With more than 32 years of experience as an employee benefitspecialist, Suzy K. Johnson understands benefits betterthan most. She is president and owner of Employee Benefit Advisorsof the Carolinas. I had a chance to speak with Suzy and ask herabout her thoughts on the industry and where we are headed.

Rick Ramos: Suzy, you’ve qualified for the NAHU SoaringEagle agency recognition award each year since its inception in2010. What’s changed most in the benefits space in the last sevenyears?

Suzy K. Johnson: The better questions is, “Whathasn’t changed?” We used to primarily do small groups under100 employees and now we only prospect groups with more than 50employees. Our average new case used to be 35 lives and nowwe average around 115 employee lives.

We used to educate about how small groups under 50 employeeswere rated based on their risk factor, but now it is only ACAcommunity rates or level-funding with underwriting questions forgroups of 25 or more in North Carolina.

In 2008, we received a lucrative percentage of commissions alongwith handsome volume overrides from carriers. This meant we had anautomatic increase in annual revenue, even if our new productionwasn’t what we targeted. Now we are paid a per employee per month (PEPM) fee for grouphealth of all sizes. Now when employers lay off workers, ourrevenue decreases. As a result, we must continuously sell newconsulting work to grow revenue and the company.

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I’m not saying some of the change hasn’t been good. It hasforced us to grow and develop professionally and adopt newstrategies to help our clients bend the ever increasing cost curve.Our value proposition to our clients has increased and we are morevaluable to the right client than ever. We spend a lot more timesearching for the right client profile where we can be paid for thevalue we bring.

It dawned on me a few years ago that good brokers and advisorswere in a unique position to drive change so that our clients werenot so helpless in their ability to control costs. As Mark Gaunyalikes to say, “Health insurance is expensive because health care isexpensive;” and sadly, the ACA missed the opportunity to addressthe real problems.

Five years ago, I would not have predicted that brokers would bethe ones driving change and bringing solutions such as directprimary care and health insurance captives. I didn’t think thegroup market would go away like many did; but at the same time, Ialso didn’t see the role we would play in driving change.

You’ve been active in introducing level-funded plans tomid-market clients. What’s the biggest misconception aboutlevel-funded plans?

The biggest misconception is that these plans can work well forgroups that have an inherently sick population, who utilizebenefits a lot, without changing anything else. Level-fundingprovides a similar level of protection to fully-insured plans, withthe client having the ability to walk away if the rate increase istoo high -- but the company is still left with high costs ifnothing else changes.

When a level-funded plan is introduced, the client needs to getinvolved in adopting a consumer driven plan, educating employees andproviding tools with access to efficient telemedicine and conciergeservices, information about benefits, and direction to lower costfacilities for care. Sixty percent of today’s health care costs areoutpatient services, and much of this cost can be impacted bybetter transparency information when the employee has skin in thegame to save their own dollars. There is a lot of room to saveemployees and the plan dollars by providing more transparency andcost comparison data. And the potential for lowering prescriptionspend is enormous as well, through the use of concierge assistanceand better information.

Containing costs and reducing claims is important forall employers, especially self- and level-funded plans. What’s yourapproach to tackling this problem?

As I mentioned previously, the plan needs to be designed in sucha way that the employee has “skin in the game.” They need to bemaking choices about spending their own money, rather than someoneelse’s. This will incentivize them to make a phone call or engage amobile app to find out the best, lowest cost facilities andprescriptions, because they are spending money that they can keepif they make wise choices.

I am a big believer in HDHPs with health savings accounts fundedby employers and employees for this reason. It is possible todesign a very rich plan and still build in incentives and tools tohelp employees find the best price for their services. This is thefuture and it can’t come quick enough, in my opinion.

And finally, we believe strongly in employers adopting dataanalytics tools that uncover anonymized health information abouttheir employee population. They can then better manage health risksby identifying gaps in care and doing outreach to improve the careand services employees receive.

What do you see as the most exciting trends today inhealth benefits (alternative funding options, voluntary,etc.)?

By far, the most exciting trends all revolve around technologysolutions. Whether it’s improved employee online enrollment,improved access to data, improved education and concierge tools forthe employee, or better health outcomes at lower cost, the commonthread is technology solutions that didn’t exist five yearsago.

When the employee has a concierge service to call that can helpthem obtain the care they need at the best place for the best cost,the game changes. Employers suddenly aren’t helpless inefforts to try to control claims spending…something they have neverbeen able to impact before.

We love helping employers design their non-medical benefits suchas group life, voluntary life, group dental, group vision, groupshort- and long-term disability and worksite products suchas critical illness, accident and hospital indemnity. These are allvery important parts of the entire package provided. A Fortune 500benefit package is within reach for all businesses, large andsmall.

However, the most significant value a great advisor provides isrelated to managing the health plan costs. When an employer is ableto level the growth of the health benefit plan spend, they areaccomplishing what many believe is impossible. For the consultant,it is difficult but rewarding work, especially since we must firstconvince the client that the impossible is in reach. They just haveto let go of the status quo.

This interview has been edited and condensed forclarity.