The $64,000 question on state and federally managed health exchanges will be "what is the broker compensation?" Reliance on state and/or federal government to control your compensation is an uncontrollable factor that could lead to the demise of many brokers whose sole business is groups under 50 lives.
There are two "exchange trains" that have left the station. The state and federal exchange train - don't board that one if you are searching for a rosy future - and the private exchange train. Private exchanges continue to be built around the country and very well could be a key differentiator for those firms that succeed. The U.S. is in a major transformation from an employer-driven payor model to a consumer-driven model. Private health exchanges with a defined contribution approach will be the key driver of this transformation.
In this future, a broker will understand the public exchanges and the various financial implications, which should also open up the discussion of private exchanges as a viable alternative. In this scenario brokers will have an opportunity to strengthen their role by offering solutions that help employers of all sizes control costs.
Securities offered through MarshBerry Capital, Member FINRA and SIPC.
How are you preparing your agency, clients to work in an exchange?
We have been working with an exchange called the Commonwealth Connector since 2006. We serve as a member of the Connector's Broker Advisory Council and offer helpful guidance on market perspectives as new legislation is contemplated or regulations are promulgated.
I don't believe many or any of our clients will go to the exchanges. They tend to be entrepreneurial service companies with rich benefits and robust contribution strategies. But, we are discussing and explaining the exchanges to keep clients informed.
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