Now that the PPACA is on the books, it's up to those who sell health insurance to figure out how they will survive decreasing commissions and a reduced number of products in the market place as a result of the new law. Brokers coasting on a business-as-usual basis will be out of business if they don't consider new products for their customers. The health care world has changed; those brokers who don't change with it will be left with only change in their pocket if they don't increase their inventory of saleable products, including insured products and other types of programs.
If your agency has been informed by your carriers that you will be working for less, then it's time to crank up the sales and look for products that will survive the new health care legislation in the years ahead. If you cannot adapt, you need to look for another career. However, any broker worth his salt should know there are companies and individuals hungry to buy affordable products and need someone to help them through the insurance maze.
You just need to find the programs that financially make sense to you and the client and add value to the overall financial plan and medical needs of the buyer. Right now, there is some confusion in the market place, primarily because not all the sand has settled with this legislation, and there still may be more changes coming.
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If you are wondering what's will happen to your commissions, then you really have the wrong focus. You should already know there is less pie to share. The real consideration should be to find reputable companies offering good products that have staying power and help the consumer. The service aspect of what you do as a broker should be more important than the financial part of your business. Although no one goes into business to lose money, it's vital that not only do you keep your eye on the bottom line, but you constantly raise the bar of how you take care of your customers.
Commissions will definitely be squeezed as the new health ratios are put into place. Because insurance companies are now forced to put more money into actual medical care, the amount left over for profit is reduced. That means brokers and agents will see a reduction in payments to sell the plans. It's your job to focus on the service, and the sales will come.
Where to go, and what to do? Here are a few clues to help you find extra money:
1. Limited Medical Benefit Plans–These plans can be offered in conjunction with a major medical plan as a secondary offer to companies that have employees who are not considered corporate management. For example, businesses that have a high turnover rate (hospitality, restaurants, retail), can use LMBPs as a way to attract workers who likely will not have a long shelf life, work hourly wages, cannot afford health insurance, or don't qualify as key employees. They make less money, but they still need some type of coverage.
2. Voluntary Benefits–These products make a lot of sense and can bring in additional commissions. Companies such as Aflac and American General provide great benefits for critical illness, accident, AD&D, short-term disability and more. These plans help offset high-deductible plans and add true value to an employer's health plan.
3. Health Reimbursement Accounts–These plans for ancillary benefits, such as dental, vision, wellness and more,are inexpensive. You can profit by selling to an employer that wants to manage its health care costs or is self funded. Careington and Ameriflex have recently partnered together for an affordable dental and vision HRA that is flexible and cost efficient to employers.
4. Discount Medical Plans–A discount plan acts as a supplement to insured products without cannibalizing the enrollment, especially for dental. Usually, most companies have at best a 20 percent take rate for voluntary benefits, and participation for employee dental insurance is typically low. Most hourly employees cannot afford it. Using a discount plan, especially one wrapped with a wellness bundle, keeps employees healthier and provides services to attract new hires and keep them longer.
Look for ways to increase profitability, and sell products that make your clients happy. Service the clients well, and they will give you more business. Brokers who go for broke in the new health care landscape will not go broke.
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