By Dave DeWitte
In its first two years, Acumen Benefit Advisors in Cedar Rapids has grown rapidly, not just in spite of the 2010 passage of the Affordable Care Act (ACA), but partly because of it.
“The ACA has reset the board for brokers and employers in terms of how they approach benefits, and that has been the opportunity for Acumen,” said CEO Andrew Morf.
With a staff of 24 located in Cedar Rapids and Des Moines, Acumen handles health, dental, life and disability insurance. It operates within a hybrid business model, both offering benefits programs directly to employers and operating as a wholesale provider of insurance products to independent benefit advisors throughout the state.
Mr. Morf and Acumen President Kirby Moss were members of another local benefits firm in 2012 when they determined that the impending changes resulting from the ACA required some different and innovative approaches. They decided that starting their own company would be the only way to develop those approaches, so they split off with their own book of clients, joined by some of their colleagues.
In less than two years, Acumen has doubled the group health insurance contracts it handles to 1,200, and nearly quintupled the number of individual health insurance contacts it administers to 10,200, Mr. Moss said. Revenues have doubled within the past year. The number of independent advisors served by Acumen has grown from 50 to 220.
“To some degree, it was the idea that we needed to do this survive,” Mr. Morf said. “The irony was that the opportunity was ten-fold what we expected.”
The Affordable Care Act has taken effect in stages, but 2014 was a significant milestone because the individual mandate, which required most Americans to have health insurance, took effect on Jan. 1.
The impact feared by some health benefit advisors for the post-ACA marketplace was dire, according to Mr. Morf, causing some to wonder if they should even stay in the business. But the reality has played out much differently.
Because of the individual mandate, job-seekers actually became more focused on finding jobs with employers that offered health insurance coverage, making it a more vital benefit for employers to offer.
The companies that had been paying employees to buy their own health insurance began to reconsider the importance of having an employer-sponsored health plan, because under the ACA, it was more tax efficient for both the employee and the employer.
Employers who already had good health insurance plans valued having a good benefit advisor because health insurance prices go up in the large majority of cases after they switch from so-called “grandmothered” health insurance plans to ACA-compliant plans. Grandmothered is the term the government uses for non-Affordable Care Act policies extended until 2016 for individuals and companies with fewer than 50 employees.
“Any challenge creates opportunities and for us it was just understanding where the opportunity was,” Mr. Moss said. “We really needed to change the paradigm.”
Acumen developed a proprietary process for analyzing an employer’s health benefit needs, taking into account indicators such as total claims, large ongoing risks and utilization of claims. While declining to go into specifics, Mr. Moss and Mr. Morf say the process allows the employer to assess the value of the benefits rather than just looking at the cost.
Employers had long been relying on the same three tools to manage rising health insurance costs – reducing coverages, shifting more of the burden onto the employee and changing insurance carriers, Mr. Moss said. With the shakeup of the ACA, he said employers are now willing to dig deeper into the toolbox and innovate.
Self-insurance and partial self-insurance, for instance, are now being used by even small-group employers, Mr. Morf and Mr. Moss said.
One of the other services Acumen offers its clients is a benefits concierge service. Employees with coverage questions can simply call or e-mail the Acumen concierge to get answers about their insurance coverage and how to use it, according to Angela Billman, director of operations at Acumen.
“In a lot of smaller employer situations, the owner wears the HR hat and doesn’t have time to answer benefit questions,” Ms. Billman said, adding that employees would often prefer not to have to go through the owner with many of their questions.
Acumen’s hybrid business model has been an advantage to members of its broker network rather than a source of contention. The company understands the issues that advisors are dealing with in the market because it is working with employers too. Even Mr. Moss and Mr. Morf, the company’s two senior leaders, work as advisors directly with clients.
“Every day we’re in the trenches, working side-by-side with our employers,” Mr. Moss said. “We can use that experience to help our agents we work with.”
Although much of Acumen’s growth has been organic, the company has acquired blocks of business from existing agents and firms who decided they didn’t want to stay in the rapidly changing industry. An asset acquisition in April of this year brought a new Des Moines office with seven employees and a significant book of new accounts.
Acumen’s workplace culture befits a fast-growing organization. Ms. Billman characterized the culture as both empowering and supportive.
“We give them a lot of responsibility,” she said. “We give them a lot of opportunity, with the expectation that they will rise to the occasion. We empower them to achieve whatever they need to achieve.”
Acumen’s Cedar Rapids headquarters is on the top floor of the Plaza 425 Building at 425 Second St. SE, formerly known as the APAC building. Mr. Moss and Mr. Morf said they chose the Cedar Rapids area for their headquarters because most of its original clients were in the area. The Des Moines office also brings the company closer to some to some of the health insurance companies it represents.
While Acumen sells other types of products, health insurance dominates the product mix because of its cost and importance. Employers are looking for better solutions, and Acumen is striving to provide them.
“Health insurance is one of the largest hot buttons for employers out there,” Mr. Morf said.