Hogan Knows

PPACA and the economic situation have created a new reality for brokers.   This reality is one which is best described as chaotic and uncertain.  Twenty five years of distribution and process consistency has been upended in a very short period of time.  Payers have rigid new MLR guidelines and alternative distributors, including our own government are now emerging as competitors.  The health insurance industry has been vilified and continues to be.  Many brokers are discouraged and distraught.  Others are energized and motivated by the challenge.  I direct this post to those brokers;  the elite professionals who are raising the bar by establishing a new standard for the handling of plan sponsors and their plans.  What’s your plan?  If you don’t have one….you need one now.  The most relevant brokers are getting in front of their plan sponsors now to discuss these issues.

We’ve spent much of the last month attempting to capture exactly what it is that a broker should and could be doing for their plan sponsor.  New payer compensation arrangements for many carriers in the middle market now dictate that brokers negotiate with their plan sponsors to determine exactly what services they will perform and for what fees.  Further, this arrangement must be memorialized in an executed document with the plan sponsor.  I’ve attached two pieces which should help you in your conversations with plan sponsors on this issue.  The first attachment sets out the issues and overarching themes regarding a broker’s role:  (1) strategy, (2) administration, (3) compliance, and (4) other issues.  The second attachment attempts to vet each of these themes to help you lay out all of the things that you could/should be doing for the plan sponsor.  While the listing is not exhaustive……it should provide you with a good basis for creating your agreement with your plan sponsors.

The best brokers will set the bar higher than they have before.  The worst brokers will merely attempt to undercut fees by offering more limited services.  Our money is on the best brokers.  That is who we will work with!  It seems clear too that payers are aligning themselves with the best brokers with their new broker tiering plans.  Owners of companies are looking for your guidance in this complex and volatile environment.  Get out to see them today.  The appendix of this tool provides you with some checklists that will help you to cross check your existing work.  Experience has shown that employers, even when Exchanges are available, want to work with a broker and need your help.  Get to work!  Do it now!    Jeff