Unlike the past Evolutionary Changes - generally driven by the Insurance Broker's and Carrier's competitive and profit driven motivations - these new disruptive changes are being foisted upon a reluctant set of Industries being forced to dramatically reform their old paradigms. Having fought the demands for change in Congress, the Supreme Court, and Elections, Brokers and Carriers now face the impact of PPACA, Obamacare and the New Regulations. The Insurance and Benefits Industries - as well as the marketplace - will never be the same! Unlike the dinosaurs and buggy whips of old that were not provided opportunities for changing their fate, Brokers and Carriers have opportunities to meet the new demands of their environment or business. Brokers, Carriers, and those providing related Services have Choices. They can remain on a collision coarse with extinction or embrace the disruptive changes as a Great Opportunity. These Opportunities can be Profitable for Brokers, Carriers, and Service Providers while reducing costs for Employers, Employees, and Individuals!
In our past two Blogs we, BenefitPlace.biz and BPTadeshow.com, have focused on a set of Integrated Opportunities to assist the Industries in complying with PPACA/Obamacare while at the same time better meeting the needs of Employers, Employees, and Individuals while Profitably Surviving. These are:
- Private Exchanges - For offering Core, Voluntary/Worksite, and Ancillary Plans, Programs, and Services!
- Defined Contribution - For providing: Employers budgetary controls; Employees valued choices to meet their Needs and Price-Points; Brokers positioning as "Trusted Advisors" and new needed revenues; and Carriers enhanced Distribution Channels!
- Integrated Benefit Choices - For providing Employees the capacity to meet their Individual and Family Needs and Price-Points working with qualified Brokers - Choices including: Core, Voluntary/Worksite, and Ancillary Benefits!
- Integrated Support Technologies - For Employee Education, Communication, Enrollment and Data Distribution Management!
- Inbound Marketing - For Shortening Selling Cycles, Reducing Marketing Costs, and Driving Revenues for Carriers, Brokers, and Service Companies leveraging the Power of the Internet, Search Engines, Social/Business Media and SEO!
Note: These strategies can be used together or on a stand-alone basis for meeting the needs of all parties to the Insurance and Benefits Decision-Making Processes.
1) Private Exchanges - Set-Up Requires:
a) Creating a "Marketplace" to assist Employers, Employees, and Individuals in making their overall decisions about Insurance and Benefits. The private exchanges must be fully compliant with PPACA/Obamacare and embrace, as best possible, the Federal and State Exchanges given their capacities.
b) Branding Capacities to represent and promote the sponsoring Brokers and/or Employers.
c) Utilizing Defined Contribution (DC) Strategies for Employers offering Employees Insurance and Benefits. (See # 2 Below)
d) Offering Choices in Core Benefit Plan Designs including Fully Insured , Partially Self-Funded, and Self-Funded Plans.
e) Offering Integrated Insurance and Benefits related Choices of Plans, Programs and Services to meet the needs of Employers, Employees, and Individuals on a customized, case-by-cases basis. (See #3 Below)
f) Utilizing Available Technologies for creating the customized marketplace accomodating back office requirements and the Education, Communication, Enrollment, and Data Distribution Management. (See #4 Below)
g) Delivering Awareness of the New Marketplace to Clients and Potential Clients - Employers, Employees, and Individuals. The value of the Private Exchanges must be articulated and the value conveyed to replace doubts, fears, and confusion. (See #5)
2) Defined Contribution(DC) - Offers Employers Budgetary Controls, Employees Choice, and Brokers Control. The DC Design Strategies require:
a) Competency - Brokers and Consultants must thoroughly understand the Plan Design Strategy. While the concept is fairly simple, the structuring and implementation can be complex. More sophisticated designs can generate significantly improved results in terms of Cost-Savings and Employee Satisfaction.
b) Buy-In and Support - Employers, CFOs, and HR Departmants must understand and participate in the strategy on an ongoing basis. While their contribution of time and effort can be significantly reduced, their support is extremely important for generating Cost-Savings and Employee Satisfaction.
c) Offering Choices in Core Benefit Plan Designs including Fully Insured , Partially Self-Funded, and Self-Funded Plans.
d) Offering Integrated Choices of Plans, Programs and Services to meet the needs of Employers, Employees, and Individuals on a customized, case-by-cases, basis. The Broker must be dedicated to building a Menu of Choices - Core, Voluntary/Worksite, and Ancillary to meet the Needs and Financial Capacities of the Employees. Carriers should not be allowed to determine the Insurance and Benefit Choices. They cannot be unbiased! (See #3 Below)
e) Implementing the Employee Education, Communication, Enrollment, and Data Distribution Management Processes - The Brokers, Carriers, Employers must implement Strategies and the Supporting Technologies to support the DC Implementation. Enrollment choices for Employers should include: One-on-one, Group Meetings, Paper Based, Call Centers, Internet Based, and Combinations of Methods. (See #4 Below)
f) Utilizing Available Technologies for implementing the DC Plan Design including Education, Communication, Enrollment, and Data Distribution Management. (See #4 Below)
g) Marketing the New DC Plan and Explaining its Value Proposition - Employers, Employees, and Individuals must understand the advantages of the DC Design. The CFO and HR Department - as well as the Carriers - must embrace the short and long-term value of budgeting costs as well as meeting the Employees and their Families needs with Choices supported by Education and Communication. (See #5 Below)
3. Integrated Benefit Choices - Here is where the Broker(s) can take control, become Trusted Advisors, and replace Lost Income due to shrinking and disappearing Health Insurance Plan Commissions and MLR. Providing Employers, Employees, and Individuals inclusive Insurance and Benefit Choices requires:
a) Understanding of Core Benefit Plans and Choices - Including the impact of PPACA/Obamacare on their underwriting, integration, reporting, and potential penalties. HHS is rolling-out guidelines on a day-by-day basis.
b) Understanding of Voluntary/Worksite Plans as well as Ancillary Benefits - No one Carrier/Provider provides the best of all choices for the diverse requirements of Employers and Employee.
c) Understanding the Tax-Advantaged Plans available to Employers and Employees - and now Individuals - These plans include: Premium Conversion (Section 125 IRSC); 105 Plans; Reimbursement Plans for - Medical/Health Costs, Dependent Care for Minors and Seniors, Transportation and Parking; HRAs, HSAs, 401(k); and more.
d) Understanding the importance of the Education, Communication, Enrollement, and Data Management Processes - For successfully delivering the Choices to the Employees and gaining both Participation and ongoing Persistency.
e) Understanding the Technologies Required for offering integrated Carrier/Providers and their Plans, Program and Services (See #4 Below)
f) Willingness to Partner - Brokers and Service Providers with different areas of expertise should work together to provide the integrated Plans, Programs, and Services. This will require Working Together and Revenue Sharing.
4. Integrated Support Technologies - In this New Marketplace - driven by the complexities of PPACA/Obamacare - can include all of the above strategies. Supporting Technologies are required for efficient, cost-effective, and profitable delivery. Given developments over the past several years, there are now affordable options for Brokers and Carriers to offer Employer Groups of all sizes. Technologies being utilized should have the capacity to be integrated and support:
a) Offering Private Exchanges. (See #1 Above)
b) Offering Defined Contribution Plan Design. (See #2 Above)
c) Offering Choices in Core Benefit Plan Designs including Fully Insured, Partially Self-Funded, and Self-Funded Plans.
c) Offering Integrated Insurance and Benefit Choices from multiple Carriers/Providers with a selection of Plans, Programs, and Services. (See #3 Above)
d) Supporting Employee Education, Communications, Choices of Enrollment Methods, and Data Management Processes.
e) Offering levels of Cost and Complexity to meet the Needs and Capabilities of Larger and Smaller Brokers as well as Employers of all sizes.
5. Inbound Marketing - A strategy for reaching out to the vast marketplace created by the Disruptive Changes with PPACA/Obamacare. The Costs and Inefficiencies of traditional marketing models, ie. Cold Calling, Buying Lists, Call Centers, Media Advertising, Traditional 3 Day Trade Shows, etc. have become prohibitive and dysfunctional. The End-Users/Clients are now using the Power of the Internet, Social/Business Media, Search Engines, and SEO to gain information about the Plans, Programs, and Services they need and to find Providers. Reaching the markets in need - Brokers, Employers, Employees, and Individuals requires:
a) A Budget for marketing that combines traditional Outbound with Inbound Marketing.
b) The Willingness to Integrate a New Marketing Strategy with old Marketing and Sales Models.
c) The Capacity to Develop a Website and Landing Pages that convert visitors into Clients.
d) A Working Knowledge about Search Engine Optimization(SEO) and how to gain website page ranking as well as website traffic.
e) An Understanding of How to Use Analytics to measure ROI from the various Marketing Strategies - including A/B Testing..
f) An Understanding about the Social/Business Media Tools available combined with the time and expertise to utilize their diverse Capacities.
g) A Willingness and Capacity to Build Trust, Add Value and Develop Content before starting the Selling Process.
h) Patience and Realistic Expectations - Very few New Strategies work over-night! Inbound Marketing requires much less in dollars but does require consistency and time to gain traction. Potential Qualified Prospects will knock on your door when they understand what you offer and what differentiates you from your competition.
Conclusion - Disruptive Change created by PPACA/Obamacare - and new Inbound Marketing Strategies - have forever destroyed traditional Broker, Carrier, and Employer Strategies for offering Benefits. The entire marketplace has changed! While in the past evolutionary and incremental changes could be made to the Insurance and Benefits relate Plans, Programs,and Services - as well as their marketing - the new requirements and opportunities require a re-writing of the entire Business Plan. New Business Plans should take into account:
- Targeted Markets (Existing and New) - Where Clients and Potential Clients fit under PPACA/Obamacare - as well as their willingness to accept different types of changes required or optional - within your Plan.
- No Historic Data - Existing statistics and data do not apply to many of the new strategies.
- Flexibility - Any new Plans must be prepared for adjusting to new regulations as they roll-out.
- Income Projections on Traditional Core Benefits - must be reduced to encompass lost commissions due to MLR and the direction Carriers are taking toward Direct Marketing.
- Fee Based Income - The potential of shifting in part to a Fee Based Consulting Model replacing the old Commission Based Models.
- New Income Projections must be added to account for New Income Streams including: Voluntary/Worksite, Ancillary, and Fee Based Income.
- The Cost and Profit from Partnering to retain existing accounts as well as building new blocks of Clients.
- Changes in personnel required to embrace change and to optimize opportunities.
- Risks/Rewards - in expanding the Plans, Programs, and Services offered.
- Costs and Requirements - of Outsourcing vs Developing Internal Capacities.