There has been perhaps no more divisive issue in this country over the past three years than that of health care reform. Supporters love it; opponents loath it. Most don't really understand it.

Beyond the obvious partisan politics, there is deep confusion among employers and employees alike on how health care reform will impact corporate benefit plans, provider offerings, and costs, when it takes effect on Jan. 1, 2014.

A recent roundtable discussion among the nation's leading benefits brokers revealed:

• • Employers are wrestling with how much change they can afford at their organization.

• • Employees don't want the burden of managing their own health care plan decisions.

• • Employees don't want the burden of managing their own health care plan decisions.

Neither side understands how health care insurance marketplaces will really work.All of this makes the next few months critical for educating the public on what health care reform holds in store. It is also changing the traditional role of the insurance broker. In this new environment, brokers need to play the role of consultant and advisor on both a corporate and an individual employee level. Rather than representing large pools of employees on a corporate plan, brokers will sit down, one-by-one to advise employees on what to do. They may send employees to public or private marketplaces (sometimes also referred to as marketplaces) or other plan offerings; and they may depend on voluntary benefit sales to offset lost company plan volume.

To a large degree, health care reform success in the next few months will depend on how well brokers can step into this new advisory role. This will require a strong understanding of the new health care reform regulations; how insurance marketplaces work; how to market and sell voluntary benefits; and how to advise employees on the best health care option for them. Both employers and employees are depending on it.

A Land of Confusion

By most accounts, employees are not prepared for this concept of consumer-driven health care. Even if they do understand what it means, a majority of workers say they don't want greater control over their health care plan decisions. Quite simply, employees are used to their employer making health plan decisions for them. For many, choice has meant simply, “Do I want to add a spouse or children to my plan?”

With health care reform, millions of new Americans will qualify for—and must have available—health care coverage. That may be with their employer. It may be with one of the new public or private marketplaces. So employers are scrambling to decide who to let into their existing programs and on what terms. The confusion is not only over the new regulations; but how new choices will impact existing programs.

“None of my clients know how it's going to affect them,” noted Ali Archer, senior account manager at Lockton Insurance Brokers. “They want to know: 'Does this mean I have to work with the employees now? Does this mean I have to offer benefits? What about the exchange—what is this exchange?”

Meanwhile, newly-qualified employees will have to decide if employer coverage is affordable and desirable. Brokers will have to evaluate a number of plan options and supplemental voluntary benefits to recommend the best coverage for each employee accordingly.

In this scenario, the insurance broker is now really working for the employee, not the employer.

Not surprisingly, employers are as confused about all this as employees are. With a wider public health care safety net, many employers wonder how closely they must work with employees on making these key decisions. Some may actually see health care reform as an invitation to drop company-provided health care plans. For them the penalty may be the more attractive option.

Some employers are reducing hours worked by certain staff roles in order to have them fall off the plan criteria. This will drive those employees to the health care marketplaces. Other employers are faced with interpreting different exchange offerings and regulations in different states.

Most importantly, leading employers are convinced that a robust health care plan is a must-have offering to attract and retain skilled staff. For them, the challenge is how to keep it affordable with a larger pool of insured employees, many of whom may place an imbalance of needed services into the system. These organizations are faced with their own set of tough questions: Do we reduce the offerings on the company plan? Do we increase the percentage of the plan paid for by employees? Do we point employees to voluntary benefits as a way to design a plan most meaningful to them?

Turning Adversity into Opportunity

Some might see this changing landscape as bad news for the health care benefits broker. Others see it as opportunity.

To be sure there's always been an advisory piece to the broker's role. But experts say this role has now kicked up several notches. Beyond the general confusion over health care reform, brokers are now filling a void created by shrinking HR departments – becoming a benefits administrator.

As Krystie Dascoli, vice president at Wells Fargo, noted, “I think our role is going to be more individualized: visionary for the whole, but we will become more of a concierge [role] to all those employees; sitting down and helping them figure out how to navigate all their choices. In some cases, in some of your groups, you have three or four options that they have to pick from. Or, they might get a bucket of money to utilize: to purchase programs that make sense for them.”

This is where opportunity comes in. Plans are moving away from employers dictating the benefits; to a model where employees have purchasing power. They need help understanding how various plans compare, how deductibles and copayments work with each, and which will best meet changes to their personal circumstances.

This educational role will be one of the most important, and time-consuming, for brokers in the months ahead. In the process, brokers will be able to advise employees on voluntary benefit offerings that will round out shrinking corporate plans or limited exchange plans—meeting the most important needs of the employee. That will also be a critical revenue piece for brokers, as they move away from a fee-based model.

From Broker, to Advisor, to Marketer

When it comes to benefit plans, after initially signing on, employees don't usually think much about them.

“Ninety percent of workers simply rubber stamp their benefits choices from the previous year,” said Kip Havel, vice president of marketing communications at AFLAC. “Even if things change, they are going to say, 'I will just do the same thing because I don't want to pay attention to this.”

Why not? If it made sense last year, it seems right for this year too, right? Not anymore.

More importantly, the newly-qualified Americans don't have that experience with health plans. They will not be allowed to just join the plan on Jan. 1, 2014. They must have already made a decision on which route they are taking in order to sign on by enrollment deadline.

That is requiring a lot more conversations between brokers, HR and employees before the Oct.1 sign-up date. And the conversation is moving from benefits communication to benefits marketing.

A growing number of employers say they can't afford the anticipated impact of health care reform, and they are reforming their own benefits plans beforehand. That means a benefits bucket approach—allotting a certain amount for health care to each employee, to be spent as the employee likes. The company will offer a basic medical plan, basic dental, life or disability options, etc., and then a variety of voluntary benefit options can be bought. Navigating through these voluntary options will be a key role, and opportunity, for the broker.

An even greater opportunity will be had with many employers. Most HR professionals are not trained in the health care reform regulations. They don't know how to handle this topic with employees, and need help. The broker can help take the sting out of an otherwise unpleasant conversation. Further, the company wants to do right by its employees, but costs are going up. Just like the employees, the employer wants to know what its best options are.

All of the above scenarios paint a very different landscape for the benefits broker. Which is probably why a recent study predicted that over the next four years, over one-quarter of brokers will be out of business. The keys for survival that same study noted: mastering the regulations of health care reform; and marketing voluntary benefits.

“I think the future of voluntary benefits is going to evolve in the next three years,” noted Dascoli. “I see this as my glass half full because I feel like this is a great time for opportunity. As long as you stay on top of it; and you're learning; and you stay creative; and you think outside the box—if you can do all that, I think this is where the value is going to lie.”

The roundtable participants

The nation's leading benefits brokers, the largest supplemental plan carrier, AFLAC, and the leading industry publication, Benefits Selling leant their expertise to this discussion at the 2013 Benefits Selling Expo on April 29, 2013 in San Diego. Participants were:

• • ALI ARCHER, senior account manager, Lockton Insurance Brokers, Irvine, Calif.

• • JEANNE N. BRANDON, practice leader, Wells Fargo, Charlotte, N.C.

• • TIMOTHY BYRNE, vice president and partner, M3 Insurance Solutions Inc., Madison, Wis.

• • KRYSTIE DASCOLI, vice president, Wells Fargo, Dana Point, Calif.

• • KAREN ESTLICK, vice president of sales, VBA (Voluntary Benefits Agency), Palm Harbor, Fla.

• • KENT EVANS, vice president, Willis of Delaware Inc., Wilmington, Del.

• • KIP HAVEL, vice president of marketing communications, AFLAC, Columbus, Ga.

• • DENNIS MARTIN, senior manager, AFLAC, Louisville, Ky.

• • DEREK MOORE, senior benefits consultant, Leavitt Group, Santa Ana, Calif.

• • JONATHAN D. SADLER, business development, Oswald Companies, Cleveland, Ohio.

• • KYLE SHALLAHAMER, senior consultant, Leavitt Group, Santa Ana, Calif.

• • DENIS STOREY, editor, Benefits Selling (moderator)

• • KIM ZIRRILLO, senior vice president, NFP (National Financial Partners) Corp., Austin, Texas.

Workforce ill prepared

American workers are ill prepared for the implementation of health care reform in 2014, with most being unfamiliar with consumer-driven health care, and a majority not wanting to take greater control over their insurance options.

Those are among the findings of the recent study, the 2013 Aflac WorkForces Report, which surveyed nearly 1,900 benefits decision-makers and more than 5,200 U.S. workers on trends, attitudes, and use of employee benefits.

The Aflac report revealed that:

• • 75 percent of workers said they think their employer would educate them about changes to their health care coverage as a result of reform; but only 13 percent of employers said that educating employees about health care reform was important to their organization.

• • 72 percent of the workforce has not heard of the phrase consumer-driven health care.

• • 62 percent of workers believe the medical costs they will be responsible for will increase, while only 23 percent are saving money for potential increases.

• • 54 percent of workers would prefer not to have greater control over their insurance options because they don't have the time or knowledge to effectively manage it.

(Readers can request a full copy of the report at [email protected].)