THE NEXT GENERATION BENEFITS AGENCYuahu.org/wp-content/uploads/2018/03/May_2016-Next_Generation_B… · 03/05/2018 · Sources: Telenet and Ovation Sales Group, 2015 MHI Sales Best

THE NEXT GENERATION

BENEFITS AGENCY

Introductions

Chad Schneider

Chad Schneider is an insurance industry veteran of 14

years. He is currently the Chief Sales Officer of Code

SixFour. LLC He is based in Los Angeles, CA. Chad

previously worked with Aflac for 13 years and was a pioneer

of their broker strategy. Chad was a co-founder of NAHU's

Vanguard Council on a national basis and is the current

NAHU national media chair.

3

Are we entering a time when brokers will diminish in

importance?

Source; http://www.reaganconsulting.com/The-Future-of-the-Insurance-

Agent-Broker.cfm

June 2001!

Agency owners need to decide

whether to march on or get out

while they can…

We’ve heard “The independent

agent is going the way of the

buggy whip manufacturer…”

If you don’t meet the needs of

customers, you are out of business. If

you don’t effectively distribute,

carriers will find some other way. If

you don’t provide attractive

opportunity for employees, they’ll go

elsewhere…

The Future of the Insurance Agent / Broker

http://www.reaganconsulting.com/The-Future-of-the-Insurance-Agent-Broker.cfm

What We Will Discuss Today…

Building – And Flying – The Rocket Ship

Driving Sustainable Organic Growth

AGENDA

CHANGING

MARKET

RISE OF

CONSULTINGYOUR NEXT

STEPS

AGENDA

CHANGING

MARKET

7

The B2B buying process is changing across all

industries

Sources: Telenet and Ovation Sales Group, 2015 MHI Sales Best Practices Study, Decoding The Decision Dynamic, Forrester

These trends strongly affect the way agencies and producers “go to

market” and interact with employers

Self guided: By a 3:1

ratio, B2B buyers want to

self-educate versus talk

to sales representatives

to learn about new

products and services

Multi-channel: B2B

purchases nearly always

involve 2 and often 3+

channels

Multi-channel

“shopping”Deliberate buying

Structured &

measured

Prospecting harder:

# calls needed to reach

prospects has doubled in

last 5 years

Longer selling: Cycle

time increased 22% in

past 5 years

More decision-makers:

23% increase in DMs per

deal (to 5.8) in last 5 yrs

Formal processes: 61%

of B2B buyers use formal

bidding processes (up

from 45%)

8

A thoughtful customer engagement process is needed to

match this new buying process—but many firms see gaps

0

5

10

15

20

25

30

35

40

45

50

1-2 2-3 3-4 4-5 5-6 6-7

# F

irm

s

Need for engagement process improvement

Average

Source: ZS SFE Navigator Benchmarking Summary (2014); CSO Insights; Sales Performance Optimization Study, 2015 Key Trends Analysis

Where is the most

improvement needed?

Major MinimalSignificant

Capability

Significant

need

Ensure Reps Sell Value to Avoid Excessive Discounting

55%

Ensure Reps Effectively Differentiate Offerings

53%

Ensure Reps Link Solutions to Needs of Individual Stakeholders

53%

9

Example from the wealth management industry: If

you don’t drive change, change will drive you

“Wirehouse” brokers

Market: 90%+ of individual market dominated by wirehouses

Pay: Commissioned

Trends: Product pushers; trading volume; “house” funds

THEN

Wirehouses IndependentsNOW

Market: Segmented—different models for different customers;

Wirehouses losing share to all other channels

Pay: Fee-based; transparency is critical

Trends: Consultation and financial planning (for high-end

investors); rising power of national platforms; low-fee “passive”

products; automation & analytics driven

RoboRIAs

Many aspects of employee benefits are evolving and changing,

that impact a decision maker’s purchasing criteria

- 10 -

Strategy to control

rising costs and engage employees

Complying with ACA / health care reform requirements

Private Exchanges simplify Employee education and

engagement

Innovative cost-sharing and plan incentives aim to encourage better

care consumption

Simplifying benefits administration integration with

HRIS

Population Health Management and Wellness Programs Becoming Mainstream

Consumer Driven Health Care and Alternative Funding

Structures

More granular and detailed benchmarking of plans, costs, and competitive positioning

Expanding Employee Choice Through Customized Benefits and Voluntary/Supplemental

New Era of Employee Group Benefits

All of the above are re-ordering buying priorities and preferences

Unique Buyer Interests and Styles

BY THE BOOKINDIFFERENT

AGGRESSIVE ADOPTER

STATUS QUO

EMPLOYER “BENEFITS BUYER CULTURE” – WHAT IS IT?

The profile of an organization, as it relates to providing employee benefits

Tolerance For Risk

Be flexible and adaptive in plans vs.

pursue a proven strategy/perspective?

Sustain current state, or develop new approaches?

Perspective On Control Over

Outcomes

Proactive or reactive to cost increases?

Pursue traditional or innovative plan

designs?

Legalist or strategist?

Anticipate change, or adapt to change?

Communication Style

Reserved to employees vs.

congenial/upfront, casual?

Open to share vs. need to know?

Proactive to employees vs. react

to questions?

Approach to Benefits Planning

After-thought vs. pre-planned,

methodical slow pace?

Pressure to act vs. time to plan and

think?

Focusing on the process/admin vs. attention to the

outcomes?

The individual traits of business owners and HR decision makers within the organization make up the characteristics of

the benefits culture at any point in time

IDENTIFYING THE BENEFITS BUYER CULTURES

Seven factors emerged as statistically significant predictors of “culture types”

Richness OfCurrent Benefits

Perceived Impact Of Benefits On

Business Results

1

2

3

45

6

7

Benefits Communication

Approach

Benefits Decision-Making

Style

Understanding Details of ACA

Approach to becoming

compliant with the ACA

Firm Size (# Employees)

FOUR TYPES OF BENEFITS BUYER CULTURES

Believes in current benefit structure

Looks for ROI

Doesn’t have a formal strategy for managing benefits

Reactive to industry changes and cost growth

Don’t fully understand health care reform

Generally found at mid-size firms

Benefits aren’t a competitive differentiator

Offer bare-bones plans

Not much benefits-specific communication

Limited understanding of health care reform

Generally smaller firms

More critical of current benefits

Uses proactive strategy and 2X more likely to have a total rewards strategy

Use sophisticated communication to employees

Strong understanding of reform, “ahead” in compliance activities

Generally found at larger, and faster growing organizations

Tracking “on time” with all health care reform compliance

Wants to pursue a proven strategy

More legalist than strategist

Believe in proven value of benefits

Reserved in communication, uses standard techniques

Generally mid-size companies

HOW IS EACH TYPE OF EMPLOYER RESPONDING?

Maintain existing group health plan, with increased cost sharing

Reduce overall percentage of premiums paid by employer

Implement newly available HDHP alongside traditional PPO/HMO

Dropping Group Health Plan, Wage-Up Employees to Select Individual Coverage

Pricing Plan to Send Some Employees To Public Exchange

If large group, pay the fine and don’t offer coverage

Full-Replacement Consumer Driven Health Plan

Partial self-funding, or fully self-funding their benefits plans

Implementing Private Exchange with sophisticated decision support

Defined Contribution Benefits

Reduce the value of benefits (e.g. remove dental and vision), and pair with 100% voluntary coverage

Increase overall employee cost sharing

If large group, offer “skinny” benefits plan

What Clients ACTUALLY Want

Multi-Year Strategy and Roadmap

ADMINISTRATION AND TECHNOLOGY

(expert knowledge selecting benefits admin systems, private

exchanges)

COMPLIANCE AND LEGAL OVERSIGHT

(ACA, ERISA, HIPAA and more –understand all provisions, how to

comply)

HUMAN RESOURCES CONSULTING

(total rewards strategies, advise on org design and recruiting

tactics, and incentive/compensation design)

RISK AND FINANCIAL MANAGEMENT

(cost forecasting capability, claims analytics review, voluntary

benefits expert, defined contribution plan designer)

BENEFITS COMMUNICATION

(clear knowledge in how to tailor the benefits message for the

employer to their HR strategy and culture)

HEALTH MANAGEMENT (build and champion wellness

strategies, engage at employee-level in health, understand how to

empower employees as health care consumers)

Traditional Insurance Agency Model





(cost forecasting capability, claims analytics review,

voluntary benefits, defined contribution plan design)


HEALTH MANAGEMENT












exchanges)



comply)




Value-Added Services

Technology-Focused Broker Model

RISK & FINANCIAL MANAGEMENT




(expert knowledge providing or selecting HRIS, Payroll, benefits

admin systems, private exchanges, etc.)


HEALTH MANAGEMENT

Value-Added Services



(cost forecasting capability, claims analytics review,

voluntary benefits, defined contribution plan design)

Benefits Consulting Model

Multi-Year Client Strategy and Roadmap



exchanges)



comply)













20

We see agents taking four paths in response to

current market pressures

Response type: Path to growth:

Stronger Faster

(15% of agents)

Rely on strength of relationship to win the day. More will

believe this is a winning strategy than will actually bear out

Add Specialty

Advice

(20%)

Focus more on consultative (or solution) selling. Bring

relevant industry and regulation expertise to customers

Expand Offerings

(50%)

Increase offerings to employers by adding new product

lines or services. Examples: P&C, voluntary lines, and

wellness programs

Tech Up

(15%)

Use technology solutions to increase sales and fulfillment.

Typically involves using digital enrollment platforms and

other web-based services

21

Pros/cons of each approach

Response type: Strengths: Risks:

Stronger Faster

(15% of agents)

Simple (low incremental

investment)

Low short-term risk

Making a big bet on (an unlikely) status

quo

Possible overrating quality of

relationship

Add Specialty

Advice (20%)

Fast ramp up

Natural extension to relationship

Imitable

Advice must be tailored—and accurate!

Expand Offerings

(50%)

Selling into an installed base

Added revenue stream

Time consuming

Not very scalable

Tech Up (15%) Offer something more to an

employer, many times at low or

zero cost (to them)

Differentiated

Scalable

High need to understand technology

and be sure it solves customer issues

Reputation is on the line with

technology

Implementation costs

On their own, none of the above will be sufficient

AGENDA

RISE OF

CONSULTING

“Consulting”

….

Is a

Buzzword

This is NOT consulting…HUMANA HUMANA HUMANA

HDHP POS 80/50 OA HMO 14 Copay 80% NPOS 14 Copay 80/50Alternative Effective 2/1/2014 Alternative Effective 2/1/2014 Alternative Effective 2/1/2014

IN NETWORK BENEFITSCalendar Year Deductible (1/1-12/31) $1,500 Single / $3,000 Family $1,500 Single / $3,000 Family $1,500 Single / $3,000 Family

Ded Applies to Out of Pocket Max Yes Yes Yes

Copays Apply to Out of Pocket Max Yes Yes Yes

Coinsurance Coverage 80% 80% 80%

PCP required No No No

Preventive Medical

Preventive Office Visits Ded waived; Plan pays 100% Ded waived; Plan pays 100% Ded waived; Plan pays 100%

Preventive Lab & Xray Ded waived; Plan pays 100% Ded waived; Plan pays 100% Ded waived; Plan pays 100%

Physicians Charges

Primary Care Office Visit Subj to Ded; Plan pays 80% $40 Copay; Plan pays 100% $40 Copay; Plan pays 100%

Specialist Office Visit Subj to Ded; Plan pays 80% $55 Copay; Plan pays 100% $55 Copay; Plan pays 100%

Preventive Diagnostic Xray & Lab Subj to Ded; Plan pays 80% Subj to Ded; Plan pays 100% Subj to Ded; Plan pays 100%

Provider Services Inpatient &

Outpatient/SurgicalSubj to Ded; Plan pays 80% Subj to Ded; Plan pays 80% Subj to Ded; Plan pays 80%

Hospital / Facility Services

Inpatient Hospital Subj to Ded; Plan pays 80% $500 Copay/day; Plan pays 100% Subj to Ded; Plan pays 80%

Emergency Room (Waived if admitted) Subj to Ded; Plan pays 80% $150 Copay; Plan pays 100% $250 Copay; Plan pays 100%

Outpatient Surgery Subj to Ded; Plan pays 80% $250 Copay per visit; Plan pays 100% Subj to Ded; Plan pays 80%

Outpatient Advanced Imaging (PET, MRI,

CAT, etc.)Subj to Ded; Plan pays 80% Subj to Ded; Plan pays 80% Subj to Ded; Plan pays 80%

Prescription Drugs

Low Gen/High Gen/Brand / High Tech Subj to Ded; Plan pays 80% $15 / $35 / $55 / 25% $15 / $35 / $55 / 25%

Mail Order (up to 90 day supply) Subj to Ded; Plan pays 80% 2 x retail copay 2 x retail copay

Other Services

Urgent Care Subj to Ded; Plan pays 80% $75 Copay; Plan pays 100% $75 Copay; Plan pays 100%

Policy Limits / Out of Pocket Maximum

Calendar Year Max (1/1 to 12/31) $2,500 / $5,000 $2,000 / $4,000 $3,000 / $6,000

Lifetime Maximum Unlimited Unlimited Unlimited

OUT OF NETWORK BENEFITS N/A

Calendar Year Deductible (1/1 to 12/31) $4,500 Single / $9,000 Family $4,500 Single / $9,000 Family

Ded Applies to Out of Pocket Max Yes Yes

Copays Apply to Out of Pocket Max Yes Yes

Coinsurance Coverage 50% 50%

Policy Limits / Out of Pocket Maximum

Calendar Year Max (1/1 to 12/31) $7,500 / $15,000 $9,000 / $18,000

Lifetime Maximum Unlimited Unlimited

FL, TX, CO, TN

Effective 2/1/2014 Effective 2/1/2014 Effective 2/1/2014

Monthly Premium Monthly Premium Monthly Premium

Single 18 $465.54 17 $512.84 11 $578.06

Employee & Spouse 10 $1,024.18 9 $1,128.24 19 $1,271.73

Employee & Children 5 $884.52 6 $974.39 1 $1,098.31

Family 8 $1,443.17 16 $1,589.79 6 $1,791.99

41 $34,589.48 48 $50,155.42 37 $42,371.78

Current

Consulting Is a Process and Methodology

DISCOVERY

ANALYSIS

SOLUTION

DESIGN

IMPLEMENT


DISCOVERY

ANALYSISSOLUTION

DESIGNIMPLEMENT

Capabilities and Activities You Need To Deliver Ability to collect data from different systems

Collecting qualitative insights – asking the right questions

to uncover needs

Example Service Offerings Employee Feedback Surveys

Collection of Current Client Data (census, plans, rates,

contracts, bills, etc.)

Interviews / discovery conversations with executive team

(CFO, HR, Benefits, etc.)

Current program participation and demographics summary


ANALYSIS

DISCOVERYSOLUTION

DESIGNIMPLEMENT

Capabilities and Activities You Need To Deliver Data modeling, benchmarking, analysis

Uncovering opportunities for improvement

Example Service Offerings Benchmarking current plan designs

Cost projections and financial forecasting

Network performance, adequacy, and access analysis

Claims benchmarking, actuarial health risk predictive

modeling, reserve projections

Compliance testing / legal exposure analysis

Administration review and technology system integration

opportunities


SOLUTION

DESIGN

DISCOVERY IMPLEMENT

Capabilities and Activities You Need To Deliver “Scenario” and “what-if” modeling and analysis

Proposal / presentation development

Example Service Offerings Vendor selection and sourcing market pricing

Contribution strategy modeling and cost forecasting

Plan construction / value-based insurance design

Wellness / health management program design and

incentives

Reference-based pricing and high-performance network /

PCMH selection

Selection / analysis of supplemental coverages

ANALYSIS


IMPLEMENT

DISCOVERYSOLUTION

DESIGN

Capabilities and Activities You Need To Deliver Execution and implementation of specific tools/solutions

Tracking success

Example Service Offerings Plan communication to employees

Processing elections and managing status changes

Filing required government documents (5500, 1094/1095)

Constructing legal documentation (SPD, SBC, etc.)

Ongoing reinforcement communication to support specific

wellness / condition management programs

ANALYSIS

Local Brokers and

Benefit Advisors

Regional / National

Brokers & Consultancies

Unclear Client

Engagement

Model

Re-inventing

The Wheel

Talent Gaps

>Organize your content and consulting assets

Assess your current state gaps and needs

>Define and brand your consulting process

>Build external partnerships to plug gaps

>Manage your content and consulting assets

>Enable your consulting process with technology

>Develop existing talent and attract new hires

Set Your Agency Up For Success In The Consulting Model

>

- 30 -

If the only tool you

have is a hammer, it is

tempting to look at

everything as if it is a

nail. – Abraham H. Maslow

“”

- 31 -

Insurance Carrier Partners

Playing the role of "quarterback" and strategic advisor

Associate

Principal

Next Generation

Benefits Agency

Health Management Vendor Partners

Compliance & Legal Resource Partners

HR Consulting Advisor Partners

Payroll, Ben Admin, Tech Partners

Offering strategic support across these areas allows your agency and

consulting practice to create true differentiation in your market

- 32 -

Solutions and Opportunities Abound:

Administration & Technology

Market volumeCall Center /

Support Center Plan Selection /

Decision Support

Tools

Processing Enrollment

and Apps

(EDI w Carriers)

Personalized

Messaging

Engaging Content,

Personalized Videos

Wellness

Administration

Plan Benchmarking

and Analysis

Voluntary Benefits

Administration

FSA

Administration

COBRA

Administration

Billing

Reconciliation

Administer

Change-of-Status /

Life Events

Health Data

Reporting

Total Compensation

Statements

Dependent Eligibility

Verification

ASSESS

IMPACT TO

YOUR

BENEFITS

STRATEGY

IDENTIFY

REQUIRED

CHANGES TO

INSURANCE

PRODUCTS

DETERMINE

REQUIRED

LEGAL

DOCUMENTS

& NOTICES

SUMMARIZE

IMPACT TO

ADMIN. &

BUSINESS

PROCESS

Individual Mandate

Wellness Non-

discrimination and

Incentive Regulations

Transitional

Reinsurance Fee

Health Insurance Tax

No Annual Limits

Max Annual Out Of Pocket Caps

Guarantee Issue/No Pre-Ex

Small Group Essential

Health Benefits

Small Group Metal Levels /

Community Underwriting

Clinical Trial Coverage &

Provider Non-Discrimination

(final regs pending)

Waiting Period

Limitations

Processing new taxes

/ fees

Non-Discrimination

For Fully Insured

Plans

(final regulations

pending)

Maintain compliance

with existing

notifications / legal

documents

Solutions and Opportunities Abound:

Compliance & Legal Oversight

AGENDA

YOUR NEXT

STEPS

Avoid The Three Pitfalls…

Re-Inventing The Wheel:

how do we leverage existing

work among our clients, to

maximize profitability?

Process Efficiency:

how do we define the “way” we

work, to maximize profitability?

Invest in Software / Intellectual Capital:

1. Assess Your Capabilities

2. Build Your Library Of Content

Leverage Technology & Automation:

3. Define Your Consulting Process

4. Identify Tools To Automate Steps

Build Partnerships and Hire Talent:

5. Identify partners to collaborate

6. Coach and Grow Existing Talent, and

Hire “up” from larger firms

Talent:

how do we hire, train, and develop

to deliver on a more sophisticated

approach?

1

2

3

1. Assess Your Agency

CLIENTS

Hea

lth

Ma

na

ge

me

nt

& W

ell

ne

ss

Ad

vis

or

Hu

ma

n C

ap

ital

Ta

len

t Co

ns

ultin

g

The Client must be the center

of what we do

Do you have a defined

consulting process?

What is the current state of

your internal infrastructure –

staff, tools, leadership?

Where is Your Firm On

Providing Six In-House

Consulting Capabilities?

HRIS, Payroll, Enrollment, Benefits

Administration

Billing, Client Service, CRM, Sales Activity

Intellectual Capital,

Knowledge Management,

Analytics, Consulting

4. Invest In Technology / Automation Tools

Three Legs To The Stool: Best-in-Class Software Infrastructure of Benefits Consultancy

Page 39

6. Coaching Existing Talent & Attracting New Hires

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Average Actual Time Ideal Time

Spending time cleaning data,

analyzing information, and

preparing summary documents

Spending time 1-on-1 with clients,

helping them evaluate their

business and influence decisions

Page 40 40

Closing thoughts

Whether your objective is…

o Engage Your Clients Around Wellness & Health Management

o Sell More Voluntary Insurance

o Launch and Scale a Private Exchange Solution

o Market Your Compliance or Actuarial Expertise

The Keys To Success Are…

Content To Market It

Talent To Deliver It

Technology To Manage It

1

2

3

What We Will Discuss Today…

If you really want something, you will

find a way. If you don’t, you will find

an excuse.” – Jim Rohn“ ”

Documents

THE NEXT GENERATION BENEFITS AGENCYuahu.org/wp-content/uploads/2018/03/May_2016-Next_Generation_B… · 03/05/2018 · Sources: Telenet and Ovation Sales Group, 2015 MHI Sales Best