Category Archives: Employee Benefits Distribution

I Can Make a Roast Beef Sub Better Than Subway


Every now and then an idea comes to my mind that I want to share. For those of you in sales, I am sure you can relate. Today I was making a pitch to a benefits broker on our new business and value proposition when he said, “I am all set. I can do that.” We all have heard that “I am all set” response before, even though we know the person may not know what it is we are really selling.

This brought me to my latest business thought which I used with my son the other day. I asked him, “Can you make a roast beef sub?”. He said “yes”. Then I asked, “Can you make a roast beef sub better than Subway?” He said “yes”, again. Then I asked, “Can you outsell Subway?” His answer was “No way”. Making a sub is easy. Making one better than Subway is not real tough either. However, outselling Subway would be extremely difficult.

I have known the broker I was selling to today for 10 years. He has had 3-5 employees in his business since I have known him. Conversely, I have another broker friend who had 5 employees in his benefits business 10 years ago and today has 55. (with no acquisitions). From my seat, the first broker has always been saying he could “make the roast beef sub”, thinking that he is “checking the box’ of products and services he could offer. The second broker, however, was building his “Subway”. These two brokers approached their business everyday in a very different way yielding significantly different results. If you were to read their websites, they say they do the same thing, but they don’t.

There is a difference between stocking your shelves with tools and resources for your business and delivering them to market in an effective way. I will go out on the limb and say many in the benefits broker world have been stocking their shelves with the latest shiny object for the past 15 years. All the vendors know this and sell to brokers who want to make sure they have the latest and greatest. Then when something doesn’t sell, they say, “I tried that, and it didn’t work.” Well maybe it didn’t work for them.

Having dealt with “I am all set” at least 3000 times over my career, I know how to deal with objections. Maybe they are all set, and maybe not. I am certain that many people can “make the sub”, however, few can build a Subway. So, ask yourself, are you making subs or building a Subway? In my last business I will say I helped people stock their shelves. The difference this time is I am helping them build their Subway. There is a big difference.

A Zombie Movie and the Relationship to Trump’s HRA Changes


Rarely do I watch a Zombie movie and when I do, I don’t look to get lessons in business from the movie. However, one movie did give me a lesson in business and since then it has been a conscious part of my daily work-life. If you read previous articles that I had published on LinkedIn or on my blog at http://www.joemarkland.wordpress.com , you will see a somewhat constant theme which is also the tagline to my blog titled, “Challenging Everyday Thought”. The movie, Word War Z, and its lesson have contributed to my writing. It also has also somewhat prepared me and my business for the changes Trump made to the Health Reimbursement Account (HRA) rules where effective January 1, 2020, an employer can give money to employees on a pre-tax basis to purchase personal health insurance.

To summarize the clip from the movie, it is about threat assessment. The Israeli’s (in the movie), because of constant threats against their nation, developed the concept of the 10th Man. In their threat assessment process, they have a panel of 9 people who look at evidence of a threat and vote as to whether it is a threat of concern and would require action. The job of the 10th Man is to take the opposite position of the vote and try to prove them wrong. In the movie, the Israeli’s were assessing a threat of a virus spreading in a small African village that turned people into Zombie’s. The 9-person panel voted that it wasn’t a threat but the 10th Man convinced the other 9 they were wrong. (You can see the clip below.)

In my own business I play the role of the 10th Man. I don’t have a panel of 9 people assessing threats to my business, but I do read many articles in industry magazines and attend webinars and seminars on the health insurance and health care industries to try and get some idea as to where the business is going. My staff has their share of opinions too. I do this because I need to make sure my business stays relevant. The thing is, I have almost always disagreed with what I was hearing in the mainstream media of the industry. I wrote about this in my article, “Sometimes I Feel Like George Costanza”. The current health care and health insurance system is broken, and I see ways to fix it that everyone is seeming to ignore, that is until now, with these changes by Trump.

As one who looks for potential business threats, I have paid close attention to signs from those who have no interest in protecting the status quo. Those voices are hard to find. I did, somewhat accidentally, come across two instances where I heard very credible people talk about the coming changes in the health insurance and health care markets. One was Mark Bertolini, past CEO of Aetna, who I referenced in my article, The Coming End to Employer-based Health Insurance back in December 2014. (See article link below.) In Mark’s presentation to the Mayo clinic, he drew the picture of a future health care system where employers were no longer in the middle. Individuals would choose their own health insurance.

The other I heard while on a hike one Saturday morning in the summer of 2016 while listening to the Larry Kudlow radio talk show about economic issues. HIs guest was from the Trump administration, and they were talking about health care. The Trump advisor stated that somewhere in the second half of Trump’s first term, or the beginning of the second if he were re-elected, he would propose moving the deduction for health insurance from the employer to the employee. He said that the power of the individual consumer would create a new competitive environment and would be the catalyst needed to drive down health insurance and health care costs. While Trump has not done this though tax law changes yet, the new HRA rules are a start to giving the consumer the power. It just happens that Larry Kudlow is now part of the Trump administration as his Director of the National Economic Council.

I find it amazing that I had never heard any reference to the Bertolini presentation, or the position stated by Trump’s advisor, in any other media source including all the health insurance industry publications or at conferences. When I have written about these changes in the past I have often been chastised, as if I was the one proposing these changes.
After hearing these two positions, I evaluated the threat and took action, which is now my current business. However, these current changes to the HRA rules are just the tip of the iceberg and I am not naïve enough to think I have it all figured out. What I do know is that we are in the first inning of a new game and Trump just started this game. I believe there will be much bigger changes in the next 5 years that will transform health insurance and health care in America forever.

If you listen to the same people over and over, you won’t hear anything new. I think most people tend to seek out others whose opinions mirror their own. However, if you listen closely, you can hear those out there telling a different story. So, become your own 10th Man and either take action, or maybe you will need to watch out for the Zombie’s.

Article References:

You Tube of the World War Z Scene

Sometimes I Feel Like George Costanza

The Coming End to Employer-based Health Insurance

 

Sun Life Buys Maxwell Health – So What?


Today it was announced that Sun Life acquired Maxwell Health. The first thing I asked was why? I don’t see the benefit to an employer or their employees. I see no benefit to the broker distributors. In fact, I hardly see a benefit to Sun Life. I can see the benefits to Maxwell if they either needed cash or their investors wanted out. I don’t really need to speculate around that here, but I am sure someone will tell me I am wrong. Someone please tell me why this is a good or even “relevant to the market” transaction. I will print it if the reason is sound.

If I am an employer, why would I want a technology solution coming from a single vendor? Technology to manage benefits, HR, and payroll should be owned by the employer, with no attachments. It should be something you invest in to make better every day. It should be engaging and provide employees with all the relevant company information that they need. In a survey I had done, the number one thing employees wanted to see via web or mobile in an employer sponsored HR system was how many vacation days they have left. Most employee benefits technology systems don’t track time off and those that do are bad at it.

As a broker, one would think you would want to represent the employer’s interests. You would want to have more options than representing a single vendor. And why would I need a carrier to bring me a technology solution as I could easily pick up the phone and find ten systems in one hour? Providing choice in health insurance, disability, and other benefits is an asset and the core to being an insurance broker versus an agent for a single company.
Other carriers are already out there providing a broad range of technology solutions. Many are providing discounts. This move by Sun Life could create a competitive advantage, to everyone other than Sun. In my business I could bring a dozen benefits enrollment systems, HR, and payroll to any employer, all with carrier subsidies available from many carriers. I have choice for technology. Choice of carriers. And subsidies for the employer if needed. It is easy to do, and I would add not a real differentiator.

Now if Maxwell develops something real special then maybe there could be something there. However, as I have learned from being in the technology business for years, technology is easily replicated. As the saying goes, “You can’t win or stop a technology war”. So, Sun Life better have a real lot of money to continue to fight the battles of this very active HR/Benefits/Payroll technology war that is going on. I would expect investments of over $100 million per year in their technology would be required simply to compete.

So, my assessment of this transaction is, So What? It is just more noise in a very noisy market that in my opinion doesn’t change the world a bit. (Other than for some employees or investors in Maxwell.)

When Things Don’t Make Sense – Prepare for a Change


I was out having a beer after work a few weeks ago with a few friends when a woman across the bar started telling everyone how her son just made $500 selling Bit Coin. The first thing I thought was 2008, when the housing market tanked. When things just don’t make sense, there is big change coming and with it may come a lot of pain. In the movie the Big Short they found waitresses in Florida owning 5 houses when they had little income. Back then I remember thinking, “how can housing prices continue to rise at this crazy pace.” Like most others, I did nothing, and would never have imagined things were as screwed up as they were. Whether it be Bit Coin, Housing, or the Tech Bubble of the late 90’s, it seems like these Ponzi schemes with a product are not going away. In the industry I play around in, the health insurance business, is going through this now. Things don’t make sense. Change will come.

A few other things don’t make sense which is a sign of the times. My daughter is spending her semester of college in Barcelona. It will cost me less to have her study a semester in Barcelona and travel throughout Europe than have her study at the University of New Hampshire, where she will graduate next year. It doesn’t make sense. High college costs need to end. Nobody seems to care.

I saw a medical plan the other day that an employer was providing that had a $6800 deductible. That is not insurance in a country where 70% of the population is living paycheck to paycheck. The system is broken. It must change.

This same health care system has people getting on planes in our version of Domestic Medical Tourism to have surgeries in lower cost areas across the U.S. This is just plain stupid. How do you move populations of people all over the place to get health care when they would prefer it closer to their homes where friends and family can support them? I wonder how this idea can support the 6.5 million people in the Boston area. Are they going to get on planes and fly to Kansas? When you see something real dumb, change is on the horizon.

I would add that my medical insurance premium renewal was +29% this year. This was after +16% last year. It goes on and on. Then it will crash, and it should. Unfortunately, until then, our health insurance will continue to cause pain. And please, don’t tell me how you saved someone money by putting them in a captive with medical tourism, some new RX plan, and a personal direct primary care physician. All are symptoms of the problem. Aetna and CVS get this. They are trying to change this. Most perpetuate the insanity.

In the health insurance industry, we have seen private exchanges, then captives, now the buzz is referenced based pricing, domestic medical tourism, and direct primary care. For someone who has been in the business for 20+ years all of these seem like old ideas rebranded as something new. Some see this as change. I see all this as symptoms of a bigger problem. These trends will come and go. They may hide the problem for a while or simply push the problem forward a few years. But it doesn’t make sense. So, things will change.

Let 2018 be the year where we start tackling some tough problems. Health care costs, college debt, market bubbles that create havoc, Ponzi schemes with products, are all things lurking behind the scenes that for some reason most of us are blind to. Others we see yet push to tomorrow. The bubbles continue to grow. Tomorrow will come. Look around, if it doesn’t make sense, it should change. We can continue to ride on this rollercoaster of steep ups and steep downs or choose to do something about it. Let’s start.

I am starting by writing my book about how to fix health care in America. I think I have a good solution. I may never finish it, or I may be the only one to read it, but I am going to try. Maybe after that I will tackle the high costs of college. My kids will be out by then, but the madness needs to stop.

Redefining Employee Benefits


When it comes to the benefits brokering business you get people or companies labeling themselves in many different ways. When I started in the business the common title was a Group Insurance Broker. Some added the label “Consultant”. Over time the term changed to Employee Benefits Advisor or Employee Benefits Consultant. I guess in the end you can call yourself whatever you want but the market really doesn’t care. What an employee values as a “Benefit” to working at some employer is something that is personal to that individual. The consumer or customer, or in this case an employee, will determine for themselves what is a benefit and what is not. Even the employer may be offering “benefits” that their employees don’t value much as a benefit to working there.

I think we are in the middle of a redefinition of what Employee Benefits is. A 23-year-old entering the workforce with a ton of college debt more than likely does not view a health insurance plan with a $3000 deductible as much of a benefit. Most don’t see themselves incurring claims over $3000, and if they did, they don’t have the $3000 in the bank to pay the deductible. My son is that 23-year-old and that is what he and his friends told me when I asked them. Granted, this is not a large sample size.

Mark Bertolini, CEO of Aetna, who has implemented some of the most progressive employee benefits programs for their employees says, their goal is to help employees be “happy, healthy, and economically viable”. Not a bad objective, and I would assume this would help their employees be more productive. I think most people strive to be happy, or at least happier, so helping people be a little happier is a worthy goal.

When a 25-year-old single mother with no money in the bank has her refrigerator break down that is a bad day. When a 40-year-old has their spouse ask for a divorce unexpectedly that is a bad day too. And when your 87-year-old father has dementia and needs to be put in a nursing facility that is a bad day for you and your 89-year-old mother who is slowly losing her partner. These bad days suck the happiness out of most people and this almost always leads to lost productivity at work, at home, or almost at any endeavor. It is hard to stay focused when something else consumes you.

This emerging market demand to help people through their workplace has resulted in a significant amount of capital being invested in new companies providing products and services to fill the need. These solutions include wellness, nutrition and smoking cessation programs, financial fitness, college loan payment support, employee loan programs, help with bad credit, and more. At Aetna, they promote yoga and pay employees to sleep more in additional to many other programs. Aetna claims that these programs have saved them millions of dollars through improved employee productivity and a reduction in sick days. This is certainly a different employee benefits world.

For employers, the idea of providing a benefit to employees should be a good thing. Who doesn’t want healthy, happy, financially viable, and productive employees? For many though, the number one employee benefit, health insurance, has become a necessary evil that still leaves employees with a financial burden. And what employer wants to come to work and worry about managing the health claims of their employees to keep down costs and maintain profitability? You would think they already have enough to do running whatever business they are in. In addition, they are essentially delivering “bad news” once per year when they raise employee contributions. This change has made health insurance much less of a benefit. And many people believe that it is rising health care costs that is holding back salary increases. So, indirectly, employees are really paying for the health insurance through lower incomes.

As these “new benefits” enter the market there are challenges. Employers aren’t sitting there with the budgets to provide all these solutions. HR departments, that are already strapped for time, don’t have the capacity to evaluate, purchase, communicate, and administer such programs. And many programs only address a subset of a population. A 48-year-old overweight diabetic has different needs than a 23-year-old triathlete with no money who just crashed his car. Meeting the needs of a broad employee population is not easy. While today these may be new ideas, there may be a day in the near future when this will be an expectation of employers.

Helping employers meet the needs of this changing market is an opportunity that can also be exciting. The idea of helping someone have a “better day” because you provide an outlet for an individual that has some immediate need, can be rewarding. But, as stated above, this is not easy. As the definition of employee benefits is redefined, it may also redefine what people call themselves who serve this market. It may start separating the traditional Group Insurance Broker/Consultant from those providing redefined Employee Benefits Consulting. Those lines are blurry today. They may not be in the near future.

What is the Speed of Your Benefits Business


I often wonder why the benefits world is so slow to advance new ideas and new technology. I have been in the business for over 30 years yet have seen very little evolution relative to other industries. In my personal life, almost everything has evolved. The way I do my banking, communicate with friends and businesses associates, book an airline ticket, turn lights on and off in my home, pay at Starbucks, or get around a city, have all changed. Things are easier. Yet, for the most part, the benefits business is almost still the same as it was when I got in the business in 1986. Up to this point lack of change has not significantly impacted those in the business. I think that is about to change.

I started my career in finance at General Electric where the CEO, Jack Welch, was good at putting things in perspective. One quote has stuck with me and that is as follows:

“If the rate of change on the outside exceeds the rate of change on the inside, then the end is near.”                                  Jack Welch

Since I have been running a business I have heeded that advice. We try hard to change with the times and it isn’t always easy. I would say it is never easy. But we haven’t sat still.

With all the attention to health care and health insurance in the U.S. I have spent a great deal of time researching the market so that I can make an educated guess as to where the market is headed. What I have seen is that the outside world, (outside of the current benefits market including carriers, brokers, TPA’s etc..) is moving much faster than the inside world. If you only looked on the inside; at broker and carrier conferences; read benefits magazines or blogs; or listen to one’s buddy in the business; you would miss what is going on outside. The outsiders don’t care about the insiders. Unlike the past 30 years, new technologies, new business models, significant capital, a populace looking for better solutions, and government debt that is unsustainable, are the catalysts for change that exist today and not at any time in the past. Things are different.

A changing health care market is right under everyone’s nose yet many don’t see it. The Apple Watch, an Amazon Echo, Bitcoin and Blockchain technology, Artificial Intelligence and machine learning (highlighted on 60 minutes) all can be the foundation for huge changes. Never mind simple things like video conferencing, online chat and text messaging, and bots.

A few years ago, some benefits organizations started pushing Private Exchanges as some new idea. I wasn’t buying it. I sold similar plans in 1987. Many think they are offering some game changing idea, but most are simply different packaging of the same thing.

In the benefits business, small brokers may not have the capital to make the changes needed to keep up with the outside world. Many larger firms appear to be building moats around their businesses hoping the outside world won’t touch them. And as the old saying goes, it takes a long time for a big ship to change its course. The outsiders will just go around or over the moat anyway.
One doesn’t need to invent everything to have a sustainable business in a changing market. You may be able leverage the tools or resources invented by others to compete effectively. But all this change is not easy. Yet we all know that “Hope” is not a strategy.

So, look around and not just at your competitors or at some broker conference. When your Apple watch gives you your pulse. When you talk to your Amazon Echo. When you video chat with your son or daughter. When you turn on the air conditioning in your house from work. Wonder why this isn’t happening regularly in the benefits business. Is the outside moving faster than your inside? If so, well hoping Jack Welch is wrong is probably not a good strategy.

Webinar Invite – Taking HR to New Heights


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