GroupDividual:
Redefine Your Business and
Thrive in the Age of Healthcare Reform
Harness the Purchasing
Power of the Individual
Scott E. Mardis
© 2011, National Association of Health Underwriters • www.nahu.org
Be Afraid….. Be VERY Afraid
They're coming for your
commissions!
Don’t Be Frightened by Obamacare.
Protect and increase your commissions
with new payment strategies that
empower individuals
First Mover Advantage for Brokers –
Health Care Reform Overload
Seasonal/
Temporary
Workers
COBRA
Part-Timers
Small Businesses
Dropping
Coverage
Spouses
Municipalities
and
Government
Agencies
Indv. Declining Group
Coverage
Individuals
Retirees
Unions
Contractors and
Consultants
© 2011, National Association of Health Underwriters • www.nahu.org
Leading Experts – Game Changer
Source: 2013: Health Partners
America.
© 2011, National Association of Health Underwriters • www.nahu.org
Leading Experts – Game Changer
Source: 2013: Health Partners
America.
© 2011, National Association of Health Underwriters • www.nahu.org
Leading Experts – Game Changer
Source: 2013: Health Partners
America.
© 2011, National Association of Health Underwriters • www.nahu.org
Leading Experts – Game Changer
Exchanges May Draw 37 Million Already-Covered Workers
Millions of workers who are covered at work could instead choose insurance through state exchanges. How
many millions? Roughly 37 million, according to Dr. Jay Bhattacharya of Stanford School of Medicine.
“The reason is that these workers would qualify for substantial subsidies to buy exchange
insurance,”
In other words, the subsidized Obamacare premium will be less than what they pay for employer based
insurance.
© 2011, National Association of Health Underwriters • www.nahu.org
Leading Experts – Game Changer
Source: 2013: Health Partners
America.
© 2011, National Association of Health Underwriters • www.nahu.org
Leading Experts – Game Changer
Source: 2013: Health Partners
America.
© 2011, National Association of Health Underwriters • www.nahu.org
Payroll Deduction Premium Persistency
Payroll
Deduction
Persistency
Drives
Participation
55% of employees feel that payroll deductions for voluntary benefits help them to be more disciplined about
saving. This discipline – coupled with the financial safety net the benefits provide, and an integrated education
campaign – can translate into increased enrollment.
MetLife Survey – 2013
Payroll deduction participation ranges between 25% and 45% for most products but on direct pay, the
rates tend to be in the single digits.
Eastbridge Consulting Group – June 2013
The Average American bounces 12.7 checks a year and which generates $9.4 billion in bank fees
Compilation American Banker 2012
The Average Pa. checking account balance is $3,100. This would be depleted in less than one year.
The Average savings account in Pa. is ONLY $6,100.
Pitney Bowes 2012
© 2011, National Association of Health Underwriters • www.nahu.org
Joint Study Sponsored by LIMRA International
and Society of Actuaries
“Every check a policyholder/customer has to
write provides him or her another opportunity to
reconsider the purchase decision.”
© 2011, National Association of Health Underwriters • www.nahu.org
The Shift……..
• What We Know:
•
The Affordable Care Act (ACA) is here to stay
•
Employers are becoming more aware of the potential subsidies
•
Employers are asking their brokers for help transitioning their employees to the exchange
•
Brokers are concerned about lower commissions (rightfully so) and their ability to enroll and engage individuals
•
Brokers need to be able to drive new revenue from new business and from existing cases
© 2011, National Association of Health Underwriters • www.nahu.org
The Future?
•
Overall, 30 percent of employers will definitely or probably stop offering ESI
in the years after 2014.
•
Among employers with a high awareness of reform, this proportion
increases to more than 50 percent, and upward of 60 percent will pursue
some alternative to traditional ESI.
•
At least 30 percent of employers would gain economically from dropping
coverage even if they completely compensated employees for the change
through other benefit offerings or higher salaries.
•
Contrary to what many employers assume, more than 85 percent of
employees would remain at their jobs even if their employer stopped
offering ESI, although about 60 percent would expect increased
compensation.
McKinsey and Company – Private sector employer study
© 2011, National Association of Health Underwriters • www.nahu.org
The Shift……cont.
• What We Know Continued…….
• Employers and employees may no longer pre-tax individual policies on the public exchange (No
HRA’s or PRA’s)
• Once employers send employees to the exchange, they may wash their hands of all
administration – no more billing and administration which limits revenue (VB) opportunities
• Medical Insurance is becoming a “voluntary” program
© 2011, National Association of Health Underwriters • www.nahu.org
Follow The Money
The Subsidy Calculator
The ACA Calculator
© 2011, National Association of Health Underwriters • www.nahu.org
Illustrative Sample of a 60-Life Group Commission
Opportunity
Broker Income Outlook under Obamacare
Income drops to this
lower point as you
lose commissions
because employees
leave the group.
$35,000
$30,000
Your income when
you convert the
group to individual
coverages and you
remain as the broker.
You can also sell
additional voluntary
products
$25,000
$20,000
$15,000
$10,000
$5,000
$18,450
$4,613
$30,245
$0
Group Broker Commissions Current Group Client
Group Broker Commissions as Employees Peel Off
Broker Commissions Indiviudal Process Existing Client or Another Group's Broker Account You Take Over
© 2011, National Association of Health Underwriters • www.nahu.org
Total the
employee pays
for SILVER
(not Bronze)
Family
Coverage –
$172/month
Money the
government
contributes to
the employee
instead of the
employer
By the way,
the Bronze
Plan would be
FREE for this
family!
© 2011, National Association of Health Underwriters • www.nahu.org
© 2011, National Association of Health Underwriters • www.nahu.org
You’ve taken the Plunge – Now What??
• Either your client asks you to enroll their
employees on the exchange
Or
• You proactively approached your client with
these financial solutions and sold them on your
strategy
Congratulations!
© 2011, National Association of Health Underwriters • www.nahu.org
Now oh god you actually have to
sell the individuals and enroll it!!
HOW DO YOU DO THIS?
© 2011, National Association of Health Underwriters • www.nahu.org
What Do You Have To
Make Decisions About?
1. PICK PRODUCTS
What other products other than the individual medical
Critical Illness, Gap, Life, Pet, Dental, Telemedicine, ID Theft,
Disability, Vision, name your product
2. PICK THE CARRIERS? How do you pick between them?
Transamerica, Humana, Aflac, Abacus, Colonial Life, Lincoln
Financial, Trustmark, Allstate, Etc. Etc… Etc…
3. What Commission Schedule and what trips?
You probably never know unless you do this all the time
© 2011, National Association of Health Underwriters • www.nahu.org
What Do You Have To Actually Do
To Enroll The Case?
© 2011, National Association of Health Underwriters • www.nahu.org
What About The Money?
How are employees
going to pay?
© 2011, National Association of Health Underwriters • www.nahu.org
A New Solution for Carriers, Brokers, Enrollment Companies
Payment system solutions and banking platform that:

Bills, collects, and remits payments from individuals directly to carriers

Provides Direct Access to sell employees even when an employer
doesn’t offer, sponsor, or assist in providing supplemental benefits
Financial Wellness Strategies
This is not the current payroll deduction process or any existing bill
consolidation approach!
The PDD Approach (Premium Direct Deposit)
© 2011, National Association of Health Underwriters • www.nahu.org
Current Employer Challenges
New Payment Solutions
Current Challenges / Headaches
Peace of Mind Solution with Premium
Payment Aggregator Solutions
Premium reconciliation, escrow balance
recordkeeping and balance sheet headaches
No More Reconciliations
E.R.I.S.A. Plan Liabilities
Same benefits transforms ERISA plans to nonERISA plans NO ERISA LIABILITY!
Lose productivity because one third of my
employees are dealing with financial issues
Provides employees with budgeting tools and
visibility to manage their payments and finances
Administrative tasks with helping employees with
401(k) hardship loans – currently 40% of
employees request loan withdraws
This can be reduced when employees budget
their money correctly.
HIPAA – Privacy Laws YOU KNOW WHAT
EMPLOYEES PURCHASE – SHOULD YOU?
Similar to PayPal™, their purchases can be
shielded from the employer.
© 2011, National Association of Health Underwriters • www.nahu.org
Employer Access Strategy in the New World?
As Employees Turn Consumer
without Payroll Deduction Plans…
• Fact – Traditional group insurance and ESI are on the decline
• Question – How are you going to deal with this?
• Answer – Provide group-like coverage to individuals
o Engage Voluntary!
o Maintain the same access
o Maintain the same retention when they don’t have payroll
deduction
• How? Engage a Premium Direct Deposit Provider (PDD)
o Exchange Payment Methods
o Voluntary Marketplace Place payment methods
© 2011, National Association of Health Underwriters • www.nahu.org
Keys To Success
•
Follow the Money
•
Engage Voluntary to enroll your new individuals
•
Find new prospects and replace their broker!
•
Sell More Cases
•
Sell More to Existing Cases
•
Help make practical the transition from group to individual
•
Help maintain renewals of the individual product sales
© 2011, National Association of Health Underwriters • www.nahu.org