Everyone understands carriers need brokers. And brokers need carriers. We get it. Everyone also understands the need for brokers and carriers to work together to meet the needs of their clients - and their employees. No relationship is perfect -- some are less perfect than others -- and things can definitely improve on a number of fronts. Here brokers share some of their concerns related to carrier performance. So what are carriers doing well? How they can improve? And what can brokers do to make life easier for carriers?
According to Robert N. Arnoff, president of Arnoff and Associates in Bainbridge, Ohio, it's a very challenging time for brokers, largely because it's a very challenging time for health care providers in light of all the changes going on.
"For example, children with pre-existing conditions have to be accepted for coverage, and by 2014, that will be true for everyone, including people with AIDS, cancer, or other terminal disease," he notes.
As a result, Arnoff found, brokers are constantly challenged with the information process when working with clients.
"We don't really know how providers are going to react to a particular group, because they have to fund for the future, as a result of the upcoming events related to health care reform," he explains.
Arnoff says providers need to take steps to improve communication.
"A lot of the time, providers are leaving brokers in the dark," he says. "We actually end up having to read about something somewhere in order to learn about what providers are doing, rather than getting the information directly from the providers." Arnoff is a member of the National Association of Health Underwriters.
"This is the largest association for health insurance agents, and I'm amazed, even through our own association, how little is being communicated to us by providers," he adds. Another concern Arnoff harbors is that of providers always playing defense. They seem to constantly be reacting to things.
"They aren't offering long-term plans, or even short-term plans, they can share with us," he suggests. "It would be helpful to have at least a short-term plan, especially in terms of the kind of information advisors should be sharing with clients."
On the retirement side, Arnoff has seen a huge fluctuation in the marketplace, such that a lot of employers are holding back on providing matching fund programs for employees. "As such, retirement plan providers really need to 'sharpen the saw' to gain market share and work more effectively with advisors," he advises.
Mark Samar of The Indemnity Group, in Orange Village, Ohio, wishes he and his colleagues had access to more information from carriers on what is going on with health care reform, and how involved brokers will be in the process going forward.
He also is concerned with what he sees as a lack of consistency among carriers.
"I have been in this business for 22 years, and I've always thought providers should've put together some sort of universal application, which they still haven't," he states. "It would make life a lot easier for providers, for brokers, and for employers."
In terms of underwriting, it's difficult for Samar to get a group through these days at a rate that's affordable to the employer.
"It's off-the-chart expensive, which is why we're seeing a shrinking number of employers providing coverage," he notes. Owen Wingate, co-owner of Wingate Insurance in Ponte Vedra Beach, Fla., would like to see carriers offer more benchmarking information, along the lines of: What is everyone else doing? How is everyone else paying?
"Certainly," he admits, "this is more difficult given what's going on with the government in terms of health care reform."
Wingate also thinks carriers could be more transparent about how they are coming up with their rates.
"However, the new laws will force them to do this anyway," he adds.
On the plus side
Despite their concerns, brokers see carriers doing some good things. One thing carriers are doing well, Wingate admits, is moving more toward electronic self-service. "We have more access to employee information and are more easily able to get people into their system electronically," he states. "This has created more of a burden on us as brokers, as well as on our clients. However, it's streamlined operations and made it easier to deal with the carriers." Samar agrees.
"The fact that carriers have engaged the Internet and begun to use it as a medium for contact has really made things easier for brokers," he notes. "Everything is basically done online these days." Samar also sees a lot of carriers moving ahead with more efforts related to wellness programs, especially with groups of 50 or more. While some carriers charge for these programs, others offer it free of charge, or at least on a reduced-cost basis.
He admits, though, it's difficult to determine the value of these programs quantitatively. "However, more people seem to agree that wellness programs really do save money in the long term, and carriers are responding to this," he notes.
Susan Combs, president of Combs & Co. in New York, offers a number of recommendations to carriers on how they can improve their services to brokers and, ultimately, clients.
"In the future, I think carriers will rely more and more on brokers, especially as all of the health care changes take place," she explains.
One reason is it will cut down on the amount of work they have to do interacting directly with the public. In addition, getting the information to the public directly from brokers seems to be in everyone's best interest. The reason: In general, Combs says, the public tends to have more animosity toward carriers than brokers do and more animosity toward carriers than toward brokers.
"However, before brokers can provide this information to the public, they need to have access to the information from the carriers," Combs continues.
Not surprisingly, she's found some carriers are better than others at providing information on health care changes.
"One carrier provides us with almost daily updates on what's transpiring in this area," she notes. "Others do webinars, which are useful."
Combs also advises consistency. Her company writes business all over the country, and she's found that communication channels and relationships vary by state.
"One of my people came from Philadelphia," she points out. "When she used to call carriers in Pennsylvania, she had a dedicated rep for each carrier and was thus able to build some relationships. However, here in New York, when she calls a carrier phone number, she gets a different person every time."
Combs also says carriers should keep brokers updated on changes.
"A broker can look like a schmuck if he or she submits something to a carrier, and the carrier responds by saying it will have to be redone because the form the broker used is outdated by two days," she notes.
She's also found while some carriers are ahead of the curve in terms of technology, others are well behind it.
Her final recommendation to carriers: Do what you say you are going to do.
"Some carriers say, 'We're going to do this and this, and add these bells and whistles,'" she says. "However, 12 months later, still nothing has changed."
Warren Benoit, president of Warren Benoit & Associates in Kenner, La., also offers some recommendations to carriers.
"Quality products are important, meaning that there is some flexibility in the underwriting," he states. "Some carriers offer this. Some don't."
Commissions remain sacrosanct - particularly to agents just starting out.
"However, commissions are not the lifeline of our organization," he notes. "The lifeline of our business is the service we can provide, so we need to be able to get service from the carriers."
In Benoit's experience, and in talking with colleagues, he's found when brokers call in to customer service people and other back-shop people at some carriers to get answers, "it's almost like they are calling India. I try to stay away from carriers where I can't get people to answer the phones. I figure that if I can't get through to someone, then I know my clients won't be able to either."
Ownership is also important to brokers, Benoit says. With some carriers, the broker owns the business. With others, they don't. "Carriers need to understand the importance of the relationship that brokers have with their clients," he explains. "I only do business with carriers where I know that I own the business."
Looking in the mirror
Of course, improvements are a two-way street. While carriers can do a lot of things to improve their relationships with brokers, brokers can also do some things to make life easier for carriers. When Samar was talking with the head of sales at one carrier in Ohio, he found out there are 11,000 licensed insurance agents in Ohio. Of that, however, only 750 have sold to groups with more than 50 employees.
"Agents who are selling to small groups, such as three-person or 10-person groups, are usually not really educated on the ins and outs of the policies and what effect they will have on the employees and employers," he states. "They usually haven't done their homework. For example, they may not know that there are limits on the numbers of certain therapies. They may not know that certain prescriptions are not covered. They may think something is in-network, when, in fact, it is out of network."
As a result, he says, these brokers are doing a bit of a disservice to the employers and employees.
Benoit is conscious of the level of business he does with carriers.
"One thing I try not to do is represent too many companies," he explains. "When we go in to do an enrollment, we usually try to have two products. We don't want to do business with 20 companies and not do justice to any of them."
Benoit also insists brokers should be sure to bring in high-quality business, so the company can build relationships and continue to do business with the clients in the future, benefiting the client, the broker and the carrier.
"Brokers also need to become more knowledgeable in terms of finding out how each carrier works," he continues. "If you understand how their systems work, what their hierarchies and chains of command are in terms of how to get things accomplished, then everyone benefits."
In other words, when brokers know the right people to call, this makes things easier on eveyone.
Finally, brokers definitely need to invest in technology and have systems that allow them to provide carriers with cleaner data.
"They also need to provide carriers with more information on how employers are running their operations," Benoit concludes.