How will the Affordable Care Act and associated changes in the employee benefit market impact the role of the broker? A recent LIMRA survey of small businesses provides insight into steps that brokers can take to boost their standing in this market.

Research shows that among small businesses (with fewer than 100 employees) that currently use an adviser for employee benefits, 53%  are very satisfied with their adviser, while only 4% are not satisfied. However, this leaves more than 4 in 10 small employers feeling neutral about their benefit adviser — indicating much room for improvement. Client satisfaction will become increasingly important in the coming years, as employers continue looking for ways to rein in their expenses.

One key area of concern is that some small businesses that work with producers may not view these financial professionals as “advisers” in the first place. A notable portion of small employers claim that they do not have an adviser, even though they have purchased benefits through an agent or broker. This suggests that they may view the producer relationship as transactional rather than as a source of advice. In addition, employers that have recently stopped using a benefit adviser cite reasons such as the adviser being too expensive, not providing the necessary consultative services, or not providing in-depth input on important topics. 

It is clear that to maintain their position in the employee benefit market going forward, advisers will have to truly live up to their name by providing customized service and thoughtful guidance to their employer clients. The need for such insight is likely to increase in the near future, particularly as the ACA continues to be implemented.

Small employers express extremely low levels of knowledge about the ACA, and particularly about the newly created public exchanges. Since many of these small businesses could potentially obtain medical benefits through the exchanges, they will need well-informed advisers to help them evaluate their options. Indeed, more than 90% of firms expect that their need for an adviser will increase or remain the same over the next two years. Proactive benefit professionals can use this time of confusion to prove their value by supplying insightful guidance and tailored advice, thereby cementing their relationships with small business clients for years to come.

Landry is analyst, group insurance research, at LIMRA. Reach her at (860) 285-7889 or klandry@limra.com and hear her session, “Has ACA Shifted The Role Of The Broker — Are You Failing Your Clients?” at 1:15 p.m. on Monday, Feb. 24 at the Workplace Benefits Renaissance. Click here to register, and for more information.

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