If the Patient Protection and Affordable Care Act has been good for anything, it’s been as a sales driver in the voluntary space. Not that voluntary needed much help given the tear these products have been on lately.

Steve Lathrop, senior vice president at USI Insurance Services, in Orange County, Calif., which specializes in executive compensation and employee benefits, spoke with BenefitsPro about which direction he sees the growth taking. He also discusses how brokers need to prepare for a new way of doing business.

Specifically, how is health care reform affecting benefits brokers?

Health care reform is putting additional pressure on carrier margins. By law, insurance carriers serving 50 or more employees must spend 85 cents of every dollar on direct claims. That leaves 15 cents for all else, including broker commission. There’s a belief by many that this will reduce broker commissions. While there are signs of this, it hasn’t yet become extreme. Still, brokers are starting to think about alternative sources of revenue. Voluntary products are a logical place for them to look.

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