Moving to a Fee-Based Model

Transcription

1 Moving to a Fee-Based Model TECHNOLOGY AS A STRATEGIC ADVANTAGE Troy R. Underwood CEO, benefitsconnect Benefits Selling Expo May 10,

2 Moving to a Fee-Based Model AGENDA Why Now? The Opportunity Fee-Based Model Best-of-Breed Technology Enhanced Communications Value-Added Consulting

3 Why Now? T I M E S T H E Y A R E A - C H A N G I N Competition in an uncertain economy Patient Protection and Affordable Care Act (PPACA) - MLR requirements - Supreme Court decisions Is it too late?

4 Why Now? T I M E S T H E Y A R E A - C H A N G I N Companies are looking for ways to save on benefits and reduce administration overhead. HR departments are looking to outsource their work and keep their departments small. Large payroll providers continue their growth into the benefits space. PPACA and the MLR rules will change traditional broker models.

5 The Opportunity C A R P E D I E M S E I Z E T H E DAY Reducing HR Overhead Average distribution costs of benefits materials can be up to $12 per employee annually, and due to continuous changes, printed materials usually are outdated by the time of delivery. Average cost for HR staff to manually enroll an employee is $ CFO.com. Manually administering life events & changes costs up to $45 per task CFO.com. Add it all up and employers are paying nearly $14 PEPM to manually perform benefits enrollment and administration!

6 The Opportunity C A R P E D I E M S E I Z E T H E DAY "Shifting toward a fee-based model could enable brokers to further leverage their firm s proprietary tools and assets, such as service platforms, enrollment support, or communications tools. MetLife s Broker and Consultant Study : Where do we go from here? Prospering in a Post- Health Care Reform World

7 Fee-Based Model A F O R M U L A F O R S U C C E S S Brokers charge rates for specified services through a consulting approach. H OW A R E M Y P E E R S T R A N S I T I O N I N G TO A F E E - B A S E D M O D E L? It varies. Many brokers are doing a combination of both commission and fee-based models using consulting fees. Some brokers have adopted an almost entirely fee-based with only their small groups on commission. Others have successfully made the transition to 100% fee-based model.

8 Fee-Based Model S U C C E S S S TO RY: H O L L A N D P OW E L L, C EO, B e n e f i t D e v e l o p m e n t G ro u p 100% fee-based. All clients on a 36 month contract. Services Fees apply to: Benefits Administration Consolidated Billing COBRA Online benefits administration is a MAJOR tool in his business. Resells benefits administration software with a markup and is still HALF the price of the payroll giants.

9 Fee-Based Model B E N E F I T S T E C H N O LO G Y + F E E - B A S E D M O D E L = M O R E S U C C E S S Broker Survey Reveals More Benefits Technology Success Stories: Employers are finding it valuable to provide 24/7 employee access to benefits and increased accuracy of enrollment data, eligibility and payroll information. By using online benefits enrollment and administration, we have been able to expand our services and to help our clients stay abreast of new technology and streamline their enrollment process. - Colorado-based Benefits Consulting Firm Using online benefits technology allows our staff to work more closely with clients, payroll vendors, COBRA administrators, and all other partners involved. It helps keep us in close proximity to our clients. - Texas-based Broker

10 Best-of-Breed Technology ENROLLMENT TECHNOLOGY While there is no shortage of solutions in the market, a best-ofbreed benefits administration platform can offer much more than just online enrollment. An increasing number of employers are turning away from one-time online enrollment solutions and looking for a more robust platform for benefits administration. Advantage: brokers, employers, and employees can access it 24 hours a day, 7 days a week, 365 days a year.

11 Best-of-Breed Technology ENROLLMENT TECHNOLOGY When it comes to benefits enrollment, it s all about the big picture not just a once-a-year requirement. Smart brokers know that a successful benefit enrollment requires taking a long-term view and a holistic, rather than piecemeal, approach. Jay Hutchins, California Broker Magazine

12 Enhanced Communication D E C I S I O N M A K I N G TO O L S TO D R I V E SA L E S Consultants must offer communication tools that focus on empowering consumers, such as: Decision calculators Videos Avatars

13 Enhanced Communication D E L I V E R C O S T - SAV I N G W E L L N E S S S O LU T I O N S Wellness programs can save employers money and increase your value with your clients. - Preventable illness makes up approximately 90% of all health care costs. - Health costs tied to obesity reached $190 Billion. - Employers get an average of $3.48 back in reduced health care costs and $5.82 in lower absenteeism cost for every dollar spent on employee wellness.

14 Value-Added Consulting T E C H N O LO G Y A S A S T R AT EG I C A D VA N TA G E According to the Met Life study 83% of brokers see themselves spending more time consulting in the next three years. A reduction in commissions and a transition to fees spells opportunity. Ohio-based broker, Benefits Selling Survey

15 Moving to a Fee-Based Model FEE-BASED MODELS + BENEFITS TECHNOLOGY = A FORMULA FOR SUCCESS Question & Answer For additional questions, please contact: Troy R. Underwood, CEO (916) x1013 troy@benefitsconnect.net Connect with benefitsconnect Today! Follow us Online: