For clients, benefit advisers can double as superheroes

“With great power comes great responsibility.”

This phrase, of course, was made popular in the superhero movie Spider-Man, but I think it should be the theme for every benefits adviser.

We touch the largest expense and most valuable asset for every employer: their employees. Between salaries and benefits, most employers spend more than 60% of their revenue on these two areas, and the difference between the top-performing organizations and the rest of the pack is their people. For advisers, that means we should strive to be thought of as more than just the-health-insurance guy or gal. How do your clients perceive you?

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This article is a call to action of sorts, for the entire benefits advisory space to change the way it thinks about the programs or solutions brought to employers. I know what some of you are thinking: “It’s worked out well for me so far” — and that’s true. But ask yourself this: how has it worked out for employers and their employees?

Honestly, not so good.

The Peterson-KFF Health System Tracker found that costs related to health spending soared to $1.4 trillion in 2020 from $74.1 billion in 1970, while costs have increased by more than 31 times per capita over the past four decades.

There are many other reminders of this unfortunate result. Average annual premiums for family coverage were $21,342 in 2020, according to the Kaiser Family Foundation’s 2020 Employer Health Benefits Survey. That’s nearly identical to the price of a 2022 Honda Civic.

Workers contributed an average of $5,588 toward the annual cost, which means employers picked up 73% of the premium bill. For a single worker in 2020, the average premium was $7,470. Of that, workers paid $1,243, or 17%.

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Here’s the rub: Many sources state that 67% of all personal bankruptcies are caused by medical-related expenses, when most of these people have health insurance. The Federal Reserve reports that 39% of Americans don’t have enough money on hand to cover a $400 emergency.

If your personal financial adviser were to lose your money at the same rate your clients are having increases in their medical insurance, you’d fire them. I know that hurts to read, but can you deny it’s true?

Albert Einstein said it best: “Insanity is continuing to do the same thing while expecting different results.” The industry norm is to approach each client each year with the same strategy, looking for solutions from the same companies that have produced the previous decade’s results. They all have a vested interest for costs to rise.

As an industry, we must do better. We must demand better. We are being trusted with an organization’s greatest asset and greatest expense. We are supposed to be stewards of a family’s financial well-being and health. But we also are supporting one of the nation’s biggest cost centers. Healthcare is almost 20% of GDP in the U.S., and we spend more than any other developed country in the world. Fixing this issue is both big-picture and everyday details.

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If we as industry leaders don’t solve this, then the federal government will make an attempt. This is a threat to our everyday lives, careers and income, but should also be a sign — for all of us — of failure. Regardless of political affiliation, this should cause concern when it comes to the experience of accessing healthcare. I have been to the DMV and seen the efficiency of our USPS. No offense to the people in those organizations. You have tough jobs. However, I don’t want my next doctor’s appointment or knee surgery to be “now serving L349.”

But we do have power to fix the way most Americans get health insurance, which is through their employer. I’m guessing most advisers do it the same way because they lack knowledge or other options. So in the weeks ahead, I’m going to introduce different strategies, approaches and solutions proven to lower health care costs for employers and their employees.

They will include an examination of the lowest hanging fruit trapped in opaque Rx programs and incentivizing employees and their families to find high quality providers and facilities, as well as partnering directly with healthcare providers to eliminate the need for middlemen. These strategies should show advisers how to differentiate themselves in their community while also positively impacting employees. The purpose will be to eliminate the “I never knew,” and allow us as one industry to do better.

With this knowledge, we will have the power to be superheroes. Now, you must ask yourself, are you ready for the responsibility?