Health care and the Supreme Court are expected to take center stage this month in what will be a magnanimous announcement that will telegraph the futures of many, regardless of what the high court says. Now you may be reading this in the latter part of June when the decisions on PPACA are already old news, but read on because whatever choice the court makes has consequences that will change your direction and that of our industry for a long time to come.
Option 1: The individual mandate or the whole law is found unconstitutional
The individual mandate is the funding card. Pull this lynchpin and the whole house of cards crumbles. The law lacks severability clauses, meaning that if one part of the law is struck down the rest can remain intact. That is not in PPACA, but the high court can probably figure out how to do whatever they choose. The consequences of this decision will likely lead to a renaissance in the employee benefits brokerage industry as players reenter the industry because of a bright line of sight, at least for the next few years.
Players will similarly flood back into the brokerage business if the entire law is found unconstitutional. This will essentially create a need for brokers and consultants to help employers undo two years of groundwork which has been laid in keeping with PPACA's rules. Buyers will be scrambling for quality information on what the new normal now looks like. That's where you come in, and you'll be able to sell medical again without encumbrance. It will be a good time and you'll make a lot of money if you prepare now for this potential eventuality. Prepare now.
Without PPACA, brokers and consultants will scramble without the burden of MLR and other rules to help their clients with group and individual health plans. This will be particularly true for employers with insured group medical plans. Carriers will once again confront the necessity for advisers and slow or reverse the slippage in commissions.
Getting PPACA out of the way will feel like the good old times for brokers, consultants and employers because of the change to normal. Do not, however, be lulled into a sense of complacency. New legislation will be created, but hopefully less draconian.
Option 2: The individual mandate or some part of PPACA is found constitutional and upheld
A decision that the individual mandate or some part of PPACA is constitutional will mean hyper rhetoric by both political parties in this important election year. Each party will jostle for political points (and potential votes) by touting their party's talking points for or against what is already a very unpopular law. This will increase awareness of benefits in general among employers and employees - always a good thing for brokers. Depending on who wins the White House and one or both houses of Congress, shouts for repeal will be heard on TV news, talk radio, robocalls and a truckload of junk mail. What does all this mean for you?
An upheld PPACA law means that your professional life will continue as it has and continue to change as we move into 2014 in what will be arguably the most trying time for brokers, consultants, employers and health plan participants. You will be very busy having reasons to call on all kinds of buyers to explain what's next and to pick up business in the process. You will have all lines to sell, including commercial - except insured medical.
We've talked about helping your clients with something we call HR clusters, particularly in the mid-size market. This will continue to be an enormous opportunity for you that will continue for years to come as you seek to broaden your revenue base and keep your clients close to you with value. We're already moving into that area in a big way for brokers and I am amazed at the strong response.
As H.C. and the Supremes take center stage this month, realize that some form of change will again be upon us. Change is good. Some brokers and consultants will feel low, while others will feel, correctly I believe, like the sky's the limit because change always brings opportunity. We have talked about short- and long-term opportunities in this brief column. What will you seize? The future is so bright for those who drop old ways of making money in employee benefits and morph with the times to adapt new and exciting opportunities that buyers present to us. One needs to only look around.
Davidson, CEBS, is founder of
