Sharing the health care burden
Insurance agents support business leaders’ efforts to up their benefits
SPONSORED BY MICHIGAN ASSOCIATION OF HEALTH PLANS
By Leslie D. Green
The new carrier didn’t cover the procedure. Seeking advice, the employee called the insurance agent who represented her employer.
“At one point, the employee kind of said, ‘Forget it, I’m not going to get (the procedure). It’s okay. I’ll just deal with it,’” recalled that agent, Dave Sokol, president of Troy-based insurance agency Wilshire Benefits Group.
“Insurance agents work for their clients. They don’t work for the carriers,” said Cathy Cooper, legislative director for Lansing-based Michigan Association of Health Underwriters. The organization advocates on behalf of agents to make health insurance more affordable and accessible.
Lansing-based Michigan Association of Health Plans, with the help of MAHU, partnered with Crain’s Content Studio, the marketing storytelling arm of Crain’s Detroit Business, to gather leaders from seven Michigan-based benefits groups to discuss the role of an agent today’s business climate. MAHP works to improve access to health insurance for consumers and to improve value, choice, affordability and competition in the health insurance market.
The group shared the benefits and best practices of insurance agents and dispelled myths about the agent’s role.
“Rising healthcare costs have put health insurance in the top three expenses at most businesses,” said Jeff Romback, MAHP deputy director. “It affects employee retention, attraction and health. Your agent or broker is the gatekeeper for this expense who marries your interests to the changing landscape. Agents can be strategic partners; reviewing their performance against your goals should be at the front of a CFO’s mind.”
Leading organizations is challenging enough without having to worry about the rapidly increasing cost of health benefits, choosing the right plans and educating potential and existing employees — as well as unions — on the value of those benefits.
Because insurance agents understand these concerns, they work to relieve some of the burden of their clients’ executive team.
“Employers are not wanting to be in the health insurance business,” said Kareim Cade, president and CEO of Southfield-based Great Lakes Benefit Group LLC. “They don’t have the (time) to gather all the facts they need to be able to get through the health insurance process right.”
Stacey LaFay, president of Franklin Benefits Solutions in Grand Blanc, said insurance agents strive to offer clients the best coverage options available.
“We look at self-funding. We look at what can we do with prescription costs,” said LaFay. “We look at reference-based pricing (provider reimbursement based on a percentage of what Medicare would typically pay).”
At the same time, they look beyond mainstream insurance carriers, such as Blue Cross Blue Shield of Michigan and Blue Care Network, to find clients the most beneficial and cost-effective coverage, explained Jeff Romback, deputy director of MAHP.
“Smart shopping for health insurance means looking at all the options,” Romback said. “Knowing what’s available at different carriers with different structures makes for a full picture.”
The insurance agent’s job is to make sure they are exposing clients to all the benefits, health or otherwise, that will help them attract and retain top talent, said Michele Bolser, director of benefits for VTC Insurance Group.
There are 7.3 million job openings, which is about 1 million more jobs than there are workers to fill them, according to a June report from the U.S. Bureau of Labor Statistics. HRDive.com suggests employers offer benefits, such as flexible work schedules, remote work options and paid family leave, that are in high-demand among employees and job seekers.
“Is it a student loan payoff benefit? Is it a college tuition benefit? Is it pay-on-demand?” Bolser asked. “Even if we don’t think it’s necessarily something that substantial, (that new benefit) could be the difference.”
Agents also know that explaining health benefit changes to unions just adds to the complexity of negotiations between the administration and union leaders.
Great Lakes Benefit Group, which works with public sector organizations, strives to lessen tension in those conversations. “We sit between the union and the administration and say, ‘Hey, we all want to get to the same place,’” Cade said.
Human resources professionals do a lot.
They interview, recruit, hire and onboard staff. They work with executives on strategic plans for attracting and retaining talent. They address employment-related issues, such as harassment allegations or other complaints, along with developing and administering health and safety programs.
At the same time, they juggle employee training, payroll and benefits administration.
Navigating the health care system takes time and resources away from those other responsibilities; and high costs, changing regulations, and the plethora of choices can overwhelm even the savviest of professionals.
Simultaneously, though, offering the right benefits is crucial to a company’s bottom line and often a key to attracting and retaining top talent.
“Eight or nine years ago, the economy took a dive in Michigan, and companies cut back substantially on support staff for HR departments. We have HR managers and directors out there doing a lot more than before,” Sokol said.
Insurance agents can help fill the gaps on a company’s HR team in terms of educating employees during open enrollment season and servicing employee benefits plans all year long.
They can answer employees’ questions about their benefits, help solve insurance-related problems and be the “voice of knowledge, experience and reason in a confusing area,” Sokol said.
Agents also operate with a sense of flexibility, always ready to respond to their clients’ HR needs.
When Tyrone Jordan II, vice president of Adrian-based Kapnick Insurance Group, visited one of his large clients during open enrollment a couple of years ago, he witnessed a staff member answering the phone every two minutes.
Afterward, Kapnick built a client call center so employees could ask agents questions about their benefits.
“That’s really been huge for staff to free up time to do other things they really want to do,” Jordan said.
An agent’s job isn’t done after identifying the best benefits for a business. They also help that organization’s HR team communicate the significant worth of those benefits to employees and illustrate how they stack up to what the competition offers.
“The national unemployment rate is at 3.6 percent. Those who are unemployed are not employable. So, you’re only going to get good people by stealing them from competitors,” said Greg Liposky, president of Troy-based Creative Benefit Solutions. “Benefits help illustrate the compensation package better. So, their paycheck might be x, but the percentage of the benefits the employer is funding or subsidizing could be 25 percent to 40 percent of their W2.
“We help the HR team disseminate that information in an effective way.”
Although organizations pay nearly $15,000 a year per employee for health insurance, employers often say their staff complain the insurance is junk.
Before, during and after open enrollment, insurance agents can help combat misconceptions by educating employees about how the plans might affect them, said Micah Widder, president of Security First Benefits Corp. in Flint.
“We take a very difficult topic and explain how it works,” Widder said. “We help them understand what is the deductible, what is coinsurance, what is a copay.”
DEBUNKING MYTHS ABOUT INSURANCE AGENTS
- Work for insurance carriers.
- Charge employees a fee for their services.
- Act as a free resource for employees.
- Sell value and educate clients.
- Undergo compliance training to learn codes, ethics and other nuances of the industry.
- Provide services for independent contractors, freelancers and those otherwise self-employed.
Beyond open enrollment season, agents can research viable cost-effective alternatives to a company’s current plan and even directly float the possibilities of different plans to the employees to get feedback on whether their providers would be in the new network.
“By the time we get in front of them to do the enrollment meeting, they understand the benefits of the plan,” Sokol said.
Wilshire Benefits holds a pre-enrollment education session on how high-deductible health plans and health savings accounts work for some of its clients. Liposky has seen the benefits of this education. His organization found that pre-education meetings increased employee participation in HSA plans by 20 percent to 25 percent.
Jordan said education is also crucial to union negotiations. When Kapnick held separate meetings with unions and administration for a school district client, messages weren’t being spread across the entire district, he said. “So, I started hand-picking people to work within the group. I said, we need one custodian, we need a secretary, we need people that are going to be talking to each other,” Jordan said.
“Negotiations became easier … It took away a lot of the fears of change because they understood the differences between the networks, between the plans, deductibles and coinsurance options, and they were telling the rest of their members. By the time it came to a vote, it was very quick and easy because people understood it at a level they never had before.”
Education and transparency are also vital to lowering health-related expenses.
A single person earning a $50,000 salary who receives an employer-sponsored health plan generally spends 11 percent, or $5,250, out of pocket on health care, according to Kaiser Family Foundation. Insurance agents participate with nonprofits, such as MAHU, to help lower those costs.
MAHU, an advocacy group for insurance underwriters, takes the concerns of insurance agents and agents’ clients to Lansing and Washington, D.C. The agency also endeavors to acquire data about coverage costs — for pharmaceuticals, emergency room procedures and out-of-network care and more — for companies of all sizes.
Agents armed with information from MAHU can provide employers with a clear and thorough understanding of tools and benefits available through their selected coverage. Employers then can help employees comprehend cost and care implications.
Employees need to understand that the doctors they see or places they go for tests and procedures may not be the most cost effective or of the highest quality, said Cade, of Great Lakes Benefit.
Transparency allows them to inform employers and employees when there is a different location that provides high-quality care at a lower cost.
Franklin Benefits Solutions’ LaFay said a limited number of insurance carriers have transparency tools, such as cost estimators. Still, agents often work with organizations to incentivize wise choices that keep costs down.
For instance, LaFay said Franklin Benefits is incentivizing participants in some of its self-funded groups. “We’re saying, ‘If you go to the least expensive facility, we’re going to give you a $100 gift certificate,’” she said.
ADVICE FOR BUSINESS LEADERS
- If you’re not seeing a variety of health insurance options for your employees, change agents.
- Find an agent you trust as you would a lawyer or accountant.
- Provide your agent the information necessary to do a solid market analysis for your organization. If you don’t trust that person with that information, change agents.
- Keep an open mind when agents bring new concepts to the table. Those new ideas might differentiate you from your competitor and make it easier to attract and retain talent.
- Include your insurance agent when you create your company’s three-to-five-year growth strategy.
From one-on-one insurance consulting to high-level strategic planning, business leaders should consider the insurance agent a vital human resources partner all year long. Health benefits shouldn’t be something an organization discusses just before renewal periods.
“Health care agents should be part of any strategy for a company that is looking at growth,” Cade said. “As business leaders look at moving forward, health care should be a part of a three-to-five-year strategic vision. Organizations that are progressive are taking that type of approach.”