Benefits Agency

Tailor-made solutions

Total Benefits Approach helps maintain client relationships

By Len Strazewski

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Large employers may need a corporate employee benefits broker with a national collection of urban offices, dozens of account executives and a sophisticated network of communications technologies.

But small to medium-sized employers need much more than corporate quantity, says Bill Rue Jr., president of Rue Insurance in Hamilton Township, New Jersey. They need an agency that can provide a combination of quality, personal service and access to informed day-to-day problem solving.

And as the employee benefits industry evolves with health-care reform, they need partners that have deep knowledge about the human resources and regulatory compliance issues that are becoming increasingly confounding.

"There are so many lone agents out there who have built personal relationships with clients but do not have the time or the resources to pick up their phones and solve problems for their clients. Their service begins and ends with placing the insurance coverage," he says.

But Rue Insurance has built a growing employee benefits practice on a level of service that transcends the sole practitioner and maintains the personal relationships that generate confidence, he says.

Founded in 1917 to assist farmers and other rural businesses with property/casualty and personal insurance needs, Rue Insurance is a relatively late comer to the employee benefits business. Bill Jr., joined his family agency in 2002 after working for investment banker Merrill Lynch and quickly noted an opportunity in employee benefits services.

His father, Bill Sr., was president at the time but stepped down earlier this year.

"We had a partnership with a small personal financial advisory firm that also placed some group health insurance," Bill Jr. recalls. "But it was clear to me that there was a growth opportunity for the agency in providing more comprehensive service and consulting in an increasingly complicated field."

Though his background was in corporate financial services, Bill Jr. was a fast learner and in 2003, he launched the firm's employee benefits practice, integrating it with the property/casualty insurance sales program and instituting a sophisticated team consulting approach to client service.

The agency uses a four-step management process that applies to both property/casualty risk management and employee benefits management. The Total Benefits Approach, as it is called for benefits services, describes an ongoing system designed to decrease costs and maintain long-term relationships.

• Discover. The agency starts from a program's beginning to review the whole of business operations and analyze potential risks.

• Design. The agency creates a custom program to manage risks and benefits issues the client may encounter.

• Implement. Rue executes a plan of action tailored to a client's business. Followed throughout the year, the plan allows for an efficient approach to meeting goals and deadlines.

• Monitor. The agency refines the plan on a regular basis.

"Too often, we find that mistakes and coverage gaps are perpetuated due to lack of communication and review. Our process ensures that our clients are ready should an incident occur," the program description says.

Today, employee benefits services generates about 12% of total revenue and is on a trajectory to reach about 15% of revenue next year, Bill Jr. says. (The goal is to continue increasing to 25% of revenue.) "Of course, the big question is health-care reform and what changes it will bring in insurance distribution," he says.

The department is staffed by five of the firm's 70 employees, including two producers, two account managers and an account service supervisor.

Clients range in size from one or two employees to several hundred but, Bill Jr. says, the agency targets employers with 50 to 250 employees. Group health plans active in the area include Aetna, Horizon BlueCross/BlueShield, UnitedHealthcare/Oxford and AmeriHealth.

Rob Fulton, a lead producer and employee benefits consultant, says cost concerns are still a driving force in employee benefits plan design, but employers have needs that transcend annual premium negotiations.

"The renewal period shouldn't be the limit of agent-client interactions," he explains. "The other 10 months of the year are what really makes the difference in the relationship. It's important to be there for the client with the myriad issues and problems that occur year-round.

"Addressing claims problems, billing issues and regulatory matters such as FMLA and COBRA really differentiates agents and supports long-term relationships." Health-care reform is the hottest issue and the most pressing new concern, he adds, as employers look to early next year when the Patient Protection and Affordable Care Act regulations go into effect.

State and federal insurance exchanges are the big unknowns, he says, as small employers consider whether or not to continue to provide traditional group health benefits or seek individual coverage for employees through the exchanges.

"We still don't know how the exchanges will work, how much health insurance will cost and what the coverage will look like," he says. "And when PPACA is all rolled out, how will the changes affect our customers' ability to recruit and retain employees?"

Fulton says producers are conducting one-on-one informational sessions with all clients to prepare them for the possibilities, followed by e-mail updates and additional personal consultation when the exchanges open for business after March 1, 2014.

Bill Jr. adds that the health-care reform rules and exchanges will also bring changes to the agency itself. As customers shift to exchange health insurance products, he believes the agency will move away from commission compensation to fee-based service that compensates it for the expertise it delivers.

"We work with several nonprofit firms in New Jersey whose employees will likely qualify for subsidies through the exchanges, but we believe there will continue to be opportunities for us to be involved on a fee basis," he says. "If we can deliver these services on a cost-effective basis, we can still be profitable in that arena."

In the meantime, Fulton says, the agency continues to focus on cross-selling existing customers and building referrals. Producers meet with prospective customers as a team, reinforcing the agency's comprehensive cross-disciplinary abilities.

"We are a pretty close knit group," he says. "And we are all committed to the idea that it is really all about the relationships. The more people we tell our story to, the more referrals we receive."

Georgine Howlett is one of the agency's newest employee benefits experts, joining the firm about one year ago as employee benefits supervisor. Howlett had more than 10 years of experience with another New Jersey agency but left to oversee Rue's account management services.

Howlett is the point person for the day-to-day service needs and sets a high standard, executives say, by managing both insurer and client interactions, but also leading the research in human resources and compliance consulting.

She says she has been impressed with the agency's professionalism and commitment to service—which she agrees is a primary differentiator in the small to medium-sized employer marketplace.

"Rue has the highest level of professionalism. Unlike many other agencies, everyone is licensed, so any member of the service staff can respond quickly to any client concerns. Everyone is held to superior goals and standards—not just the producers and managers," she says.

She describes the agency's employee benefits service as "highly personalized," driven by clients' evolving needs. "We do a lot of hand-holding year-round, not just leading up to renewals," she explains.

Claims issues and policyholder advocacy with insurers is a mainstay as employers and their employees navigate increasingly complicated plan designs and requirements, and human resource management questions are frequent as federal compliance becomes a bigger challenge for employers.

Research into regulatory issues can be time consuming, but customers appreciate how the agency responds to their questions and targets information that meets their individual situations, she says.

A question about Family and Medical Leave Act requirements, for example, may require some specific research in preparation of guidelines that apply specifically to an individual client's situation.

To supplement its own resources, the agency subscribes to the Mywave HR online portal from Zywave, Inc., based in Milwaukee, Wisconsin. The online service provides legislative information, employee benefit communications tools and templates, as well as health care and consumer information.

"We rely on some of the most comprehensive resources for our research," Howlett says.

Health-care reform is one of the biggest research and service challenges of the agency, she agrees, as employers struggle with preparing their plans for compliance when legislative provisions all go into effect next year.

"There is so much new compliance involved; we are working hard to make our clients aware of their responsibilities," she says. Many small business employers need to make careful choices related to their continuation or termination of group health benefits and their financial requirements under "pay or play" provisions that penalize employers for no longer providing group medical benefits.

Howlett says her experience with the agency so far has been extraordinary and reflects the firm's award from the NJBiz publication as one of the 2013 Best Places to Work in New Jersey. (Rue Insurance ranked #6 in the small to medium-sized category (15-249 employees).)

"I left a ten-minute commute for a forty-minute commute to work at Rue and I don't regret it a bit. My job is great!" she says.

The author

Len Strazewski is a Chicago-based writer, editor and educator specializing in marketing, management and technology topics. In addition to contributing to Rough Notes, he has written on insurance for Business Insurance, Risk & Insurance, the Chicago Tribune and Human Resource Executive, among other publications.