Category Archives: Employee Benefits Distribution

Webinar Invite – The New Math of Health Insurance


The Key to Cost Reduction for Years to Come  

November 5th From 12:00 – 12:00 EST

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  What if the math you were using to advise your clients around health insurance was wrong? What if the decision support tools employees are using are wrong? In this webinar we will show you a whole different approach to the Math of Health Insurance that can impact an employer and employees health insurance decision. Some of you may have figured this out already, but I have spoken to hundreds of brokers and few have realized this “New Math”. And this New Math can pave the way to lower insurance costs for years to come. 

The Agenda
–    The Old Math
–    The New Math
–    Impact on Employers and Employees
–    How to Present to an Employer

This is an “eye-opening” webinar that will be well worth 30 minutes of any benefits professionals time. If you would like to attend just click on the Register Now button. If you have any questions give us a call at 508-498-7591.      

View Webinar – How 1 million+ MA Employees Can Reduce Health Insurance Costs Now


I just conducted a webinar that may be of interest for MA brokers or employers. Here is a link to see the recording.

View Recording

For Benefits Brokers viewing this I just want to let you know I work with brokers but am not a broker. I do sell non-broker services direct to employers but am not a licensed agent. I also consult brokers and provide tools and resources for a fee. Call me at 508-498-7591 if interested.

Webinar Invite – The Transformation of Employee Benefits


For Employee Benefits Brokers

October 27th and November 4th

12:00 – 12:45 Eastern Time

“If everyone is thinking alike then nobody is thinking.”
Ben Franklin
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The wheels of change are in motion and employee benefit programs offered by employers have started the move to a whole new benefits model. Employers are welcoming this change, and employees are reaping significant financial benefits. It is “transformational”. In this webinar we will present this new benefits model and outline how benefits brokers can separate themselves from the pack by delivering a unique and compelling value proposition. Many brokers may see this as a threat to one’s current business, but we think it is an opportunity. This can be your Netflix or Blockbuster moment. Let’s make it a Netflix like moment.

The agenda is as follows:

* The Foundation for Change
* What the Democrats and Republicans Agree On
* How Group Health Benefits Could Go Away Fast
* The “New Math” of Employee Benefits A
* New Employee Benefits Model
* Introducing a Proprietary Solution for Brokers
* The New Revenue Model

This webinar provides brokers a plan to thrive in a changing benefits world. To participate just click on one of the Register Now buttons. If you have any questions, give us a call at 508-498-7591.

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How the Next Executive Order Could and Should End Employer-based Health Insurance by 2023


Over the past 6 years I have published several articles on the need to personalize health insurance (and get the employer out of the way) by making an individual insurance policy tax deductible. This happened partially through the introduction of the Individual Coverage HRA (ICHRA) which was effective January 1, 2020, but it did not go far enough. Since the ICHRA became effective I have analyzed 50+ employers across the country comparing their group health insurance program to alternatives on the individual market. While not all individual markets are competitive at this time, I have seen enough evidence to conclude that the move to a total individual insurance market is inevitable and it could happen with one quick stroke of the pen. The benefits of this change can be tremendous. Employees throughout the U.S. will reap benefits through lower costs, more options, and ultimately better health care.

The running narrative around employer-based insurance is that it is not broken. I disagree. An interesting statistic, that few in the business have realized, is that the number of employees covered under employer-based insurance is the same today as it was in 1998 while the population has been rising. (Source: Kaiser) Deductibles and employee contributions have also increased at rates higher than inflation and wage growth, creating a working poor population. (See chart below) I do not know how many more non-profits or home health care companies I need to look at that have 30% participation to support my position.  

I have recognized a few things while analyzing the 50+ cases. First, I will say that employers are over-buying insurance for most employees. One size does not fit all and many employees, when given options, would choose more narrow networks with slightly higher deductibles and fewer pre-deductible copays if they can benefit from the decision. In Massachusetts, the average individual insurance buyer is choosing a plan that is 14.4% – 33.7% less expensive (depending on income) than the average large employer. (Source: MA Health Connector) This frees up an average of $2200 per year that can go towards a health savings account or maybe pay down one’s credit cards. Employers are forcing employees to pay more for health insurance leaving less money to pay for actual health care. Funding an HSA will make money available for first dollar care.

Another issue I am realizing, though I will not get into all the details here, is that the majority of the “decision support tools” guiding employees current buying decisions through employers are flawed. This is a big statement that will get some pushback. I will cover this in another article and back it up with data. My only point here is that these tools are also contributing to consumers over-buying insurance. Few who are buying health insurance have a true understanding of their real risk.    

The current model of group insurance is a one-size fits all model. The employer buys one or a few options and asks employees if they want to participate in this employer purchased insurance. I have to ask, where in our personal lives does one size fit all? Everything is becoming personalized. Consumers, when acting in their own best or selfish interest, can make decisions and drive down costs. The employer in the middle is the problem.

Another belief is that employers have more buying power than an individual. That really is not true. Individual insurance is negotiated with the States and the individual market is one big risk pool. In most States insurance companies have tens of thousands of employees in their individual risk pools underwritten as one big group. Also, when one looks at the cost of running an individual program it is often 5-6% less than running a typical group program.

The current market depends on two things to “release the power of the markets”. First it requires the employer to “give employees the freedom to choose” by adopting an ICHRA. The second is the health insurance companies need to rethink their position on the individual markets. States can also lead the way by adopting the MA model of pricing health insurance. I have looked at all 50 States and MA has it right. In Massachusetts, individual and group pricing are required to be priced as one risk pool. In prior articles I have written that splitting risk pools is a key cause of the problems with the U.S. health insurance system. By putting individuals and groups in the same pool it stabilizes the markets and stops the gaming of the system by employers seeking better risk pools. For those thinking the that employers managing risk through all types of crazy cost containment programs is something they want to do I would argue that most would prefer to simply be out of that business.     

This gets to my prediction, and a possible solution to saving the private health insurance markets, driving down costs, and ultimately improving consumer health care. Through Executive Order, the President (whoever it is) can make an individual insurance policy an eligible expense under a Health Savings Account. By doing this the employee could be in control, not the employer. An employee can ask the employer to pay them the money instead of buying their health insurance, giving the employee the option to buy what they want. The insurance companies would respond to this new demand and start focusing more on the individual market. Capitalism and market forces can work, if we let it.

This change could happen under a Trump or Biden Presidency. Trump has already indicated that he intends to expand options. Secretary Alex Azar said in September 2020 that, “We’ve created new ways for workers to have a broader set of insurance options through Health Reimbursement Arrangements, and the president pledged last week to push for more reforms to open up even more options.” These more options could be the Health Savings Account.

Biden’s big push is for a Public Option. I would assume the Public Option is chosen by individuals not employers, so he would be in favor of maintaining the ICHRA rules and possibly expanding individual choice. I want to add that I really do not understand the deal of the Public Option. If the hospitals and doctors would accept Medicare type reimbursements right now from any insurance company, they could do it without the government being involved. The Public Option could be run through a private market today if the providers would accept lower reimbursements from private plans. The current problem is the providers need the private markets to subsidize public plans. This may play out soon.

The move to a consumer-centric model based around individual health insurance is inevitable. I think employers, employees, and providers would welcome the change.  It is an easy change because the individual health insurance markets and Health Savings Account Administrators already exist. Much like the ICHRA, with one stroke of the pen, tens of millions of Americans can be choosing their own health insurance in 2021. Employers can provide money to employees for health insurance as they are today, but when it comes to choosing health insurance they simply need to get out of the way.  

Rapidly Grow Your Benefits Business This 4th Quarter – Webinar July 28th – 12 – 12:30 EDT


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The opportunity to deliver whole new employee benefits solution to market and create rapid growth is here. In this webinar we will introduce a model that is designed to help brokers grow by 20% annually while helping employers reduce health care costs, forever. And this is NOT the short-term type solutions most other brokers are delivering.

This webinar is by invite only as we are looking for just 2 brokers per market to deliver this new model. We think leads will be rolling in. Without giving up too many secrets the agenda is as follows:

• Review of the Changing Market Trends
• Gaps in the Market and Opportunities
• The Broker Blind Spots – What Many are Missing
• How Brokers Can Grow Revenues
• The Marketing and Sales Plan Overview

The time to act is now. Getting the message out in advance of the 4th quarter is an important to generating activity. To participate in this webinar just click on the Register Now button. If you have questions, feel free to give me a call at 508-498-7591.

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An Alternative to National Health Care


During the worldwide crisis from the Coronavirus many countries are recognizing problems with their current healthcare systems and the U.S. is no exception. In the U.S. this has prompted new calls for a national health care system. I read an article titled, “There’s Never Been a Better Time for Us to End Private Health Insurance Than Right Now” by Tim Higginbotham from the Jacobin. Tim made a compelling argument that those on the left will support. Others will reject the arguments and claim “Don’t take away my healthcare”. The narrative in the media is an ongoing debate between two options, keep what we have, or move to a national health insurance program. I think there is a middle of the road solution that I would like to propose.

I agree with Tim that change is inevitable because the Coronavirus has exposed some major problems in our current system, though my solution does not go as far as Tim does. In his article he said the following:

“But the pandemic has already disrupted the status quo. We no longer face a choice between keeping things as they were and implementing a major change. Change is coming, no matter what, and it’s our choice whether we respond to it by using public funds to prop up a broken system that constantly kills and bankrupts Americans in the name of profit, or by using those same funds to create a stable, single-payer program designed in the interest of public health.”

I agree that the status quo has been disrupted. The problems with our current system are exposed and the system is broken. It is bankrupting America and what will follow this pandemic will be a system looking to recoup the losses being incurred right now.

Let me start with a basic premise as a U.S. citizen. I think we would all agree that we want every citizen to have access to healthcare. We don’t want people suffering and dying in the streets. On the other side, we also don’t want endless healthcare consumption with no consideration of costs or quality. With healthcare costs skyrocketing something needs to be done. Inaction is no longer an option.

The United States has the highest healthcare costs in the world and there is one thing we do that no other country does. In those markets where there is private health insurance, we are the only country where someone other than an individual chooses the insurance for the individual. In a recent conversation I had with an ex-member of the Trump administration that worked on the recent changes in the health insurance laws that brought the Individual Coverage HRA to market, we agreed that “employer-based insurance” is inflationary. It must change too.

Number 1 Problem: Fee for Service Healthcare

Before getting into the details there is one component to our healthcare financing system that simply doesn’t work. Fee for Service healthcare is probably the number one problem with our current system. Fee for Service incents the system to perform more care. My doctor makes more money when I am sick, and my insurance company makes more money when I am healthy. I want my doctor to make more money to keep me healthy. It also incents employers to hire younger and healthier people. Fee for service healthcare is the impediment to fixing most of the issues in our healthcare system as I will point out throughout this article.

The Coronavirus outbreak has exposed some of the issues related to our current system. The first question I pose is:

What should our healthcare capacity be?

I see our healthcare system much like the fire department. We need to maintain a certain capacity of trained people, equipment, facilities, and drugs, regardless if there is a fire. Usage of our healthcare system increases in the winter and goes down in the summer. Are we supposed to lay-off doctors and nurses in the summer? What would the costs be to put out a fire if it were fee for service? Everyone would complain. The thing is, we need to pay these people when there is no fire.

The Coronavirus has made the shortage of facemasks, ventilators, testing equipment, and hand sanitizers part of our daily news. How many ventilators should we have had in storage? Who should have paid for them to be there? Is there some other equipment we need to start buying and storing now for some other type of virus that could hit next year? I hear everyone complaining now while over the past 5 years the same people were complaining about spending too much.

These are all tough questions that need to be asked and answered. What I do know is that paying for a certain healthcare capacity is inconsistent with a fee for service model. We all need to be regularly supporting our healthcare system. We can’t have money going through the system that doesn’t build and maintain capacity or provide care. In the U.S., only 4% of Medicare funds go to administration. In the Private Health Insurance market, it ranges from 12% to 20%. This money is simply lost. It pays people incomes who are working for insurance companies and other administrators, but it does not contribute in any meaningful way to providing healthcare or build and maintain our capacity.

Over the past several years I have been reading regular entries in LinkedIn by people attacking the Hospital systems including their costs and inconsistent billing practices. Price transparency has been in the headlines for months. I would contend that it is our healthcare financing system that causes this broken billing system. Between hundreds of different payors, different funding mechanisms, cost shifting from government programs, and having to take care of the uninsured, it is no wonder. Everyone wants better care, but everyone is also looking for some way to pay less. However, over the past several years the healthcare financers have declared war on the hospital system beating up the costs and reducing our hospital bed capacity in the U.S.

Use of Technology

Another thing exposed during this crisis is the use of technology. Telehealth has moved to the forefront as we all practice social distancing. Prior to the current conditions, most telehealth services were purchased through an employer. The problem with that is the doctor on the other end of the line would be someone other than my primary care doctor. And the consumer would have to download the telehealth app that the employer provided.

Now imagine I am a primary care doctor with 1500 patients coming from a wide range of employers. If I were to participate in telehealth would I have to accommodate all these different apps? Is the Primary Care doctor even involved? As a consumer, when do I go to a CVS clinic, versus my primary care doctor, versus telehealth? And if I receive some type of care from all 3 how does my data get consolidated?

Fragmented Market and Disconnected Care

Use of technology can be a valuable resource in healthcare and can save lives. Artificial Intelligence can be used to identify health conditions before they become too serious. The problem is, artificial Intelligence requires access to one’s data. At this time, my insurance changes for two reasons out of my control. It changes when I change jobs and it changes when my employer chooses to change it. As a result, there are times I had to change doctors and other medical facilities simply to have coverage. Who knows where my data is? I imagine it is scattered all over, giving me little value. And my new employer may have a different telehealth company with a different app and different providers.

There are other problems with the current system as Tim Higginbotham points out.
“The major flaw in tethering healthcare to employment has never been clearer: workers are constantly at risk of losing their employer-sponsored insurance.”
With the Coronavirus employers are laying off people creating the administrative burden of converting employees to COBRA, if they can afford health insurance at all. Employers, on average(at least in Massachusetts) provide health insurance plans that are 33.7% more expensive than what employees purchase when making an individual purchase. Massachusetts happens to do it right and have a viable individual insurance market. Employees going on COBRA would benefit from having an option to choose lower cost plans as finances get tight. Our current system does not allow that. And worse yet, if an employee chooses COBRA the premiums must be paid on a post-tax basis. This is simply wrong. All insurance should be on a pre-tax basis of our government wants us to buy it. It is a societal obligation.

Bernie Sanders and Elizabeth Warren have pushed national healthcare for years. However, when answering the question of “how are you going to pay for it?” I never hear them give what I would say the right answer is. Well here is what my answer would be.

“We are already paying for it through many means. When you add up the government expenditures from existing government programs, payments from employers and employees, costs absorbed by hospitals to treat patients with no insurance, free services from non-profits, and administrative costs incurred by hospitals and other providers, you would get a number that in the end is larger than a national health insurance program. So yes, people will have to pay more in taxes. However, they will pay less in employee contributions and have higher wages because employers would not have to pay for insurance. In the end, we can reduce costs through efficiencies, adopting technologies, and creating incentives for healthcare systems and consumers to practice better health. Rewarding the healthcare system for keeping people healthy will align the incentives of most consumers who want to live a happier and healthier life.”

I am not a proponent of national health care. I believe that when the incentives are aligned with what we want our outcomes to be you have the best solution. The current system rewards the health care system that provides more health care. Insurance companies are rewarded when they provide less. This is backwards. Government programs simply don’t reward excellence anywhere in the system. I know that may be too broad of a statement but in most government systems that is the case.

The Solution

I will start by saying fee for service needs to end and there needs to be a move towards full capitation. Kaiser is the model of the future. (Capitation is where the insured pays into the healthcare system a fixed monthly fee rather than to an insurance company who then disperses funds to healthcare providers on a fee for service basis or in some limited capitation basis.) This is no different than the way we fund the fire department. Fee for service also cannot coexist with capitation as the young and healthy would gravitate towards fee for service programs which essentially leaves them not supporting the system. In California and other markets, Kaiser competes with other fee for service insurance plans which leaves problems to contend with. The best solution puts everyone into the same type of risk pool.

The solution I propose is a private health insurance system where consumers buy their own insurance policy. This is similar to Switzerland though we can do it better. Employers may provide funds for employees, and for those in need, there can be a government subsidy. The key component is the consistency of having the individual own their own policy so they can keep it wherever they go. This is also similar to what the Goodman Institute proposed. I suggest looking at the Goodman Institute website at www.goodmaninsitute.org.

The move to an individual market should help local healthcare systems. Employers often choose PPO type programs from national companies to accommodate an employee population that may be in different locations. Individuals will be able to choose local healthcare plans. This shift will enable local systems to get into the risk business and begin benefitting from keeping people healthy and leveraging technology for efficiencies. Aetna is partnering with local systems to create these types of programs. If employees buy their health insurance from the same company that provides the healthcare then that system can use dollars to invest in technology, wellness, and proper capacity.

Other things we need to do:

• Decide and establish what is needed healthcare capacity locally and nationally.
• Set goal of administrative expense at no more than 5%. It is possible.
• Develop 5-10 standard insurance programs. The country only needs 10. By doing this, systems can be pre-programmed to accommodate these 10, significantly reducing administrative costs.
• Make individually purchased health insurance tax deductible with a more progressive program. Full deduction for lower paid employees and less for higher income earners.
• Allow all employees to use employer funds as they choose versus having the employer chose insurance for them. Today, the employer is choosing whether they will allow employees to buy their own.
• Eliminate employer-based insurance. The employer tax advantage is a main reason for health care inflation. (This is another article.)
• Develop standards for managing health data and leverage blockchain technology for data control and security. It is time individuals start controlling all their own data and have this data used to maybe save their lives. (This is also another article.)
• Develop standards for telehealth enabling consumers to use the devices they have in a more secure way with the healthcare provider of their choice. Apple or Android can have secure “Facetime” rather than download a new app.

The move away from the current paternalistic health insurance system is inevitable. The Coronavirus pandemic has exposed the problems in the system and will be one of the catalysts to change. I believe the only way to save the private healthcare system is to move away from defending the current employer-based system and propose and defend a new system that solves many of the existing problems. Let the debate be between single-payor and something more reasonable. Digging in to protect the status quo will only open the door to a government run program. I believe the solution is in the middle.

The Status Quo is “The Other Guy”


What is the status quo? In the benefits business, there are many who like to label the “other guy” as protecting the status quo. Yet, after I learn about what the person making the proclamation about his/her competitor is really doing, I conclude that they are protecting the status quo too. I know there is a desire to be different in business. Many books have been written about needing to be different. However, one is not different through a simple proclamation.

I hear new ideas every day. In the health insurance and health care businesses some of these proclaimed “new ideas” are really repackaged “old ideas”. Private Exchanges promoted as new in 2014 were recreations of cafeteria plans sold in 1986. Level-funded plans are similar to minimum premium plans sold in the early 90’s. GAP type plans were being administered in the late 80’s. On many occasions, these were promoted as new and if you didn’t sell these products, you were protecting the status quo.

Now we have an army of benefits advisors promoting things like direct provider contracting, direct primary care, referenced-based pricing, as the new savior of the health insurance system. Yet, according to one-person I quote and trust, Mark Bertolini, ex-CEO of Aetna, “direct contracting will be a failed model”. Those promoting these programs are claiming that those that don’t promote them are “protecting the status quo” while a respected insurance executive says they won’t work. Who is one to believe?

I am taking a different perspective. What if protecting employer-based insurance in general is protecting the status quo? There are brokers running around saying “Mr./Ms. Employer, you are in the health insurance business, get over it and take control”. Put in all these programs to micro-manage your claims. Well I am pretty sure employers don’t want to be in the health insurance business and be in the claim’s management business. (Though they don’t mind giving the employee some money.) If given the option to get out they would.

I am also pretty sure most employees would like more health insurance options versus having the limited options provided by employers. I know I would want more options. Yet I see no lobbying to get the employer out of the middle of health insurance, other than from the likes of Mark Bertolini and President Trump. So, if virtually everyone wants the employer out of the middle, then I would conclude that protecting employer-based insurance is protecting the status quo?

President Trump, through Executive Order, made the biggest change to our health insurance system in the last 60 years. However, rather than embrace it and deliver what most employers and employees want, the industry is somewhat ignoring it. I have some news though; this is not going away. The train has left the station. Employers and employees will eventually get what they want, and when they get it, they won’t go back.

So as one wanders through this health insurance maze, pause before you label “the other guy” as the one who is protecting the status quo. In some eyes, the one protecting the status quo may be the one in the mirror.

What Sport is Your Benefits Business Playing?


NOTE: This was written in 2016 but don’t think I ever published it.

With firms like Fidelity entering the benefits business, others like Zenefits and Gusto raising tens to hundreds of millions of dollars, and the national firms continuing their rapid pace of acquisitions, one must wonder whether the benefits game is changing in a bigger way. Is all this money resulting in an improvement in the business? Are the rules of the game changing? Not only the rules, but one must understand what league they are competing in. And if the rules and competition change can one continue to compete? Is the price to compete greater than many firms can afford?

In business as in sports it is important to understand the rules of the game and what league you are playing in. How you staff your team and how you play the game will change as the rules and competition changes. And as we all know we don’t get to make all the rules and control how the competition plays the game.

To compete in an individual sport like golf you need a single talented person. In basketball, you need anywhere from 7-10 skilled people. In baseball, the number is around 12-15 while in football you need 20-25. At lower levels of competition, you generally have athletes playing more than one position. In high school football, I played quarterback, safety and was the kicker. In college I was the 5th best QB so I became a safety, and my kicking skills were such that nobody would have ever called me a kicker. At the professional level, you have very specialized skills and the number of skilled athletes you need to win is even higher. Some NFL teams even have two kickers, one to kick-off and another to kick field goals. At the professional level, you need 40 – 50 quality players.

In some businesses, all these rules also play out. To compete at the highest levels, you need more players with more specialized skills. Smaller firms have fewer employees often playing multiple positions. I heard this the whole last quarter where people would say, “I’m too busy, call me after the first.” So, their 2017 plans are on hold because they could not handle fourth quarter business while planning their 2017 or even starting their marketing or sales efforts. They are playing baseball with 5 fielders and don’t recognize it. Others however, in larger firms, have staff making their 2017 plans and do have the time to start their marketing and sales efforts. They have 9 players and a bench creating a competitive advantage.

How many benefits brokers wear the hat of the sales person, the finance person, marketing, and even service? In these firms, it is not possible to deliver the results that larger firms can deliver simply because of number of resources and skills needed to compete. Some larger firms also struggle because they have the numbers but because of their structure they don’t properly leverage their size or skills properly. I once spoke to a producer in a national benefits firm creating her own brochures. Certainly, not an effective use of time or skills. I am also quite sure the marketing piece did not have a professional quality.

I always felt that lead generation or telemarketing is a very different skill than sales or benefits consulting, yet in many benefits firms the person who dials for dollars is the same person that makes the sale and then does the consulting. They play the QB, safety, and kicker. And speaking from my own experience, most often not very well.

I started creating a list of all the things a benefits firm can do for themselves, their customers, and the employees of those customers, that would be of value that most brokers simply don’t do or struggle to do. If I were to start a benefits firm from scratch today this list would be my opportunity to be different in the market. At this time my list has 54 items on it. I know many benefits firms across the U.S. yet I can only think of one firm that is executing on many of the items on my list. A few others have the ability to do so but more than likely lack the vision. So, I believe the opportunity still exists.

With new entrants to the market looking to disrupt the current benefits community and driving desire to win I don’t think my 54 items will be a secret forever. The bar will get raised and raised again, in a way that the price to compete is more resources and more specialized skills. This often means more money. It can be equivalent to the difference between playing high school football and professional football. My quarterbacking skills would not have won me any games against the pros.

The benefits game may be changing faster and in more ways than people think or see. Sometimes these things sneak up on you and if it does you could be caught off guard, ill-equipped to respond competitively. There will surely be changes coming to the healthcare market from the Trump administration. These changes may be much different than most anticipate.

This benefits game may no longer be a golf event where a single skilled player can compete. It may not even be a basketball or baseball game where 5 and 9 players are adequate. It may require the army of a professional football team with 53 highly skilled players. The increased competition in sports and business is all around us.

You can choose to compete in places where there is less competition. Many assume this is in the small group market but there are a number of new competitors going after that business too. You can sell your business. You can also choose to build your team. To do so you can raise money and hire a team like Zenefits and Gusto. To do this you will need a unique product or value proposition that can scale. You can grow organically like a Fidelity or a Paychex but that takes capital, risk, and time. Alternatives would be sharing resources with your peers as we do at N4one.

So stop stocking your shelves with new technology tools or looking for that new idea at some conference. The technology vendors want to sell to everyone so you won’t end up with anything unique. And I couldn’t imagine finding some grand idea at a conference. I certainly wouldn’t share our secrets at some conference. Even if you found some grand new idea, getting this idea to market effectively will require resources that many benefits firms don’t have. The place to start is with a vision and a plan. Or you can call us at N4one. We have created a plan. Built an army. And we have 54 things or more we are doing that most others are not.

An Imagined Trump/Bertolini Health Care Discussion


Below is a conversation I imagine that could have happened between President Trump and ex-Aetna CEO Mark Bertolini. I would imagine this is a simplified version of a deeper conversation, but you will get it.

Bertolini – It is great to see you Mr. President.

President Trump – Same here Mark, how are things?

Bertolini – Things are great!

President Trump – Mark, as you know, health care costs are out of control. The costs are adding to our deficit and we will never control spending if we don’t wrap our arms around health care. And the citizens are beginning to really feel the pressure from these increased costs and higher deductibles. I know you have been leading the way on how to transform the health care business. What do you think we can do in the short term and long term to stop this trend?

Bertolini – Well, the number one problem is that employers are in the middle. This is a formula that can’t work and drives up costs. Until the consumer is empowered there is little chance to controlling costs. Also, in today’s environment the insurance companies make more money when people are healthy, and the health care providers make more money when people are sick. We need the health care system to be rewarded to keep people healthy.

Trump – How do we get the employers out of the middle? Everyone says you can’t take my health care away.

Bertolini – You need to eliminate the employer deduction for health insurance. As long as it is more beneficial from a tax perspective to buy through an employer than the employee buying directly, then you will have the employer in the middle. It isn’t even fair that an employer can get a deduction, but an individual can’t. Move the deduction from the employer to the employee and that will start the process to solving this problem.

Trump – The Democrats want Medicare for All. They have also don’t like the lower corporate tax rates. I have been talking to other Republicans and they are willing to trade off keeping the lower corporate tax rates and eliminating the health care deduction at the employer level. The Democrats also don’t like the fact that it is regressive. The higher income earners get a much greater deduction in pure dollars than lower income earners. If we move the deduction to the employee, they want to make it progressive. Someone making $50,000 may get the full deduction but someone making $500,000 may not get any at all. This is a compromise that could work.

Bertolini – We did the deal with CVS because we expect the employer gets out of the middle. As I said, we need to empower the consumer. If you move the deduction to the employee, you will essentially save the individual insurance market overnight. You know that right now employers are doing everything they can to dump bad risk on the individual market and you have an army of insurance brokers assisting in this process.

Trump – Well getting this done in the next year or so is going to be tough. Budget negotiations are brutal.

Bertolini – Is there anything you can do now?

Trump – Well I can work within the current laws and do something through Executive Order. What if I made an individual policy purchased through employer contributions tax deductible? I can do that real fast.

Bertolini – That’s a great start. It will put things in motion to start the focus on the consumer. Many employers want to get out of the health risk business. They would rather give employees money and just let them buy themselves. Insurance companies will start supporting the individual market much more if you do this.

Trump – After the next election we will need to pass a budget, and I think we will have to compromise and move the deduction from employer to employee. Democrats and Republicans are on board with that.

Bertolini – This will save the private health insurance market and empower firms like Aetna/CVS to really start focusing on the consumer. I always believed that the companies that provide some form of health care need to be in the risk business. The incentives need to align with the outcomes you want to get. This will do that and drive down costs.

Trump – Thanks Mark. You have been very helpful.

June 2019 – The individual Coverage HRA becomes a reality.

Possibility – Effective January 1, 2023 Deduction for Health Insurance Moves from Employer to Employee

 

Webinar Invite – Grow Your Benefits Business by 20% by Delivering a Unique New Employee Benefits Model to Market


And Join the Movement to Reducing Health Care Costs by 15%

November 21  –  2:00 – 2:30 Eastern Time

November 26  –  2:00 – 2:30 Eastern Time

REGISTER NOW

On January 1st we are launching a whole new way to view and deliver employee benefits to the market. The model is designed to help brokers grow by 20% annually while helping employers reduce health care costs, forever. And this is NOT the short-term type solutions most other brokers are delivering.

This webinar is by invite only as we are looking for just 2 brokers per market to deliver this new model. We think leads will be rolling in. Without giving up too many secrets the agenda is as follows:

• Review of the Changing Market Trends
• Gaps in the Market and Opportunities
• The Broker Blind Spots – What Many are Missing
• How Brokers Can Grow Revenues by 20%
• Reducing Health Care Costs by 15% – Forever

To start January 1 the time to act is now. You can finish your 4th quarter while we get you the head-start you need to have a great 2020. To participate in this webinar just click on the Register Now button. If you have questions, feel free to give me a call at 508-498-7591.

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