Darwinism Effect – Survival of the Fittest for Employee Benefits Consultants
Survival of the Fittest for Employee Benefits Consultants
PPACA (Patient Protection and Affordable Care Act), known by most in and out of the industry as “ObamaCare” is no longer something that agents can hope will not happen — it is here, it has begun, and it is reality. In fact, the media reported last week that Democrats are preparing to launch a multi-million dollar advertising campaign to encourage public support for the legislation and those who helped pass it.
If you are a health insurance agent or an employee benefits consultant and you are unfamiliar with PPACA and all of its underlying provisions you have one of two choices — either raise the white flag or begin studying health care reform NOW so you can properly educate and advise your clients in the right direction. PPACA will have (or already has had) myriads of implications on the group health insurance plan your clients have in place today.
The reality in almost every type of business is that massive change equals massive opportunity. Those who are well-versed, well-staffed, and are forward-thinking will succeed and those who cannot accept the realities associated with PPACA will fade — and fade quickly. The health insurance agents or employee benefits consultants are “The First Victims of Health Care Reform” according to an article released on August 26th 2010. In fact, “The First Victims of Health Care Reform” is the actual title of the article. Below are three small excerpts from the article:
“Insurance agents and brokers and small insurance companies are among those who may have to scramble to stay afloat over the next few years. This is partly by design and partly an unintended consequence of a new law that is so sweeping, it will affect nearly every corner of an industry that accounts for one-sixth of the U.S. economy.”
“Agents and brokers are so concerned they will be viewed as redundant under the new law that they successfully lobbied to get state insurance commissioners to publicly acknowledge their importance.”
“Agents and brokers are also worried about the future for another reason: a vital part of their current role, sales and marketing, could be made redundant thanks to the new state insurance exchanges that will go online by 2014.”
Once again, if you are an agent (or broker or consultant) and you haven’t already made the necessary changes (internally as it relates to your business model and externally as it relates to communicating to and providing proper guidance to your clients) you are quickly running out of time. If you are an agent that has traditionally “shopped the market” for your clients every year, assisted your clients with open enrollments, and assisted your clients with their renewals, you need to change gears immediately. The successful agent realized several years ago that it goes way beyond simply providing the lowest rates. With today’s hazy economic climate coupled with the unprecedented changes associated with PPACA, employers need much more than an agent to help them “shop the market.” The successful “agent” will be much of a “consultant” — the insurance plans with the lowest rates will likely not the most appropriate choice for the employer. The successful benefits consultant will provide employers with analytical recommendations based on claims usage and employee behavior. The successful benefits consultant will be providing service on a year-round basis, not simply at the three-month window that revolves around a renewal date. The successful benefits consultant will invest in technology and outside resources to truly provide their clients with the best solutions to their unique situations. The successful benefits consultant has likely already incorporated some form of consumer-driven healthcare to their clients’ benefits package — consumer-driven health plans (CDHPs) are the future — the traditional $500 deductible PPO plan is becoming less and less common among organizations offering a benefits program.
If you are in this industry and you haven’t revised your business plan yet to align with PPACA, I can promise you that the clock is ticking and it is just a matter of time before other agents, the “successful benefits consultants,” will be calling on and enlightening your clients — do not put all of your eggs in one basket, especially if the one basket is loyalty.
About the Author
David Goldfarb is the owner and operator of DSG Benefits Group, LLC, an independent boutique employee benefits brokerage and consulting firm specializing in innovative benefit plan designs providing services to hundreds of clients nationally. Over the last decade David has developed the ability to understand an employer’s specific needs and develop an appropriate, tailored benefits package. DSG encourages its clients to integrate a heavy emphasis on consumerism and wellness into their benefits package. The firm strongly believes that year-round employee education and access to health care information are core components of a successful employee benefit plan. The firm prides itself on bringing innovation, value, and responsiveness to the complex world of insurance and employee benefits. David’s broad market knowledge, coupled with strong carrier relationships allows him to tailor a program that is competitively priced and meets his clients’ individual needs.
Mr. Goldfarb is an active member in several industry associations such as DAHU, TAHU, NAHU, NAIFA, NAABC, AHIP, SHRM, IFEBP, NCPA, and The Heartland Institute. He has also received numerous awards, including the National Association of Health Underwriters’ “Golden Eagle Award,” the highest recognition bestowed upon an individual who has demonstrated professional excellence in health and disability income insurance. 2010 was the seventh consecutive year for David to win this award. In 2010, David also qualified for the Million Dollar Round Table’s (MDRT) most distinguished membership level, Top of the Table. This is an exclusive forum for the world’s most successful insurance and financial services professionals that represents less than 1% of the MDRT international membership.
David has been featured in the Dallas Morning News for his progressive strategies in helping lower overhead costs for nonprofit organizations, allowing them to enhance funding for actual programming. He has also contributed to publications for MSNBC and Texas CEO Magazine. David has been a featured speaker for other professional associations such as CPAmerica International, where he has shared his knowledge with other professionals to them with their clients.
Outside of his involvement in industry associations, David is also active in his community, especially with nonprofit organizations. He is a charter member of the TACA Corporate Council as well as an active member of The Center for Nonprofit Management. Additionally, his firm is a corporate patron for several local Arts organizations such as the Dallas Symphony Orchestra, Dallas Summer Musicals, The Dallas Opera, Dallas Children’s Theater, Dallas Black Dance Theatre, The Women’s Museum, and several others.
Mr. Goldfarb is a graduate of the University of Texas, Austin and currently resides in Dallas, Texas with his wife Kerri.