No secret, benefits and insurance advisors are prone to chasing bright and shinies in a way that makes most heads spin.  

The most recent trend to capture our attention is the re-emergence of Value-based Insurance Design (VBID). But, I should emphasize, it’s only the most recent in a very long line of distractions. I hesitate to call this phenomenon just a distraction because it has such genuine and significant impact on the overall focus of the business.   

Not too long ago, the industry’s attention was focused almost completely on technology/ben admin. Compliance, HR resources, and communication platforms have all taken turns as the bright-and-shiny of the day. 

As each has had its moment in the spotlight, it seems the spotlight shines so brightly as to blind advisors to all of the other solutions that came before and are collecting dust in the toolbox. 

Take advantage of the door opener 

The spotlight on VBID is particularly blinding. For any number of reasons, advisors are finding it easier to get the attention of the C-suite. One of the most obvious reasons is the potential for significant savings resulting from the implementation of VBID ideas. 

Of course, you would be foolish to not take advantage of a conversation that can get you an audience with a prospect. However, it’s critical to expand the conversation once in the door. 

If a prospect senses you are there to push an agenda, game over and you will likely lose. And, if you show up pushing a single idea/solution, that prospect is going to sense you are there to push your agenda.  

However, if you show up curious about how they define success in their overall HR/benefit program; if you take the time to learn what it is about their current situation that is holding them back; if you make it clear you have any number of solutions/strategies to help them get better results, they will see that you are there to help further their agenda. 

On the flip side of this C-suite attention-grabbing, VBID is producing another interesting phenomenon. As large as its bandwagon has become, there are advisors who push back against it with almost equal passion.  

We hear “Not in my market” way too often. I think what is happening is that too many advisors look at the more extreme versions of VBID, such as a completely deconstructed self-insured program, and don’t see it as applicable for their market. 

However, if they would reframe the idea of VBID as simply taking a more creative approach to plan design, most would find a comfortable place on the plan design spectrum. They would find that options like HRAs, level-funding, and traditional self-funding are ideas that apply to much of the market. 

Raise the bar 

We teach the agencies with whom we work that they need to establish the standard that will earn them the business and do so as early in the sales conversation as possible. There are two basic components to the standard. 

  1. It must become very clear to both the advisor and the prospect that there is an opportunity for significant improvement to the prospect’s overall HR/benefit program. 
  2. Second, it must be clear to both the advisor and the prospect that they could effectively work together and that the advisor has access to the right solutions and has the ability to implement those solutions in such a way as to ensure improved results. 

It takes much more than a single idea-of-the-day to make the type of business-improving impact clients really need.  

Land of forgotten bright and shinies 

I am certain that most of you have made significant investments in other solutions for the benefit of your clients – compliance, HR resources, technology, communication, etc. You know the drill. You’ve made these investments because you know how critical they are in helping clients drive the type of success I mentioned above. 

But do you think your clients need those solutions any less now than they did the day you decided to invest in them? I don’t think that’s the case at all. 

Yet, because they are so excited about the potential of VBID and its effectiveness as a door opener, I hear from advisors all too often who are passionately introducing VBID to prospects, but who are also leaving all of their other solutions at the office to collect dust. 

Not only do I believe the other solutions are still important, I believe they are MORE important than ever before BECAUSE of VBID.  

With the increased complexity of VBID plans, employers likely face greater compliance burdens (certainly no less) than ever before. Because of that increased complexity, having the right ben admin system to create consistent operational efficiencies is absolutely necessary. And, given that complexity, the need to have a well thought out communication strategy to introduce the programs to employees and their dependents so they understand them and don’t flip out is ABSOLUTELY critical. 

Addition by addition 

I definitely believe you need to be having VBID conversations with your prospects/clients. And I encourage you to take advantage of it if it to open doors for you. But, I also believe that to be the complete advisor your clients need you to be, you can’t be a one trick VBID pony.  

Add VBID to your conversation, but don’t let it replace the rest of the conversation. 

Bright and shinies will continue to come along, but don’t allow yourself to be blinded by their beauty. No single solution should ever become the entirety of your conversation. They should be embraced only when they add to your current conversation and allow it to evolve in a healthy manner. 

I know many see VBID/ben admin/compliance as a silver bullet to growth problems, but if you hunt with a silver bullet, you’re destined to shoot yourself in the foot. 

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