From the December 19-26, 2011 issue of National Underwriter Property & Casualty • Subscribe!

Health-Care Reform Doesn’t Have Agents Running for the Exits—Yet

To thrive and prosper in PPACA world, small-sized benefit shops need to deliver boutique services to increase their client value

Independent agents worried about being relegated to a diminished role under the health-care reform law aren’t about to throw in the towel over their employee-benefits business just yet.

“I don’t think the mood is overwhelmingly negative, but the concern is the viability of selling the policies,” says Campbell H. Wallace, government-affairs counsel for the Professional Insurance Agents associations of the states of NY, NJ, CT and NH. “Producers have questions, but they don’t fear the future.”

Some experts believe that one viable way for agents to adapt and survive the impact of the Patient Protection and Affordable Care Act (PPACA) is by increasing the services they offer clients.

Some are doing just that: Ramping up their operations as advisors; charging fees for their expert insight; and expanding their benefits operations to include long-term care, life insurance, dental and other employee-benefit programs.

And while some predicted a spike in agencies with employee-benefit revenue selling off that business as a result of PPACA, that is not happening yet.

“There appears to be no huge increase in [mergers and acquisitions] activity in the past two or three years,” says Brian Deitz, senior vice president for Reagan Consulting.

Instead of selling off the business, Deitz says, agents are adding services where it increases the value of the agency.


Some employee-benefit agents are complaining that they are not seeing “enough thoughtful and positive energy” spent planning for the eventual new reality health-care reform will bring, says Arvid R. “Dick” Tillmar, an agency consultant for Tillmar Connect in Milwaukee, Wis.

Tillmar says that there are two things an agency should be doing today to deal with changes in health-care insurance. One is to form an employee-benefits committee to more actively and thoroughly discuss the agency’s future plans.

Second, “if you are not into voluntary benefits, you’d better be,” says Tillmar. It is important for agents to increase their value to their clients and find additional avenues of revenue, whether that comes in the form of contingent fees or some retainer.


Lydia Jilek, head of voluntary products for financial-services company ING in Windsor, Conn., explains that in selling these voluntary-benefits programs, producers should view health-care reform as an opportunity and not a burden.

She notes the price of health insurance continues to rise—and in an effort to control costs, employers are increasing deductibles.

Voluntary programs, Jilek says, can help consumers. She cited an ING critical-illness plan in which an individual can receive $15,000 worth of coverage in addition to their medical coverage in the event of a heart attack, sudden blindness, stroke or other malady.

She stressed that these voluntary programs, which can include accident insurance and disability, act to fill in the gaps and cover employees’ out-of-pocket expenses.

To prosper under PPACA, she observes, agents and brokers need to “take on more responsibility and increase their value proposition.”  


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