Tossing A Line Into the Turbulent Waters of the Affordable Care Act

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There’s no question the Patient Protection and Affordable Care Act (PPACA) — often known simply as the Affordable Care Act — has made a significant impact on the way Americans look at health insurance, and nowhere has this impact been stronger than in the world of voluntary benefits. Indeed, many brokers and companies now view voluntary benefits as an essential part of their benefits package, resulting in an increased opportunity for voluntary sales.

But it can be difficult to keep up with all the recent rule changes and how they will ultimately affect you and your clients, especially given the frequency with which these changes occur. Many brokers and agents use various industry websites to track and stay abreast of these changes, and while that’s good, what’s more important is your ability to distill those changes into information you can put in front of your clients.

A Sea Change in the Health Benefits Market

Now that this watershed event’s nearly one year old, I believe the benefits marketplace has become much like fishing. Do you want to catch an individual fish or a group of fish? Do you go after the smaller fish and hope to catch a lot of them, or do you target the larger fish, satisfied with just a few?

In the past, I’ve taken deep-sea fishing trips with the hope of hooking the “big fish” only to return empty-handed. However, I’ve also had much better luck on other trips I’ve taken, returning to the dock with a monster fish in tow. I guess that’s why they call it “fishing” instead of “catching fish” — you just never know what may be looming below the surface, let alone what’s going to happen once you’re out there.

So how do the PPACA and voluntary benefits compare with fishing? The first thing that comes to mind is that you absolutely must know what you’re fishing for. Many professionals are trying to find multiple streams of income for each of their accounts, but whether it’s adding voluntary benefits, property and casualty insurance, 401(k) plans or something else to your service offerings, you have to know what kind of bait is most attractive to the type of fish you’re angling for, or in the case of health benefits, what kind of approach will attract the types of clients with whom you’d most like to work.

Use a Lure They’re Eager to Bite

Although the PPACA is poised to change the employer-based benefits landscape radically, from almost any way you look at it, several truths are certain:

  • Employees will need reliable, actionable information in order to make wise decisions regarding health benefits. Now more than ever, voluntary offerings that remain largely untouched by the hand of health reform have become more attractive tools when it comes to enhancing employment recruitment and retention. Although you may be generally aware of these changes, it’s ultimately your responsibility as the benefits expert to pass this information along to your clients on a consistent basis. So, as clients both large and small seek new solutions to the familiar yet intensifying problem of increasing health insurance premiums, remember to take a balanced approach. It may be tempting to focus most of your efforts on seeking new business opportunities, but remember that keeping your current book of business satisfied with strong communication is just as important.
  • Voluntary benefits continue to offer valuable and affordable financial protection for working Americans.
  • Benefits communication that’s both meaningful and personalized remains perhaps the most effective device not only for combating the confusion of health reform, but also for fostering the creation of an environment characterized by choice, value and security. So, while technology certainly provides us with an array of online enrollment capabilities, the questions about the PPACA are just too prevalent among the American workforce for a purely electronic approach to meet their current needs fully.
  • For all of these reasons, taking the opportunity to conduct face-to-face enrollments during this period can be a powerful way for benefits professionals to distinguish themselves from everyone else who’s casting a proverbial line in the water. Instead of just telling employees about the new rules, features and prices, use this valuable time to leave no stone unturned. Explain why the deductible increased, why you offer voluntary benefits, why certain benefits may have been added or deleted and why anything else they ask about happened.

Employers of all sizes are being challenged to rethink employee benefits in this strange new world of healthcare reform. Tight budgets and a still-recovering economy mean benefits managers must think beyond health insurance and look at the benefits they offer as a whole. They must think creatively and more broadly, and they must step up their communications to help employees navigate and manage the changes ahead. The task requires commitment, but the payoff is more than worthwhile — a benefits program that helps employers of all sizes compete more effectively in tomorrow’s marketplace.

Know Where and How to Find Them

If you expect to put dinner on the table, it helps to know where you need to go fishing. It’s simple: If you’re craving largemouth bass, you need to be in a freshwater lake. You won’t catch largemouth bass in salt water, no matter how skilled you may be. It’s much the same when it comes to looking for clients: You probably wouldn’t waste your time sending your message to large companies if you know your experience better serves individuals.

Anyone familiar with the sport or who’s seen one of the shows focused on the dangers of fishing knows that the best fishermen don’t just throw a line in whenever it’s convenient. Instead, they keep a list of coordinates where the best fishing spots are located, often a mix of their favorite places and lucky spots. Furthermore, they’ve also researched where they’re going to drop their bait, and they always know exactly which kind of fish they’re aiming to catch.

One of the best ways you can pin-point your favorite and luckiest markets is via referrals. Reputation is everything, and referrals are just as instrumental as they’ve ever been. These are the best leads you can receive, so if you’re providing your clients with great customer service and smart solutions, don’t forget to ask them for referrals. It can be as simple as asking, “I am trying to meet with these three businesses near you. May I tell that we are working together?”

Ways to Get the Most Promising Nibbles

Before you go fishing, it’s important to know all about the season. Why? The season defines exactly which fish you are allowed to catch and how big they must be for you to keep. It’s similar with the PPACA, but the recent changes have made it difficult to know what season we’re actually in right now. Nevertheless, you must also be willing to customize the tackle you use to attract your ideal prospects. While many brokers have an assortment of tackle appropriate for virtually every excursion, not everyone’s that lucky. Not only is good tackle pricey, but it also must be maintained for optimal performance. Then what about the bait? Some fish (and prospects) just seem to respond best to more expensive bait. If you don’t have the right equipment to offer voluntary benefits, consider partnering with someone who does while you fish about for group health insurance, property and casualty insurance, 401(k) plans or something else that fits with what you know and what you have.

Because the PPACA has churned up the waters and muddied the landscape, today’s prospects aren’t biting as much as they used to, so you have to be more strategic about where you do your prospecting. And when you catch a new client, you need to make sure you’re in perfect compliance and haven’t violated any minimum requirements.

As I mentioned earlier, referrals are still the best way to get the best leads. Are you part of any networking groups? Are you contacting your current book of business and asking for referrals? You should be, and I strongly encourage you to schedule those meetings and ask the referral question when you’re face to face. If you’re targeting larger accounts (100+ employees), you’re going to use data lists that give you great information on the accounts you want to reach, right? If so, have you put that in your budget for 2015 yet?

It’s also wise to evaluate your current client catch and then determine whom you should prospect for in the future, and how to do it effectively. Although many benefits professionals are all too eager to climb aboard a party boat with a bunch of people, when it comes to the benefits market, the advantage goes to the individual willing to chum the water even with cold calls if that’s what it takes to attract prospects to their smaller vessels.

In Conclusion

In short, workers must understand their benefits in order to appreciate the true value of your investment in their well-being. But the vast majority of the American workforce doesn’t understand the value of the benefits they have now. In fact, benefits today account for more than 30% of employee compensation, according to a March 2013 report from the U.S. Bureau of Labor Statistics. Yet few employees know what it actually costs their employers to provide these benefits — health insurance in particular. This is evidenced in a 2011 LIMRA study, “What Is $1 Billion an Hour Worth? Navigating the Employee Benefits Marketplace,” which revealed that even though 60% of employees thought they knew the cost of their medical insurance, only 15% could actually provide a reasonable estimate.

The full impact of the PPACA will not be felt on the industry for a number of years. In the interim, the wiser benefits fishermen will proactively try to anticipate these changes in order to be ideally positioned to meet their clients’ and prospects’ needs, while their more passive counterparts will drift behind, waiting to react to news of where others are finding success. So if you’d like to capture your own share of this profitable market quickly and efficiently, take the proactive route. Those who follow the reactive route will be left to troll behind your wake, desperately trying to land whatever may be left over from your tremendous catch.


Brian Summers is a territory sales manager for Colonial Voluntary Benefits in New York. Colonial Voluntary Benefits financial protection products are offered through the workplace to employees and their families, along with benefit services and education, enrollment technology and personal service. Products are underwritten by The Paul Revere Life Insurance Company of Worcester, Mass., and include disability, life, and supplemental accident and health insurance policies. For more information, visit Colonial-PaulRevere.com.

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