By Len Strazewski

The Affordable Care Act (ACA) has already paid dividends for health care consumers-providing broader coverage and greater access to care for millions of Americans. But delivery on the promise has put extreme stress on the independent agents and brokers who advise and service the employers who pay for most of the benefits.

Members of the Gulfshore team visit with client Mediterra, an award-winning gated community that includes world class golf, a members-only clubhouse, a private beach club and a state-of-the-art fitness center and spa. From left: Brad Havemeier, President; Jack Powers, Executive Sales Officer; Keith E. Hughes, Chief Financial Officer for Mediterra; Shirlene Industrious, Human Resources Manager for Mediterra; Dan Thompson, Client Advisor; Sue Nelson, Director of Business Development.

Gulfshore Insurance in Naples, Florida, was founded in 1970 as a property/casualty insurance specialist, focused on the risk management needs of small employers in Southern Florida, says Executive Sales Officer Jack Powers.

Employee benefits became part of the agency's services in the 1980s as support for the traditional client base. As employee benefits plans became more complex, Powers says, employers began to seek help with their benefits planning.

Gulfshore's employee benefits practice really took off with the launch of the ACA and the complex series of regulations and employer and employee requirements. "Our property/casualty customers had lots of questions-and still do-so they turned to us for answers and assistance in compliance," Powers says. Since then, "we have grown both geographically and organically."

The agency also has offices in Fort Lauderdale, Fort Myers and Marco Island and continues to expand throughout Florida, planning to open an office in Sarasota in 2016. Powers notes that the agency also recently signed a large corporate account in Tampa, breaking new ground for the firm.

The agency has 110 employees, including six employee benefits specialists. Employee benefits accounts for about 15% of total revenue. Industry niches include local government, construction, manufacturing and transportation, in addition to professional nonprofit organizations and medical practice groups.

Gulfshore has evolved dramatically from the days when agents and brokers just shopped insurers for the lowest price, Powers says. Today the agency directs its employee benefits clients through a five-step process that identifies and analyzes risk and develops a customized approach: evaluation and health risk assessment, plan and carrier analysis, plan selection, implementation and service.

The ACA also changed the shape of the agency's employee benefits targets. Dan Thompson, an employee benefits client advisor and agency partner, has worked at Gulfshore for 10 years, became a partner in 2010 and has earned the Certified Heath Reform Specialist designation.

"Our property/casualty customers had lots of questions-and still do-so they turned to us for answers and assistance in compliance." -Jack Powers

He notes that before ACA, the agency specialized in employers with two to 100 employees, but it began to focus on larger employers as health care reform created new options for small employers, some of which directed their employees to buy individual insurance from government exchanges and others that purchased new community-rated plans designed for small companies.

Now Gulfshore focuses on larger employers with 100 to 500 employees whose census and premium volume allow the agency to develop more creative customized health plan designs that can include aspects of self-funding, loss control and wellness, Thompson says. "Small brokers just don't have the expertise to develop these more sophisticated plan designs," he says. "So our reputation has taken us beyond South Florida to business from all over the state."

The larger groups not only need the professional expertise but also enhance the Gulfshore position. "The larger groups bring in more revenue and increase our clout with the carriers, allowing us to bring better rates and services to our existing clients," Thompson says.

Executives say that client retention tops 97% and cross-selling has become the rule rather than the exception. "When we began, the property/casualty side provided most of the employee benefits referrals, but today the benefits side also directs a lot of business to the P-C side of the house," Thompson says.

Gulfshore provides a wide range of employee benefits products and services, including group health, dental, and vision care; long- and short-term disability; group and individual life insurance; long-term care insurance; Employee Assistance Programs (EAPs); and administrative services-only agreements for employers that self-fund benefits.

Leading health plans in the region include Florida Blue, Aetna, Cigna Health and United Healthcare.
Wellness programs are a growing component of Gulfshore's employee benefits offerings. While some employers are just dabbling in health screening and healthy activity programs, Thompson says that many employers are making a commitment-regardless of any immediate evidence of direct return on investment.

Coordinating outside vendors, the agency can provide health risk assessments, biometric screenings, blood pressure monitoring, health fairs, smoking cessation programs, and educational publications and seminars.
Gulfshore also serves as a model to its clients. For the past three years the agency has been recognized by the American Heart Association as a "Start! Fit-Friendly Company" for helping employees eat better and move more.
Thompson points out that Gulfshore has also diversified its products and services. Personal lines were once considered an accommodation but executive benefits, including key-person life insurance and personal lines, now account for about 25% of revenue and help support the employee benefits practice.

"Three out of 10 individuals still do not realize that they are required to purchase health insurance or pay a penalty." -Susan Nelson

Non-insurance support services have become a key component of Gulfshore's operations. The agency provides payroll and employee benefits administration consulting and support for Zywave employee benefits management and information services.

Employee education is another important service. Susan Nelson, director of business development, explains that in the post-ACA era, the stakes have risen for both employees and employers-putting greater demands on agents and brokers.

Small employers may have opted out of group benefits in favor of individual coverage, but their need for information and technical support has continued to grow.

"Today, more than ever, people need to make careful decisions about their health insurance coverage, their spouse's coverage and their dependents' coverage," Nelson explains. "Three out of 10 individuals still do not realize that they are required to purchase health insurance or pay a penalty."

Small employers and individuals are supposed to work directly with health insurance companies but are left with a knowledge gap that can impair their ability to make the correct decisions under the law. As a result, the new regulations and pressure for compliance have made the greatest demands on the groups with the least human resources support, she says. "Small employers have been left in the dark, and their employees are more confused than ever. The employers themselves are more confused than ever."

With implementation of the ACA, agents and brokers have become the key information resource for employers. In the past, employers and employees turned to their human resources professionals for advice and expertise, but Nelson points to a changing dynamic in human resources. Small employers tend to have little human resources support. "In many cases the human resource function is managed by a business owner or an accountant-an individual with limited training and expertise in benefits/human resources."

Even though their agents and brokers are no longer providing group health coverage, employers are being called on to support the transition to individual coverage with advice and employee education.

Gulfshore has responded to its clients' needs with broader levels of professional resources, including consulting on regulatory compliance such as Family and Medical Leave Act (FMLA) issues, recruitment, retention and termination practices, management systems and wellness programs.

"The larger groups bring in more revenue and increase our clout with the carriers, allowing us to bring better rates and services to our existing clients." -Dan Thompson

Nelson says Gulfshore has business partnerships with 10 or more specialists-including two benefits attorneys-who can provide consulting support to agency clients, often at no additional charge.

"We have been resisting a fee-based service model," she explains, noting that state insurance regulation discourages retainer-based relationships on legal advice between third parties and their clients.

The increased need for HR expertise has also changed the firm's hiring plans. Nelson says the agency seeks prospective employees with human resources as well as employee benefits experience. Payroll and information technology experience is also valuable, she says. "Every independent broker now needs information technology expertise to support his or her clients. The incoming talent pool is very limited, but we continue to look for the individuals who can help us help our clients."

Even the agency's larger clients require more sophisticated services. The firm has recently won business away from Professional Employer Organizations (PEOs) that consolidate employee groups for property/casualty insurance and employee benefits bargaining and payroll management.

Florida is considered the birthplace of PEOs, and many organizations have built strong client bases in the region. Despite the competition, Gulfshore has had continued success in regaining and attracting former and current PEO customers that have a need for deeper levels of support and service specifically on the benefits/HR side.

"Many PEOs don't want to deal with employee benefits issues any longer, providing us with an opportunity to regain employer groups that originally drifted away from the independent broker community," Nelson says.
Thompson agrees. Once an innovation that reduced employer costs, PEOs have lost some of their ability to contain employee benefits costs. "We have been able to bring in the same coverage as a competing PEO for a huge savings and provide more human resources support for the employer."

The author
Len Strazewski is a Chicago-based writer, editor and educator specializing in marketing, management and technology topics. In addition to contributing to Rough Notes, he has written on insurance for Business Insurance, Risk & Insurance, the Chicago Tribune and Human Resource Executive, among other publications.