Independent benefits brokers are probably the last mom and pop industry left —outside of physician groups, perhaps. But with health care upheaval, our industry is in a wild state of flux — to put it mildly — making it difficult for many brokers to predict their future.

As we all know, many employers are seriously considering opting out of health care and so-called “navigator” models basically haven’t materialized, leaving little clarity and still lots of heartburn.

Another key force in our industry pressure cooker is the trend toward carrier consolidation. It used to be that increasing commission caps were our only focus. Now, with loss ratio, Wall Street and other pressures, carriers are cutting their sales forces and can’t afford to manage large groups of independent brokers with only a few accounts. To remain relevant and continue their relationships with certain carriers, brokers either have to have size or market presence to survive.

But while carriers want consolidated broker relationships, employers want independent firms. At United Benefit Advisors our research shows that 93% of groups use the services of an independent adviser vs. a large firm. While this bodes well for mom and pop brokers, beware. Employers are also searching for significant PPACA support and ERISA counsel with detailed pay or play analysis tools and services.

Successful independents will find creative ways to serve this growing demand by coming together to maximize carrier negotiation, offer compliance support and other cost-effective solutions. Some are rapidly growing their large group markets and still others are aligning with a local legal firm to provide the added labor law expertise. What are some of the strategies that you are using?


 Mangan is an EBA Advisory Board member and CEO of United Benefit Advisors, an independent employee benefits advisory organization with more than 270 offices throughout the U.S., Canada and the U.K.




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