Waiting to see how private exchanges play out is no longer a business strategy; and to succeed, brokers must change their business practices.
Speaking last week at the Private Healthcare Exchanges conference in Chicago, sponsored by Employee Benefit Adviser and Employee Benefit News, Perry Braun, executive director of United Benefit Advisors, said too many people are playing the waiting game on making the move to private exchanges. They should find strategies and business practices that are the best fit for them, he said.
The agency of the future, he believes, will have to focus on four ideas:
- Pensions and employee benefits
- HR administration and technology
- Compliance and regulation
- HR planning and execution
There will always be disruptors that create chop in the water, so we look for ways to work within the wake, he said. Consolidation is happening.
[There] is an arms race for market share right now.
If [the changes] dont scare you, it should, he added. Big things are happening with the aircraft carrier and we are presumed as the tug, but we are the aircraft carrier.
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For Braun, a private exchange is the solution and something brokers can carry.
Holley Maher, principal at MRCT, a St. Louis-based benefits firm, decided to take that route. Long story short, employers need to do more and our clients look to us as the broker/consultant to be that expert, she said. But brokers are an expert on every topic, we are not lawyers. We are not CPAs, she added.
To overcome that challenge, brokers need tools to help and a private exchange is a way to acquire those tools, Maher said. We needed to come up with ways to not only maintain revenue, but keep it, she added.
With a private exchange, there is a single source of truth so nothing slips through the tracks, and there is a reputable process to make sure the right documents are provided to employers and employees, she explains.
All our clients have challenges, she adds. Agencies want to be a good resource, their problem is our problem. As they have issues, we have solutions and become better resources to our clients.
The employers perspective
For an employer, these changes and challenges come and go, said Nora Black, director of HR at Sachs Electronic Company, and a client of Mahers. Cost is also an important factor as the pie is not getting any better. When Black joined Sachs two years ago, the company offered one super-rich medical plan with a $1,000 deductible meant to attract employees.
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However, retaining Maher as a new broker, Black, being a the sole HR representative at Sachs, was advised to offer a private exchange as a potential management tool. Shortly after, Sachs made the switch.
Following the change, Black said she was speechless as it was the first time she had received positive feedback in her career.
We wouldnt have done it, had it not been introduced as a potential solution, she said. We were the perfect case study. We were an early adopter and it was a good thing for us.
