There are murky new ACA liabilities for your benefit agency. These potential liabilities lie with insurance protection coverage that you may need. Hint: Walk wary with the terms you use in advising on the ACA or buy more insurance and take your chances.

The dust settles ever slowly and clarity emerges around the far-reaching impact of the ACA. Put a review of your commercial insurance on the docket. Look at lines that cover you, your producers and your benefit agency in the health benefit sales process. 

Producers and their agencies must tread carefully with words used in advising clients on the ACA. Courts have ruled that some D&O policies do not cover terms like “professional services.” Here is another potential no-no: use of the word “expert” or “specialist” as an ACA adviser. Using these terms in a sale raises the stakes of legal liability for agency owners. Have you or other producers in your agency passed a legitimate certification process or other testing program to use those titles? Common sense says those titles may be questioned hard when attorneys get involved and an E&O or D&O claim arises.

Chances are you fill your sales proposals with information about the ACA. You may also tout your ACA expertise on your website and email. Do such representations truthfully depict who you really are?  We wade in a sea of insurance policy language and nit-picky attorneys whose stock in trade is dissecting the written word. Be careful!

Communicating complexity

Few disagree over the complexity of the ACA for producers and buyers. How do you communicate the rules of the ACA to clients? Are you accurate? Are you thorough with the details? Practice essential accuracy and thoroughness to minimize your risk of an E&O claim against your agency. Do you use the same terminology as the carrier? You should. Ensure that your customers understand what you say. Ponder these questions in this litigious world of E&O and D&O claims.

  • Document what you do. According to E&O experts, use properly and carefully written documentation of your work with clients on the ACA to protect you and your firm if an E&O claim arises.
  • Be timely. Documents should be handled and processed by the person who had the conversation with the prospect or client.
  • Journal the details. Who did the agent speak with? What specifically did you, or your producer, discuss with the client? What was resolved? Do open items exist? What is the nature of those open items? Does the producer in question keep a diary for follow-up matters?

Experts recommend you put a standard message on the street, in your proposals, email and everything else when it comes to ACA communications with the public. That includes not saying certain things that may cause problems at best or be flatly false at worst. Document your sales processes, checklists, workflow, and then follow your own procedures. Following this minutia helps you run a tight ship in the stormy waters of the ACA, and it could save you on an E&O claim.
Be wise, but fear not. You can manage the risk of claims that could arise. Get started now if you have not already done so.

Davidson, CEBS, is founder of Davidson Marketing Group, FutureOffice Network and Dial FONHR. He is also on the faculty at the Sheldon B. Lubar School of Business at the University of Wisconsin, Milwaukee. Reach him at craigd@davidsonmarketing.com.

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