The fears are:
- Agents will be cut out as the middleman on insurance sales.
- Government insurance will be purchased with little to no commission paid to the agent.
- Government regulations will determine how much commission an agent can make if they are able to make commission.
- Government Insurance coverage options will dilute to a form so simple, agents will not be necessary. Hahahahahahahahaha. Sorry, had to laugh at the words Government and simple in the same sentence.
Ok, lets assume that all of these concerns are correct (which they might just be). Should benefits agents get licenses to sell property and casualty or start looking for a Government job (250,000 new jobs expected for administration of Government health insurance)?
Well, if you want to hedge your bets, go ahead. But I think the better opportunity is between the lines in this bill.
The opportunities to take advantage:
- Did you notice it is a "Government" program. Soooo, administration, bureaucracy, complexity, compliance, reporting, documentation... sorry, I started getting dizzy. Read between the lines.
- Did I mention the bill is 2014 pages and the additional documents will probably double that number. How many Business executives do you think will read the bill. None of the people who passed it did. And if they did, what chance would they have of understanding it? Read between the lines.
- Businesses are running leaner than ever. They are struggling to survive and they certainly don't have the staff to manage new regulations, compliance, reporting... oops, got dizzy again...(See above). Read between the lines.
- Businesses are running leaner than ever (did I mention that before?). What they really need is for people to be healthy and at work. You probably don't have time to read between the lines!
Personally, I think it is about time for EMPLOYEE BENEFITS brokers to start acting like their name. Yep, the Health Insurance sales people might want to start job hunting. But, if you are a true employee benefits consultant the opportunities are very big in the future.
Employee benefits consultants have an opportunity to create great value and get paid with this new law.
The products that people will be willing to pay for are:
- Health, wellness, and nutrition strategies that actually work.
- Employee compensation consulting including; rewards & incentives for healthy employees and penalties for unhealthy ones (within their control).
- Compliance with the new regulations.
- Reporting and documentation tracking.
- Consulting advice around creating competitive employee benefits packages and plans.
- Employee counseling for plan choice.
- Supplementary insurance coverages (see current Canadian Health Care program).
- Funding Advice and self insurance modeling.
- HSA and HRA modeling and advice.
- Managing and restructuring "Cadillac" Plans.
- Employment practices law assistance.
- Employee development and team training.
- Hiring practices and employee retention strategies.
This is a start. Businesses spend billions of dollars annually to comply with government regulations. The smart insurance agencies will figure out how to get some of those dollars.
So don't sell the practice too soon. Maybe a little adjustment of what you offer and package it to create a unique experience to help businesses navigate through a very uncertain future.
Hey, I have an idea... Someone could probably make money teaching others how to do this... hummmm?
Sitkins International and Benefits Growth Network!
3 comments:
Have you been able to figure out what the employer mandate is in this bill? As far as I can tell it is to offer coverage but it doesn't seem to specify what the contribution (if any) should be.
Pat,
The way I understand it, employers are required to make sure insurance plans are offered to their employees. If the government subsidizes a firm with more than 50 employees (with at least one receiving a tax credit) the employer will have to pay $2,000 per employee from the 31st employee on.
So, the mandate is to either provide the coverage to employees or let the government do it.
At that point, it is just fines and penalties. The real challenge for most businesses is going to be consistency.
Two issues that I think will have an impact on this issue:
1. Employer plans are many times very expensive to employees. If employees are required to have coverage, they will probably opt to the government plan. Also, if the local market for insurance pricing is higher than the government plan, many people will take the government option. Thus, the $2,000 tax hits the employer. So, some companies will decrease their existing plans to employees to afford the new additional people. This will put new people "underinsured" in the system.
2. Many businesses have employees that are not certainty for long term employment (construction companies hire labor for jobs). But, they will be required to offer equivalent, non-descriminant coverage to all employees. Sounds reasonable. But, most of these companies don't provide coverage today and most cannot afford to do so. If the employees can't afford the coverage they currently offer, they will have to take the government option. This will trigger $2,000 penalty on the employer.
They have also changed the law to be more like Canadian law as to counting employees. Each part time person is considered 1/2 an employee. So, you can't have 6 part time people that are not offered benefits. 6 part time people are now 3 full time employees in the count.
Also, "cadillac" plans will be taxed. I am concerned that the numbers they have placed on these plans is too low. I think a lot of plans will fall in this category. $10,200 (individual) and $27,500 (family). These are not far off of what most standard plans cost. These plans will be taxed at the employer level.
Can't think of anything else.
LL
The products you mention people will be willing to pay for ... I am curious how the list is different from what "should be" provided at present by consultants. I appreciate the mention of the oxymoron "simple government", but as you mention, good consultants must keep their doors open to explain it all. EB decisions are scary enough without this new bill, and now uncertainty creates opportunity.
Employers who have been cutting benefits, decreasing contribution percentage, and firing employees because they cannot afford the benefits, now must reconsider.
Health and disease management, wellness programs, and patience in explanation are key... As you preach ... It is the how and why, not the what ... Employers will get dizzy with the what here ... Now the true value and differentiator is the consultant.
Thanks for the chance to post Larry!
Keith Lewis
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