Q&A with Erik Gawthorpe

An interview with Erik Gawthorpe, Area VP of Strategic Partnerships with VSP Vision Care.

About VSP:

Vision Service Plan (VSP), founded in 1955, is located in Rancho Cordova, a suburb of Sacramento, CA.  VSP has 5400 employees and over 70-million vision members. In recent years VSP has expanded to include the manufacturing of frames, lenses and international vision insurance programs.

About Erik Gawthorpe:

Erik Gawthorpe, Area Vice President of Strategic Partnerships with VSP, began gaining vision benefit experience in 1997. This is his 10th year with VSP and the goal for his division is to help Partners grow and manage their vision products. Gawthorpe, who lives on a horse farm in Nashville, TN says, “Vision benefits not only help you look good, but should be integrated into every employer’s medical management program.” 

1. As a market leader in the insurance industry, what core principles has VSP pursued that have proven to be successful?

• Unbeatable savings with a focus on health, better provider choices, and award-winning service:
• Focus on Health: Identify chronic conditions early. VSP doctors have identified signs of chronic conditions in 4.5 million members since 2005. Engage more employees in preventive care.
• Better Provider Choices: VSP offers 71,000 provider access points, including nearly 4,500 participating retail chain locations and the largest national network of independent doctors. 27 of the 2014 Vision Monday Top 50 U.S. Optical Retailers are VSP network providers.
• Exceptional Service: We don’t just talk about great service, we back it with the best performance standards in the industry, making VSP a reliable business partner for exceptional service. Our VSP Concierge Transition Service™ takes care of the transition details so you don’t have to, including best-in-class implementation plans and a dedicated local account team.

VSP puts employees first and guarantees their satisfaction. As the only national not-for-profit vision company, we offer the best choices, value, and care.

• Employees enjoy great every day savings on eye exams and glasses, as well as Exclusive Member Extras.
• VSP Doctors are often the first to detect sign of chronic conditions, resulting in increased productivity and lowered healthcare costs. In fact employers may see $2,787 in savings over 2 years for every employee who seeks care for diabetes after early identification. (Human Capital Management Services, Inc. (HCMS) on behalf of VSP, 2013)
• The VSP Concierge Transition ServiceTM offers best-in-class implementation plans and turnkey member communications.

2. How has the Affordable Care Act impacted vision insurance?

Despite the advent of private and public exchanges, we have seen only growth through the traditional employer channel. Unfortunately, vision care was not a mandated benefit on the public exchanges. We have also had to increase our pricing to cover the additional taxes placed on fully insured vision programs.

3. With vision insurance now being one of the essential health benefits covered under the ACA, what confusion do you see in the marketing place?

Vision Care services for adults are not mandated benefits under the ACA, so employers need to consider the overall needs of their employee population and their families. Since vision disability is one of the top 10 disabilities among adults over age 18, vision care services are essential needs for many millions of employees and families.

Some of the confusion has been that the Essential Health benefits are only applicable to fully insured business. It is not applicable under a self-insured plan. Vision is exempt from the Comparative Effectiveness Fee and Transitional Reinsurance Fee.

4. What opportunities for new business does VSP see in the marketplace?

Vision is a critical added value to any benefits package and surprisingly there is a vast segment of employers who have yet to establish this essential component to their portfolio. Employees who have a vision benefit are nearly twice as satisfied with their benefits — and are more than twice as likely to say benefits are a reason they stay with their employer. (MetLife Seeing Eye-to-Eye on Vision Benefits, 2013; 2. Vision Council, VisionWatch December 2014). There is a huge opportunity to help employers find a vision benefit that can improve employee health and productivity, command high levels of employee engagement, all while lowering healthcare costs. VSP’s Diabetic Exam Eye Reminder letter is an example of what our member’s receive for free to help them monitor their overall health.

5. What changes has VSP made internally to adjust to the new ACA environment?

Like most insurance carriers, VSP has had to absorb the ACA Provider Fee requirement into the premiums. We recognize this has created challenging discussions for brokers, and we understand the frustration.

6. With VSP being the largest vision carrier in the country, what advice would you offer to agents to position themselves into the advisory role for their clients?

Employees are more diverse than ever, and so are their vision needs. Brokers have the opportunity to work as advisors with clients to provide customizable plans that meet the specific needs of each employee. When employees are getting exactly what they want, they are getting a more valuable benefit, which results in a 13% increase in enrollment.

Don’t be afraid to “upsell” your clients to a richer plan design. Especially when the program is a voluntary premium plan offering. We have learned (through the case studies) that employees who select the plan design with a 12-month frame benefit are 12% more satisfied. Yes, they enjoy paying more premiums to use the plan more frequently. The other benefit is with a richer plan design comes increased revenue and commissions.