Capitalizing on benefits

Benefits know-how

Agency's evolving benefits practice helps clients focus on wellness and health management

By Len Strazewski

“It’s not what you know, but who you know!”

Grandpop’s conventional wisdom used to apply to local politics, but it could also apply to health insurance renewals—back when getting a good renewal rate on group employee benefits depended solely on a friendly relationship with a health plan underwriter.

But after decades of steady increases in health care costs and resulting premiums and more than 20 years of failed attempts to curb those increases, technical and strategic know-how applied year-round has become more important than industry relationships tapped only at annual renewals, say principals at the Brower Insurance Agency, LLC, a multiline agency based in Dayton, Ohio.

The agency slogan, “The Value is What We Know,” is featured prominently on the firm’s Web site (www.browerinsurance.com), and the adage applies more than ever to its growing employee benefits practice, says principal John A. Barron Jr., CLU.

Founded in 1935, Brower has offices in Dayton and Cincinnati, Ohio, and has about 175 employees. Earlier this year, the agency merged with another Ohio stalwart, Consolidated Insurance Agency, which has offices in Springfield and Columbus, Ohio.

The agency specializes in small to medium-sized employers with 50 to 500 employees, but it continues to provide services to some larger Ohio and Kentucky corporations, principals say.

Barron, the lead employee benefits producer, joined the agency in 1985 and started the employee benefits practice—when managed care and health maintenance organizations were the favored cost control methods and employers and employees engaged very little in direct management of employee health issues and their health care decisions.

The business has changed dramatically since then, Barron says, becoming more sophisticated in plan design and much more reliant on proactive employer and employee involvement in management of health care costs and cost drivers.

“Today, employers are trying everything to engage employees in their own health care decisions and spending,” he says, and employers are investing in consumer-directed health plans that provide incentives for employees who make smart decisions in staying well and choosing appropriate health care.

“We’ve introduced a lot of health reimbursement accounts (HRAs) since the plan design was introduced a year ago. Not so many health savings accounts,” he says.

HRAs require employer contributions to employee-controlled accounts that are used to fund health care claims under a high-deductible health plan. The accounts are more complicated than more traditional preferred provider organizations and demand a commitment to employee education and health management.

“Employers started out slowly in exploring the idea of consumer-directed health plans but in my experience, once they go consumer-directed, they like the results and don’t want to go back to older plan designs,” he says.

Since Barron began the employee benefits operation, business has been growing at about 10% each year and has become the fastest growing segment in the agency book of business.

Today, about 30% of agency revenue is derived from employee benefits, and the firm has about 21 employees in its benefits division, including six producers. If the practice continues to grow at its present rate, Barron anticipates it will eventually become responsible for about half of the agency’s total revenues.

Barron says that the agency’s employee benefits practice has a broad scope and includes a full range of group insurance products such as dental insurance, group term life insurance, and short- and long-term disability insurance. The agency also has a growing worksite marketing program featuring voluntary supplemental life and disability and employee-paid dental insurance for employers that do not provide group dental coverage.

The employee benefits practice has continued to evolve since he first joined the agency, he adds, as health care costs have continued to increase and employers struggle to control their costs and build strategies for long-term stability. One of the most significant changes in recent years has been the acceptance of wellness and health management.

Chris G. Pulos, another agency principal and employee benefits producer, agrees. “In the last four to five years, employers have really come to understand that there is a relationship between employee health and wellness and the costs associated with poor productivity.

“They are much more interested in investing in health education programs for employees, smoking cessation and weight control programs. And a growing number of employers have begun to pay for health risk assessments that help plan participants identify their health risks and begin early treatment,” Pulos explains.

Health plans are also providing better aggregate claims data to employers about the specific health risks present in their workforce, but he admits that “most employers still don’t know what to do with this data yet. It takes two to four years before the data can identify meaningful trends that can help direct decisions,” Pulos says.

In the meantime, clients rely on Brower to provide plan designs and programs that are consistent with their strategies. The agency works with third-party wellness service providers and health incentives firms as well as services provided directly by health plans and assists employers in choosing and evaluating the services.

“We’ve become more of a consulting service than a sales operation as we try to guide our clients to be more proactive and preemptive rather than reactive to their situations,” Pulos notes.

Account service remains a strong component of the employee benefits practice and has become more important as the health plan designs have become more complex, says Benefits Group Administrator Barb Coate.

After the employee benefits producers provide the strategic recommendations to clients, the account management team, which may consist of an account manager and an account technician—depending on the size of the employer—develops the proposal that is delivered to underwriters and then provides a continuing service relationship.

If needed, the account manager can also enlist the assistance of the agency’s claims management or enrollment management specialists to solve specific claims problems or develop tailored enrollment programs.

Benefits Account Manager Colleen Ehret says the account management team also directs the education and development of new programs or plan design launches such as the introduction of consumer-directed health plans.

Ehret says the development of consumer-directed health plans takes extra time—much more time than simply preparing a renewal proposal and getting a quote from health plans—even though carriers offer the account-based plans.

“We usually begin about six months out with the education process,” she says. “The program would normally include literature for both employees and their dependents, roundtable discussions with employees and other on-site programs. Then 90 to 120 days out, we would begin one-on-one sessions and introductions to the support programs and eventually the enrollment process.”

As employers struggle with the health care costs and emphasize health benefits in their programs, voluntary benefits that are marketed at the workplace have become a growing business for the agency, adds Coate.

“In an era of downsizing and layoffs, employers are looking for something positive to promote. Voluntary benefits are really perceived as an employee benefit, even though they are made available at no cost to the employer,” she says.

And the benefits are tangible to employees who can purchase the additional products at a group discount. Guaranteed issue for supplemental term life insurance, for example, is of real value to employees who otherwise would not be eligible for additional life insurance purchased individually.

While traditional group insurance sales remain the backbone of the employee benefits department, the agency has expanded its internal advisory resources and client education.

Barron says the agency provides in-house legal counsel on employment and regulatory compliance issues and sponsors education and training seminars for local human resource professionals. In 2009, the agency has scheduled educational training programs an average of twice a month on property/casualty insurance, employee benefits and human resources and regulatory compliance issues.

Benefits and human resource topics include sessions on leaves of absence and the Family and Medical Leave Act; the MyWave benefits portal; equal employment opportunity, diversity and harassment, and hot topics in human resources, among others.

The agency also employs three certified human resource professionals who provide additional services to chief financial officers, human resource staff and other client executives responsible for benefits and employment issues.

The human resources consulting team is directed by Andrea L. Zavakos, who received her Ph.D. in Leadership and Change from Antioch University in 2006. The team provides a wide range of resources on a fee-for-service basis, including strategic consulting on workforce and career issues, job analysis and job description development, employee surveys, employee handbook preparation and compliance assessments.

Barron says that while the educational series and human resource consulting team projects are not formal marketing programs, they do contribute to the agency’s reputation for knowledge and expertise and can lead to new business referrals and opportunities.

Barron also notes that even though knowledge and expertise is the driving force and key agency differentiator, who you know still has some value. It certainly doesn’t hurt to maintain good industry relations and respect the underwriting expertise of the region’s health plans, he says.

For the past three years, the agency has celebrated those personal relationships with a “Carrier Appreciation Day,” attracting an average of 75 individuals the agency likes to know when renewal time comes around.