Health insurance exchanges represented gloom and doom for many advisers one year ago. That feeling is not so true today.
The U.S. Department of Health and Human Services threw up their hands sometime in the past year on federal exchanges. They announced that 33 states with federal exchanges would not have an exchange for groups of less than 100 employees until "the earliest sometime during 2015." That is not Jan. 1, 2015 and it could mean almost any time after 2015. The number of 100 employees is significant, since 95% of Americans work for a company of less than 200 employees and most of that number is under 100 employees. I smell selling a opportunity.
Since most employees work for employers with fewer than 100 employees, this means federal exchanges are off the table for that market segment until further notice. Many of the remaining 17 states operating their own exchanges allow brokers to sell on those exchanges at decent commission rates, at least in the first year.
So selling in some of those states may also be a boom time. Advisers who hustle can sell group as if health care reform never happened. I say this because the threat of federal exchanges is off for now, but the growing body of administrative requirements is increasing.
That spells an opportunity to educate prospects, and with a little luck convert your demonstrated expertise into an AOR. What am I missing here? This is a golden time to be selling group health.
What is wrong with the federal exchanges?
Many insurance companies have legacy computer systems. Private exchanges wrote their code in modern languages that are supposed to talk to the archaic computer systems of many insurers. That does not work and is a big reason why the federal exchanges, and perhaps some private exchanges, will have problems in executing this key component of the ACA.
Another problem with the federal exchanges is the various other laws still in effect that make insurers nervy about selling plans over the exchanges. You know the biggies: HIPAA, HITECH and GINA. All deal with the privacy of patients' medical information.
The fines for breaking these laws are stiff. I have read and taught a lot on the ACA and have found that this area of concern is not locked down yet, hence some reluctance exists among "issuers," as the ACA calls insurance companies.
Sell by educating prospects on the ACA. I have taught more than a dozen webinars with employers on the ACA since January. It is the No. 1 topic on their minds. They do not understand this monster with its complicated administrative requirements. The lack of knowledge among employers is stunning.
You must educate your clients and prospects on the ACA because your competition either is doing a great job at this, or is hardly doing anything at all.
You have to play offense and defense in selling and talking about the ACA. When you come across a prospect that has Joe Bag-of-Donuts as an adviser, cater your knowledge of the ACA and its fines to that particular prospect. The prospect will love you, and you will set yourself up for a sale.
It is hard to learn just the basics of this vast law, but the concept of using it to win sales is simple.
Davidson, CEBS, is founder of Davidson Marketing Group and FutureOffice Network. He is also on the faculty at the Sheldon B. Lubar School of Business at the University of Wisconsin, Milwaukee. Reach him at
