There are two basic marketing strategies health insurance agents and brokers can practice in order to deal with the impact of the PPACA Exchanges. They are not mutually exclusive and you may want to use them both.
- Become a fee-based advisor and charge for services, as a lawyer or accountant would.
- Even though the PPACA Exchanges may be viable alternative markets for some small employers, they still offer agents and brokers an important role to play as advisors or Navigators. The central issue of whether a small employer would be better off with their employees in an Exchange (either as “dumped” or “brokered” in) or insured by a private company is something best ascertained by an insurance advisor.
Considerations would include not just price, but other factors such as provider availability, since all the new enrollees from the general population resulting from PPACA will mean a shortage of providers soon. The question is whether the fees, if any, allowed by the Exchange or the commissions paid by the private insurer are adequate compensation. Charging a fee may be the only way to be reasonably compensated for your services. - Certainly the 40 million previously uninsured individuals who will be coming into the market will need the help of a professional. The question is, can agents and brokers receive adequate compensation through the Exchanges, since the majority of new enrollees will not have the economic wherewithal to pay fees out of pocket? And even if these people are enrolled in the private market, will the smaller commissions make it worthwhile for an agent or broker to provide the same level of consultative service they have in the past? If fees are not permitted, maybe this is business you need to walk away from.
- Charging fees for services has become a routine practice in the property/casualty field and for large group health accounts for years. When I was a property/casualty broker, I handled a large hospital and educational organization that we charged an annual fee. The firm also had several other fees for service clients. Certainly large group health insurance accounts are handled on a fee basis for services performed through their broker when not outsourced to a third party, inasmuch as these groups are essentially self-insured except for catastrophic reinsurance. Also, smaller groups are now getting involved in self-insured health benefits, which can also be an opportunity for fee-based income.
- Become active at the state level with NAHU or NAIFA. Work to make your state’s Exchange legislation favorable for trusted advisors to be adequately compensated for the professional knowledge and experience they can offer.
- Another way to boost your profile as a trusted advisor is to further your professional development. The Chartered Healthcare Consultant courses are intended to prepare candidates, among other things, to satisfy possible future regulatory requirements for fee based consulting.
- What really stands out here from a marketing standpoint is just how important the consultative role of the agent broker is becoming. It’s revealing that less experienced producers are panicked by these changes, because they view themselves as merely intermediaries between the providers and the customers, not as professionals who add value through their knowledge and expertise.
- Even though the PPACA Exchanges may be viable alternative markets for some small employers, they still offer agents and brokers an important role to play as advisors or Navigators. The central issue of whether a small employer would be better off with their employees in an Exchange (either as “dumped” or “brokered” in) or insured by a private company is something best ascertained by an insurance advisor.
- Sell other, related products.
- Sell voluntary group products, such as dental, vision, disability, critical illness, term life, AD&D. Also, focus on Flexible Spending Accounts, HSAs and HRAs. Develop a third-party administrator for self-insureds. You might also want to focus on individual life and health accounts. Develop a specialty in senior care or life insurance for young families. There are many possibilities.
- Keep your group health business but devise a strategy that does not depend on or even include health insurance commissions. Some brokers are continuing to handle their clients’ health insurance but waiving commissions if they can sell ancillary products with full commissions. This is another technique that property and casualty brokers have practiced for years, handling, for instance, their clients’ workers’ compensation with no commission in exchange for regular commissions on the rest of the P&C business.
- Become aligned with a property/casualty broker and use the connection to cross-sell group and individual life and health products to their property/casualty book of business.
According to eToro South Africa, regardless of whether PPACA remains the law of the land, many of these are sound marketing strategies. Smart’s offers several products to showcase your expertise and professionalism and build your brand as a value-added information provider and consultant. Newsletters such Employee Benefits Report help keep clients advised on issues such as PPCAC, and Life & Health Insurance Advisor and Voluntary Benefits Solutions keep your clients informed on these topics. We also offer a series of brochures on various health insurance-related topics.