The past year hasn’t been easy for anyone. The unemployment rate has remained stuck near 9 percent. The economy is getting worse, not better. We still don’t know what’s going to happen with health care reform, how it’s going to be implemented or even if it ever will. But it’s been especially hard on brokers and anyone else in the business. Though 2011 was difficult—at best—people in the biz are coming up with new ways to keep their livelihood. And a lot of those innovative ways involve greater employee contributions—think voluntary benefits and wellness programs. That’s one way to stay relevant and stay in the game, but as one expert told us, the only certainty there is in the coming year is uncertainty.
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Scott Mardis
Senior vice president, sales
Ameriflex
Mount Laurel, N.J.
“In 1999, brokers and agents only had to learn three simple acronyms to be successful— HMO, BOR and a BIC pen. In 2011, acronyms have far surpassed these simple three to become a whole new language essential for survival in today’s benefit marketplace. Brokers and agents have to navigate through complex plans that cover a variety of different product designs. It is not unheard of for a broker to implement a CDHC, HDHP with an HSA/LPFSA and HRA wrap on a PPO platform pre-taxed through a POP plan, bridged with a VB GAP plan, a DHMO, and LTD/STD offering all while remaining compliant with COBRA, HIPAA and ERISA and up-to-date with HCR and PPACA. It’s enough to need a PhD or good EAP.
If 2011 was the year to learn this new language, the challenge in 2012 will be to teach this new language to employers and employees. I can guarantee you that to most employees, these acronyms are about as familiar as BFF and LOL are to my grandfather. We need to be adept at speaking and teaching this language or face the real possibility that both the language and industry become the new Latin and Roman Empire—DEAD.”
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Brian Robertson
Executive vice president, Fringe Benefit Group
Austin, Texas
“2011 has been full of opportunity but it has also required a lot of creativity. At Fringe Benefit Group (Framework Health Plan) we have spent more time building products and ramping up initiatives than in years past. The changes in the marketplace are allowing for us to meet needs in new ways and we are excited about the opportunities for 2012. While we continue to help employers move away from the expense incurred limited medical plans, we are actively moving toward new avenues to help more customers with their part-time and hourly workers. We did a survey of our large clients during the summer and frankly, were quite surprised that none of them are planning for 2014 yet. Most of them indicated they are just trying to get through 2012 and 2014 isn’t on their radar yet. It’ll be interesting to see if/how that changes in 2012, especially as a result of the presidential election. I think a lot of everyone’s energy is going to be consumed by election rhetoric, unfortunately.”
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Jim Christenson
Field vice president, Allstate Benefits
Plymouth Meeting, Pa.
“2011 was strong transitional for benefits with greater emphasis applied to voluntary and worksite benefits. Consolidation activity was strong with smaller and local-based brokerages and agencies selling in advance of health care reform. Electronic online enrollment is now the standard with consulting companies and an integral part of brokers’ expanding value proposition. Insurance companies are challenged with this advance as traditional products are unworkable in an online enrollment scenario. 2012 will bring more of the same, as rapid change will be the constant. We, in the benefits industry, await the Supreme Court decision to hear the Patients Protection and Affordable Care Act as 2014 will be one year closer. For me, 2011 was my best year ever. 2012 promises even more.”
Randy Horn
President and CEO, Colonial Life
Columbia, S.C.
After several years of economic woes and health care reform wrangling, the only certainty in the future of workplace benefits may be continued uncertainty. But insurance brokers who want to be prepared for 2012 should pay attention to several emerging trends.
Voluntary insurance sales will continue to grow. Increasing work force diversity and the need to offer choices to employees with widely varying needs will drive an uptick in sales. Group products will continue to grow as a percentage of voluntary sales, while life insurance sales continue to fall, which points out the need for better education of workers about the need to protect their most valuable assets with life and disability coverage. Critical illness insurance in particular will continue to attract new customers. With the costs of treating cancer, heart attacks and strokes far exceeding most employees’ major medical coverage, critical illness insurance can provide vital out-of-pocket protection. Updated versions of this relatively new product include benefits for multiple occurrences of a critical illness, adding to their value. Brokers will be increasingly involved in the voluntary benefits market as they continue to look for different revenue streams. Reduced major medical commissions, uncertainty in the market because of health care reform changes and a continued slow economy are forcing brokers to look for new revenue sources. Voluntary benefits will continue to grow as a simple solution because brokers are finding they can get in this market with little training and no overhead by partnering with an experienced voluntary benefits carrier.
Wellness programs will become more prevalent as a way for employers to control health care costs and increase productivity and retention. With no let-up in sight for rising health care costs, employers are increasingly seeing the value of workplace wellness programs as a way to control premium increases and claims costs. Ranging from health screening tools to online nurse services, wellness-related offerings will become a bigger part of benefits providers’ value-added services. However, the key to seeing a true bottom-line benefit may be as much about employee awareness and engagement as it is about the actual service, and that requires a strong communication plan as well.
Government sector employers will focus on cost containment measures for their benefits plans. Government employers are strongly feeling the effects of several years of reduced tax revenues, and now find themselves in the unfamiliar position of being forced to reduce benefits or raise their employees’ share of the costs. The good news is there’s a huge opportunity for government employers to control costs by changing their benefits plan design to include higher-deductible health plans and voluntary benefits.
Thomas Blomberg
Regional sales director,
Security Life Insurance Co. of America
Minneapolis
The evolution of the benefits marketplace continues—and 2012 promises even more change. As a result, opportunities abound for proactive, creative and inventive brokers and carriers, especially in the voluntary space.
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Mark Lacher
Benefits Selling 2011 Broker of the Year
Partner at Lacher & Associates
Souderton, Pa.
As I look forward to 2012, I expect one thing to remain the same as 2011—change. Our industry is undergoing dramatic changes that impact our ability to grow, hire employees, invest in technology and remain relevant to our clients. However, ever the eternal optimist, I think the best benefits shops will continue to thrive by being strategically aligned with their customers, focusing on innovative solutions, and investing in ways to stay relevant in the marketplace.
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Joe Frustaglio
Vice president, private sector retirement plans sales, Nationwide Financial
Columbus, Ohio
As was the case this year, a continued focus on education and the regulatory landscape will remain important in 2012. Employees are faced with balancing immediate financial concerns in a tough economy with long-term savings goals, and their confidence for having enough money for retirement is at an all-time low. The industry has to provide educational resources and personalized support to help participants prepare for retirement. That’s one reason Nationwide launched the Nationwide On Your Side Interactive Retirement Planner this year, a free online tool that allows consumers to help calculate how much annual retirement income they’ll need, where their potential gaps are to reach that goal, and ways to fill those gaps to stay on track.
Washington will also remain a focus in 2012. The industry will continue to keep a close eye on the regulatory environment in 2012. Research we conducted this year showed the top concern among professional service firms was keeping their plan in compliance, yet only one in four of these firms could correctly define ERISA. Providers and advisers will need to provide the regulatory guidance and support necessary if they want to retain these plans moving forward.
Nationwide took steps this year to assist advisers in this area by launching a new online resource that allows them to ask regulatory questions and get answers from Nationwide’s ERISA specialists. They also introduced a 3(38) co-fiduciary service, which enables the plan sponsor to transfer the responsibility and legal liabilities associated with the selection and monitoring of plan investment options to IRON Financial, which offers fully independent fiduciary services as a component of its retirement plan platform.
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