Part Three: The Five Biggest Mistakes Brokers Are Making About Obamacare
3. “I Only Sell One Kind of Insurance” (One Size Does Not Fit All)
The ACA is causing all of us to look at business and insurance differently than ever before. As a result, new products and strategies have popped up that come at the problem in different ways. Every business has different needs, goals, financial circumstances and appetite for risk.
Two of biggest mistakes a broker can make are (a) to try to jam the wrong insurance solution down an employer’s throat and (b) to be unaware of other insurance solutions available that could have been a client’s ace in the hole.
One of the pitfalls I see frequently is when brokers only look at things from their perspective. While perspectives are important because they help us make decisions about our world, the number one perspective we should all be considering is the perspective of our employer-client. For example, while the broker might like to see an employer offer rich benefits that will result in better coverage for employees and higher commissions, the employer may only wish to comply with the letter of the law. Complying with the law is difficult enough without employers also having to figure out if they are being led astray to appease an advisor’s moral convictions or lack of understanding of the requirements.
There was a time that fully-insured programs were the go-to in this country. However, there are pieces of the ACA that have made some fully-insured plans less desirable than self-funded programs. It is critical to understand how self-funded programs are changing and how plan administrators are creating new structures that make this strategy attainable to smaller businesses than in the past.
No broker should be dismissing other insurance plans out there without first trying to understand the purpose it serves. I often hear brokers dismissing insurance plans they don’t understand as being illegal or likely to be challenged by feds. As a lawyer, I understand that before someone put these plans out on the market, they were thoroughly vetted by insurance experts, attorneys, CPAs, actuaries, underwriters, etc. My first assumption is that it is valid, and then I start to look to understand which niche it fills. I am frequently shocked by the number of brokers I meet who believe they know more than these experts and rather than focusing on learning the new strategy, they focus on trying to prove it wrong.
Luckily, however, I meet many more brokers who understand the innovation that is happening and they are learning about as many strategies as possible so that they are armed with the strategy that meets their clients’ needs.