Tag Archives: Benefits Technology

Two Things Zenefits is Doing That Most Brokers Aren’t

I was working last weekend and browsing the web when I had a Zenefits Ad pop-up on the page that I was on. I know how that works, if you have searched Zenefits in the past then the system remembers you and pushes their ad onto the page. Had I not searched Zenefits the ad most likely would not have popped-up. I would imagine this would also happen to the thousands of employers getting calls and email from Zenefits. They may check out who they are on the web and then sometime in their future browsing they get the same ad. I also saw a commercial on TV the other day from Namely, another technology vendor getting into the benefits brokerage business, so Zenefits is not the only such firm advertising on TV and the web.

Recently my organization was the target of a Zenefits marketing campaign. Within a two week period of time my HR person (I don’t know where they got her name and email address) received 3 phone calls and 4 emails. She did give them the opportunity to present to her and their pitch was pretty compelling. However we are a little more educated in the technology area and have a solution much more advanced than Zenefits.

To compete with Zenefits many brokers sign up with some technology company so that they can say they  have a Zenefits-like solution. What they don’t realize is one of the reasons Zenefits is successful is because of their marketing. Most brokers don’t have the marketing system in place where they can find the right person in a company across the country and make 3 phone calls and send 4 emails in two weeks. In fact most have not even thought through what to say on a call or write in the email. What you say and how you say it matters.

When I start working with a benefits firm one of the first questions I ask is whether they have a marketing person on staff and an operations manager. It is amazing how few firms staff these type of people. Many will say they have a marketing person but that person is often not trained or skilled as a marketing person. The employee may have been the best PowerPoint person and became the head of marketing. Few majored in marketing in college. The ones that do have thriving businesses.

The same goes with operations. I rarely see benefits firms with operations managers on staff. Once again, they may have someone that may have the title of Operations Manager but that person often was someone who was promoted from some administrative role or the Office Manager position. It is amazing when you see a company that is operating with a great operations manager.

The lack of staffing and vision around these two functions may become very critical to a benefits firm in the near future. These are the areas where firms like Zenefits will shine. I believe Zenefits will eventually become the most efficient small group broker in the country. Much like Digital Insurance they will put the systems, people, and processes in place where they can become more and more efficient operationally. This efficiency will enable them to operate their business at a lower unit cost yielding higher profits than the average benefits firm. And if benefits commission changes significantly they will be able to charge fees for their services because of the systems they built to provide better service at lower costs.

Most benefits firms have no vision for operational efficiency. This is an area where I have a great deal of experience having discussed and viewed how hundreds of brokers are operating internally. Many have a database that can store information but few have thought through every process in their organization and develop automated workflows to make those process better. It is amazing how many times I hear from a business owner that “their staff won’t use it” when referring to their internal system. Since when should that be an option?

Many benefits brokerage firms are structured to be successful in what I think may be a dying business model. They are designed to protect the status quo. I have written numerous articles in this blog including one about the coming end to commissions and the rise of price competition. ( Fee for Services for Benefits Brokers – It Changes Everything and It’s Coming ) Another article I talked about the future of health care where health insurance may be all individual purchases and the future insurance companies may be the hospital systems. ( The Coming End to the Benefits Business As We Know It ) If commissions get reduced then those organizations with operational efficiency can have an advantage. With solid marketing they can grow rapidly as others struggle to adjust their business models. Also, if the health insurance purchase moves from the employer to employees then those organizations that can service individuals will also have an advantage.

Many brokers think firms like Zenefits will perpetually be bad and others hope they go away. What they are not seeing is that Zenefits is building a business to thrive in a new benefits world. By leveraging technology and building organizational efficiency they will have lower costs and higher profit margins.  And if they don’t someone else will.

Sometimes I Feel Like George Costanza

I was reading an article published on one of the online benefits magazines where the author wrote something that I almost totally disagreed with. As I read it I was thinking to myself, “that point is wrong”, and then “that point is wrong too”. Yet the comments at the bottom of the article coming from what I would imagine are mostly benefits brokers seemed to all agree with the author. I couldn’t believe it. Not one comment challenged the author. I couldn’t tell if the author truly believed what she was writing or if she was simply writing what she thought the audience wanted to hear. Regardless, there were many there to heap praise and say, “Great article. I wholeheartedly agree with you.” I started to feel like I was George Costanza of Seinfeld. Seinfeld buffs may recall the episode where George concluded that if everything he instinctively thought turned out to be wrong then the opposite of his instinctive thought must be right. Am I George Costanza here? Are all these brokers right and I am wrong? Is the way I think hurting my business or is there a lot of Groupthink going on? Should I do the opposite of what I think, like George Costanza?

The title of this blog is Challenging Everyday Thought. That doesn’t mean I like to say the opposite of what people are thinking just to be the antagonist. I think it is just my nature. As an athlete I always encountered competition. Someone was always trying to beat you. As a pitcher I was trying to fool batters. I was always thinking “what is he expecting me to throw”? And then sometimes I would do the opposite. In business one has to assume the same. However, while in sports having a losing season may be disappointing, having a losing season in business can be critical. Especially when it is a small business and the business is yours. So I am always thinking of ways to remain competitive in my business. A way to be different. If everyone is thinking the same thing then how can one possibly be different? I once saw a quote by Ben Franklin that said,

“If everyone is thinking alike, then nobody is thinking.”

So maybe it is not that everyone is thinking the same thing. It may be that technically nobody is really thinking at all. There is no great revelation when you say something everyone already knows or thinks.

I have referenced Peter Thiel and his book Zero to One in the past and in his book he says that when he interviews people he always asks following question, “What important truth do very few people agree with you on?” He asks this question because he is looking for people who think different. Those that are going to challenge the status quo and change the future. As we all know the future will be different.

I like to think outside the box but more important I think there is danger in Groupthink. As a business owner I can’t afford to fall into a pattern where I don’t anticipate change. Think Blockbuster Video, Circuit City, and Kmart here. Because the world will change, those that anticipate change may be better prepared for the future.

You can apply this thought process to the benefits business. Just ask yourself the following:

  • What if employers really don’t want to provide health insurance for their employees?
  • What if most people don’t want choice?
  • What if employers don’t value a brokers services?
  • What if Zenefits is right, and employers value what they do more than what you do?

Imagine a broker going into an employer with a new value proposition which is the total opposite of what others do. Many, many, brokers sell the value proposition of helping employers manage their risk and claims to lower health care costs. They provide wellness programs and other tools to try and reduce costs. What if you went into an employer and said, “Mr. Employer, managing your health care costs is almost impossible. Not only do you have turnover in your employee population but you are not in business to worry about managing the health of your employees. What if we developed a program to get you out of the health management business while still maintaining your competiveness for employees? Is this something you would be interested in?” This market approach is almost the exact opposite of what every broker in America is doing.

You can go through this thought process in other areas of the benefits business. Think about your business today and then think the opposite. Is the opposite a likely or unlikely event? I ask myself these questions every day. To quote Peter Thiel once again (maybe you should read his book) “What secret is out there that the world has yet to discover?” He believes there are many secrets out there and if you find one that a market will value then you can bring great success to your business. What I do know is that those secrets aren’t in any blog or in any PowerPoint Presentation. And if you are thinking just like the next guy then maybe you really aren’t thinking at all. So maybe being George Costanza for a day is not a real bad idea. It may be the key to a successful future.

It’s Not About the Technology – Brokers are Getting Out-Sold

I have written several articles on “how to be different” and how benefits brokers are “stocking their shelves” with technology solutions (to be different). A more recent article was about how to build an enduring business which does require having a relevant value proposition that would be valuable even in 5 or 10 years into the future. In spite of all the new tools and resources that brokers are stocking their shelves with and their efforts to be different many are still losing business to other firms that often have inferior solutions, at least on paper. What has really astounded me is that many benefits brokers are simply being out-marketed and out-sold. I am surprised because most brokers believe themselves to be pretty good sales people. For the most part, I agree with them. However, I believe the problem is much deeper in most organizations, but this is a solvable problem.

The reason I am writing this article is because I have seen this too often. I have seen benefits firms with superior capabilities and even technology lose to companies like Zenefits because the sales person did not have the training to deliver the right message. Or in many cases the benefits firm did not deliver any message to their clients at all about some of their capabilities. How often does this happen? It is not the sales persons fault. Their firm loaded their company up with tools and resources but these became somewhat “trinkets” thrown on top of a fairly weak foundation. The success of many firms to date often has been the result of strong sales people but the world has changed. Old messages with little marketing and no clear vision will not win against focused organizations with a unique value proposition, a strong brand promise, and well trained sales people.

Whenever I meet a new broker I often ask the question about how they are unique. It is amazing how often I either don’t get an answer or the answer is “we provide great service”. I remind everyone that great service is rarely a measurable differentiator. And I guess if everyone says that great service is their differentiator then how can one be different when everyone says the same thing. It reminds me of the Yogi Berra quote where he said, “nobody goes there anymore because it’s too crowded.” Everyone provides great service and that’s how their different? Sounds like Yogi to me.

The problem I am seeing is not with sales. It is in marketing which includes brand building. It even starts with a lack of vision. And all this is combined with a lack a planning. How can one plan when there is no clear vision and brand promise. Even when there is a brand or vision that vision is rarely “lived” throughout an organization.

My best evidence of this was seen when I was working with a producer from a national benefits firm who showed me a brochure she was using. I asked her who wrote the brochure and she said she did. She said she had no marketing in her office and nothing came from corporate so marketing was left up to her. Imagine a national firm where all the producers had to create their own materials? What I am finding is that this is common.

When I got into the benefits technology business in 1998 I was the CEO of a dotcom company that raised significant capital. One of the best exercises I went through was with my marketing firm. Our whole campaign started with one simple question which lead to one simple word. That question was “If you were to give a sales presentation or drop off some brochure to a prospect what one word would you want them to use to describe your company two weeks after the presentation? That word or it could be a few words needs to “live” within your organization. It needs to emanate through your organization and everything you do.

OK, so what is the answer? As I mentioned in my recent webinar most brokers are looking on the outside for answers when the answers are the inside. It starts with a re-evaluation of your vision. As Simon Sinek would say it starts with “Why”. It really requires that one understands their purpose for doing what they are doing. Does everyone in your organization agree with your Why? Then one must build from there. The building of the brand and then the marketing pieces, website, and whatever it is that you may bring to a prospect. It will then require educating your team and training the sales people on how to deliver your vision. Your Why!

I believe most firms have not done this. At least I have seen little evidence of this. Most have been looking to the outside for their differences; for their competitive advantage. They attend every sales presentation from some technology vendor or other vendor that promises to deliver the answer to success. But the competitive advantage people are looking for is often sitting under their own roof. Yet, most can’t find it, because they are looking in the wrong place. As a result clients and sales are lost. And they spend more money, on more trinkets, wondering whether or not they have found the answer.

This change requires hard work. It takes an honest look at one’s business to see if there is an understanding of one’s Why. It does no good to lie to one-self on this one. Or maybe over time firms have wandered far away from their Why. So the whole organization does not act as one unit but as a bunch of individuals trying to figure things out themselves. So I ask you a few questions. How is your firm unique? What is your vision? Your Why? And does everyone in your organization live this? Good answers to these questions deliver great results. Bad answers are the reason most companies are out-marketed and out-sold.

Webinar Invite – Upping the Benefits Game – Introducing Ideas Most Brokers Aren’t Thinking About

I am conducting a webinar for benefits brokers that you may be interested in. This addresses many of the recent events in the benefits business and incorporates some of the content previously published on this blog. Between what Willis has done and Aetna there is a lot to discuss.

The webinars are on July 8, 13, and 21st from 12-1 est. to register click on this link to my website.


Here is some of the text from the invite.

How would brokers react if the entire small group benefits market went fee for service like Aetna is doing? What would the market look like if an individual health insurance plan became tax deductible? HR Technology Advisors would like to invite you to a webinar that will introduce what we think are strategic business decisions that brokers can make today that will position their firms for a much different benefits world. We can assure you these ideas are things most brokers are not close to thinking about that can give you a competitive advantage today while preparing your business for the future.

Feel free to call me if you have any questions at 508-530-5043.

Willis Acquires Towers Watson – Is there more to this story?

When a company makes a big financial move I assume that they have a good reason to do so. Sometimes to the outside world it may not make sense, often because the outsider’s view of the world is different. These large companies have analysts that are studying markets and making projections well into the future. I assume they know something I don’t. So to me these financial moves can be quite interesting and if you study them they may actually tell a story of where these firms think the market is going.

Yesterday it was announced that Willis is buying Towers Watson. They say it is a merger but the Willis shareholders will own 50.1% of the stock. I read through numerous articles and interviews with their Executives to try and see if there is a story that is being told by this acquisition. More specifically I was looking to see if there are implications as it relates to the employee benefits business. There are a few quotes that hinted as to what these firms are thinking. In a Business Wire article Towers Watson Chairman and CEO John Haley said their reasons included, “accelerating penetration of our Exchange Solutions platform into the fast-growing middle market.” He added that they want a “significant presence with mid-market and smaller employers around the world”.

Willis CEO Dominic Casserly stated that Towers Watson’s market leading private exchange platform is particularly attractive.” And of course they both reference the efficiencies they will generate through a merged organization.

Keeping in mind that employee benefits is simply one part of these multi-national multi-dimensional companies this deal is more than likely about much more than just employee benefits in the U.S. However we can still speculate because that’s what others in the industry do. This happens in sports as we share our opinions as to why teams draft a certain player or trade another and it happens in business when key employees leave or companies make acquisitions. I guess it is human nature.

When I look at this acquisition on its own its hard to speculate as to the reasons, but when you look at other moves in the industry there may be a story developing about the future of the benefits business or more specifically the healthcare business. It was only a few years ago that Towers Watson bought Liazon and their private exchange solution for $215 million. Just last year Aetna purchased bswift for $400 million. I wrote about this acquisition last November in this forum. Now Willis buys Towers Watson. Are the events all tied together?

Back in 2011 Aetna CEO Mark Bertolini made the comment, “Not too far away from now – in the next 6-7 years – 75 million Americans will be retail buyers of healthcare. And they’ll come to the marketplace with their own money and either a subsidy from their employer or a subsidy from their government. And it doesn’t much matter – they’ll be spending their money.” Since then Aetna has been acquiring technology companies including bswift that has built “exchange” capabilities. Bertolini thinks healthcare will be individually purchased. Aetna buys exchange technology. Towers Watson buys exchange technology. Willis buys Towers Watson. Are these events part of the same story?

Maybe this is a stretch but if Mark Bertolini is right and in the near future Americans will be retail buyers then what would I need to do if I am a benefits broker and consultant? A 10,000 employee client could no longer be viewed as a single 10,000 person firm. It becomes a firm with 10,000 retail buyers that I may need to consult and support. The structure of my company. The technology I use. How I staff my business. The revenue/expense model that I would need to operate under in this type of business would need to be much different than that of the average benefits firm today.

Do these larger firms like Willis, Towers Watson, and Aetna see something most don’t see yet? Are they preparing for a different future where a consumer-centric “retail” model is the way health insurance will be purchased? Will the Cleveland Cavaliers resign Lebron James? Is this Peyton Manning’s last year? Who knows what they are thinking? What I do know is there is usually a story being written and many of us on the outside can only speculate as to what an acquisition like this means for the rest of the industry. And I am pretty sure that somewhere in the benefits world the next chapter of where the market is headed is being written.

Stay tuned.

To see a webinar on this topic click on this link:


The webinar is titled “Upping The Benefits Game – Introducing Ideas Most Brokers Aren’t Thinking About”.

Can Your Benefits Business Endure?

I spent the past few weeks traveling across the country meeting with different benefits brokers when I had a question asked of me that required some thought but produced what I think may be an interesting observation. The question was “What brokers are investing in changing their businesses the most to meet the changing demands of the benefits marketplace?” I speak to many brokers and work with many more and as I thought closely my answer came out as follows: “The brokers changing the most are those that plan on being around in 10 years. It is those that want to perpetuate their businesses independently rather than prepare their businesses for sale.” I could actually visualize the business owners of these firms that I was referring to as I was answering the question.

In my business I contract with brokers and one of the things I try to figure out is whether the broker I am speaking to is going to survive and thrive, sell, or fade away. I don’t know if one of the options is to exist as is in perpetuity. Can a broker survive but not thrive, sell, or fade away for a period of 5, 10, or 15 years? Will “as is” be an option?

The question also reminded me of a quote I saw in Peter Thiel’s book Zero to One that stated, “For a company to be valuable it must grow and endure”. The most important question you should be asking yourself is “will this business still be around a decade from now?” He is not asking whether the business will look different but will it even be around. Using this idea I thought about some of the questions one needs to ask oneself including:

  • Will health insurance still be purchased through an employer plan?
  • Will benefits brokers still be the main distribution source?
  • Will the carriers still be paying commissions? If so at what rate?
  • Will the current insurance companies still be around?
  • How will people (employees) be accessing their benefits information?
  • Will there still be claims analysis tools, underwriting, and where will wellness be?

–          What will health insurance plans look like? If they exist.

There are probably many other questions I could ask.

If you honestly answer these questions or at least make an educated guess then the future of the benefits world will be much different than it is today. If the industry is different how will your business be different?

What I am finding in the marketplace that the national firms are working hard to change. Obviously if they are publicly held companies then there are many people in the organization that want growth or at least compensated for growth. Other organizations that are changing include ones where the owner had brought in a son or daughter into the business. Organizations where the owner is less than 45 years old also see then need to be around 10 years from now. I don’t want to put everyone in the same box as we know there are exceptions to every rule but these are trends that I see.

The behavior of those that plan to be around is much different from those planning to sell or those wanting to hang on until retirement. Those planning to be around are investing in the future. They are making strategic decisions based on the long term and not just short term. They are building a culture that is not complacent but one that is dynamic where people can think different. They lead not follow.

Others have a plan of “Hope”. They hope the world doesn’t change. They hope that they can survive as is. They hope carriers don’t reduce commissions. They hope Zenefits goes away. They don’t invest in the future but actually reduce expenses to save money. They make minimal changes, usually following some other firm rather than think outside the box and plan for the long run.

So now I have written another article on change. I had one broker ask me what I would do if I were a broker. Good question. I don’t write these articles without taking my own advice. Or should I say take the advice of Peter Thiel. The answer to this question will be revealed in my upcoming webinar titled, “Upping the Benefits Game – Introducing Ideas Most Brokers Aren’t Thinking About”. Benefits brokers are welcome to attend this webinar by clicking on the following link to register. http://www.hrtadvisors.com/AboutUs/HRTWebinars.aspx

I guess I will finish with a quote from Henry David Thoreau who said, “Never look back unless you are planning to go that way.” I think it is safe to say that the future of the benefits business will look nothing like the past. So ask yourself, can your benefits business endure? Will it be around in 10 years? If so what will it look like? It is time to ask and answer those questions. Then take action.

Be Careful – Your Benefits Goggles May be Blurring Your Vision

There comes a time in many industries where things begin to change. Some people welcome change and others fight it. Regardless, change is often inevitable and the market forces of change are too powerful to prevent it. I think the employee benefits industry is going through some big changes right now. This article is not really about what those changes are though I can throw out some words like Private Exchanges, Zenefits, ACA, Consumer Driven Healthcare, HSA’s, ACO’s, that are all terms that are more common today than just a few years ago. What this article is about is the ability to recognize change and then take action to meet the challenges that those changes may present. Or should I say to capitalize on the market opportunities that the changes present.

In any industry it is important to recognize change. When you look at firms like Kodak and Blockbuster Video you see two firms that missed the market change. Try to think of the biggest selling cell phones before the iPhone or Samsung. Remember the Motorola Razr? How about the health insurance business? When I entered the benefits business in 1986 UNUM was in the health insurance business. So were Travelers, Prudential, Metropolitan, and Guardian. I do recall delivering my first renewal with an employee rate of over $100. What will the benefits business look like 10 years from today? For the most part the brokerage side of the benefits business has not changed that much over the past 3 decades. However, over the past 5 years the fastest organically growing benefits brokerage firms have been a payroll company and now a technology company. Times are changing.

Recently I have been conducting many webinars for benefits brokers about some of these market changes. While I am not going to proclaim that I am the soothsayer with a clear vision of the future, I do like to try and point out some of the factual changes and provide some interpretation of what these changes may mean for the industry. Zenefits raising $500 million does have industry implications. And how about the number of hospitals entering the insurance business? What are the future implications there? What I find most interesting is the broker audience reaction to some of these webinars. Some brokers don’t want to acknowledge that changes are coming while others simply misinterpret what the actual changes are. Those that don’t see the change most likely don’t want to see it, while others are simply viewing the world from a narrow perspective. I like to say they that their “benefits goggles may be blurring their vision”.

There are many examples of different perspectives. Is Zenefits a technology company or a benefits broker? They call themselves a technology company. Others call them a broker. I refer to them as an outsourcing firm. At lunch today I had the President of a major HR Technology company tell me he believes stand-alone benefits enrollment systems will not exist in the future while earlier this morning a broker was telling me he just invested in a benefits enrollment platform. I had one broker tell me the future will all be individual health insurance. Other brokers are entirely dependent on an existing employer-based insurance model. An employer recently told me he would never allow his broker to offer voluntary products to his employees because he thought they were too expensive. At the same time voluntary product vendors are saying the way to make up for decreasing medical commission is by selling more voluntary products.

The changes you may need to make to compete effectively in a future benefits world may be dependent on some prediction as to where you think the market is going. I know brokers today are struggling to decide whether they want to make a play to compete with Zenefits. The moves you make may be very dependent on what you think their value proposition is. If they are a technology company then you may need to do one thing. If they are really an outsourcing firm you may need to do something else. Whatever it is you choose to do my advice is to take your benefits goggles off. They may be blurring your vision. Because if your vision is off you could choose the wrong path for your business which could have negative implications in the future. And if you want to buy a benefits enrollment technology company just give me a call. I know several that are for sale.

Benefits Brokers – Part of the Problem or Part of the Solution?

If you read some of my articles and look at the tag line of my blog, “Challenging Everyday Thought”, you will realize that I like to “think outside the box”. I like the idea of challenging everyday thought. I have always done that even when I was in the insurance business. As one who writes such articles I am always getting those that challenge my ideas. I really don’t mind that because I believe in healthy debate, but what happens most often is that I have people arguing for the status quo. In my opinion it is the defenders of the status quo that are fighting innovation and change in an industry, healthcare and health insurance, that is in dire need of new ideas.

Such a discussion took place this past Friday afternoon with a benefits broker after I gave my webinar titled “Zenefits raises $500 Million – What is means for benefits brokers.” You can still see this by registering here ( http://www.hrtadvisors.com/AboutUs/HRTWebinars.aspx). This broker was giving me all the reasons why employers won’t want a broker that does not provide local service. Keep in mind this is after I talked about how Zenefits sold $20 million in new business with no local service. This broker wanted to believe that the current broker model was too valuable and would never change. I was just reporting the facts and the facts were saying otherwise.

I always believed that the industry protecting the status quo invited the government in. Since Hillary threatened the industry in the early 90’s up until Obama came into power the industry had 18 years to make changes. Yet there was very little change. Brokers, carriers, and the providers, had it pretty good. This reminds me of a quote I read just this morning that said,

“Institutions will try to preserve the problem to which they are the solution.”  – Clay Shirky

Is this what we have going on in the health insurance industry? Will benefits brokers contribute to the solution or is the desire to protect the status quo too strong? I think there are some “fake” changes going on. Private Exchanges don’t save anyone ten cents in real health care dollars yet the some sell this as a big change. Private Exchanges are a reincarnation of Cafeteria Plans from 1988. Did Zenefits create anything real new? No. They have a nice little technology that many other vendors have but there really is nothing new. Corporate Synergies was doing what Zenefits is doing in 2002. Corporate wellness programs are failing and won’t solve the problem. Disease management programs, claims analysis tools, it seems like everyone is still squeezing the balloon of health care costs with no real answers.

I believe that the health care industry is about to go through some big changes. I wrote about this in another article titled “The Coming End to the Health Insurance Business as We Know It – And What Brokers Can Do About It” (see it here: https://joemarkland.wordpress.com/2014/12/02/the-coming-end-to-the-health-insurance-business-as-we-know-it-and-what-brokers-can-do-about-it/) Boy did I get ripped by the status quo people on that one. The way I see it is that the industry is going to change but most brokers and insurance companies will either stand on the sidelines or fight the change. The people or companies that are going to change the industry don’t have an interest in keeping it as is. And with the amount of money spent on health care there are a real lot of them trying to capitalize on changing health care delivery. Brokers and insurance companies may be casualties of this change if they don’t become part of the solution.

I use a quote in my presentations from Mark Cuban that says, “Every day some stranger somewhere in the world is trying to come up with a way to put you out of business.” In this environment with Zenefits raising $500 million; more and more hospitals getting into the health insurance business; new technologies; more and more government intervention; it is not the time to fight to protect the status quo. There are many people here trying to put insurance companies and brokers out of business. When Hillary was asked what the insurance people should do if she succeeded with her health care plan she said they could get another job.

One needs to ask one-self ‘What will the benefits business look like in 10 years?” I guess if you are 55 and plan to retire it may not matter. Fighting for the status quo for a few years may be the plan. However if you plan to have a thriving business in ten years then it is time to change your mindset. It is time to be part of the solution and I am talking real solutions, not fake solutions that protect the status quo. It is time to join me in challenging everyday thought. OK status quo guardians, start tossing your darts. I am ready.

Webinar Announcement – Zenefits Raises $500 Million – What does this mean for benefits brokers?

I write on this blog periodically about Zenefits. Just this week Zenefits announced that they have raised $500 million in additional venture capital. ( read more here ) In my opinion the rules of the benefits game have now changed. $500 million is a lot of money. If you have not heard of or competed with Zenefits they will show up fast, real fast, in your market. It is NOW time to take action – not a month from now or 2 months from now. By then most brokers will lose a case or two to Zenefits. According to Zenefits,  “The new round of funding will enable Zenefits to build up its sales and marketing teams to help the company reach the approximately 5 million American businesses with between 2 and 1,000 employees and to scale its account staff so that it can support these new customers.” And yes, they are going up market.

I am conducting a webinar on this topic over the next few weeks. Any benefits broker that wants to attend this webinar can register by going to my website at http://www.hrtadvisors.com. Go to the webinars section.

While I have done other webinars on this topic this webinar will be different. It will get more into where the market is going versus where it is. I think those who attend will find the time well spent. Click on the link to register. Thanks.

Turning the Benefits Service Business Upside Down

A few weeks ago I was speaking at the Silicon Valley Association of Health Underwriters Conference where Zenefits CEO Parker Conrad was also present and took questions from the audience. He had an interesting response to a question that reminded me of an article I had written back in 2009 titled “Xbox – The Future of Employee Benefits Customer Service”. (You can see the article here: https://joemarkland.wordpress.com/2015/05/04/xbox-the-future-of-employee-benefits-customer-service-reposted-from-2009/ ) He was asked if he provided any face-to-face service. He responded somewhat tongue in cheek by saying that he did as long as they could walk to the meeting. Of course that got a chuckle from the audience. I don’t remember his next comment word for word but he followed that by saying that most brokers assume that providing service via the phone and/or web conferencing does not yield the same result as an onsite visit. He totally disagrees with that premise. He believes that centralized services using the latest technology can actually provide a better result. To most brokers this is turning the benefits business on its head.

Many benefits brokers live by the idea that face-to-face onsite service is the only way to provide quality service. Certainly that is one of the advantages a local broker has, being local. But times change. Web conferencing and even high definition web conferencing is now readily available to even a small business. Consumer behavior has changed too. Some CEO’s and others find it acceptable to meet via the web. Some may even find the company that can do this to be more forward thinking or technologically advanced. Others will see web conferencing as being more cost conscious. Millennials have no problem speaking to others via the web, smart phone, text messaging or chat. It is becoming more commonplace.

Onsite service also has a capacity problem. Imagine I am a national brokerage firm that has a highly skilled actuary or underwriter on staff. If that actuary were to drive one hour out to meet a client, meet for an hour, and then drive back that one meeting would take 3 hours. During those same three hours that same actuary could attend 3 web meetings. In this example onsite service is 3 times more expensive than a web meeting. Imagine if the client were getting billed for that time. In my 2009 article I used selling voluntary benefits sales as another example. Insurance buying events such as getting married, having a baby, buying a house, happen every day. It is simply not possible to be face-to-face for everyone when they have a need. Setting up an automated sales/service center can result in more sales.

The benefits business is seeing commissions being cut in many markets. I have a feeling this trend is far from over. Imagine if you had to build a business for a future benefits world where revenues were lower or you had to compete with other brokers on a fee for service basis. You would need to build a business that leveraged the latest technologies to improve operational efficiency. You may want to help your clients leverage technology so they too could be efficient in managing their HR and Benefits reducing manual service demand. Employees in this new world would have ready access to such needed information via the web and mobile. They would be able to speak with a benefits broker face-to face via mobile or web. In this new world you would be able to deliver state of the art technology and high-quality services to more customers at a lower cost. If you were to do this you would be building a business model like, well I guess, Zenefits.

While onsite meetings may not go away it is naïve to think that another company could not deliver a similar level of service and advice via the web and mobile using technology. Brokers fixed on old beliefs will be surprised when they get a BOR where the other broker has no local representation. It is happening today and will become more common in the future.