Follow Sam Fleet
Connect with Sam Fleet
Employee Benefits Pros: Avoid Extinction by Adapting, urges AmWINS Group Benefits’ Fleet
At Employee Benefits Leadership Forum, Points Spotlight on Neglected Issues and a Better Way
At Employee Benefits Leadership Forum, Points Spotlight on Neglected Issues and a Better Way
May 28, 2008 – Hot Springs, VA – The employee benefit
market is undergoing a total transformation, as prospecting is more
difficult, products are commoditizing, commissions are being cut,
and additional competition from non-traditional sources is having a
significant impact on business. Before an audience of top benefits
professionals and insurance carriers, Samuel Fleet, CEO, AmWINS
Group Benefits, today gave brokers the stark choice to either adapt
to marketplace changes or become extinct.
Speaking at the Council of Insurance Agents and Brokers’ Employee Benefits Leadership Forum, Fleet said agents and brokers “must make a radical break with the past and reinvent how they sell employee benefits.”
He stated the key is to seek hot opportunities apart from the standard and bring fresh thinking and new innovative product offerings to customers.
“One of the best opportunities for brokers is where employers need to cut or drastically reduce retiree health programs. Look for businesses with a non-traditional workforce, government retirees, the daunting market of pre-65 retirees, and non-profit organizations,” Fleet said.
“A second opportunity is with today’s rapidly rising healthcare costs, many companies are finding that traditional, first-class health plans are beyond their budgets,” said Fleet. “That leaves them muddling through options that are too costly and impractical for their business.”
Fleet recommended several solutions when working with companies to help define the employee health insurance options and identify the best choices to help grow their business and deepen customer partnerships. He referenced expense incurred limited medical plans, as a good example, as these look much like the traditional health care plans workers are accustom to. “And with fewer dollars they will meet the diverse needs of almost all workers,” he said.
“Continued focus on cost savings will open the door to more opportunities and help position you [the broker] as a savvy consultant,” urged Fleet.
He suggested that agents recommend pharmacy and medical audits to both existing and potential customers. This value-added service will help them demonstrate their involvement in managing healthcare vendor relationships and help client meet requirements like the reviews mandated by Medicare Part D and ERISA plans.
“Offering an audit also helps your own book of business,” said Fleet. “You’ll demonstrate your ability to keep health premiums at a manageable level, which will entice new customers. It also provides an opportunity to cross-sell, offering alternative services and products.”
Fleet also expressed that availability of healthcare coverage for individuals not yet eligible for
Medicare is becoming increasingly elusive. Because the individual insurance marketplace is especially unfriendly to a group that may have more frequent and chronic health issues, Fleet encouraged brokers to jump on the opportunity to help bring products and solutions to those in pre-65 individual marketplace.
He also declared retiree health care as one of the profoundest issues facing the United States,
threatening employees and retirees with the loss of health coverage and putting employers in the unenviable position of cutting health benefits for workers and retirees.
“The number of employers looking for an exit strategy is staggering,” said Fleet. “One third of large employers are still offering retiree medical coverage, but that is down from 66 percent less than 10 years ago.”
Fleet recommended several solutions when working with employers trying to relieve themselves of the burden from retiree health business. They can terminate the plan and do nothing for their employees; increase the retiree contribution to the plan to 100 percent; establish a trust account known as a Voluntary Employee Benefit Association (VEBA) funded by cash or annuity; or set up a “notional” account so retirees can use an allotted amount of money for a range of care options they choose.
“Working with companies that want out of the retiree medical business to avoid leaving retirees on their own can instead create a group program that is more stable, less confusing and more flexible for its former employees.”
Fleet explained that for non-profits and other companies, a retiree prescription drug plan (PDP) around an existing benefit program or moving from a self-funded to an insured plan is a better idea.
Fleet also said that public employers are in the final year of phased reporting requirements under federal accounting rules, know as GASB 45. Cities, counties, school boards and others must account for their retiree health obligations or risk degrading bond ratings and the ability to borrow money for capital improvements.
Speaking at the Council of Insurance Agents and Brokers’ Employee Benefits Leadership Forum, Fleet said agents and brokers “must make a radical break with the past and reinvent how they sell employee benefits.”
He stated the key is to seek hot opportunities apart from the standard and bring fresh thinking and new innovative product offerings to customers.
“One of the best opportunities for brokers is where employers need to cut or drastically reduce retiree health programs. Look for businesses with a non-traditional workforce, government retirees, the daunting market of pre-65 retirees, and non-profit organizations,” Fleet said.
“A second opportunity is with today’s rapidly rising healthcare costs, many companies are finding that traditional, first-class health plans are beyond their budgets,” said Fleet. “That leaves them muddling through options that are too costly and impractical for their business.”
Fleet recommended several solutions when working with companies to help define the employee health insurance options and identify the best choices to help grow their business and deepen customer partnerships. He referenced expense incurred limited medical plans, as a good example, as these look much like the traditional health care plans workers are accustom to. “And with fewer dollars they will meet the diverse needs of almost all workers,” he said.
“Continued focus on cost savings will open the door to more opportunities and help position you [the broker] as a savvy consultant,” urged Fleet.
He suggested that agents recommend pharmacy and medical audits to both existing and potential customers. This value-added service will help them demonstrate their involvement in managing healthcare vendor relationships and help client meet requirements like the reviews mandated by Medicare Part D and ERISA plans.
“Offering an audit also helps your own book of business,” said Fleet. “You’ll demonstrate your ability to keep health premiums at a manageable level, which will entice new customers. It also provides an opportunity to cross-sell, offering alternative services and products.”
Fleet also expressed that availability of healthcare coverage for individuals not yet eligible for
Medicare is becoming increasingly elusive. Because the individual insurance marketplace is especially unfriendly to a group that may have more frequent and chronic health issues, Fleet encouraged brokers to jump on the opportunity to help bring products and solutions to those in pre-65 individual marketplace.
He also declared retiree health care as one of the profoundest issues facing the United States,
threatening employees and retirees with the loss of health coverage and putting employers in the unenviable position of cutting health benefits for workers and retirees.
“The number of employers looking for an exit strategy is staggering,” said Fleet. “One third of large employers are still offering retiree medical coverage, but that is down from 66 percent less than 10 years ago.”
Fleet recommended several solutions when working with employers trying to relieve themselves of the burden from retiree health business. They can terminate the plan and do nothing for their employees; increase the retiree contribution to the plan to 100 percent; establish a trust account known as a Voluntary Employee Benefit Association (VEBA) funded by cash or annuity; or set up a “notional” account so retirees can use an allotted amount of money for a range of care options they choose.
“Working with companies that want out of the retiree medical business to avoid leaving retirees on their own can instead create a group program that is more stable, less confusing and more flexible for its former employees.”
Fleet explained that for non-profits and other companies, a retiree prescription drug plan (PDP) around an existing benefit program or moving from a self-funded to an insured plan is a better idea.
Fleet also said that public employers are in the final year of phased reporting requirements under federal accounting rules, know as GASB 45. Cities, counties, school boards and others must account for their retiree health obligations or risk degrading bond ratings and the ability to borrow money for capital improvements.