Insurance Brokers Face Challenges and Opportunities!
Insurance Brokers Face Challenges and Opportunities!
Posted on Jan 6 2013 at 07:04:47 PM in B2B
2013 delivered more than a New Year to the Insurance and Benefits Industries. PPACA/Obamacare started to kick in and HHS began rolling-out guidelines and regulations almost on a daily basis.
Disruptive Changes Creating Issues - Brokers, as well as Carriers and Service Providers, face a slew of disruptive changes and new issues, these include:
If the above was not enough, economic uncertainties have placed budgetary constraints on all parties - Brokers, Carriers, Service Providers, Employers, Employees, and Individuals. In addition, Brokers face increased demands for their time and expertise with reduced support from Carriers/Providers.
Let's take a look at these changes and the issues:
1) Timelines for Implementation - While a number of groups have created timelines for the implementation of PPACA/Obamacare, we recommend starting with the Federal Government's timeline - http://www.healthcare.gov/law/timeline/
2) A New Vocabulary of Terms - We have isolated the following terms that are either reasonably new or that Brokers should review - There are probably many more! (Searching Google will provide multiple definitions and descriptions).
Adjusted Community Ratings – PPACA
Administrative Simplification Regulations
Co-Ops – PPACA Related
Deductible Limits – PPACA Related
Dental Insurance Maximums under PPACA
Early Retiree Reinsurance Program
EHBs – Essential Health Benefits
Enrollment Waiting Period - Under PPACA
Excise Taxes – For Cadillac Plans
Federal Exchanges – Health Insurance
FFE – Federally Facilitated Exchanges
Free Choice Vouchers - Under PPACA
FSA Limits – Under PPACA
Grandfathered Plans - uunder PPACA
Guaranteed Issue – Under PPACA
HDHPs – High Deductible Health Plans
HHS – Health and Human Services
HRAs – Health Reimbursement Accounts
HSAs – Health Savings Accounts
Individual Mandates – Under PPACA
Interstate Insurance Compacts
Life Time Limits – PPACA Related
MLR – Medical Loss Ratios
Multi-State Plans – PPACA Related
NAIC - National Association of Insurance Commissioners
Navigators - Exchange Related
OPM - Office of Personnel Management
Out-of-Pocket Expenses - Rescissions
Penalties - Under PPACA
Pre-Existing Conditions – Under PPACA
Preventive Care (A&B) – Under PPACA
Private Exchanges – Health Insurance
QHPs – Qualified Health Plans
QHIPs – Qualified Individual Health Plans
Risk Corridors – Related to PPACA
SBC – Summary of Benefits and Coverage
Section 125 of the IRSC
Section 105 of the IRSC
Shared Responsibility – PPACA Related
Section 105(b) of the IRSC
SPDs – Summary Plan Descriptions
State Exchanges – Health Insurance Subsidies
Tax Credits – For Providing Health Insurance
Tax Subsidies – For Health Insurance
Uniform Glossary of Coverage
Variable Hour and Seasonal Employees
Waiver Process - Under PPACA
3) The Need for Strategies and Solutions for Assisting Clients and Potential Clients with their Concerns, Questions and Demands - We suggest there are 5 Profitable Strategies and Solutions that Brokers can implement with existing Clients and utilize to attract New Clients. It is important to emphasize that this is the time for Brokers to reach out to Employers, Employees, and Individuals as a Trusted Advisor. It is essential to meet with decision-makers who are confused and need help. Schedule meetings - to inform not to sell -using a combination of traditional Outbound and New Inbound Strategies. This is the time to be pro-active!
4) Brokers face Reduced or Disappearing Commissions from Health Plans due to MLRs and Market Forces - While Carriers of the Health Plans have slashed the commissions, this is only one revenue stream for Brokers offering Benefits and Insurance. Brokers should continue to be, or become, the Trusted Advisor for the Employer's, Employee's and Individual's health insurance coverage. At the same time, the Broker should begin introducing the concept of Fee Based compensation for their advising services. Most Employers are not aware that Brokers are no longer being adequately compensated by the Carriers for their services. Employers are accustomed to paying for advice, ie. accounting, legal, risk management, etc. Brokers should also be the Menu Builder for the Voluntary/Worksite and Ancillary Benefit Plans. As Employees and Individuals participate in these plans and services (penetration), the commissions can be extremely profitable and an important piece to the Broker's Strategies for Success. The renewals generated from Employees and Individuals remaining on the Voluntary/Worksite Plans - year-after-year (persistency) - provides the Broker income required for maintaining ongoing Service.
Conclusion - In many ways 2013 and Beyond will be a great time to be a Broker - as well as to be a Carrier or Service Provider! Brokers should embrace the disruptive changes and capitalize on the opportunities. PPACA/Obamacare is not going away! There is a great deal to learn and adjust to as guidelines and regulations roll-out. The massive changes to the traditional marketplaces have leveled the playing fields. There are no experts at dealing with PPACA/Obamacare. No one has years of experience. There are Individuals and Organizations who are keeping up with the guidelines and regulations as they roll-out and that are creating profitable strategies and solutions. This is a great time to Partner and Affiliate with other Organizations to both gain expertise and to diversification.
For more information about the above - Email firstname.lastname@example.org / Visit http://www.benefitplace.biz or Call 216.577.5579