When the Affordable Care Act first took full effect in 2014, many advisers felt it was time for them to scale back or exit the benefits business. Derek Rine thought differently; he concluded it was the perfect time to dive in.
A recent graduate of the University of Akron, Rine had joined the home & auto side of his father’s insurance business, but he was beginning to suspect that the real action was in benefits.
“Left and right, I kept hearing brokers complaining about all the compliance issues and rising costs due to the ACA,” he recalls. “But I saw it as an opportunity.”
Rine is one of 20 2018 Rising Stars in Advising, chosen by EBA after a month-long online nomination process.
His firm, David Rine Insurance of Fairlawn, Ohio, began intensively researching ways for employers to subdue their skyrocketing medical costs. It concluded that self-funding via a group-captive strategy could help small and mid-sized employers reduce their costs substantially and started marketing the program, becoming one of the first brokerages in Ohio to do so.
Less than two weeks later, Rine and his firm closed their first group-captive accounts. One of them, a group of 160 lives whose CFO had initially hesitated to move to self-funding, saved $600,000 or 33% of its annual healthcare cost, the very first year.
Building on successes like these, Rine and his colleagues quickly began promoting other cost containment measures, including referenced-based pricing, employee concierge services, self-service apps and pharmacy management. They also ensured that their clients remained compliant with current legal and regulatory requirements, as part of their service offering.
Their approach has resonated with the local business community, allowing Rine to bring in ever-larger accounts. He recently took over a group of 3,000 lives from a leading regional competitor by showing the CFO how a group-captive program in tandem with his firm’s self-service app would save the employer $1 million a year.
“Derek understands that taking control of the healthcare spend has to start in the C-suite,” says Nelson Griswold, founder and president of Bottom Line Solutions, an adviser to advisers that has worked closely with Rine. “He works with the CEO, CFO or the owner to demonstrate that he can deliver real bottom-line results.”
Also see: “2018 Rising Stars in Advising.”
Working through his clients’ top management allows Rine to assume the role of healthcare supply chain manager, which Griswold views as the key to helping clients control their healthcare costs.
“Traditional, transaction-oriented brokers continue to deliver nothing but ‘less bad’ renewals,” Griswold says. In contrast, “Derek and other next-generation benefits advisers are showing employers that it is actually possible to control healthcare costs and return part of their benefit spend to their bottom line.”
Rine himself puts it this way:
“The industry needs to stop doing what’s safe. The current way of paying for healthcare is not sustainable anymore. Employers are sick of it, and this gives smaller, more nimble brokers the edge for the first time, because they’re less beholden to the traditional model than the larger, more established firms. But to succeed,” he adds, “advisers have to get aggressive and think outside the box.”
Clearly, Rine is practicing what he preaches.
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