“I’m seeing the run to spreadsheeting,” said Rhonda Marcucci, owner and consultant at Gruppo Marcucci, to brokers during a session at the Workplace Benefits Summit in New Orleans on Monday. She told brokers to not rush to rank private exchanges because they “all have different value propositions” and noted that “it’s better to consult with clients about what they need” and lead them to the correct exchange for them.
Marcucci led a panel about the common traps with private exchanges that brokers should be aware of for their clients. She emphasized that it’s a pretty “messy” area right now, but could grow to be a $17 billion industry in just a few years.
Tony Hernandez, panelist and chief information officer of Gallagher Benefit Services, noted that financial liability — what can happen if people fail to understand the contractual relationships — is a top issue for private exchanges right now. “Not understanding the agreements with carriers, providers … needing to know what’s on the hook for what pieces,” Hernandez said, is crucial for an employer to opt-in to a private exchange.
Hernandez also emphasized another point for brokers — they shouldn’t fall into the trap of the “shiny ball” of exchanges. “Do the due diligence and make sure they’re supported on the back end of it,” he said in response to the group’s consensus that employees still want a live person to talk to about benefit choices, no matter how elevated the shopping choices get.
Marcucci told the mostly broker audience that clients need to commit to all employees enrolling. “See that an employer is willing to be with it for a certain amount of time … educate the employees about this,” said Dayne Williams, chief executive officer of Plansource, also a panelist. The group emphasized that it will take time for a company to see the benefits of a private exchange.
The panel also cautioned brokers about looking thoroughly at their clients thoughts on benefits administration. “We see it everyday that people think they want an exchange and they really only want ben admin,” Williams said.
Marcucci and the panel parted by reminding brokers that consumerism is really coming and to think about the right type of private exchange — not just any exchange. “You won’t go wrong if you look at who’s better for what client,” Hernandez said.
