Have you given any thought to what your role as a group health insurance agent will be in the coming years? At a recent sales conference for health insurance agents, a speaker asked everyone to look around at their fellow agents. "At least half to two thirds of the agents you're looking at now will be out of business or not selling health insurance in 2014," said the speaker.
Too dramatic? Perhaps, but because of the Affordable Care Act, our industry is facing a sea change moment - a broad and complicated transformation filled with challenges for everyone - particularly you. It's imperative you start thinking now about your new role as an agent under the ACA regulations and how it will differ from what you've done in the past.
The new health care adviser
Health insurance agents typically perform the following duties:
* Work with the employer to evaluate their benefit plan design options.
* Explain the details of different fully insured plans from various carriers.
* Spreadsheet the various plans so the clients can see which plans are the least expensive.
* Make specific recommendations and tailor plans to suit their needs and budgets.
* Review their plans periodically to update coverage and limit costs.
In addition to these responsibilities, the health care adviser will need to maintain consistent contact with their client throughout the year in order to:
* Communicate the requirements of the ACA.
* Explain HIPAA and ERISA compliance and employment law as they relate to the ACA.
* Assist in long-term planning regarding "pay or play" scenarios.
* Promote wellness education.
* Educate employers on the benefits of alternatives to fully insured plans - such as self-funding - and understand the mechanics as they relate to medical underwriting, claims management and employer internal cost allocation.
* Serve as their advocate and adviser in dealings with insurance companies, doctors, hospitals and government agencies on claims, services and regulations.
* Help employers communicate benefits packages to employees and explain how the plan meets or doesn't meet ACA guidelines and what employees' options are for coverage.
It is now imperative you, the health care adviser, have a working knowledge of all the provisions of the ACA, including the inner workings of the newly formed public and private insurance exchanges and insurance cooperatives. As new regulations are released, it's critical you be prepared to explain to your clients how the changes affect them.
For instance, the Obama administration announced in July that they will delay the mandate that employers with 50 or more employees must provide coverage for their workers or pay a penalty. Penalties have been pushed back from 2014 to 2015 and will range from $2,000 per employee for failure to provide coverage to $3,000 for failing to provide minimum value, affordable coverage. Many employers, though, will need assistance determining full-time equivalency and what constitutes minimum essential coverage, minimum value and affordable care.
In addition, many large employers with low-wage employees cannot afford to provide insurance and may be interested in learning about their options, such as self insurance, which does not fall under many of the ACA rules and regulations. It's important you understand the key components of these plans.
Using ACA to grow your agency
The good news is that opportunities abound for agents who are willing to work hard and expand their offerings. Good ways to grow your business include:
* Embracing and learning more about self funding, including the components that make it viable for small businesses - such as stop-loss coverage to reduce risk.
* Build a fee-for-services model, because you will be compensated differently for your services.
* Health care insurance agents traditionally have been paid a commission; the new health care adviser often will be compensated with fees for services.
* Sell ancillary products.
* Discontinue low revenue, low margin business.
* Partner with competent resources such as general agents, carriers, third-party administrators, ERISA specialists and larger agencies.
As a professional health care adviser, it's important for you to act on the rapid changes happening. The ACA has brought change and turmoil into the industry at a level we've never experienced. But with great change comes great opportunity to those who are prepared. Right now, your clients need you more than ever. You'll work harder than you have before, but the potential rewards and opportunity for growth are there for the professional agent.
As we get closer to 2014, the health insurance agent will die; the professional health care adviser will thrive.
What will be your choice?
Meylan is the national sales director for Allied National, Inc., a Shawnee Mission, Kansas-based provider of small group self-funded health benefit plans.
