Future of Employee Benefits Agencies... ahead or behind

AON purchases Hewitt Associates. How about that? AON is investing a lot of money to get deeper into human resources products and services to clients. We have been sending this message for 2 years.

Businesses want productive employees. They want a return on human capital. We have been encouraging brokers to get in the game and build your products and services to include helping businesses get a return on human capital.

Heck, read the posts below this one!!!

So, now one of the largest brokers in the country has invested heavily to be able to go tell that story. How will you compete? Will you begin to start looking for someone to partner with and be able to say ME TOO? Will you start to develop products to compete against them with your own in house person?

I actually have good news here. I know people at AON. They will not do a good job with this. They will have big egos and fight for who is in control and they will not deliver a product to the client at a high level. It will be a flop.

But, they will take some of your clients in the interim because of the energy and excitement of the new toy!

What must you do to get back out in front?

1. Get a human resource product that focuses on return on human capital.

2. Brand and package your unique process to bring a strong perceived value to the client.

3. Get people that can speak that language. Most benefits people can't even tell you what their clients do for a business. Understanding the return on human capital is foreign to anyone that doesn't understand the business model. Hire people that will understand the clients business and that can articulate the products you develop and package that address getting a return on human capital.

Unfortunately many insurance agencies were passed up at lighting speed with this move. I would say it is time to get moving and get back in front. I think AON made a great move. But I have watched them and other alphabet houses blow those moves before. They will probably do it again. But, others will not!

Insurance Agencies... Wait, don't close your doors!

The insurance agency and brokerage community is terrified of the health care bill.

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!

What should they do... but they won't?

We have seen the positives and negatives of the healthcare bill all over the media and in my latest blog. I didn't give all the good, nor all the bad about the bill. The dang thing is over 2,000 pages long in its original form and over 150 pages of revisions. You wouldn't have read my blog if I listed everything.

So, I hate complaining or complimenting without giving advice. What are the possible solutions to healthcare reform?

Objective:

Get as many people in America covered on healthcare as possible and get the costs as low as possible.

Bottom line. If you have $10 dollars to pay for a $12 item. You can't afford it. So, you have to either buy a $10 or less item or you have to get more money. I have some suggestions on how to do both.

Solutions:

1. TORT REFORM. Reduce the law suits to numbers that give compensation to people to make them whole or as close as possible. People make mistakes. If we continue to pay $10 million dollar law suites because a doctor makes a mistake, we will never solve this problem. The reality is that the patient gets about $4 million and the attorney gets $6 million of that $10 million, and WE pay for it all... not the doctor. Canada has passed laws in this area and it has made a huge impact on the costs of goods and on insurance costs. This is the biggest area of impact that we could make on the healthcare industry. BUT, the attorneys run our government. Good luck ever seeing tort reform at the level necessary. This would equal billions of dollars annually.

2. PPO Plans with deductibles at $2,000. Government subsidies for low income families paid in the form of medical stamps. Incentives for not using them. (there is more that ties this together - see #4). Insurance rates lower if they are not responsible for the first $2,000. Also, you could include a HSA Account to make it possible for people to put money in these accounts and invest it (helps economy as well) and build medical dollars for the future.

3. Government catastrophic insurance coverage to protect from medical bankruptcy.

4. Doctor and hospital rate posting in the facility and online. When was the last time you checked around with a few doctors for the cost of a procedure? When was the last time you checked to see if you could get lower medical tests (MRI's)? If all doctors rates and fees were posted and we had options to attend the different doctors, we could let supply and demand drive the prices down.

5. Shorten the food and drug standards on the length of time it takes to approve medicine. We have the highest price of drugs in the world and it is directly related to law suits and the food and drug administrations regulations.

6. The new bill penalizes doctors who's patients return for the same issues. I would require insurance companies to give incentives to doctors who don't have patients return for the same issues. One concern would be that doctors could become jerks so people wouldn't return with issues. Keep in mind item number 4 above.

7. Allow medical co-0ps. These would be risk pools that would reduce health care costs because of proactive health coordination.

8. Require healthcare penalties and rate increases for life style choices. Non medical related obesity (medical related would be due to thyroid or other issues), smoking, drinking, drug use, high cholesterol. You have to give incentives for the right behaviors. This would be fazed in to allow people to adjust lifestyle choices over time. If you are going to raise the cost of healthcare pools because of lifestyle choices, you should be required to pay more for coverage.

9. Eliminate HMOs. HMO's create an entitlement healthcare mentality that makes people believe they should go to the doctor for a sniffle. This drives costs up and insurance companies have to raise rates to pay for it.

10. Eliminate the government Cadillac plans. Government workers have the best insurance program in the country. It is not right that American people work, pay taxes, and the people in the government have better insurance than the people who are funding it. They need to have good healthcare plans but those plans need to be more in line with the average American. Most people in the U.S. have had their insurance plans reduced over the last 15 years. Government workers plans have improved over that same period. This is costing all of us more money.

Oh well, seems like these items would certainly lower our healthcare costs and would IMMEDIATELY lower insurance premiums and make healthcare more affordable. It wouldn't cost a fraction of the cost of the legislation that just passed.

You know, I wouldn't even mind paying a little higher taxes to help support subsidizing people who truly couldn't afford healthcare. I would have to think about how to structure it where they would have to be able to prove the hardship, but I think it could be done and I would be happy to help pay for it. It is the right thing to do.

There you go. Some ideas from an old jock country boy. Love to see your ideas. Post comments if you agree, disagree, or have better ideas.

Republicans and Democrats can sure tell you their side of the story

Since most people either don't have the time or desire to read these bills (HB3200, HR3962, HR4872, HR 3590), we depend on someone else to tell us what they say. So where do we go?

We can go to Fox News, Republican Politicians, and conservative sources and get "all" the insight and information about the legislation.

And, we can go to CNN, NBC, Democrat Politicians, and liberal sources and get "all" the insight and information about the legislation.

So, if these are the sources in America that are supposed to be for the people, we should be getting the truth, all the truth, and nothing but the truth... right?

So why does it look like these people are looking at two completely different pieces of legislation when we hear the different reports?

Reality! If you look with an objective eye, you can find some good legislation in this bill and you will find some bad. It has it all.

The good:

More people will have access to healthcare. Young adult teachers who can't afford housing, transportation, and barely can put food on the table cannot afford healthcare. This bill may help them get closer to making that happen. How about that family that lives paycheck to paycheck and finds out their little girl has asthma. But, they can't afford the $300 per month in medicine. So, they take a chance and just watch her close. Want to be those parents?

This bill is also good because it has put the pressure on people to find good legislation. Maybe this will create a sense of urgency for some good legislation like tort reform, health care stamps, govt catastrophic insurance, and other things that could actually help us control costs.

The bill will decrease some of our healthcare costs through controls on drug companies, medical equipment suppliers, and will make the insurance companies fight hard to get more productive and efficient to be able to compete with the govt plans.

The bill is going to require everyone to be on a healthcare plan. This will hopefully widen the pool of healthy people on plans and decrease the risks and costs (law of large numbers).

Pre-existing conditions can no longer be considered in providing coverage to someone.

Hey, and my daughter can continue through medical school on my medical plan now (up to age 26). She texted me tonight to let me know how excited she was to be going to school to become a doctor so she can get paid equal to any doctor, no matter what specialty they have or how much education and skill they develop.

The Bad:

BOTTOM LINE: MONEY DOES NOT GROW ON TREES!

Cost. This legislation is projected at over $1 trillion dollars. Someone has to pay for it. The plan suggests that medical supply companies, people who choose to not be covered, people with income over $250,000, corporations who choose to not offer coverage for employees (or cannot afford to), Cadillac plans, and "hopefully" a decrease in healthcare costs. But, no data supports that this will be an accurate number. The real cost will be higher. Reality will hit this plan in the face if it stays in its current form. Our economy is decreasing the high income earners. Our government is building systems on high income earners taxes. The plans they develop will continue to decrease economic output and less tax dollars will be available. If you want proof on how this works, look at California.

The plan makes 32 million people eligible for coverage, but it does not have enough savings to make it affordable. The plan has different provisions that kick in over 1 to 10 years. This plan will not cover 32 million people. It just opens the potential of coverage to them.

Pre-existing conditions patients joining the pool will drive health care costs up for others. This will make health care unaffordable to many who have coverage today. Insurance pricing is based on the law of large numbers. These are actuarial costs that the really smart people crunch and determine how to stay slightly ahead of to make a profit. When you increase the cost in the pool, the actuarial costs go up, the premiums go up. Ok, I know the argument, that isn't a fair thing to say that the pre-existing people shouldn't have coverage. I AGREE. But, don't put a solution in place that makes coverage unaffordable for them and for others.

We are creating an entitlement plan for people who choose to have material things and not pay for medical care. Yep, it is true for a lot of people. But, keep in mind, a lot of people don't fall into this category either.

People will have to buy insurance or pay a fine. This is potentially unconstitutional. It is also bad for people who can't afford another few hundred dollars a month. This is the majority of the people they want to cover in this plan. These people can't afford to pay for this coverage if it costs anything at all. So, lower cost, government subsidized insurance doesn't mean they will all the sudden have a few hundred dollars a month to spend. So, now they get taxed about $700 dollars for not buying insurance.

Business will HAVE to provide insurance or pay a fine. I read financial statements every day in my job. I have seen a lot of financial statements in the last few years that won't allow for ONE DOLLAR of extra expense. Many companies I know today are out of trust and bankrupt, they just don't know it yet. If you require them to cover people who are employed and they don't have the money to do it... they will let people go. This is much worse than our current situation.

The bill does not apply to members of congress. I am sorry, I struggle with this.

The government will have real-time access to an individual's bank account and will have the authority to make electronic fund transfers from those accounts.

SUMMARY

I think you can probably tell that I am not for this bill. But, make no mistake about it. I would be on the fence as to whether I would have voted for it or not if I was in the House. Yep, I said it. I believe we have to do something. We can't keep going down the path of fewer and fewer people having access to health care. I might have voted for this bill for the one reason that I think it made enough people so mad that they are going to do two things.

1. They are going to start looking for ways to get the right legislation in place for us to solve this problem.

2. We will see a lot of people in congress lose their jobs over this (both sides of the political table). I think it is time for this to happen!

Ok, more to come. This was the technical blog. Sorry. Hope it didn't hurt too bad. I'm looking forward to sharing my ideas on what legislation should be brought to the table!

HB 3200

Ok, so the House has passed HB 3200, the sun came up and we live another day. What does this healthcare bill really say? What does it mean for U.S. Business? What does it mean to individuals? I actually read the bill and have a lot of thoughts about it. I am going to write (as often as I can) over the next few days and give my opinions.

Let me warn you. If you have strong opinions one way or another and haven't read the bill... you won't like my blog. My blog is going to have positives and negatives to both sides of the legislation. I will be opinionated (that is what you get to do in blogs) and hopefully make you think. I am planning on having a lot of fun.

Some of the topics I want to cover are:

1. Republicans and Democrats can sure tell you their side of the story.

2. What should Christians think about HB3200? What should they think about health care? What should they be doing?

3. How will this bill impact insurance agencies?

4. The bill makes 32 million people eligible for healthcare, but, how many people will the bill cover?

5. If Social Security and Medicaid has been helpful to many people since inception but are about to go bankrupt, why isn't doing the same thing again such a bad thing?

6. Just do it! It worked for Nike, why shouldn't it work for Health Care Reform.

7. How do I take advantage of this legislation?

8. Look at all the new jobs that were created!

9. The Government is required to create legislation that impacts today and doesn't worry about tomorrow.

10. The future plan will be excellent because this legislation passed.

In case you are wondering what I believe about this legislation let me give you a few quick summary points about me and some initial thoughts:

1. I am a financial conservative.

2. I am a social moderate leaning toward liberal (Don't know how I could do anything different with my Christian beliefs).

3. I care about people and struggle with the fact that people don't have healthcare.

4. I am not an idealist. I am more of a social economist and I don't just think ONE DEEP in the area of cause and effect. I look at multiple levels of complexity to understand the outcomes of decisions and events.

5. I believe this bill is going to be a good thing. I don't think the bill is a good thing, but I think the bill is "going" to be a good thing. You will have to read more of my blog to understand why!

6. Insurance Agencies (Brokerages) will benefit from this legislation, if they know what to do.

Look forward to seeing you and watching your comments. Tell others about the blog. It should be a great conversation.

Executing Your Highest and Best Use

We hear a lot about Unique Abilities, Natural Talents and Strengths. Many consultants and advisors will give advice about the importance of only doing what you do best. But, most executives continue to struggle with the execution.

Recently I was given great advice on how to get and stay in my unique abilities. The advice was focused on how you look at your life and job.

Most people look at themselves as a job label first and then they look at their contribution. A CEO will say, I am the CEO of XXX before he or she will state the value they bring to the world. This was me. I would respond to the question of what I do as, "I am the President of Sitkins International", or "The writer of Make the Noise Go Away", or other titles I have gained. Unfortunately, this focus on the job or product is forcing me into doing things that are not my unique abilities.

What should I say? "I am the voice". Let me explain the voice. The voice is speaking, writing, motivating, encouraging. The voice uses my unique abilities of creating intellectual capital and opening new files for people through my speaking and writing. My unique ability is my voice to others.

So why is this such a revelation and so important to doing what I do best? I am now able to look at the companies I work in, and the products I am involved with, and the world I live in (philanthropy as well) and be "the voice". That is my job.

My job is to be the voice at Sitkins International, Benefits Growth Network, Make the Noise Go Away, LGL Business Solutions, World Vision, and others. Now, this doesn't mean I am the only voice in these companies. It means I have to be focused on using the unique abilities and talents around the "voice" if I want to make the biggest impact for others and for me.

It is amazing how worthless I become when I get involved in the other stuff around the business. Now that I have identified this unique ability brand, I am free to do what brings the highest and best use of my abilities to the company.

My advice to anyone who wants to make a big impact on their work and world is to identify your unique ability and natural talent. Pull yourself back from the company title. Brand your highest and best use as what you do. Then serve your company with these skills. Treat it like a consulting gig that you only get paid for doing this skill. It will make a huge difference.

Consequence Decision Making

Ever heard of consequence decision making? Probably not. If you are like most Americans or Canadians you have been to the school of "don't bring me a problem, bring me a solution."

I was at a class about 15 years ago when I heard that message and I just couldn't accept it. It was early in my career but I had been around long enough to know that I didn't see how bringing a bad solution was any better than brining a problem.

Every problem has multiple solutions. When someone can't solve a problem and they continually bring those problems to management (or others) to solve, it may not be a lack of solutions issue. It may be that they don't know how to think.

Recently I was with a consultant who works with 20 somethings. He mentioned that one of his biggest issues is these 20 somethings were so scheduled all their life, and their parents made all the strategic decision in their lives, that they don't know how to think strategically. This is a current problem. Now look at the educational system and see that since the Industrial Revolution, we have been educating people under core strengths manufacturing principles. That means we want everyone to know the exact same things. Ever hear of "common sense"?

So what does this mean? We are not teaching people to think. So, if I was told to give authority to a bunch of people who are not trained to think, by asking them to bring me solutions not problems, I would quit my job.

In the book Make the Noise Go Away - The Power of an Effective Second in Command, I address this problem with a different solution; The Consequence Worksheet.

I found that teaching people to think past problems and potential solutions and into the consequences of those solutions will make them much better problem solvers. One employee came to me a few years ago and asked me what to do about a client situation. I asked her to brainstorm as many solutions as possible based on the desired end result she wanted. Then I told her to come up with as many consequences (positive and negative) that she could for every solution. I told her to come back for help after she finished that small project.

She never came back! I went to her a few days later and asked her if she still needed help. She told me the solution was very clear when she went through the exercise. She also told me she was surprised that every solution had both positive and negative solutions, but it was very clear what to do when all consequences were listed side by side. If we teach our people how to think through problems to the consequences of possible solutions, we will make more of our noise go away.

The Consequence Worksheet can be found in Make the Noise Go Away - The Power of an Effective Second in Command. It is a powerful tool to make the noise go away!