Half Of Benefit Brokers Considering Quitting

By Melissa A. Winn
June 27, 2014

In response to health care reform, nearly half of benefit brokers say they are considering getting out of the benefits game, despite the fact that many agree a huge opportunity exists for advisers willing to remain in the business and adapt to their clients’ changing needs.

Nearly half (49%) of brokers say they are considering leaving the benefits industry altogether, new research from Aflac says, up 4% from the same poll last year. In fact, 67% of benefit advisers say they have peers who have left the business in the past year. Yet many brokers and agents also identify a huge opportunity as employers have steadily increased their use of brokers in the past three years.

“At the inception of the passing of the Affordable Care Act, we really thought we would lose some agents,” says Ronnell Nolan, president and CEO of the Baton Rouge, La.-based Health Agents for America. She says so far she’s seen some large agents sell out to huge agencies, but many agents are staying the course and those that have held on “look at this as an opportunity.”

“I have said from the beginning, not everyone will survive. We will look different, work harder, get paid less, but we will survive,” she says. “This law is a very complicated law and employers and consumers need us.”

Aflac’s 2014 WorkForces Report for Brokers, released Thursday, confirms just that. Year-over-year use of brokers has grown from 56% in 2011 to 61% in 2013 to 64% in 2014, the report says. What’s more, almost half of companies say they will be relying more on brokers or insurance providers to help make changes to benefits due to the evolving health care environment.

See related: Brokers worried about relevance, Aflac poll finds

Adviser role expanding

While some brokers have left the industry and others are considering it, benefit advisers who not only want to survive but thrive in the changing health care environment know they need to adapt, says Tye Elliott, vice president of broker sales at New York-based Aflac.

Advisers are “expanding their focus to be more consultative and to offer a wider range of products and services,” he says, adding that data shows “this has been a successful strategy as many businesses are now relying more heavily on their partners for guidance.”

Employers, he tells EBA, need help from advisers with navigating the health care reform law, making sure they’re in compliance with it and ensuring their plans make sense from a cost benefit perspective, but also for employee retention.

“As agents, we have to become a different people, ask different questions, have a certified public accountant and an attorney in our toolbox for success,” Nolan agrees. “We must provide much more service than ever before.

The role of the benefit adviser is also increasing when it comes to employee education about their benefits.

“It’s more important than ever for the employees to be educated on their decisions because they are now making major financial decisions,” Elliott tells EBA.

Adaptive strategies

In an effort to remain relevant benefit advisers are creating consulting practices, acting as navigators for insurance products and helping clients purchase policies from both private and public exchanges, according to the Aflac report.

Seventy-eight percent of brokers say they have expanded their consulting services or created a consulting practice in the past year, and more than one-third (35%) of brokers say they are now functioning as a navigator for insurance products handled through an exchange.

As EBA also recently reported, some brokers and benefit firms hoping to stay relevant are considering more partnerships with other brokerages, either through membership groups such as United Benefit Advisors and Benefit Advisors Network or via more informal networks in their local markets.

Thom Mangan, president of the human capital practice at Market Financial Group and former CEO of UBA, says partnerships through formal organizations are “critical for independents.”

See related: Partnership versus acquisition: The future of the employee benefit brokerage