Why the history lesson? “This problem that every single one of us in this room is trying to solve is actually a new problem,” Chelsea said. The skyrocketing cost of health care that employers are grappling with? In the 80s, an employee health care premium with no copays and a $100 deductible could go for as little as $50.

And that environment required brokers to have a completely different skillset. A transactional, rates-based approach to selling benefits worked. Blind cold-calling and knocking on doors was how to get new business (in part because there was no social media or online resources that a broker could use to solicit new business).

Chelsea also highlighted the administrative processes that now seem ancient: fax machines, hand-written renewals. “It wasn’t until the 2000s that Internet and email changed the game for brokerages,” she said. “And 2010s brought the digital transformation with ben admin employee engagement and data analytics.”

The year 2010 also brought another major change for employers: the Affordable Care Act. “That was when the employer mandates came out, the individual mandates, minimal essential coverage,” Chelsea reminded the audience. “Reporting for compliance exploded. That’s when we really started seeing the shift from brokers as transactional to providing a service. New broker models started to emerge. There was more fee-based consulting.

“And health care became political," she added. "Hard to imagine a time when it wasn’t, but it really wasn’t!”

The culmination of these changes caused the industry to change in several fundamental ways:

• “Bigger is better” mindset is replaced by greater on transparency in plan design
• Plan retention is replaced by a focus on problem solving and new solutions
• Broker compensation becomes more transparent
• Loyalty to carriers is replaced by loyalty to clients
• Compliance moves from checking boxes to a point of differentiation

“Once again, we’re at a crossroads,” Chelsea said, one that is spurred by the passage of the Consolidated Appropriations Act (CAA). “The spirit of this law is to get employers access to their data. Whether you’re successful or not, if you position yourself to employers as this, you will be successful in maintaining that relationship.”

Adding to the fire are the push for greater health care price transparency, PBM reform and lawsuits seeking to hold employers and stakeholders to a fiduciary standard. Meanwhile, on the administrative side, brokers are grappling with an explosion of data and the rise of generative AI on automation tools.

“The broker of today can either evolve or reinforce the status quo,” Chelsea said. Some of the choices are new iterations of the same issues: how to approach compliance, compensation disclosures and carrier loyalty. Some are new: the cost of care has undoubtedly moved into the spotlight as employers’ biggest pain point.

The session wrapped up with a prediction of what the benefits industry of tomorrow will look like:

• Seismic shift brought around by regulation, litigtation, data and cost pressures
• Breakdown of the carrier-controlled model
• Employers held to a fiduciary standard
• Universal transparency of broker compensation, hospital pricing and claims data
• PBM reform reshaping the market
• Greater enforcement of the CAA and continued ACA reform
• Plan design that leverages innovation and local networks

“You won’t have a choice in the future. There will be one path, and it will be this: the downmarket lawsuits are going to force employer/broker alignment. Ai-driven practices are going to take off, and there’s going to be deep specializiations, and innovative plan designs will prevail.”

And, finally, what can brokers do to futureproof their agencies?

• Invest in a solid prospecting model. Build a brand online that really reflects who you are. And then walk the walk.
• No more selling. Start to become a problem solver, an educator. Offer audits.
• Implement feedback loops within your organizations. Ask your clients how your teams are doing.
• Utilize claims data. Consider predictive analytics.
• Evaluate the ROI of programs.
• Start building your specialized teams now. Make sure your next hire understands data.