According to Hendrickus van Bulck, a partner with Van Bulck & Company (Sumter, S.C.), health benefits are at a crossroads, especially with the move toward health care reform. "No one knows what will happen," he states. "However, what is certain is that, in the foreseeable future, health care will change one way or another. If you are in that market, it is important to be prepared."
Van Bulck believes the processes of marketing and selling in general will not change. What will change are the reasons people buy. In addition, what the product will do for the buyer also will change, from a more or less specialty service to a commodity item. "Once everyone is required to be in that market, health care or similar benefits will be like buying gasoline," he suggests. "The products will be more and more similar to each other."
So, the question becomes: If you are selling these products and competing with so many other people selling substantially the same products and services, and if the price differentials may not even be that great anymore, what can you truly sell? "What you can sell is how you make the people feel about what you sell," continues van Bulck. And one way to do this is to excel at providing consumer education.
Bob Barry, senior vice president of product and market strategy for Connecture (Waukesha, Wisc.), a provider of Web-based sales, service and process automation solutions for the health insurance industry, sees another reason for the growing importance of consumer education. "There has been a pretty significant extension of the individual marketplace," he notes. "In the last six years, it has increased about 80 percent. This is the result of a lot of new companies and small employers that don't offer coverage, as well as some of the larger employers no longer offering coverage."
With the increase in the individual market, Barry believes, individuals looking for benefits are seeking brokers who can act as trusted advisors to walk them through the sometimes complex sales process. "As such, anything that can be provided in the way of consumer education to aid these advisors is important," he states. Barry believes that this trend toward a growing individual marketplace will continue. This poses challenges for brokers, given that, in recent years, plans have tended to become more complex.
"There are more plan features, more nuances, and care management and disease management programs that carriers have introduced," he notes. "As such, there is a lot of education required not only around the benefit plan itself, but also around the entire 'carrier experience.'"
The Trend Toward Tech
Both van Bulck and Barry believe that technology is an important component of the growing need for consumer education. According to van Bulck, education is becoming much more Internet-based. However, as people become more Internet-savvy, education needs to become less transactional and more relational.
"In other words, it is important to use the Internet, but also to be very personal with it," he suggests. Certainly, according to Barry, younger people are very tech-savvy and prefer being educated this way. But older people are also becoming comfortable with electronic education.
"In fact, the fastest growing population of Internet users is actually seniors," he points out. "One reason is that they want to be able to send and receive e-mails and photos from their children and grandchildren." Then, they begin using it for other things.
Up Close and Personal
While technology is a growing trend in consumer education, it all starts with personal relationships and personal education.One broker who understands the importance of this is John R. Edmonds, CFP, LUTCF, president of Coastal Financial Group (Culver City, Calif.).
"Without consumer education, employees are less likely to understand their policies, as well as the clients' strategies, such as a desire to offer policies with higher deductibles," Edmonds explains. Employees need to know that the employer still wants to offer the plan, but, in order to do so, they are offering higher deductible, lower cost plans to the employees, but which will require the employees to fund more cost.
"It is important to understand employee concerns, and then sit down with them in meetings, really listen, and then help them pick the best plan that works for them," Edmonds continues. It really does require an emphasis on one-on-one communication. It also requires an environment where employees really feel free to talk and voice their concerns.
"When we do this, we not only get greater buy-in, but greater appreciation on the part of the employees about what the employer is trying to provide," he adds. Providing education not only helps the client and the employees, but the broker as well, Edmonds believes.
"There are a lot more brokers competing for your business these days," he states. "As a result, you have to be much more in touch with your clients and employees than another broker would be. If you aren't, someone else will." Susan Combs, president of New York-based Combs & Co., is also a strong believer in the personal touch. But before anything else, she makes sure she's educated herself. "I am always taking continuing education credit courses," she notes.
As a broker, you continually get invited to meetings and seminars. Combs believes that it's good to attend some of these, because you often do get questions from clients that you can answer because you've attended these events. Combs frequently attends meetings sponsored by carriers and organizations such as the National Association of Health Underwriters.
Combs arranges formal meetings with employees to go through the entire benefits program, and then follows up with a Q&A session. "People know they have insurance, but they don't know any of the details until they have a catastrophe," she explains. It is useful for them to have a lot of this information up front, "We want our clients to be proactive and know what they have before they actually need it."
Combs holds these meetings around renewal time, during open enrollment. Part of the process also involves educating existing enrollees on any new changes.For some of her clients that don't have formal HR departments, Combs is actually the "HR arm."
"When they have a new hire, they have that person contact us directly, and we go through their benefits with them," she reports. "In addition, if there are a number of options, we discuss these with them. We will ask them for a list of their doctors and let them know which ones are in-network."
This personal touch to education not only helps the client and the client's employees, but Combs as well. "About 60 percent of our business comes from employee referrals," she states. One organization that understands the importance of technology and the personal touch is Chard Snyder, based out of Mason, Ohio.
"For us, education is an on-going process," explains Alissa Ashworth, presentation & training coordinator. "We often do educational meetings on new products. We also do enrollment meetings, where we get into more detail." Chard Snyder then does follow-ups with e-mails and literature. It also has a customer service department where people can call to get additional information.
"They are talking to a live person within eight seconds," states John Gutzwiller, vice president. "We also receive a lot of e-mails, and we have a system where we can respond to these very quickly." Chard Snyder has seen this volume increase quite a bit, because it allows participants to ask questions and get answers, even during off-hours. Gutzwiller says last year, an entire department was dedicated to doing only this.
On the technology side, Chard Snyder has found success working with Evolution Benefits, a company that creates and provides consumer education and communications material. "We began working with them as a result of being awarded a large contract in our area," reports Joy Snyder, president of Chard Snyder. "The incumbent was using Evolution Benefits at the time, and the client liked it so much that they wanted us to continue that relationship."
Chard Snyder eventually moved its whole book of business to them from another vendor in mid-2007. In the future, Snyder plans to look into technology even more. "We want to explore communication strategies that the young generation are comfortable with, such as texting, and using Facebook and Twitter."