We're celebrating 10 Days of Membership! Today's Gift: Receive $20 to Amazon.com with a professional membership with promo 10DAYSAM
Training, policies and tools to help HR prevent and respond to harassment claims.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Develop your HR competencies and knowledge in-person in 12 U.S. cities or virtually.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
‘Very concerned’ about lower medical insurance commissions
Given the slow economic recovery and the uncertain impact of health care reform, U.S. benefits brokers and consultants are planning to focus their efforts on selling employers voluntary benefits and wellness programs, according to MetLife’s 2011 Broker and Consultant Study.
Only 25 percent of benefits brokers and consultants with large clients (1,000 or more employees) and 12 percent with small and mid-sized clients are very optimistic about the benefits industry overall. Three out of five respondents expect that employer-paid medical insurance will still be an important growth opportunity in the next three years, but 73 percent are very concerned about reductions in medical insurance commissions in light of health care reform.
“With new challenges for employers often come new opportunities for those brokers and consultants who can bring creative solutions to the table,” said Anthony J. Nugent, MetLife's executive vice president for U.S. business. “While wary of how health care reform might change their own business operations as well as those of their clients, four out of five benefits brokers and consultants say their firms are actively exploring new models and strategies in order to stay relevant and pursue growth opportunities.”
Broker and Consultant Concerns
Over two-thirds of brokers and consultants expressed concern that the slow economic recovery might cause employers to cut benefits—particularly small and mid-sized employers.
“The convergence of economic issues and health care reform is reshaping the benefits landscape and demanding agile navigational skills from brokers, consultants and their clients alike," said Ronald S. Leopold, Metlife's vice president for U.S. business. "The key to growth for brokerage and consulting firms will be the ability to differentiate one’s self from the competition—a concern expressed by two-thirds of survey respondents."
Potential Strategies for Profitability
Brokers and consultants in the study identified a wide range of potential strategies that they believe could increase the overall profitability and sustainability of their firms. The most popular strategies are enhancing consulting services, selling more voluntary and ancillary products, and playing a greater role in health and wellness.
The study found that 58 percent of brokers and consultants see the potential to sell more voluntary benefits and ancillary products over the next three years as important initiatives to increase their firm’s profitability and sustainability in a post-health-care-reform world. More than half of brokers and consultants expect to see a rise in importance for the following benefits offered by employers on a voluntary basis: disability, life, long-term care, dental and critical illness.
The size of the client affects the level of interest in health and wellness programs. However, 58 percent of brokers and consultants with large clients and 44 percent of those who work primarily with small and mid-size companies see greater involvement in health and wellness programs as a growth area for their firms. In addition, by 2013, more than half of brokers and consultants expect to see more opportunities to help clients with benefits administration, such as enrollment, billing and claims.
The Broker and Consultant Study was conducted during the fourth quarter of 2010 and the first quarter of 2011.
80% of Employers Concerned About Health Reform'sAdministrative Obligations
The 2010 health care reform law is increasing employer costs and administrative hassles, said 80 percent of U.S. employers responding to a June 2011 employer survey by Lockton Benefits Group, a benefits brokerage and consultancy. Employers say the law is making group health insurance more expensive and more burdensome and that the cost impact and administrative complexity are significant, according to the survey report.
The fact that a large majority of employers showed high levels of concern about the additional administrative obligations of health reform did not surprise Edward Fensholt, director of Lockton's compliance services division. "There are more notices to employees, additional plan summaries, a variety of reports to federal authorities, including W-2 reporting of health plan values, and significant penalties for noncompliance," Fensholt said. "Just the sheer amount of work and associated dollars added are significant to many employers. Federal regulators are trying to minimize the burdens—they're doing a good job of soliciting input from employers—but the obligations remain a significant challenge."
Stephen Miller, CEBS, is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Five key facts about High-energy visible (HEV) a.k.a. “blue light”
Join SHRM's exclusive peer-to-peer social network
SHRM’s HR Vendor Directory contains over 3,200 companies