decline as local and state governments have been forced to implement shelter-in-place orders. Employers have had to furlough employees and cancel their group health benefits just to stay afloat. It’s a tough but necessary decision.
To give you an idea of the number of people affected, the Commonwealth Fund reported in October that “as many as 7.7 million workers lost jobs with ESI [employer-sponsored insurance] as of June 2020 because of the pandemic-induced recession. The ESI of these workers covered 6.9 million of their dependents, for a total of 14.6 million affected individuals. Only with time will we know how many job losses are ultimately permanent, resulting in loss of ESI for workers and their dependents.”
There are countless examples of industries that are suffering: restaurants, retail, event services, dry cleaners, florists, etc. We could go on and on.
A recent News Medical article focuses on the entertainment industry, which has been especially hard-hit by the pandemic. “From Broadway to Hollywood, many actors, directors, backstage workers, musicians and others in the performing arts” are struggling to find work and, as a result, are losing their health coverage. In the entertainment industry, people tend to have multiple employers, but they can sometimes get coverage through a union contract if they accumulate enough hours in a given timeframe; lately, though, those hours have been hard to come by.
Whatever the industry, when people are no longer working full-time hours, they usually lose eligibility for the employer-based health insurance plan. And while some will qualify for COBRA or state continuation when their coverage is terminated, these sorts of continuation options are only available when the underlying group policy is in place. If the employer has to make the difficult decision to drop the health coverage, then any continuation option also ends.
The good news for people who have lost their employer-sponsored coverage is that they do qualify for a 60-day special enrollment period in the individual market. And, because they’ve lost their income and may have difficulty replacing it in the short term, these folks might also qualify for a premium tax credit and cost sharing subsidy.
That’s where the opportunity lies for agents who sell individual coverage. Right now, there is a HUGE need for individual health plans, and it’s fairly easy to identify who needs the coverage based on the industry they work or worked in. Brokers would do well to reach out to business owners in industries that have been hard hit by the pandemic and offer their services in the event that the business owner has to cut someone’s hours, permanently cut their workforce, or even drop their group coverage. Let them know that you help individuals get health insurance for themselves and their families and that they might qualify for financial assistance. Most business owners want to make sure that their workers are taken care of, so offer to help if they want to pass along your contact information to their employees.
Again, this is a difficult time for a lot of people. Fortunately, we as agents are in a position to help.