As published by Professional Insurance Agents (PIA)
While summer is known as a time for some relaxation and fun, those in the benefits world often view it in a different light – one influenced by the shadow of the active and all-important Open Enrollment season to come. For insurance agents, it’s never too early to start planning and building a strategy for their clients’ open enrollment program. In fact, the savviest producers are constantly looking at trends that may impact the employee benefits space. By analyzing changes in the insurance marketplace, staying up-to-date with what’s happening on Capitol Hill, and state and local governments, and by assessing the evolving expectations of your clients and their employees, you can gain a critical competitive edge in the months ahead.
Of course, the goal of thoughtful planning is to ensure that you retain your current clients and grow your book of business. Clients and prospects are demanding more today than ever before. They are looking for insight and guidance in an era defined by the complexities of the Affordable Care Act (ACA). They expect to receive practical insurance solutions that deliver tangible cost and administrative efficiencies. They also want to keep their employees happy and attract new ones by setting clear expectations when it comes to benefits, offering attractive choices, and providing support to help them make the best decisions.
In September, most agents will begin the process of direct outreach on specific Open Enrollment topics. At that point, communications from carriers regarding changes will have begun, and you can start to communicate with clients and prospects to explain the options available. Until then, however, it’s important to step back, view the broader benefits picture, and ask some basic questions, including:
How is the U.S. workforce changing and how will that influence the kinds of plans employers want?
How can you help clients and prospects better communicate with employees, and what types of value-added services are important to companies today?
How will employers handle cost challenges – for their business and for their employees – and how will the products you offer play a role?
With these questions in mind, let’s take a look at some trends that will impact Open Enrollment this fall:
Insurance companies landscape
The health care industry is changing rapidly, and corporate acquisitions proposed earlier this year are just part of the picture. Cigna’s plans to purchase Express Scripts and Aetna’s potential merger with CVS could eventually have a direct impact on the types of products available for your clients. In the meantime, these potential transactions reflect a clear direction for the insurance industry: a move toward cost containment by emphasizing preventive care and wellness to their members. Aetna, for instance, has been focused on helping its members view healthcare as a journey - one where the carrier is involved at every step and works with physicians in each community to create a patient-centered plan for wellness. Aetna’s proposed deal with CVS would provide a brick and mortar pathway toward greater engagement and personal health management strategies. Open Enrollment this year will likely feature a growing number of products that integrate health and wellness goals and programs for employees, as well as expanding employers’ interests in prioritizing these offerings.
Digital health care options
Technology already has impacted the way that healthcare is delivered and the processes involved in managing and delivering benefits. Consider the innovative digital tools that allow patients to access physicians remotely, such as Teladoc; the online services that deliver corporate fitness programs for employees; wearable technology and mobile apps that allow users to monitor health status; and web-based personal health and benefits management programs. These tools are not just changing how end-users approach their own healthcare, they are altering the insurance dynamic and the kinds of products that make sense for employers and employees. With the increasing focus on prevention and wellness by insurers and employers as a means to contain costs, we can expect a growing focus on digital healthcare. Your clients and prospects will look to you for guidance on strategies for integrating these new types of programs and services.
A Diverse Workforce
Today, employees in one company can span generations. According to Pew Research, the U.S. workforce consists of 35 percent millennials, 33 percent Generation Xers, 25 percent Baby Boomers, and 2 percent Traditionalists. Five percent are post-Millennials. What does this mean for your clients and your business? Essentially, the growing multi-generational workforce suggests that the benefits programs you offer must also be diverse, with more products that appeal to employees at different stages of their lives and careers.
Expanded Service Management Strategies
In the wake of the ACA, its complex rules and ensuing regulatory modifications, employers are increasingly looking for help with administering benefits, communicating with employees, and ensuring compliance. Agents who can offer value-added service options will be at a distinct advantage as we approach Open Enrollment season. While the idea of agents partnering with Professional Employment Organizations (PEOs) used to be met with a healthy dose of skepticism, today the trend is changing direction. Partnerships between insurance agents and the right PEO – one that offers attractive commissions to agents and high-caliber services to clients– are growing in importance. PEOs drive best practices, administrative efficiencies and savings through aggregation. The mission of PEOs extends well beyond the administration of health insurance and related compliance – the industry leaders also offer payroll, technology and tax administration; safety and risk management; worker’s compensation administration; human resources and regulatory compliance support. Agents that can bring the full suite of PEO services to their clients and prospects can tick off a lot of boxes on the value-add list. For small and mid-sized companies to compete with their larger counterparts, especially in today’s evolving benefits environment, they need to operate more efficiently and strategically, and PEO/agent partnerships can be the right answer.
The Role of Affordable, Minimum Essential Coverage Plans
Deductibles and premiums continue to rise, and employees are paying an ever-increasing amount for their benefits. According to the Kaiser Family Foundation, workers are paying a greater share of their medical bills. In this light, a recently proposed rule by the Trump Administration to extend the sale of short-term medical plans suggests that 2019 Open Enrollment may see more interest in “skinnier” plans – a lot less coverage, but lower premiums, which allows employees to better tailor insurance options that meet their specific needs
Paid Leave Benefits
In May, New Jersey adopted state-wide mandatory paid sick leave. New York City has expanded the types of leave covered under its sick leave policies. In fact, paid leave benefits are expected to grow in states across the country, and companies that are looking to compete for top talent in a tight labor market are also considering implementing their own expanded leave policies. Insurance agents should be sure to discuss these issues with clients and prospects in the coming months.
A Focus on Financial Wellness
More employers are now considering benefits for their employees that extend beyond healthcare. Think of the number of companies today that offer in-office perks, enhanced vacation policies, and flexible work schedules. Helping employees with their personal financial management is a growing area of focus, so financial wellness is key. Today, businesses are exploring possibilities beyond 401(k) plans, providing in-office financial coaching, access to online financial classes, and tools for investment. One trend from 2018 that will continue in 2019 is the push to help younger employees pay off student debt. Agents should bring potential financial wellness solutions to their clients and prospects, and those that work with partners such as PEOs can offer fully integrated, turn-key programs for employees.
Open Enrollment season is a time not just to meet the expectations of your clients, but to exceed them. The best way to do that is by understanding changes in the market, the needs of employees, and the overall financial and operational pressures that drive business owners. With the right research, you can develop the best proposals for the year ahead.