Weathering health care reform: A broker's toolbox for 2013 and beyond

By BenefitPlace.biz - BPTradeshow.com

BenefitPlace / BP Trade Show


Benefit brokers and consultants need to develop, or acquire, new tools for dealing with PPACA, including the deluge of regulations and guidelines rolling-out from the HHS, DOL, EBSA, IRS, and other agencies. They must deal with the general disruptive changes within the insurance and benefits industries when working with employers and employees. Health insurance is only one part of the decision-making process. There are many decisions to be made. The times they are changing!

To assist brokers and consultants, we have developed a list of tools and strategies for broker/consultant survival:
  1. Utilizing inbound marketing — Develop inbound marketing capacities for reaching targeted markets more efficiently and cost-effectively. Reducing wasted marketing dollars and increasing the number of qualified prospects will open up the availability of scarce dollars for providing increased client services in the face of reduced commissions.

  2. Selecting voluntary/worksite benefits — In the face of reduced or disappearing commissions from health insurance plans, voluntary/worksite plans will offer a new and welcome opportunity for employers and employees to meet their needs and price points. The plans, programs and services offered may include: core benefit plans (health, dental, vision, etc.); voluntary/worksite choices; ancillary plans; section 125 of the IRSC; reimbursement accounts; and more. Some of these choices will also generate significant income for the Broker/Consultant on a first year and renewal basis. The trick is finding the best-in-class of carriers and plans.

  3. Developing a private exchange — Private exchanges are the wave of the future. When utilizing the most efficient and affordable emerging technologies, brokers and consultants are provided an opportunity to efficiently platform the plans, programs and services they offer to employers, employees and individuals.

  4. Utilizing defined contribution — When utilized for the overall employee benefit plan design, defined contribution (DC), in its simplest form, allows the employer to budget their contribution to employee's benefits by classification — without discrimination. At the same time, working with the broker/consultant, the employer builds a menu of benefit choices to offer the employees.

  5. Utilizing self-funding — While many brokers/consultants have shied away from suggesting self-funding/self-insuring — except for the large employer groups — this strategy for risk management has become a viable alternative for many employers of all sizes.

  6. Selecting a TPA for self-funded groups — When working with the employer to determine if self-funding is a viable alternative, it is essential to work with a qualified TPA. The TPA must also efficiently manage the administration of the plan.

  7. Selecting a TPA for reimbursement accounts — Working with a qualified TPA for providing employers and employees access to reimbursement accounts (flex plans) — health/medical, dependent care and transportation/parking — is imperative and provides enhanced benefits as well as cost/tax savings.
  1. Providing employee education, communication and enrollment — With the many choice available to employers and employees, as listed above, it is essential for brokers and consultants to provide a well-designed and affordable strategy for the education, communication and enrollment processes. Employee participation (penetration) and how long they stay with a plan (persistence) will often be determined by how well the employees understand their choices and the utilization. These factors will determine how satisfied the employer is with the plan design and the brokers/consultants income.

  2. Selecting the benefits related technology — To best serve employers and employees, it is essential to select the most affordable and efficient best-of-class technologies for delivering all of the tools we are discussing, including data management. New technologies are emerging at a rapid pace.

  3. Developing strategies and solutions — With all of the disruptive changes in the insurance and benefits industries, it is essential for brokers and consultants to reach out to employers with strategies and solutions for dealing with PPACA/Obamacare and plan design. Employers and employees have been confused by the politics and media surrounding reform. They have been provided little accurate information and guidance. Employers and individuals also fear and face penalties (taxes) for non-compliance in 2014. Brokers could also face E&O problems as they move forward.

  4. Utilizing continued education and coaching — PPACA/Obamacare has changed the norms and rules. Much of what brokers and consultants learned in the past no longer applies. When developing strategies and solutions specific to the employer's plan design, it is essential to understand the myriad of regulations and guidelines. Brokers/consultants should remember, what you don't know will hurt you. As we have been pointing-out, PPACA's bite will be worse than its bark. The stakes are high.
If brokers and consultants utilize the above tools, they will be enabled to focus on developing case-specific employer/employee benefit plan designs. The disruptive changes delivered by reform have created vast new opportunities. Those brokers and consultants who do not change with the times will fail. Those who adopt new tools and embrace change will thrive.