Some years ago, I was a researcher for a major employee benefits educational association. I learned that changes in federal legislation mean big business for advisers because of the demand they create for education. So here is my educated prediction for the new year: the equation in 2011 will be education equals sales.
PPACA was the biggest single piece of benefits legislation since ERISA. It created an enormous demand for education among your prospects and customers. This demand is exacerbated by the confusion surrounding the regulations that have been issued so far and new threats that the whole thing may be repealed, replaced, defunded or struck down by the courts.
As a result, advisers with the most current knowledge about health care reform are in demand among perplexed employers. Remember: Educating your prospects and clients in 2011 equals more sales.
You'll want to bone up on the slew of new rules affecting your prospects and customers. Gift horses like this don't come along every day and you want to become the expert adviser on all things new for your prospects and clients.
In this topsy-turvy time of economic uncertainty, it is not a big stretch to think that you can score an AOR by being an educational savior for your clientele.
Start by using FutureOffice Network to generate one of several timelines for implementation of health care reform. Then move on to what is next. In this fluid environment, give your prospects and clients a steady diet of what is happening in Washington and the states.
FSAs and MSAs
Get out in front of this one fast since it went into effect on January 1. FSAs and MSAs are popular and you'll face questions about the new FSA/MSA rules. You want to be Johnny-on-the-spot with the answers.
Come prepared with nice hand-outs that explain what is happening - that is, OTC medicines now require a prescription to be eligible for reimbursement, and the maximum deferral is now limited to $2,500 a year.
Despite the overload of compliance material from carriers, TPAs, competitors and other vendors, your prospects may not know about these new rules yet. Turn your educational discussion into a sales opportunity. You may not sell a product, but at least you can use the opportunity to position yourself.
Don't assume your prospect understands these new rules or even knows about them. This is something important to talk about and use to sell yourself. That's always a good thing.
Distributions from HSAs to Archer MSAs
This one may not apply to all customers, but keep it in your back pocket. The tax distribution from an HSA to an Archer MSA that is not used for qualified medical expenses under Section 213(d) of the Internal Revenue Code is now 20% of the disbursement.
This is a relatively obscure rule and almost not worth talking about in many markets. But what if your competitor is talking about this and you're not? You get the point.
The temporary national high risk pool
This piece of health care reform is an option for individuals who cannot get affordable coverage because of pre-existing medical conditions. It is in effect until Jan. 1, 2014. You want to talk to prospects and clients about this one to show off, but also to provide meaningful advice.
(Note that it only applies to adults; plans are already prohibited from applying pre-existing condition clauses to individuals 18 or younger.)
Elimination of lifetime dollar limits on group health plan coverage
Some annual limits on health plan coverage are still OK, but lifetime limits are out. For some self-funded plans this means a second look at aggregate stop-loss insurance. Your ASO buyer essentially has a larger risk exposure with the disappearance of lifetime limits, particularly if the limits are not set high.
Your insured employers will need to talk to you too so that you can explain the negative effect that this change will have on premiums, especially plans with high-risk populations and below-average turnover. Insurers are now also prohibited from rescinding coverage except in cases of fraud.
Zero cost-sharing for preventive services
There is no free lunch, but this one is perceived as such by plan participants. Perhaps you've seen ads on TV aimed at seniors promoting this freebie. As of last September, certain health plans cannot charge plan participants for receiving a limited menu of preventive services. These include, but are not limited to, certain immunizations, preventive child care, women's preventive care and screenings, and more.
This rule, which went into effect for all plans on January 1, represents a prime educational opportunity for employees and an opportunity to educate employers about the negative effect on premiums.
Tax subsidy for small employers
This subsidy has been covered well in various media, but given the sheer volume of rules coming from HHS it behooves you to talk to your small-employer prospects and clients about it again and again. (The rule defines small employers as those with no more than 25 employees and average annual wages of less than $50,000.) Remember, 95% of Americans work for employers with fewer than 200 employees - and the biggest segment of that group is employers with fewer than 100 employees.
Bottom line: You probably have clients and prospects with fewer than 25 employees. Get out and talk this up. Education equals sales.
Reinsurance program for some retirees
This a rule that took effect last year, but you should be talking to prospects and clients about it this year. It offers some relief to plan sponsors that cover retirees who are older than 55, but are not eligible for Medicare.
Premium rebates from carriers not meeting MLR requirements
Health plans are now required to provide rebates to consumers for the amount of the premium spent on clinical services and quality that is less than 85% for plans in the large group market and 80% for plans in the individual and small group markets. At first glance this sounds like a great cost control, but it really is a Trojan horse that, once implemented, will result in fewer services and higher costs for health insurance.
Your prospects and clients probably see this as a good thing, if only for a short time. You need to educate them on basic health care economics. You'll look good for doing so, and you'll provide a favor that your prospects and customers will respect you for - maybe this year, and certainly in the years ahead as the adverse economic effects of health care reform kick in.
Grants for wellness programs
Wellness is all the rage today, which is why you want to get out in front of this. PPACA increases the maximum incentive employers may offer plan participants who meet certain targets in bona fide wellness programs, up to 30% in 2014. HHS also has set aside $200 million in grants over five years for small companies to start wellness programs. Sounds to me like a great story to talk to your prospects and clients about.
Yes, 2011 will be the year when education equals sales. We don't know everything this new year will bring, but we do know it will bring change. Your prospects and clients will need you to explain the intricacies of all these changes and how each one affects them. So switch gears and become an educator.
As always, contact me at craigd@davidsonmarketing.com if I can answer any questions or be of assistance to you.
Davidson is founder of Davidson Marketing Group,
