A funny thing happened on Gayle McCann’s way to becoming a benefit adviser. She earned a degree in nursing, but didn’t want the insane hours of working in a hospital. So, she became a financial planner and soon started with her husband, Pat, one of the most respected employee insurance brokerages in Minnesota.
Before she became Partner, President, Risk Advisor of the Johnson McCann Division of North Risk Partners in St. Paul, McCann pocketed her nursing degree and moved to Colorado with her new husband to live just outside of Denver. They were both Minnesota natives and they loved the mountains of Colorado. She soon found work managing 10 paramedical examiners for life insurance physicals and marketing to the life insurance companies. Within six months, a sales manager for Mutual of New York (MONY) proposed that McCann become a financial planner.
Also see: “Who are EBA’s 2016 Advisers of the Year?”
On her first day of work, McCann discovered that her manager of the MONY office was fired. She went down to work and in her first year was awarded Rookie of the Year by writing more commission and applications than the other agents, despite that fact that she was new in town. Still, at the age of 24 and with limited leads thanks to her newcomer status — “There were not a lot of warm leads,” she jokes — she and her husband decided to return to Minnesota. She transferred to the St. Paul MONY office after serving 15 months in the Denver office.
In her home state, McCann helped business owners and their employees with their financial planning and finding group insurance. McCann soon found that she preferred working with the businesses on their group benefits because she could help all the employees and not just the owner.
Thanks to her nursing background, she formed a bond with local medical clinics and enjoyed working with the doctors and their staffs. Seeing a real opportunity, Gayle convinced Pat, who worked as a property/casualty account executive with Marsh McLennan, to leave his job and start their own firm. They started Johnson McCann Benefits in 1984. (Johnson is Gayle’s maiden name.)
The first client
“Our specialty, or our niche, that we spent many years working with is the medical groups. The medical groups tend to be on the smaller side and they can also grow and you can have the multi-specialties that are very large,” she says.
McCann brought together 10 OB-GYN groups in Minneapolis to purchase benefits as a larger group. Soon, that group grew with the addition of around 21 pediatric groups that purchased everything together, and then roughly 10 multi-specialty medical groups also joined.
“If they were small or medium it didn’t stop us, we figured out a way to make them large,” she recalls. “The carriers would do it until 2000, and then they wouldn’t. Our state law changed and it differentiated laws for small groups compared to laws for large groups.”
Because some of the groups within the purchasing pool were small, they felt that they had to undo the association. Therefore, all the groups had to purchase benefits independently all over again. “It’s the health carriers that were fine for about 10 years and then not fine again,” she says.
But McCann wasn’t fazed. She found a way around the issues, developing enhanced offerings for Triium, a Minnesota-based group purchasing organization formed to support small- to medium-sized businesses. Since her offering began 12 years ago, the medical groups have experienced cost reductions at each renewal. Triium now has 95 groups with $5 million in premium for the block.
Vision of the future
McCann’s brokerage covers the St. Paul region and also has clients in the state of Minnesota and a few others in neighboring North Dakota and Wisconsin.
When asked if she has plans to expand, she does not demur. “Oh, yes, we always have plans to expand. One of the main goals of North Risk Partners is to expand,” she says. “We have other platforms, there’s, I believe, 18 or 19 other platforms so they’re almost like cousins to us throughout the United States, but along with one other cousin, we’re the only two here in the upper Midwest. So we absolutely plan to expand farther into the upper Midwest, Iowa, South Dakota.”
Does she have a map on her wall with pins showing her next conquest? “Well, we have to strategize with the North Risk Partners as a whole, so I believe at this point we are still focusing on further acquisitions in the state of Minnesota.”
This is quite the change from the early days. The McCanns started Johnson McCann in 1984 and built the company to $3.7 million in revenue, with Gayle’s book at $1.7 million by 2011. Their firm merged with three other brokerage firms in Minnesota in 2013 to become North Risk Partners. The other brokerages concentrated primarily on property and casualty insurance and personal lines.
McCann is president of North Risk Partners’ benefits hub in St. Paul, while Chris Meidt is CEO and COO of North Risk Partners. With these combined insurance offerings, the company serves as a full-service brokerage to its clients. The merged group has 15 locations, 170 employees and $27 million in revenue.
One of those employees is Gayle and Pat’s daughter, Courtney, who started working at Johnson McCann in 2012 after a three-year tenure at Sun Life. Their son, Andrew, will likely join the firm, but his parents require that he work three years at another company before considering employment at Johnson McCann.
McCann has won several awards. She is the winner of the Blue Cross & Blue Shield Agent of the Year in 2006 and Johnson McCann won Best Place to Work award from Minneapolis/St. Paul Business Journal and the Sun Life MGIS Summit Award. She is also a member of the Million Dollar Round Table and is a Certified Life Underwriter.
What employees and employers want
In her years in the business, McCann believes that what employees want is based on the unique demographics of the company. “For the very first time we have employees from three different generations, if not more, because the employees are working longer and the younger ones are changing jobs more frequently,” she observes. This makes serving these different demographics a challenge, to say the least.
“What I have found [to be] really taking on steam is the private marketplace. The employee who is different from their next door neighbor can take the proceeds of the defined contribution from their employer and purchase what they personally need and they personally believe in and no longer does the employer have to struggle with how to make everybody happy,” she says.
Although McCann says that she and her fellow brokers saw this happening back in the early 1990s when it was called a cafeteria plan, they didn’t have the technology to make it a widespread reality. “We weren’t there yet, and now we are,” she says, citing the innovations of web browsers, Internet communication and social media.
“Another huge breakthrough, besides all of the technological advances of the employee going online and looking at everything in a portal, was the ability to have a statistical guideline and an algorithm to choose the portfolio best for them based on questions that they answered.
“The other piece is the insurance companies seeing this as the future and being far more flexible in allowing a group to come on and not requiring a participation minimum,” she says. “It used to be that you needed 20-25% of the employees to take a voluntary benefit and now that’s all gone. If one employee wants critical care they can have it, or if one employee wants dental and nobody else does, they can still have it.”
How does she find the right balance between employee demands and employer needs? McCann admits that she finds this exciting and appreciates that it adds variety to her practice. “You are always having to change with the times and I think that’s what makes our business so great, because no day is the same and no client is the same, and no answer for a client is the same,” she says.
She adds, “That’s why I’m in benefits. I think that’s why benefits is very innovative and with change always in every single situation came opportunity.”
The latest innovation is not necessarily technology but the adoption of the private marketplace, McCann’s preferred term for private exchanges.
“I think it’s a win-win-win for everyone. The employees love it and they think it’s absolutely fantastic. The employers are able to budget and they no longer have to make all the decisions for all the different types of employees that they have. So the decision is out of their hands and yet they are still fulfilling their obligation through ACA to provide affordable benefits that meet minimum coverage requirements,” she says.
“And, from a broker standpoint, it’s fantastic because you have all these products that you’re offering. And then also for the HR needs it’s all online. It makes their life so much simpler and automated. So it’s a win-win-win-win, really.”
McCann is just getting started now. “It was also a lot of fun for our group because we went to the local carriers — every city has local carriers — and we introduced a new platform [called Bright Choices by Liazon]. Our group brought it to the attention of the carriers and made it happen for our clients, but it’s available to all brokers in the state of Minnesota.”
What millennials want
As baby boomers begin to retire from the workforce, the question on everyone’s minds is what do members of Generation Y expect from employee benefits? McCann says that the younger breed of employees expects everything to be automated and that all information will be relevant to them. Plus, she doesn’t expect them to stay at their jobs for very long as they find their way in this “gigging” or so-called Uber economy.
“I think they’re not going to stay at a job very long, so they’re going to want to move from one job to the next and not have the benefits be that much different so they have to relearn everything over again,” she says. “I think that they’re going to want to be able to purchase it on their own and not be told what they’re getting.”
Almost like insurance for their car in a way, she says as an example.
McCann believes that one of the key notions of the Affordable Care Act era — portability of insurance from one employer to the other —could be a reality very soon. “Right now, our marketplace is group, but I can see the marketplace changing to individual,” she says.
Along with technology, one of the biggest disruptors to the benefits space has been the ACA, she notes.
“ACA was a major shakeup because our clients looked to us for help that really was starting to enter into an entirely different profession. They looked to us for legal help, they looked to us for accounting, they looked to us for payroll, so then they started to expect a lot out of us. Then we had to outsource quite a bit,” she says.
The Affordable Care Act made it necessary to add “expensive resources,” such as Zywave, to keep all clients in compliance with the new law, McCann says.
Her firm also partnered with organizations that were able to provide her employees with much needed information about the sweeping healthcare plan. This included working with an attorney who made it her goal to specialize and know everything about the ACA.
The attorney hosted many of the firm’s webinars and seminars to keep the firm abreast of all of the ever-changing environment of the ACA. “I also belong to an organization out of Washington, D.C., called Employers Council on Flexible Comp, and they keep up with all of this and the interpretation of the law,” she says. “Our carriers help us, as well. It’s a combination of organizations, legal assistance and the carriers.”
In McCann’s 32 years in business and after working with roughly 250 groups, she still enjoys serving her clients. “Our organization thrived on creating products that would be entirely different from what anything else anyone was offering. We thought long and hard, what can we do to help these clients that nobody else was thinking about,” she says. “Because we were in a niche, you get to know their challenges and their points of pain and what they need, and because of being so close to those clients and really getting to know them and what’s unique to your industry, then we were able to go to the carriers who we were also very close to, to come up with a product that would fill that need.”
McCann adds, “Our proudest moments have always been when we’re not just selling products that are already created, we listen to our clients and we create the product along with the carrier. And I think that’s very unique,” she says. “We actually created a health concerns product, but it was only available to a particular industry which was the industry that is our niche.”
Marcus Merz, former CEO of Preferred One, is a former colleague who can attest to McCann’s drive. “I have known Gayle for over 30 years as one of the hardest working professionals in her industry. She has never shied away from tough clients,” he says.
Also see: “Who are EBA’s 2016 Advisers of the Year?”
“Even though many brokers and insurers avoid small business owners or medical groups because they are seen as difficult to work with, Gayle has served them well — recommending plan designs, benefit choices, and creative funding options,” he adds. “She has cultivated an extremely loyal client base, which is testimony to her competence and knowledge of their insurance needs.”
Her current colleagues agree. “Gayle’s commitment to her clients first and foremost, and her practice is truly exemplary. As an adviser, she has helped me understand what it takes to be a true advocate and professional. Her knowledge of the benefits industry, and continued mission to find or develop new solutions to deliver clients has been paramount to her success,” says Adam Olson, risk adviser for North Risk Partners.
“In an industry that is truly in need of innovation and differentiation, Gayle keeps her client’s attention by introducing new strategies and thinking outside the box. She is ultimately respected, and a trusted adviser. Gayle’s lead-by-example approach has been key to my development as an adviser,” he adds.
McCann credits her early days as a nursing major with helping her diagnose her clients’ needs. “Since I entered that profession you can gather that I’m a very empathetic person and I listen. Because in order to diagnose, you need to listen and get to know the person, get to know your client, and care about what your client wants to achieve, that your goal is to help them achieve that and to protect them when it comes to compliance and that sort of thing,” she says. “Protecting your client, and guiding your client and assisting with the diagnosis is critical.”
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