By Len Strazewski

Building an employee census, shopping health plans and trouble-shooting enrollment-that used to be the heart of an employee benefits broker's activities.

But since the implementation of the Affordable Care Act, employee benefits service has become just as much about regulatory compliance as premium calculations, says Tom Sharkey Jr., president of Meeker Sharkey & Hurley Insurance in Cranford and Bedminster, New Jersey.

Consolidation among health plans has reduced agents' and brokers' ability to shop for lower prices among a wide range of providers, he explains. Rates vary little among the shrinking markets, but plan design and the way plans fit corporate strategies are still important challenges. And compliance is critical.

"At some point, we're going to be down to the big three health insurance carriers, so the broker's value proposition has changed from getting the lowest quote to really helping employers strategize about their benefits. The compliance aspect of it is taking an incredibly important role and we are almost more like compliance advisers now," he says.

The federal healthcare law and its myriad regulations also keep changing. For months, employers were concerned about the much-anticipated Cadillac tax-a penalty for employers who provide benefits beyond a standard level. But at the last minute, the tax implementation was delayed, Sharkey says.

"So it changes. It's changing constantly and employers and their human resource professionals need to have someone who's watching the stuff all the time and watching their backs for them."

Meeker Sharkey & Hurley's Chief Operating Officer Craig Sutherland (left) and President Thomas J. Sharkey Jr., CIC.

Meeker Sharkey & Hurley has also been changing and evolving: the firm started as a family-owned independent agency, eventually merging with the insurance division of Summit Bancorp in 2000. But in 2007, the firm relaunched again as an independent agency. In late 2014, Meeker Sharkey merged with James F. Hurley Insurance Agency, adding to its expertise.

The agency now has about 30 employees, including seven specializing in employee benefits. Employee benefits services accounts for about 25% of revenues.

Clients range in size from about 100 to 2000 employees, including construction, higher education, and non-profit organizations. Key health plans in the region include Cigna Health, Horizon Blue Cross Blue Shield of New Jersey, Aetna and Amerihealth and United Healthcare/Oxford.

The firm provides a wide range of traditional employee benefits products, including group health insurance, dental and vision care benefits, group life and long- and short-term disability insurance, long-term care insurance and employee-paid voluntary benefits.

Craig Sutherland, chief operating officer, came to the firm in the merger with the Hurley agency. He says the merger has expanded the firm's ability to serve a wide range of clients. The Hurley agency specialized in benefits for smaller employers but wanted the additional resources to service its larger property/casualty insurance customers and prospective clients that wanted more diverse services.

"It opened up an avenue for us to try and expand certain relationships where otherwise we might not have had that opportunity," he explains.

Cross-selling is a strong part of the firm's culture and the strong employee benefits revenue base is due in part to its history of reaching out to property/casualty insurance customers and winning their employee benefits business, says Senior Vice President Richard Skorupski, CIC, CPCU, CRM, a lead producer in property/casualty insurance and a practice leader in the firm's nonprofit business niche.

Skorupski worked for the agency for about 15 years before its sale to Summit Bancorp and then returned after it relaunched as an independent agency.

He describes agency Chairman Tom Sharkey Sr., CLU, ChFC, as "very much a visionary back in the day when we were 90% property and casualty.

"Tom was a life agent who had the ability to cross-sell insurance to our clients, and that's how he started to build the agency. He had the foresight to see that employee benefits were necessary to offer a rounded approach to secure accounts."

After the relaunch of the firm as an independent, the agency promoted itself as a boutique with one-stop shopping for commercial insurance services.

Richard G. Ambrose, Senior Vice President and Practice Leader, Employee Benefits, and Donna K. Dodd, Vice President Employee Benefits, discuss the many wellness programs Meeker Sharkey & Hurley encourage their clients to participate in.

"So, the culture here has always been cross-sell and offer a multitude of insurance services to our clients," Skorupski continues. "Employee benefits is just a natural business to be in when you're servicing your clients and trying to come up with solutions."

Over time, the agency has become more consultative, integrating analysis of business strategy, human resource objectives and financial objectives into the risk management and employee benefits strategy.

Strategic planning is foremost, Sharkey Jr. adds: "learning about your client's business, their goals, and their initiatives. Then devising a strategy based upon what they're trying to accomplish."

Richard Ambrose, senior vice president and employee benefits practice leader, joined the company six months ago to expand the employee benefits practice. Like many of the Meeker Sharkey executives, he brings experience from larger insurance service providers.

Ambrose has 30 years of experience in the benefits field and most recently worked for Crystal & Co. in New York. He agrees that the benefits business has changed dramatically since he entered the field.

"The employee benefits environment has become more complex; it's actually more compliance driven. It's no longer just about insurance anymore. We need to be more consultative, more strategic because it's now really all about drilling down into the numbers, discussing plan design such as wellness initiatives, and confirming they are in compliance with the ACA."

However, benefits costs are still a serious issue for employers, Sharkey says, and for many employers, the benefits budget has come to surpass the property/casualty insurance costs.

"That's where they're feeling pain these days. We continue to see medical rates up in double digits, and the only way people are really addressing it is to cost shift to larger deductibles and coinsurance and employee copays."
The ACA has also affected the tools and plan designs benefit specialists can bring to the challenges, Ambrose adds. Self-funding remains attractive for some employers and provides some freedom from regulation, but is not for all employers.

"We're working on a situation right now where we are not the current broker but it's a proposal for a significant nonprofit religious organization with several hundred participants. We were asked to look at self-insurance and see if that could save them some money-after the fact that they actually got a 2% rate decrease on their last renewal."

But in the new regulatory environment, this approach may not be workable for some employers.

"As we looked at the numbers that they have been running since the last renewal, we're now projecting that actuarially they're going to receive a 30% to 40% rate increase on their renewal. So forget about self-insurance. We're trying to tell them, here comes the truck. It's about to run you over," Ambrose says.

"The merger opened up an avenue for us to try and expand certain relationships where otherwise we might not have had that opportunity." -Craig Sutherland Chief Operating Officer Meeker Sharkey & Hurley Insurance

Donna Dodd, vice president of employee benefits, takes a lead in client services and also administers one of the newest programs available since ACA. Meeker Sharkey provides the BeneStream program for employers with low-income workers. The program identifies employees eligible for the expanded Medicaid benefits under ACA and can offer individuals health benefits at little or no cost, also reducing employer costs.

"Most of the non-profit organizations have employees who are low paid and because they're low paid employees, a lot of them really cannot afford the health insurance premium contributions," she says.

The BeneStream program is available to employees earning $33,500 and below as a family and who may be eligible for the New Jersey Expanded Medicaid Program. Under that program, the employees and families receive healthcare at little or no cost and are eligible for food stamps and a free cell phone. They are not part of the employer group coverage.

Dodd also guides employers in other special programs and services. Some employers are exploring private exchanges that allow them to make a defined contribution to healthcare premiums and let employees choose among various deductibles, coinsurance levels and plan features.

Wellness programs are also growing in popularity, she says, as employers take strategic steps to both lower costs and improve the health of their employees. However, many employers seek an immediate return on investment-an unreasonable expectation, she says.

The key to the Meeker Sharkey reputation is its personal service and timely response, Dodd says.
"You know, it's all about service. Even though we are a boutique agency, we pride ourselves on the personal attention that we give to our clients. We have our cell phone numbers on our business cards and our employee groups can call us at any time," she says.

The agency has also developed relationships with other resource providers, including human resource consultants, attorney specialists in employee benefits law, actuaries and retirement plan consultants who can meet expanding client needs.

"It's important that you partner yourself with strategic vendors that are well-versed in all of these different compliance types of issues. And we work with vendors that are not just call centers but are real partners that operate more or less as an extension of our resources," Ambrose says.

"As long as we can bring to the table best in class partners and a solutions network for the client, we think that that will win the day," Sharkey concludes.