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The Fear About PEPs

I am a proponent of multiple employer plans (MEPs) and the new change that will allow pooled employer plans (PEPs) that will be what we called an Open MEP in 2021. As discussed in other posts, the PEP change doesn’t change what trouble most MEPs, the struggle to grow assets and achieve that promised cost savings.

 

I’ve talked to plan providers that are very skeptical about PEPs, especially as it pertains to asset size and cost savings. While I don’t think any third-party administrator (TPA) should forget about PEPs or focus only on them, I think they can be a good opportunity for the micro plan market. My concern is that if as plan providers that we don’t embrace PEPs, one of the larger bundled providers will and cut a lot of us out of some serious business. If a plan provider targets the PEP as a turn-key solution and has a good distribution system, the concern is that they will cannibalize the small plans of every smaller plan provider out there.

 

Give me a call and we can talk about what we can do about PEPs, would love your insight as a plan provider because you just got mine.

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