A REGIONAL BROKER'S TEAM APPROACH TO CLIENT GUIDANCE
Strength in HR services helps prepare clients for health care reform
Forget the Mayan calendar, which predicts the end of the world in 2012. The year 2014--when health reform legislation becomes completely effective and sets new rules for health plan design and marketing--is the year that concerns many employee benefits brokers.
Will that year ring the death knell for traditional health plan marketing and the stable premium growth that group health benefits provide many independent agencies? Will employers abandon their sophisticated plan designs and cost control measures?
"No, they will need us even more," say employee benefit executives at InterWest Insurance Services, Inc., in Sacramento, California, one of Northern California's largest insurance agencies.
Health reform is likely to change the group health plan process, possibly eliminating the emphasis on the traditional annual renewal marketing and pricing cycle for many employers, says Keith Schuler, president and chief executive officer. But health reform won't eliminate clients' needs for expert consultation on the underlying financial and human resource management issues that are linked to employee benefit plans.
When the equity market crashed and the 21st century recession began, employers stopped having much to say about their employee retirement benefits. Many companies reduced their defined contribution plan matches or tabled them completely until the economy recovered. The manifold investment options that were supposed to please employees tanked with the market, shocking employees who saw their plan balances plummet.
Since 2008, few employers have wanted to talk to their agents and brokers about providing more retirement benefits or more options, but as the economy begins to recover, so does interest in alternatives. The matches are back--though maybe not at the pre-recession levels--and employers are again looking for some inexpensive ways to deliver good news to employees about their retirement.
A forward-thinking addition to the benefits lineup
HR directors are focused on relentless health insurance rate increases, the impact of health care reform, and tighter internal budgets. Is this any time to talk to them about an addition to their benefits menu? What if the proposed addition is a complex and relatively expensive coverage--long term care insurance? Why would they consider it?
One answer, according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), is "tax deductibility." A primary reason for "an uptick" in long term care sales, Slome says, is a rise in group purchases of the product by small businesses.
"At a certain size of small business, the premium for long term care insurance can be totally federal tax deductible. That's where we're seeing incredible growth in the business."
Slome continues, "You can decide which employees to include and not include, and whether you want spouses to be included. Long term care insurance can be a complex product, but for property/casualty agencies that serve businesses with three or more employees, you don't have to become a long term care insurance expert. You can partner with one."
