I recently attended Self-Insurance Institute of America’s (SIIA) conference, Self-Insured Health Plan Executive Forum, and was continually impressed throughout the event with the level of knowledge and professionalism among the speakers and attendees. One of the sessions I attended was a panel discussion on the new-found enthusiasm for self-insurance and the lack of education and/or professionalism that sometimes accompanies newbie advisers.
The session was titled Beyond Disruptors & Rockstars – Let’s Talk Execution. The panel was led by Mike Ferguson, President & CEO of SIIA and made up of four long-term industry professionals:
Arlene Cayetano, President & CEO of Greymatter Risk Management
Mark Gaunya, Co-Owner and Chief Innovation Officer of Borislow Insurance
Jim Rinere, President of CWI Benefits
Kevin Trokey, Founder of Q4intelligence
During this session, the overwhelming theme that emerged was the need for extensive education and teamwork across the board for the brokers, employers, and employees. Without the education, everyone is left fumbling around and it doesn’t become a successful transition for anyone.
Here are some highlights of ideas and questions that came from the panelists at the session. I’m not providing answers here, but rather sharing ideas to take away for further consideration.
- Self-funding requires a completely different skill set. Who is responsible for broker education? Who is responsible for client education? Where does the education come from? It becomes blurry when there are so many complexities, and there is no standard in the industry or a single place to go for education and expertise.
- We have brokers all over the spectrum of knowledge and education about self-funding. When you get a newbie broker out there forcing a self-funding platform, it’s like taking your clients on a bicycle ride without the training wheels for the first time. Everyone is going to feel unstable and a little out of control.
- Moving from fully-insured to self-insured is moving from tactical account management to strategy and risk management for/with the client. Most brokers and clients are not prepared to make this transition.
- Some brokers don’t want the TPA to connect directly with the client and it leaves a void in communication. Yet, the most successful clients have brokers who are very engaged in the collective relationship with stop-loss, TPA, client.
- A huge issue in moving to self-insurance that brokers need to be aware of and address is knowing what the pitfalls are, how to educate themselves about those pitfalls, and how to avoid them. Seeing the education theme here?
- For example, so many brokers do not understand the importance of the SPD and don’t communicate that to the clients. This is a critical document that should be given the level of importance and reviewed like a tax document.
- TPAs should try to be as agnostic as possible and not require brokers/clients to work with certain stop-loss (or other) vendors.
- Getting ramped up and educated enough to take a self-insured solution takes time, and brokers who rush into it risk their reputation and the employer/employees’ wellbeing. Plan to spend a good 18 months getting educated and comfortable with the concepts, the possible solutions, and the vendors you’d be working with.
- Brokers cannot explain to a client in 20 minutes what it’s taken them 18 months to learn themselves.
- TPAs and stop loss carriers cannot explain to a broker in 20 minutes what it’s taken them a career to learn and develop.
- Stop panicking about falling behind people who are making a lot of noise online, and take the time to learn for yourself and to be able to effectively educate your clients.
- Advisors who have taken an angry position are rightly frustrated by the lack of transparency. Yet most of their books are still funded with revenue from the carriers. Their own compensation with clients is often as opaque as anybody else in the delivery system. Don’t just believe what you see and hear online. There’s a lot a of overstated bragging.
- The advisor’s purpose should always be to serve the best interest of their clients.
- Carriers are going to figure this out and adapt their models. There are too many 0s on their balance sheet to just disappear into irrelevance. Tread carefully.
Self-insurance is not for every employer. And for those for who it may be a good fit for, today may not be the right day for it. And self-insurance is not for every broker/adviser. And for those who it may be a good fit for, it takes time to learn it well enough to properly execute on it.
Health insurance is not something to use for your personal playground to see how it works and just try it out on a willing participant. Peoples’ lives are literally at stake. Take that role seriously and do everyone a favor by slowing down and doing it right and for the right reasons.
Photo Credit: Fabio Formaggio
