|
Service platform helps boost
benefits to 40% of revenues
Wide range of services solidifies client relationships
By Len Strazewski
The list of acronyms in the benefits/human resources area is daunting: HSA. FSA. COBRA. FMLA. And there may be more to come as health care reform and related legislation work their way through Congress. For most agents and brokers, the tasks of assisting the human resource departments of their client employers is one more burden on an organization that is designed primarily to market insurance, not manage bureaucracy and regulatory compliance.
But at J.W. Terrill in St. Louis, Missouri, value-added services, including analytical consulting; human resource and wellness consulting; and communications support, are an essential part of the agency’s employee benefit service offerings and a key component of the company’s ability to build client confidence, says President and Chief Executive Officer Andrew Thome.
“Many agencies talk about their desire to cross-sell property/casualty insurance and employee benefits and to provide comprehensive services to their clients,” he says. “ Until you develop the core competencies in all of your service areas and continually raise the bar to exceed client expectations, it will be difficult to achieve consistent success in every aspect of your business.”
Building an employee benefits and human resource practice takes more than the occasional attention of generalist producers, he adds. “Producers can’t just dabble in employee benefits. The field is too complex and requires special training. If you are going to successfully market yourselves as a compre-hensive agency, an employee benefits professional has to be at the table for every meeting, along with property/casualty insurance experts.”
The agency began developing its competencies in employee benefits in 1985 when this segment of business was less than 10% of the firm’s total revenues. At the time, Section 125 cafeteria employee benefits plans were becoming an important technique for many employers, and a flood of new regulations was making human resource management increasingly complicated.
J.W. Terrill began with flexible benefit management services and COBRA health benefits extensions, Thome recalls. Later, executives detected an increasing demand for additional services, including claims administration, plan design analysis, funding mechanism analysis, and ongoing administrative support, including the latest in employee benefits technology.
“With benefits becoming one of the largest nonpayroll expenses for employers, it’s important for employers to partner with a consulting firm that can help them offer a benefit program that meets the needs of their organization,” Thome says.
The agency continued to grow its specialized expertise throughout the 1990s, increasing the level of revenues generated by both the insured group benefits and administrative services. In 2000, the agency acquired a third-party administrator company (TPA).
Today, employee benefits and related services account for about 40% of total revenues, and about 55 of the agency employees work in the Employee Benefits Division. The majority of clients range in size from 50 to 1,000 employees, but the agency also provides a team of specialists for smaller employers, executives note.
“Our employee benefits target is the middle market employers that are seeing increasing challenges in managing and funding their employee benefits programs—and I’m pleased to say we do an outstanding job in the consultative area for these employers,” Thome says. “I see our future success in the consulting arena as health care reform reshapes nearly everything we know about health benefits.”
Lynda Baris, executive vice president, is trained as a certified public accountant and takes a focused look at the financial underpinning of employee benefits costs. “You have to figure out where the costs are coming from,” she explains. “Over the years, our client contact has shifted to include chief financial officers who put a high priority on financial analyses, and developing strategies that are driven by those analyses.”
This understanding has helped drive the agency’s reinvention of its employee benefits programs to focus on various value-added services, including dedicating two agency employees as financial analysts to crunch numbers from the employee benefits programs and develop options for employers. The firm also has a partnership with a national actuarial consulting company to provide benchmarking information by industry and region. The goal is to help clients use data to make educated decisions about their benefit programs.
“From the very first meetings with our clients, we are looking at employee benefits not just as insurance cost but as part of the organization’s overall strategy,” Baris says.
The Terrill financial analysis team can use claims data to develop projections for modifications in plan design and reimbursement to affect utilization and to help manage or reduce overall costs and improve performance and productivity. Additional services include plan reporting, plan funding analyses and plan modeling.
Consumer-directed health plans (CDHPs) have become a standard option in plan proposals, Baris notes, as employers look to influence utilization and engage employees in making better health care choices.
“CDHPs can be very effective, particularly if employers implement them with ‘buy-up’ provisions that allow employees to manage their risk and control their financial position within high deductible designs, CDHP enrollment is not yet dominant among plan options. Employers are waiting for the data to document the long-term impact of these plans.” she says.
Wellness and preventive care has become an important part of employee benefits consulting and a companion to CDHPs, Baris notes. Among its employee benefits specialists, J.W. Terrill employs a wellness specialist who can work with clients to design customized wellness programs for employees and work with outside vendors to explore new wellness options as programs become available.
The agency can lead tobacco cessation programs, nutrition seminars and help employees engaged in fitness programs maintain exercise and nutrition logs as part of client incentive programs. The agency also negotiates membership discounts for clients at fitness and exercise facilities, and it coordinates wellness services available from local group health plans.
Baris says the agency can also assist clients in developing custom wellness newsletters and can develop health fairs, including health risk assessment programs and ongoing health screenings.
Health risk assessments have become important tools for employers that want to reduce the long-term health risks and costs associated with lifestyle-related diseases, she explains. The health screenings programs help client companies gather vital data about their employee population without violating individual privacy and then allow the companies to develop and target wellness initiatives with their health plans and private service vendors.
Technology provides underpinnings of support for the agency’s various value-added services. J.W. Terrill offers clients an online employee benefits portal which allows employees to access information about their employee benefits and support services and other human resources programs on a 24/7 basis.
Employers can also access administrative and compliance services online with TerrillCommunity, TerrillFlex, TerrillCOBRA and TerrillClaims service portals.
The agency employs three human resource specialists within its value-added services team who consult directly on human resource administration and compliance issues. The specialists staff HRPRO, Terrill’s knowledge hotline for the human resource staff of clients that can call any time with questions about topics that range from standard human resource procedures to latest federal and state regulations.
Baris agrees that federal health care reform has become a hot topic, but state regulation still poses a steady stream of problems for employers—and state regulation will continue to evolve in reaction to national health reform. Small employers, in particular, lack the staff resources to follow these changing regulations and develop practices that comply.
Human resource specialists can help the employers develop the policies and practices that meet the various new standards and help smaller employers with employee communications related to old and new issues, she says.
Client education is also an important part of the J.W. Terrill business model, executives say. The agency hosts 25 to 30 seminars each year, highlighting wellness, state and federal human resource regulation and property/casualty insurance topics. One of the recent seminars focused on employer administration of the COBRA subsidy, one of the first recession recovery laws that was renewed late last year.
Despite all of J.W. Terrill’s commitment to 21st century employee benefits services, traditional insurance marketing and group plan renewal is still important, executives say. Group plan marketing is an effective tool for leveraging pricing options and presenting a complete set of options available to each client, they maintain.
“Market relations are important to the agency and the firm’s ability to maintain the respect and support of our vendor partners,” says Thome. “Our clients benefit from our elite status designations with the carriers as a result of our volume of business. This leverages results with better negotiating power upon renewals, faster response times for underwriting decisions and direct access to service and underwriting support.”
Baris notes that the agency generally does not charge a fee for most value-added services. The comprehensive service platform is part of the general overhead of the agency and necessary to maintain its competitive leadership in the employee benefits consulting marketplace.
“We are continually reinvesting in resources, tools and technology that will improve our service offering and differentiate our firm. However, these tools would be rendered ineffective if it weren’t for the highly skilled and dedicated team of professionals that work with our clients each and every day. Every member of our benefits team is focused on proactively delivering customized services needed to achieve each of our client’s goals.”
|
