It’s no secret the Patient Protection and Affordable Care Act (PPACA) brings sweeping changes to the health care model with many of the requirements of the bill taking effect in 2014. Naturally, this change can be scary; however, transitions often offer remarkable opportunities. In addition to health care financing changes, there are significant changes that will impact brokers. Brokers have traditionally been viewed as advisors, navigating clients through the multiple health care options presented. During this time of transformation, that role will become even more significant, propelling prepared brokers to increase their client base and income.
As health care reform becomes more of a reality, employers are taking notice. According to several studies, nine to 30 percent of employers may be motivated to stop offering employer-sponsored coverage to employees as a result of health care reform changes implemented after 2014.
Therefore, while health care reform offers new options to individuals without health insurance, employer-sponsored plans will change. As a result there may be coverage gaps and opportunities to transform the way we’ve traditionally thought about health care purchasing. In fact, these gaps drive growth in areas we haven’t seen in the past, and brokers would be wise to take notice by offering alternative benefits to employees.
As employers strive to remain competitive in recruitment efforts, they will be seeking the right benefit formula to offer the greatest value at the lowest cost. This is where broker advisory is essential, and offers an opening for a great consultative sales process.
From salesperson to trusted advisor
Employers often seek outside expertise in many areas, including finance, legal and recruitment. Health insurance is no different, considering the sweeping changes entering our health care environment. This creates an opportunity for brokers to become much more than a sales force, but a true strategic advisor and consultant.
To ensure that brokers and agents are in a position to expand their business in this era of health care reform, brokers should consider their new role in this emerging landscape. Those who are most prepared will do three things:
Become a strategic guide: Brokers and agents have long been considered the retail storefront for insurance. However, health insurance is harder to navigate with the changing marketplace. Brokers must research and understand the opportunities health care reform will bring, and offer a complete suite of benefit solutions to address the gaps in coverage. Voluntary benefits will become more important as employers’ needs change.
Offer a clear consultation: Health care reform is complex, as we all know. Brokers should position themselves as the “anti-spreadsheet” with clear consultation on the issues that impact employers. No need to become an expert on every aspect of health care law, but understanding the size of your employers, and working with insurance companies that offer alternative benefits on solutions, is expected for clear and concise guidance.
Provide compliance support: There are a number of areas where employers must be compliant. Working with the employer’s human resources area, brokers must ensure that they have the decision support tools in place that will help to make critically important decisions. Company CFOs are likely to move even further into the center of health insurance decision making.
Finding the right alternatives
Employers have one primary advantage as they make important health care choices for employees: the experience of a trusted benefits advisor. Brokers are in a unique position to navigate alternatives for cost reduction and sharing, enabling employers to remain competitive in hiring and retention, without hurting their bottom line.
Valuable options include offering voluntary benefits to employers, or employee cost-sharing measures. In fact, many of these options are not subject to health care reform regulations, and can be offered with less regulation and rigidity while bringing significant perceived value to employees.
Moving forward, brokers will be sought out more than ever for their advice and counsel in navigating a health care environment that will look quite different than years past. This allows brokers to replace soon-to-be outdated revenue streams with new waves of opportunity in a post-health-care-reform environment.
In my next article, I’ll offer specifics on products you can offer your clients that will provide solutions for these gaps in benefits, and give you the opportunity to position yourself as a strategic guide and counselor as PPACA is fully implemented in the coming years. I’ll also offer recommendations on products that can enhance your client portfolio, and prospective sources of revenue moving forward.