What if? I know it might seem improbable, but what if we could create a consumer-centric, more efficient benefits marketplace? What should advisers, brokers and consultants be thinking about to help their clients make that vision a reality?
Shortly, the Supreme Court of the United States will issue its ruling on the constitutionality of the individual mandate contained in the Affordable Care Act. There is a lot riding on the decision for all stakeholders and brokers and consultants need to be prepared to advise their clients. What should you be thinking about while we wait for the decision?
ACA or not, rising health care costs are nudging the health insurance market toward defined contribution, away from defined benefit just like the financial services industry did several decades ago. The only real questions are a matter of pace and what can we learn from the financial services transition so we can make this shift more pleasant?
What can an adviser do to prepare for this market shift? What principles, tools and resources will be required for employers and their employees to navigate the changing landscape? I have a few ideas and thought I would share them with you.
The ACA establishes the requirement for state-based health insurance exchanges … it also provides for the creation of private, non-profit exchanges as well. In their purest form, exchanges offer employers a pathway toward defined contribution and away from defined benefits. For the adviser, it represents an opportunity to enhance the strategic value of your consultation to your clients and a chance to deepen the relationships with their employees through greater personalization of benefit needs.
How do you prepare your clients? Educate them on the principles of consumerism, health and wellness through the implementation of Consumer-Driven Health and Wellness plans structured with a health savings account (CDHP/HSA). This is not a new thought, but one I firmly believe lays the foundation for a shift to defined contribution — the future of the employee benefits marketplace. As employers ask their employees to work within a set budget of benefit dollars, in most cases CDHP/HSA will save employees money over traditional health plans and create opportunities for unused dollars to be allocated to other important insurance needs like accident, critical illness and long-term care insurance.
If you are prepared to proactively advise your clients — you can help them make the shift to a more consumer-centric, efficient employee benefits marketplace and in turn enhance your value, diversify your revenue and build a pathway to the real opportunity for the future — a relationship with your client’s employees and their families.
— Mark S. Gaunya is a principal at Borislow Insurance and president of the Massachusetts Association of Health Underwriters.
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