PLUS: THE TOP 50 LARGE-GROUP BROKERAGES IN THE U.S.
RISING STARS IN ADVISING John Sbrocco is one of 20 young leaders reinventing employee benefi ts strategies and reducing clients’ costs.
March 2018 • employeebenefi tadviser.com
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002_EBA0318 2 2/5/2018 4:20:21 PM COVER STORY Questige’s John Sbrocco and his fellow 2018 Rising Stars in Advising are taking ownership of healthcare distribution to save clients thousands of dollars in bene t spend.
March 2018 | employeebenefitadviser.com 3
003_EBA0318_001 3 2/6/2018 5:20:58 PM RE:INVENT | RETIREMENT A better understanding of target-date funds
VOLUME ISSUE HEALTH Unease over health plan strategy amid market mergers FROM THE EDITOR and acquisitions Take the next Rising Star under your wing HEALTH Improving wellness plans ADVISORY BOARD through digital technology Young advisers bring a fresh perspective to the business VOLUNTARY Parents seek tuition bene ts to ON THE WEB cover rising costs for their kids The 15 biggest HR challenges; record-breaking M&A activity NELSON GRISWOLD 34 BUSINESS Why advisers are taking control What it takes to put together a TAKE of the healthcare supply chain successful brokerage valuation Predictive hiring with AI; smaller groups interested in level WENDY KENEIPP funding TECHNOLOGY The important differences The cost of a ben admin between a broker and a true platform is no longer a top adviser concern
JACK KWICIEN TECHNOLOGY It is crucially important to Personalizing the bene t start thinking about business experience with AI perpetuation and have a plan of action in place BE ADVISED Finding sales partners in unexpected places
NEWSMAKERS The top 50 large-group brokerages in the U.S. OERB Employers remain behind on open enrollment preparation
Employee Bene t Adviser (ISSN 1545-3839) Vol 16 No 1 is published 6 times a year; March, June, August, September, October and November. $89.00 in the U.S. and $119 a year in all other countries by SourceMedia, Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 212-803-8200. Change of address notice should include both old and new address, including ZIP code. Postmaster: Please send all address changes to Employee Bene t Adviser/One State Street Plaza, New York, NY 10004. For subscriptions, renewals, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. Periodicals postage paid at New York, NY, and additional mailing o ces. © 2018 Employee Bene t Adviser and SourceMedia, Inc. All rights reserved.
4 Employee Benefit Adviser | March 2018
004_EBA0318 4 2/8/2018 11:26:12 AM B:8.25” T:8” S:7”
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A4864_Disability_GI_EBA_DKT.indd 1 1/25/18 4:00 PM 005_EBA0318 5 2/5/2018 4:11:03 PM New contacts he could make. Boundary-breaking stories he could cover. He was proud of his achievements, but never content to rest and bask in them. “Don’t plateau,” he would always tell me. I recognized that same level of inspiration in our 2018 honorees. Whether it’s cover person John Sbrocco of Questige, who’s tackling the healthcare supply chain to bring huge, real-dollar savings to clients, or Bob Gearhart, Inspiration everywhere Jr. of DCW Group, who is so con dent his technology- ELIZABETH GALENTINE driven approach will change EDITORINCHIEF One thing that I have in common with a lot of bene t lives that he puts part of his advisers: I didn’t know the job compensation on the line and existed until I came across the recognizes top achievers ages refuses to quote insurance eld by happenstance. 35 and younger (Pages 16-25). business, they all have a It was January 2009, We’ve been presenting fundamental desire to do the and I told family and friends these awards for several years most good for the greatest who asked about my new now, and the nominations are number of people. reporting gig that I was covering always full of impressive books Be sure to read each Rising “something involving HR.” I of business, rising assets under Star’s complete pro le on even bought the book Human management and honorable employeebene tadviser.com. Resources Kit for Dummies to community service. is year’s As someone in the same prepare for my rst day. group is no di erent, but one age bracket as our Rising Stars, I Another thing I have in commonality I noticed that have one last thing in common common with a lot of advisers: really stood out about this with them: Inspirational Realizing how fortunate I’ve particular eld of winners mentors, without whom I would been to fall into this market. It’s is a deep desire to change not have come this far. I want ripe with stories of brokers and the industry for the better, to thank Whiddon and another consultants who are making starting from the inside out boss also gone too soon, David a real di erence in the lives of by identifying and routing out Albertson, for their advice, working Americans. It’s been a aws in the operating system. guidance and belief in me. privilege to share them. It reminded me of the I urge you to take a look I felt especially inspired passion expressed by my around you, nd that doe-eyed reading the dozens of rst boss at EBA, the late millennial and turn her into applications for our annual Robert Whiddon. It’s not an next year’s Rising Star. Rising Stars in Advising, which exaggeration when I say he came to work every single day driven by what he could do to better report on this industry.
6 Employee Benefit Adviser | March 2018
006_EBA0317 6 2/6/2018 2:48:52 PM BOARD INSIGHTS
EDITORIAL HEADQUARTERS One State Street Plaza, New York, NY 10014
What is most SVP & Health Care Group Publisher: Jim Callan promising Group Editorial Director: John McCormick Editor in Chief: Elizabeth Galentine ADVISORY Executive Editor: Phil Albinus about Associate Editor: Cort Olsen Senior Art Director: Nick Perkins BOARD successful Associate Art Director: Neesha Haughton Contributing Editors: Kathryn Mayer, Fred Bazzoli, young Nathan Golia, David Weldon Contributing Writers: Nick Otto, Amanda Eisenberg, Joe advisers? Goedert, Danni Santana, Greg Slabodkin EDITORIAL ADVISERS Beverly Beattie, President, CEO, Selden Beattie; Perry Braun, Executive Director, Benefit Advisors Network;Mark BEVERLY BEATTIE Gaunya, Principal, Borislow Insurance; Jerry Kalish, Presi- dent, National Benefit Services;Tinker Kelly, CEO, Voluntary Successful Employee Benefit Advisors; George Lane, Principal, Mercer; Robert J. Lieblein, Chief Development Officer, Benefit Ad- young advisers visors Network; Andy Torelli, Area Senior Vice President, Gallagher Benefit Services;Trisha Zulic, Human Resources will bring a fresh Director, Efficient Edge and untainted VP, Research: Dana Jackson VP, Content Operations and Creative Services: Paul Vogel Director of Creative Operations: Michael Chu approach to Director of Content Operations: Theresa Hambel
reducing costs ADVERTISING HEADQUARTERS and increasing 3340 Peachtree Road NE suite 1010 Atlanta GA 30326 ADVERTISING SALES STAFF value for their Vice President & Group Publisher: Jim Callan, 770/325-7521, james.callan @sourcemedia.com clients by Publisher/Mid-Atlantic and Southeast: Michael Pirro, 770/325-7525, [email protected] disrupting the Northeast: Michelle Yosslowitz, 770/325-7526, [email protected] market with Midwest: Thomas Cahill, 847/682-5622, [email protected] truly innovative Southwest/Western: Kurt Kriebel, 770/325-7523, [email protected] strategies. Provider Profiles and Benefit Marketplace: Michael Flynn, 480/754-9049, [email protected] MARK GAUNYA Senior Marketing Manager: Amy Metcalfe, ANDY TORELLI 212/803-8267, [email protected] Maturity, being CORPORATE HEADQUARTERS One State Street Plaza, 27th Floor, properly suited New York, NY 10004 An open road 212/803-8200 for the role, and a Customer Services: Young advisers are unencumbered by [email protected] desire to succeed. (212) 803-8500 the past and free to embrace change. Reprints: For more information about reprints and licensing content from PERRY BRAUN Employee Benefit Adviser, please visit www.SourceMediaReprints.com or contact PARS International Corp. (212) 221-9595. Young advisers, your success in this business is a time tested They are Fulfillment Director: Christopher Onyekaba truth — it’s all about relationships and your ability to strategically technology CONFERENCES collaborate with others for the bene t of your clients. Benefits Management Forum & Expo National Account Executive, Conference and e world is complex and moving exponentially. Disruption is comfortable Exhibitions Group: Michael Flynn • 480/754-9049 [email protected] the new norm, not the exception. Creativity and innovation are the and leverage it currency of the future. to engage the Connect yourself to high quality people who are creative and can mentor you; provide honest feedback and tell you what you market, engage Chief Executive Officer: Douglas J. Manoni need to hear rather than want to hear, that’s called authenticity and and communicate Chief Financial Officer: Robert Dennen Chief Revenue Officer: Marianne Collins what will help you grow. with their EVP & Chief Content Officer: David Longobardi Build partnerships with the vendors that will support you; Chief Marketing Officer: Matthew Yorke clients, do not SVP, Conferences & Events: John DelMauro choose who you spend your time with wisely as you are the sum exhibit fear and SVP, Human Resources: Ying Wong total of the ve people you spend the most time with; and know REPRODUCTION POLICY what you’re really good at and how you can make a di erence. will tackle the No part of this publication may be reproduced or transmitted in any form without the publisher’s written permission. Young advisers are changing and in uencing our profession unknown. And, TRANSACTIONAL REPORTING SERVICE through their approach to work, both in mindset and execution. Authorization to photocopy items for internal or personal use, or the they engage the internal or personal use of specific clients, is granted by SourceMedia, Young advisers are free from “the past” and embrace technology to provided that the appropriate fee is paid directly to Copyright do things more eciently, e ectively and with more time laser fo- customer through Clearance Center, 222 Rosewood Dr., Danvers, MA 01923, U.S.A. cused on serving people where they live. Young advisers, your fu- questions to ture is always bigger than your past — think BIG. learn their needs versus selling a product.
March 2018 | employeebenefitadviser.com 7
007_EBA0318 7 2/6/2018 11:12:47 AM TWEET WITH YOUR FRIENDS AT EBA ON EBA magazine staff > @EBAmagazine 3 reasons employers are offering on-site tness centers THE https://trib.al/BI8g7aS WEB ELIZABETH GALENTINE EDITOR IN CHIEF NEW LEADERS, @EBA_Galentine A must-read analytical look at the NEW OBSTACLES employer’s role in managing sexual harassment highlighted by the #metoo SLIDESHOW movement from @mayereditor http://bit.ly/2BGLbJE
CORT OLSEN ASSOCIATE EDITOR @EBA_OLSEN Moving your clients to an online platform with decision support tools could triple your ancillary commissions: http://bit.ly/2mL20hM
PHIL ALBINUS EXECUTIVE EDITOR @PhilAlbinus RISING STARS IN ADVISING Twenty standout advisers ages 35 and younger are taking Alexa, what’s a health savings charge of the future of employee bene ts, determined to account? https://t.co/DOZ4IPw3Xa reduce costs and improve client outcomes. From the article, SLIDESHOW “Bene t brokerages see 90% increase in M&A activity,” available in full on employeebenefi tadviser.com.
Acquisitions skyrocket Employee benefit firm deals increased 90% in 2017 over the previous year.
200
150
100
50 THE BIGGEST HR CHALLENGES IN From workplace sexual harassment to an ever-changing 0 2016 2017 regulatory landscape, employers should remain vigilant. Source: OPTIS
Become a fan of our Facebook page at Facebook.com/ EBAMagazine for inside information and breaking news. ACCESS THE EBA APP FROM YOUR MOBILE DEVICE Join our LinkedIn group, Employee Bene t Adviser, to keep © Apple © Android the dialogue owing on numerous industry discussions.
8 Employee Benefi t Adviser | March 2018
008_EBA0318_001 8 2/6/2018 1:49:44 PM Break the rules. Change the game.
If the healthcare system is rigged, why play by their rules? The game is designed to skyrocket employer costs, year after year. Meanwhile, employees struggle to make it through the maze of healthcare without the support and education they need.
It’s time to change the game. GameChangerHR.com #GameChangerHR
© Maestro Health 2018 m3310
009_EBA0318 9 2/5/2018 4:11:04 PM QUALITY Student debt relief TRUMPS a top bene t TAKE Many millennials surveyed would scrap CONVENIENCE healthcare, retirement for loan help. FOR WORKERS STUDENT LOAN REPAYMENT PROGRAMS are climbing the pantheon Faced with the of employee bene ts, suggests a recent survey of full-time workers choice between go- with student loan debt. Poll sh found that 23% would gladly give ing to a conveniently up healthcare bene ts for a student loan repayment bene t. In ad- located doctor’s dition, 46% would relinquish paid time o and 33% would do the of ce or a more same for retirement bene ts. Also, 53% said they’d consider a salary quali ed physician, cut in exchange for a student loan repayment bene t. group health plan members are four David, Chen, founder of Millennial Personal Finance, which times more likely to conducted the study, believes student loan repayment bene ts can embrace the better-perceived medical help employers recruit young talent and appear more marketable professional. to this workforce segment. “Students are leaving school with ham- pering debt, and monthly student loan payments, not healthcare, “Traditional metrics like patient ratings, rank among their chief concerns,” he says. BODY WITH THIS to say prescribing rates and volume of patients “ e message to employers is clear: student loan repayment seen were not nearly as compelling to programs are quickly becoming an essential part of their bene ts respondents as more qualitative, con- portfolio in hiring and retaining top talent,” adds Krystie Dascoli, textualized statements about a doctor’s director of voluntary bene ts at Paci c Resources, which consults clinical expertise,” according to Nate Freese, senior director of data strategy on student loan reimbursement products. at Grand Rounds, a healthcare service With 57% of the millennials surveyed citing loan debt as a major provider for employees in need of local stressor a ecting their daily productivity, Dascoli believes the re- and remote specialty care.
The data is based on a study of 1,100 members covered by Grand Rounds, which is headquartered in San Fran- PREDICTIVE HIRING cisco. LEVELFUNDED PLANS While surprising, Freese says that result TRICKLING DOWN MARKET IF A COMPANY HIRES THE WRONG PERSON it can be a costly mistake. A recent hiring soft- depends on the information and mes- ware update seeks to elevate the science of this process. saging that’s provided to employees. A brighter light is being e cost of a bad hire can be a steep price to pay, especially for a brokerage that Just 14% of respondents based their cast on level-funded brings in a producer who doesn’t sell. In 2017, employers lost an average of $14,900 by choice on clinical expertise if they saw group health plans as making the wrong choice, according to a Harris Poll of 2,257 hiring managers and HR traditional physician pro les, whereas bene ts decision-mak- professionals for CareerBuilder. Ten-percent of the respondents said they lacked ad- it was 69% if they saw contextualized ers tackle open-enroll- equate tools to nd the right candidate. pro les. Contextualized pro les offered ment season. Several Mike Zani, CEO of e Predictive Index, says Corporate America is “absolutely more information in complete sentences industry observers say terrible at hiring.” As many as 80% of external hires are deemed not the right t for an compared to traditional pro les. These the trend is more pro- pro les also compared data against nounced given that the organization, he adds. other doctors and specialists, such as Affordable Care Act appointment wait times, expertise and remains largely intact From art to science patient satisfaction. — for now. Referencing the need for a paradigm shift from inexact art to solid science, Zani recommends machine-based suggestions to assess new hires, given that the top two Freese is encouraged by these ndings, There has been an predictors of workplace performance are cognitive capability and behavioral t for a which were recently presented at the Na- ebb and ow to these role. He says HR departments need to use “scienti cally validated, commercially avail- tional Healthcare Ratings Summit. “Don’t self-insured underwrit- able data that is incredibly scalable.” sell employees short in terms of their ten plans over the PI has added 60 certi ed partners in the past two and a half years who consult ability to appreciate quality and willing- past 18 months, says ness to sacri ce convenience,” he says. predominately in the small and midsize business market. “ ere is absolutely enough Michael Levin, CEO and co-founder of the economic revenue sharing that they can build very pro table practice areas around Offering more subjective interpretation healthcare data ser- this piece of business,” Zani says. of hard quality metrics would be helpful, vices rm Vericred. But One of those partners is John Hopkins, who runs a growth coaching platform called Freese explains, as long as employ- with a xed monthly Inspirit Growth. Recruiting and retaining top talent takes on even greater importance ers and their advisers are careful not to rate for more predict- among his clientele of closely held companies original owners don’t have the luxury “overstep what can be reasonably in- ability, he says they of making hiring errors. “If they lose a person, it really hurts,” he says. ferred based on available data.” can drive 25% to 35% IMAGE: ADOBESTOCK IMAGE:
10 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 11
010_EBA0318 10 2/6/2018 2:59:28 PM QUALITY Student debt relief TRUMPS a top bene t Many millennials surveyed would scrap CONVENIENCE healthcare, retirement for loan help. FOR WORKERS STUDENT LOAN REPAYMENT PROGRAMS are climbing the pantheon Faced with the of employee bene ts, suggests a recent survey of full-time workers choice between go- with student loan debt. Poll sh found that 23% would gladly give ing to a conveniently up healthcare bene ts for a student loan repayment bene t. In ad- located doctor’s dition, 46% would relinquish paid time o and 33% would do the of ce or a more same for retirement bene ts. Also, 53% said they’d consider a salary quali ed physician, cut in exchange for a student loan repayment bene t. turn on investment associated with o ering a student loan repay- group health plan members are four David, Chen, founder of Millennial Personal Finance, which ment program “is essential to driving the company’s bottom line.” times more likely to conducted the study, believes student loan repayment bene ts can Of 1,000 college graduates polled by SoFi, an online personal embrace the better-perceived medical help employers recruit young talent and appear more marketable nance company, 90% were more willing to accept a job o er at a professional. to this workforce segment. “Students are leaving school with ham- new company if their employer o ered a student loan contribution pering debt, and monthly student loan payments, not healthcare, bene t. In the Poll sh survey, 84% gave the same response. “With “Traditional metrics like patient ratings, rank among their chief concerns,” he says. student loan debt now reaching upward of $1.3 trillion in the U.S., prescribing rates and volume of patients “ e message to employers is clear: student loan repayment there’s never been a more important way to help employees reach seen were not nearly as compelling to programs are quickly becoming an essential part of their bene ts their nancial goals faster,” says Samir Qureshi, VP of business de- respondents as more qualitative, con- portfolio in hiring and retaining top talent,” adds Krystie Dascoli, velopment at SoFi. textualized statements about a doctor’s director of voluntary bene ts at Paci c Resources, which consults Indeed, the U.S. Department of Education estimates as many clinical expertise,” according to Nate Freese, senior director of data strategy on student loan reimbursement products. as 42.3 million Americans owe $1.33 trillion in federal student loans, at Grand Rounds, a healthcare service With 57% of the millennials surveyed citing loan debt as a major while the Federal Reserve notes millennials pay on average $351 a provider for employees in need of local stressor a ecting their daily productivity, Dascoli believes the re- month toward that debt and their median monthly payment is $203. and remote specialty care.
The data is based on a study of 1,100 members covered by Grand Rounds, which is headquartered in San Fran- cisco. LEVELFUNDED PLANS Mobile communication While surprising, Freese says that result TRICKLING DOWN MARKET Digital access depends on the information and mes- saging that’s provided to employees. A brighter light is being savings relative to fully- according to Levin. Employees at firms with mobile and instant messaging capabilities happy with company communication Just 14% of respondents based their cast on level-funded insured ACA plans that And with low attach- efforts choice on clinical expertise if they saw group health plans as must comply with the ment, stop-loss cover- traditional physician pro les, whereas bene ts decision-mak- medical loss ratio for a age in most states, More likely to recommend it was 69% if they saw contextualized ers tackle open-enroll- certain segment of the he explains that the pro les. Contextualized pro les offered ment season. Several market. plans have “very little 75% more information in complete sentences industry observers say downside risk from compared to traditional pro les. These the trend is more pro- Level funding typically the group’s perspec- Highly satis ed with jobs pro les also compared data against nounced given that the leverages an aggre- tive.” Two exceptions 71% other doctors and specialists, such as Affordable Care Act gate and/or speci c are California and New appointment wait times, expertise and remains largely intact stop-loss product to York whose constraints patient satisfaction. — for now. cap exposure to cata- on the stop-loss at- Rated HR comms highly strophic claims. These tachment point “es- 69% Freese is encouraged by these ndings, There has been an plans are offered by sentially preclude level- which were recently presented at the Na- ebb and ow to these an independent third- funded plans from 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% tional Healthcare Ratings Summit. “Don’t self-insured underwrit- party administrator or being offered” there, sell employees short in terms of their ten plans over the health insurance carrier he adds. Source: GuideSpark ability to appreciate quality and willing- past 18 months, says through an adminis- trative-services-only The arrangement is ness to sacri ce convenience,” he says. Michael Levin, CEO A recent IDG survey for GuideSpark of 270 HR and co-founder of the contract. trickling down market. decision-makers, 270 business managers and 1,050 Offering more subjective interpretation healthcare data ser- “We’ve heard from car- employees regarding workplace communication of hard quality metrics would be helpful, vices rm Vericred. But It’s best suited for riers that will go down provides brokers and advisers with a strategic companies with a to seven employees, opportunity to craft a holistic program design around Freese explains, as long as employ- with a xed monthly more targeted digital communications that bolster ers and their advisers are careful not to rate for more predict- very low risk pro le plus dependents, while talent management. One “alarming” finding in terms “overstep what can be reasonably in- ability, he says they comprised of young or others cut it off at 20 or of employee engagement and retention is that ferred based on available data.” can drive 25% to 35% healthy populations, 25,” he says. tenured employees are less satisfied than new hires
IMAGE: ADOBESTOCK IMAGE: after just the first year of employment. ADOBESTOCK IMAGE:
10 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 11
011_EBA0318 11 2/6/2018 2:59:34 PM NELSON L. WENDY GRISWOLD KENEIPP NextGen advisers are Those approaching the able to reduce the costs role from the perspective of employees’ healthcare of a consultant, whose job because they’ve taken on is to constantly educate the role of managing the themselves and offer client’s healthcare supply advice and counsel around chain — the quality and cost business strategy, are of medical treatments. seeing refreshingly new conversations.
Supply chain management is key Still selling products?
BROKERS WHO ACCEPT THE STATUS QUO AND client’s best interest because the adviser now shares the THE INSURANCE INDUSTRY HAS TWO VERY DISTINCT types continue to do the same thing year after year deliver, not employer’s goal: reducing the cost of healthcare to reduce of sales people. Back when health insurance was a ord- surprisingly, the same “less bad” renewal year after year. the company’s bene ts budget without reducing bene ts. able, selling group policies was the norm for the bene t Rejecting that status quo, NextGen advisers have a Of course, these advisers are able to guarantee results broker. As regulations and expenses have both risen to new model for delivering employee bene ts: Advisers en- only because they can deliver results. is past October, new heights, the ideas, advice and outcomes employers gage the client di erently, get compensated di erently Massachusetts adviser Mick Rodgers delivered $3.2 mil- need have also risen. ose approaching the role from and commit to delivering not just activity but also bot- lion in unused premium back to 43 of his clients. And it’s the perspective of a consultant, whose job is to constantly tom-line results for their employer client. not just Rodgers. John Sbrocco of Questige Consulting in educate themselves and o er advice and counsel around NextGen advisers are elevating their practice into the New Jersey, for example, recently delivered his client an business strategy, are seeing refreshingly new conversa- C-suite, in order to have a strategic bene ts conversation oversized check for almost $86,000 in unused premium. tions with employers. Which better describes you? with the CFO, CEO, president or owner of the company. ese premium refunds are possible because these While HR remains a valued partner in the implementa- advisers are putting groups into self-funded health plans Expertise tion and operation of the bene ts program, the adviser is with a per-employee-per-year cost 20%-25% less than the Broker: Your expertise lies in the products you sell, the car- developing the bene ts strategy with the executive who average health plan in their markets. riers you represent and the di erent ways you can redis- is responsible for the company’s pro ts. Rodgers and these other NextGen advisers are able to tribute the nancing of the health insurance plan. C-level executives are highly strategic and highly in- reduce the costs of employees’ healthcare because they’ve Consultant: Your expertise lies in understanding how centivized to increase pro ts by reducing healthcare costs. taken on the role of managing the client’s healthcare sup- a business operates and what role bene ts and HR play in C-suite executives view these NextGen advisers as business ply chain — the quality and cost of medical treatments the P&L, the operations, and the engagement and man- consultants, not insurance brokers, and are therefore much — through strategies and tools such as medical manage- agement of its employees. You recognize that changes to Griswold is an agency more likely than HR to follow their recommendations. ment, duciary PBMs, specialty med cost-mitigation pro- growth consultant the cost of the plans are not the only way to have a signi - grams, bundled-price surgery centers, surgical bidding, di- and author of DO cant nancial and operational impact on an organization. Moving the chair rect contracting and reference-based pricing/reimburse- or DIE: Reinventing Your Benefits Once they are working with a C-level executive, NextGen ment. ese and other strategies address the misaligned Agency for Post- Contacts advisers symbolically are moving their chair around the incentives in the healthcare system that drive up the cost Reform Success. Broker: Your network consists of the purchasers of health- table to sit next to the client. ey’re doing this by, rst, of medical treatment. His Agency Growth care plans. is may be the HR manager or it may be the Mastermind Network moving to fee compensation instead of commission on ese innovators are setting the standard for the in- helps agency owner/CFO, but you’re generally focused on one type of the medical insurance. NextGen advisers are then put- dustry with their “next practices” that are improving em- leaders reform- buyer and dismiss the other. proof their firm. ting part of their fee compensation at risk based on the ployees’ bene ts, engaging and educating employees on Reach him at (615) Consultant: Your network consists of many people. performance of the health plan. In other words, perfor- those bene ts, and reducing healthcare costs to ensure 656-5974, nelson@ You work with the decision makers and the in uencers mance-based fees align the adviser’s incentives with the that these bene ts are a ordable and sustainable. InsuranceBottomLine. alike, recognizing the roles that each plays in the decision- com, or through employer’s. Status quo brokers simply cannot compete with that 21stCenturyAgency. making and implementation processes, and you appre- e client implicitly trusts the adviser to act in the value proposition. EBA com. ciate what they bring to the conversations.
12 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 13
012_EBA0318_001 12 2/6/2018 11:32:34 AM WENDY KENEIPP Those approaching the role from the perspective of a consultant, whose job is to constantly educate themselves and offer advice and counsel around business strategy, are seeing refreshingly new conversations.
BODY HERE WITH THIS to say
Still selling products?
THE INSURANCE INDUSTRY HAS TWO VERY DISTINCT types Advice of sales people. Back when health insurance was a ord- Broker: You focus on the o -the-shelf products you can able, selling group policies was the norm for the bene t bring employers, the pricing o ered by the third parties, broker. As regulations and expenses have both risen to and how your o ering compares to their current plan. new heights, the ideas, advice and outcomes employers Your goal is to get a commitment from the buyer as soon need have also risen. ose approaching the role from as possible. the perspective of a consultant, whose job is to constantly Consultant: You focus on the needs the client has educate themselves and o er advice and counsel around and how you can potentially bring them solutions that business strategy, are seeing refreshingly new conversa- will improve their organization, both nancially and op- tions with employers. Which better describes you? erationally. You expand your conversations to be about both their healthcare plan needs, but also their employee Expertise and HR needs as well. You look for solutions to help the Broker: Your expertise lies in the products you sell, the car- employer address these needs. riers you represent and the di erent ways you can redis- tribute the nancing of the health insurance plan. Timing Consultant: Your expertise lies in understanding how Broker: You aim to collect renewal dates and target your a business operates and what role bene ts and HR play in selling e orts in the 90 days prior to renewal. Your con- the P&L, the operations, and the engagement and man- versation is about the current plan design, the proposed agement of its employees. You recognize that changes to plan design and the spreadsheet. You expect the pros- Griswold is an agency growth consultant the cost of the plans are not the only way to have a signi - pect to select you as the broker along with the new plan and author of DO cant nancial and operational impact on an organization. you’re proposing. or DIE: Reinventing Consultant: You also collect renewal dates, and then Your Benefits Agency for Post- Contacts you schedule your selling e orts o renewal. You explain Reform Success. Broker: Your network consists of the purchasers of health- the di erence between selecting a plan design and the car- His Agency Growth care plans. is may be the HR manager or it may be the riers who deliver the plans versus selecting a consultant to Mastermind Network Keneipp is a helps agency owner/CFO, but you’re generally focused on one type of help you navigate the waters of goals, plan designs, carri- partner and coach leaders reform- buyer and dismiss the other. ers and outcomes. You look for a right t to be selected as at Q4intelligence, proof their firm. driving agency Reach him at (615) Consultant: Your network consists of many people. the consultant and then you help them prepare for their transformation. 656-5974, nelson@ You work with the decision makers and the in uencers renewal strategy and manage the process. Learn more at InsuranceBottomLine. alike, recognizing the roles that each plays in the decision- If you recognize yourself in the broker descriptions, q4intel.com. Reach com, or through her at wendy@ 21stCenturyAgency. making and implementation processes, and you appre- I recommend making a personal commitment to up your q4intel.com, on com. ciate what they bring to the conversations. game. EBA LinkedIn, or Twitter @ WendyKeneipp.
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013_EBA0318 13 2/6/2018 11:26:44 AM JACK KWICIEN You have a very real scenario over the next five years (minimum) where the number of sellers will be increasing while the number of qualified buyers will be diminishing. That’s a formula for the devaluation of your life’s work.
Act now on proper business planning
ON THE TOPIC OF BUSINESS CONTINUATION, what plans Getting started have you made for the single largest asset that you own? As you move through the business planning process, ulti- What will be the disposition of your business if you are mately a plan will begin to come together, including the - no longer there? nancial resources and human capital that will be required Some of you are saying, “I’ll sell my business for a big to achieve your personal and business objectives. multiple.” at may be, but realistically valuations are at or Consider these topics for your table of contents: near their peak. Couple that trend with more baby boom- • Executive summary ers seeking retirement, and you have a very real scenario • Client value proposition over the next ve years (minimum) where the number of • Target markets sellers will be increasing while the number of quali ed • Products and services to be o ered buyers will be diminishing. at’s a formula for the deval- • Capabilities required uation of your life’s work. Is that what you want to count • Marketing strategy and positioning on when it comes to your nancial future? • Growth strategies On the other hand, some of you are saying, “My em- • Competitive advantages ployees will take over my business operations.” • Sales and distribution Well, that’s likely a ve- to 10-year transition period. • Client and customer interaction First, do you have the right management talent in place • Enabling technologies to run the business operations in your absence? After all, • Operational support your future income stream from any earn-out period will • Organization structure be contingent on your managers to successfully grow the • Human capital recruitment and development business and maintain pro tability. at assumes that your • Summary of key business relationships (carriers, key managers have the nancial wherewithal to pay you a vendors, service providers, etc.) substantial amount of cash at closing and make any earn- • Corporate structure out payments regardless of the market conditions. • Capital structure Do your key managers have the ability to pay you • Succession planning Kwicien is 25%-40% of the value of your business in cash? Not likely. • Financial goals and projections managing partner An employee stock option plan might be an option if Clearly, the document you will be creating can be at Baltimore-based consulting and you have a 10-year outlook (minimum), since it will take used with your own management team to run your busi- advisory services that long for employees to accumulate enough cash in ness operations. It can be referenced when important stra- firm Daymark the plan to substantially buy out your equity interest. Or tegic decisions need to be made. You will want to period- Advisors. Reach him at jkwicien@ have you already waited too long with no viable succes- ically update it so that it remains current and re ective of daymarkadvisors. sion plan for the future? how you are conducting business at a point in time. EBA com.
14 Employee Benefit Adviser | March 2018
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015_EBA0318 15 2/5/2018 4:38:16 PM 2018 RISING STARS IN ADVISING Twenty standout advisers ages 35 and younger are taking charge of employee benefits, determined to reduce costs and improve outcomes.
This year’s group of standout advisers is tackling the employee bene t supply chain with a determination to bend the healthcare cost curve and improve client experience. They’re creating employer coalitions. They’re negotiating with stop-loss carriers. They’re streamlining technology. They’re owning employee engagement. And that extends to their internal employees as well. The 2018 Rising Stars in Advising — chosen by the EBA editorial team after a month-long online nomination process — are compassionate leaders who practice what they preach, allowing exible work hours and seamlessly integrating cultures as brokerages merge. Listed in alphabetical order, these 20 leaders are active community and industry mentors who are taking the eld of advising to new heights.
BY ELIZABETH GALENTINE AND RANDY BARRETT
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016_EBA0318 16 2/6/2018 4:51:31 PM 2018 RISING STARS 1. John Sbrocco, 34 Healthcare strategist, IN ADVISING Questige Twenty standout advisers ages 35 and younger are taking charge of employee benefits, determined to reduce costs and improve outcomes.
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017_EBA0318 17 2/6/2018 4:51:40 PM RISING STARS IN ADVISING
ohn Sbrocco likes winning. ble, Sbrocco says. “ ey are specialists and e company has an in-house HIPAA at was his goal as a profes- they’re incentivized in the right manner. representative that works with employ- sional poker player earlier in ey do everything they can not to do sur- ees to nd the best care in-network. “We life and he’s still at it as CEO of gery.” don’t mandate anything,” Serillo says. “If Questige Consulting. While that may sound refreshing, you stick with the program, it becomes very But now running over the Sbrocco contends that a third of medical cost e ective. We suggest who we think you tableJ means besting insurance companies procedures done in American are unnec- should use.” and pharmacy bene t managers and lower- essary. at gure dovetails with a 2012 In- Luckily, the company hasn’t had any ing healthcare costs for his customers, most stitute of Medicine study that estimated the seriously ill workers so far. But when that of which are partially or fully self-insured. wasted e orts cost the healthcare system happens, Serillo is willing to think cre- “By focusing on a strategy that drives $750 billion. atively. “I like the medical tourism idea. I’ve immediate impact to the supply chain, it al- To further save money, Questige pro- been overseas and seen good doctors.” lows us to produce negative trend for cli- vides high-dollar medications for 25 to 30 Garden State Engineering, Surveying & ents,” Sbrocco says. “Our top goal is for them cents on the dollar. Some of that comes Planning is already seeing savings of 20% at to pay less now than they did ve years ago.” e Questige sell is a bit counterintui- By focusing on a strategy that drives immediate tive: Save money by enhancing bene ts to impact to the supply chain, it allows us to produce workers. “No employer wants to believe this when I tell them,” Sbrocco says. at boost negative trend for clients. comes in the form of improved health out- comes, he adds. from foreign sourcing, but Sbrocco de- the one-year mark working with Questige. And it means he has to do his home- clined to supply further details. For fully Gary Bender, executive vice president work. For medical procedures Sbrocco’s self-funded clients, there is no copay for any and chief nancial ocer, was prepared to company researches the highest rated doc- medications. bite the bullet and renew with their old bro- . tors based on readmission rates, board cer- Questige currently serves 75 clients. ker when Sbrocco came in and stopped him ti cations and cost. e best ones are in- e company delivers average savings of short. cluded in the covered network and often 25% over standard insurance. For some ADAM practice in outpatient settings that are much level-funded, self-insured clients, that can LACKING CREATIVITY BERKOWITZ, cheaper than hospitals. mean receiving a sizeable refund check at “John said: ‘Your guy is not very creative.’” Founder & President, the end of the year for unused premiums e other agent was presenting a “fully paid out by the company. Jersey Strand Simpara AN OFFER YOU CAN REFUSE funded A ordable Care Act plan — Obam- & Cable in Phillipsburg, N.J., received Employees have a choice. ey can make acare bronze. Our premiums were pretty With a decade of experience, Adam Berkow- $85,935.00. a phone call and get guidance on choosing high,” says Bender. itz launched his own rm in the fall of 2016. “I know the quality of insurance we the best physician in the network and re- e 65-worker company moved to a Within a year, he brought in 28 new clients have has gone up, and we’ve got cost con- ceive care for free with no deductible or co- partially self-funded plan with Sbrocco, who with the philosophy of turning the typical tainment at the same time,” says JS&C pay. Or they can go with their own provider got the whole thing up and running in six brokerage model upside down through a owner Al Pratt. and pay the usual freight. weeks. Employee deductibles declined from focus on exciting and engaging employers New Jersey Door Works in Hillside, “Bring your checkbook,” says Sbrocco. $3,000 to $1,500 and family deductibles with better bene ts. As a testament to this N.J., has worked with Sbrocco for three Ninety- ve percent of his clients’ employees dropped from $5,000 to $3,000. “ ey loved commitment, he has been accepted as a years and is partially self-funded. About half choose the network. it,” says Bender. Charter Member of the Health Rosetta Insti- of the company’s 100 employees are part of Another key to the model is lowering Sbrocco is a signatory to an unusual tute, the mission of which is to drive down the health plan. “It’s been good so far, but the cost of health claims. ose bills tend “declaration of independence” signed by 30 healthcare costs by aligning employer and you need to be committed to it,” says co- to fall into four parts: 30% hospital charges, independent bene ts consultants last year adviser incentives, value-based care, trans- owner Glenn Serillo. 20% ambulatory surgery fees, 27% prescrip- in Philadelphia. parency and more. He is saving businesses e company had lived with standard tion costs and 23% physician invoices, ac- e group had grown frustrated with 20%-40% on health insurance. third-party insurance increases until it sim- cording to Milliman. the old model of selling health insurance ply became too expensive. After discuss- e strategy is to concentrate on the and charging a standard 5%-7% increase ing options with Questige, Serillo and his outliers, says Sbrocco: “Seven-percent of each year. Collectively, they feel that model brother, also a co-owner, decided to jump members generate 80% of claims.” ose is no longer sustainable for insurance buy- in. tend to be what insurers call ‘super utilizers’ ers. More importantly — they say it is spe- “ ere wasn’t much of a downside,” who su er from complex health problems. ci cally designed to never save the client a Serillo says. “ e worst that could happen is “If we can focus on those members, that penny. we get booted back into the general insur- creates immediate impact,” he says. Instead, the signatories have agreed to ance pool.” For these patients, Madison, N.J.-based challenge the status quo by working (often New Jersey Door Works has been able Questige contracts with national centers of together) to attack the cost drivers of health- to avoid that troubling fate while holding in- excellence, such as Edison Health in West- care. “Our interests are aligned year in and surance premiums at and improving co- lake, Ohio, for a second opinion. ese doc- year out [with the client],” says Sbrocco, who pays and deductibles. Serillo admits, how- tors tend to be more conservative and often bases his fee on delivering lower costs. ever, “it takes management time.” choose less invasive therapies, if possi- “ e less they pay, the more I make.”
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018_EBA0318 18 2/6/2018 4:51:41 PM e company has an in-house HIPAA representative that works with employ- ees to nd the best care in-network. “We Begin with a passion don’t mandate anything,” Serillo says. “If you stick with the program, it becomes very for people. A belief that cost e ective. We suggest who we think you benefits can be be er. should use.” Luckily, the company hasn’t had any — ADAM BERKOWITZ seriously ill workers so far. But when that happens, Serillo is willing to think cre- atively. “I like the medical tourism idea. I’ve been overseas and seen good doctors.” Garden State Engineering, Surveying & Planning is already seeing savings of 20% at By focusing on a strategy that drives immediate impact to the supply chain, it allows us to produce negative trend for clients. the one-year mark working with Questige. Gary Bender, executive vice president and chief nancial o cer, was prepared to bite the bullet and renew with their old bro- . ker when Sbrocco came in and stopped him . short. ADAM NIKO LACKING CREATIVITY BERKOWITZ, CAPARISOS, “John said: ‘Your guy is not very creative.’” Founder & President, Health and Welfare e other agent was presenting a “fully Simpara funded A ordable Care Act plan — Obam- Consultant, Prosperity acare bronze. Our premiums were pretty With a decade of experience, Adam Berkow- Benefits, LLC high,” says Bender. itz launched his own rm in the fall of 2016. e 65-worker company moved to a Within a year, he brought in 28 new clients As the founder of Prosperity Bene ts, one partially self-funded plan with Sbrocco, who with the philosophy of turning the typical of Niko Caparisos’ driving motivations is to got the whole thing up and running in six brokerage model upside down through a “deliver solutions, not spreadsheets.” For weeks. Employee deductibles declined from focus on exciting and engaging employers example, he brought more than 50% sav- $3,000 to $1,500 and family deductibles with better bene ts. As a testament to this ings, worth $95,000, to a new client in their dropped from $5,000 to $3,000. “ ey loved commitment, he has been accepted as a . rst year working with him. He works with it,” says Bender. Charter Member of the Health Rosetta Insti- clients to de ne and manage risks to control Sbrocco is a signatory to an unusual tute, the mission of which is to drive down TOM BREW, JR., costs with a forward-looking perspective, “declaration of independence” signed by 30 healthcare costs by aligning employer and bringing Fortune 500-level bene t pro- independent bene ts consultants last year adviser incentives, value-based care, trans- Senior Wellness grams to small- to mid-sized organizations. in Philadelphia. parency and more. He is saving businesses Consultant, e group had grown frustrated with 20%-40% on health insurance. the old model of selling health insurance ERChealth and Oswald and charging a standard 5%-7% increase Companies each year. Collectively, they feel that model Tom Brew is a leader in health risk man- is no longer sustainable for insurance buy- agement, overseeing the entire book of ers. More importantly — they say it is spe- business for the wellness coaching platform ci cally designed to never save the client a of ERChealth, a division of Oswald Com- penny. panies. Under his leadership, the program Instead, the signatories have agreed to has more than 87% of enrollees seeing a challenge the status quo by working (often wellness coach and brings in more than $3 together) to attack the cost drivers of health- million in annual revenue. Brew is also the care. “Our interests are aligned year in and founder and chair of OswaldCLIMBS, an year out [with the client],” says Sbrocco, who internal association at Oswald that he es- bases his fee on delivering lower costs. tablished to attract, recruit and retain young “ e less they pay, the more I make.” professionals in the industry.
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019_EBA0318 19 2/6/2018 4:52:15 PM RISING STARS IN ADVISING
Rising healthcare costs have led us to seek out creative and innovative . solutions. . . MARK FOX, — CORY FRIEDMAN CORY FRIEDMAN, BOB GEARHART, JR., Vice President, Collateral Vice President, Benefits Benefits Group and Consulting, Alera Group | Partner, DCW Group Collateral Educator GCG Financial, LLC A third generation partner at his family’s rm, Bob Gearhart, Jr., is the driving force Services A second-time honoree, Cory Fried- behind DCW Group’s new business. Loved Backed by leadership at the National As- man continues to build on his success by by clients, he has transformed his practice sociation of Health Underwriters — includ- developing a self-funded employer health into a cutting-edge creative operation. ing NAHU’s president — Mark Fox is known insurance captive that is focused on the Clients applaud his proactive approach to as a leader and in uencer. He spearheaded veterinary industry. By identifying cost and digital bene ts management, having moved research to develop a NAHU playbook for its risk-management strategies such as care co- into o ering full bene ts administration. national chapters and helped build intern- ordination and cost-based reimbursements, So con dent in his ability to save clients’ ship programs for agency growth. He built he is changing the way plan members money, he is not afraid to put part of his his book of business at Bene ts Negotiator purchase healthcare services. He is growing compensation on the line as a guarantee. with a transparent commission structure his team and mentoring young advisers just Recently, Gearhart helped to bring in 10 tied to a reduction in PEPM payments for entering the business in the process. new clients in a matter of months — all clients. Now, in a year and a half at Collat- while refusing to quote insurance business. eral, Fox has helped the company transition from paper to digital, create sales leads from three times as many channels and helped to build a marketing plan, to name just a few advancements.
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020_EBA0318 20 2/6/2018 4:52:28 PM I take my clients away from a situation where they feel like they have no control. — SUZANNAH GILL
. . . CORY FRIEDMAN, BOB GEARHART, JR., MATT GILROY, Vice President, Benefits Employee Benefits Consulting, Alera Group | Partner, DCW Group Consultant, HUB GCG Financial, LLC A third generation partner at his family’s rm, Bob Gearhart, Jr., is the driving force International Northwest A second-time honoree, Cory Fried- behind DCW Group’s new business. Loved Along with his partner Melissa Koontz, Matt man continues to build on his success by by clients, he has transformed his practice Gilroy serves two niche audiences, public developing a self-funded employer health into a cutting-edge creative operation. school districts and cannabis companies. insurance captive that is focused on the Clients applaud his proactive approach to He takes the lead with cannabis clients, veterinary industry. By identifying cost and digital bene ts management, having moved using his background in real estate and sales risk-management strategies such as care co- into o ering full bene ts administration. to develop overall client strategy. e pair ordination and cost-based reimbursements, So con dent in his ability to save clients’ — who split their sales, book of business he is changing the way plan members money, he is not afraid to put part of his and responsibilities evenly — have brought purchase healthcare services. He is growing compensation on the line as a guarantee. nearly $900,000 into their book in just the his team and mentoring young advisers just Recently, Gearhart helped to bring in 10 . past two years. ey are heavily involved in entering the business in the process. new clients in a matter of months — all the community through volunteer organiza- while refusing to quote insurance business. SUZANNAH GILL, tions, industry associations and actively lob- Benefits Strategy bying on behalf of their specialty practices. Consultant, EPIC Insurance Brokers & Consultants Although the youngest producer at the time she joined EPIC two years ago, Suzannah Gill quickly became known as a company and industry thought leader. She uses her background as an ERISA attorney to deliver unique expertise as a consultant. She is driving down employers’ costs and guar- anteeing her incentives are aligned with theirs in the process by o ering to work on a fee-basis and tie her compensation to performance targets.
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021_EBA0318 21 2/6/2018 4:52:31 PM RISING STARS IN ADVISING
What’s fun about this job is that you must be agile. — TAYLOR LINDSEY
. . . ERIK HANSEN, TAYLOR LINDSEY, President, Vita Companies RACHEL MINER, Partner, Employee Benefit Erik Hansen contributes to the success of Employee Benefit Vita Companies by owning user experience Consultants, Inc. Strategist, Employee at all levels of the organization. Regardless A fourth generation partner at Employee of size, all clients have access to compliant Bene ts Consultants, Inc., Taylor Lindsey Benefit Advisors of the paperless bene ts work ows and cutting- is taking over a large amount of business in Carolinas edge tools that deliver strategic modeling his market by focusing on client transpar- Rachel Miner is a quick learner who abilities. His e orts contribute to Vita’s Net ency and innovative self-funding strategies. became an adviser in the summer of 2016 Promoter Score of 84 and were a factor in . It is his goal to help employers and plan after working in bene ts technology sales. his promotion to President in November participants to be smarter purchasers and e incoming president of the Charlotte 2017. Hansen is the technology chair for consumers of healthcare by designing e ec- Association of Health Underwriters, she is California United Bene t Advisors and MELISSA tive and e cient bene t programs. committed to providing expert guidance to Chairman — Young Professionals with the KOONTZ, clients through cutting-edge plan design Northern California Human Resources As- Senior Employee Benefits and technology. In less than 18 months in sociation. the business she built up a book of more Consultant, HUB than $250,000 while maintaining a com- International Northwest mitment to proactive, transparency-driven service and consistently meeting quality Along with her partner Matt Gilroy, Melissa metrics. Koontz serves two niche audiences, public school districts and cannabis companies. She takes the lead with public school clients, using her background in HR and accounting to focus on compliance and - nancial analytics. e pair — who split their sales, book of business and responsibilities evenly — have brought nearly $900,000 into their book in just the past two years. ey are heavily involved in the community through volunteer organizations, industry associations and actively lobbying on behalf of their specialty practices.
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022_EBA0318 22 2/8/18 11:51 AM I’ve turned the traditional sales-centric approach to benefits on its head. — BRADEN MONACO
. . . TAYLOR LINDSEY, RACHEL MINER, COURTNEY Partner, Employee Benefit Employee Benefit NELSON, Consultants, Inc. Strategist, Employee Vice President, Employee A fourth generation partner at Employee Benefits Leader, Brown & Bene ts Consultants, Inc., Taylor Lindsey Benefit Advisors of the is taking over a large amount of business in Carolinas Brown of Tennessee his market by focusing on client transpar- Rachel Miner is a quick learner who Quickly rising through the ranks at Brown ency and innovative self-funding strategies. became an adviser in the summer of 2016 & Brown’s Florida headquarters, Courtney It is his goal to help employers and plan after working in bene ts technology sales. . Nelson was promoted to run the company’s participants to be smarter purchasers and e incoming president of the Charlotte Tennessee operation, where she’s since led consumers of healthcare by designing e ec- Association of Health Underwriters, she is BRADEN a once declining division to achieve steady, tive and e cient bene t programs. committed to providing expert guidance to solid growth. She is a thought leader who clients through cutting-edge plan design MONACO, participates in MetLife’s Broker Advisory and technology. In less than 18 months in Co-Founder and Managing Council and is a board member of the the business she built up a book of more Partner, Blue Horizon Middle Tennessee Association of Health than $250,000 while maintaining a com- Underwriters. Colleagues describe her as mitment to proactive, transparency-driven Benefits motivated, persistent, caring, devoted and service and consistently meeting quality Over the last decade, Braden Monaco determined to serve her teammates as well metrics. has turned his rm from the traditional as clients. sales-centric approach to bene ts toward a new business model, driven by working in partnership with clients. Using a concierge service platform, he adapts to individual client needs by combining proactive man- agement and communication with state-of- the-art technology tools. It is his goal to go beyond the role of consultant and become an integral part of each client’s business operations.
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023_EBA0318 23 2/6/2018 4:52:51 PM RISING STARS IN ADVISING
We never do anything in a cookie-cuer format. We are more consultative. — JOSH SAILAR
. WALTER WINTER, . . Vice President and Technology Practice BETHANY JOSH SAILAR, Leader, Parker, Smith & RADLOFF, Investment Advisor, Feek Assistant Vice President, Miracle Mile Advisors Walter Winter specializes in working with HUB International Midwest Josh Sailar personally manages more companies that employ 100-1,000 em- than $51 million in high-net-worth assets, ployees, managing his rm’s technology Bethany Radlo has a unique ability to meet developing corporate and employee bene t practice to create innovative solutions to client objectives while maximizing their plans for the majority of his business owner drive down the cost of employee bene ts return on healthcare spend. rough strong clients. He is dedicated to the nancial without diminishing their value. He helps leadership and willingness to go above empowerment of employees and has single- clients to design a sustainable multiyear and beyond for clients, she is continuing handedly driven his rm’s retirement and strategy through alternative funding, best- to expand her book of business at a rapid bene ts practice far beyond expectations, in-class vendors and targeted incentive pace, even as she works toward her CEBS . becoming a go-to nancial resource for plan programs that encourage plan members designation. Clients and colleagues alike participants in the process. He is a member to be informed healthcare consumers. He provide “amazing feedback” on Radlo ’s DEREK RINE, of mentoring program Youth Business Al- had 100% client retention in 2017, while performance, emphasizing her technical Vice President, David Rine liance as well as Big Brothers Big Sisters of acquiring several new accounts. Under his competence, ability to make the complex Greater Los Angeles. leadership, the technology practice has simple and desire to share best practices. Insurance grown by more than 25% each year for the Determined to change the bene ts conver- last three years. sation, Derek Rine isn’t afraid to speak with a prospective client’s CFO to explain how his approach to the business will bene t the company’s bottom line. After explaining his philosophy, he’s been known to have a bro- ker of record letter signed on the spot. Be- yond meeting clients’ insurance needs, he works with them to implement long-term strategies that will eliminate compound rate increases. rough programs such as prescription advocacy and elite concierge services he and his team are working to pro- vide clients with high quality at a low cost.
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024_EBA0318 24 2/6/2018 4:53:19 PM di erent company cultures after major acquisitions. Nominated by multiple em- . ployees, his appreciation for them shines through in the family-friendly environ- TYLER SPEARS, ment he has created, including ex time and a scholarship for employees’ children. Managing Partner, BKCW Colleagues refer to him as “the ultimate Insurance, Risk Manage- visionary” who has streamlined advanced ment & Benefits technology platforms and drawn people into the eld through his passion for bene t In the eight years Tyler Spears has been advising. He is an active member of the with BKCW, he’s led the charge in tripling Independent Insurance Agents of Texas, the size of the agency and integrating three where he received Young Agent of the Year.
Crafted for confidence. . WALTER WINTER, . Vice President and Technology Practice JOSH SAILAR, Leader, Parker, Smith & Investment Advisor, Feek Miracle Mile Advisors Walter Winter specializes in working with Josh Sailar personally manages more companies that employ 100-1,000 em- than $51 million in high-net-worth assets, ployees, managing his rm’s technology developing corporate and employee bene t practice to create innovative solutions to plans for the majority of his business owner drive down the cost of employee bene ts clients. He is dedicated to the nancial without diminishing their value. He helps empowerment of employees and has single- clients to design a sustainable multiyear handedly driven his rm’s retirement and strategy through alternative funding, best- bene ts practice far beyond expectations, in-class vendors and targeted incentive becoming a go-to nancial resource for plan programs that encourage plan members participants in the process. He is a member to be informed healthcare consumers. He of mentoring program Youth Business Al- had 100% client retention in 2017, while At the heart of a smart business decision is the integrity of the liance as well as Big Brothers Big Sisters of acquiring several new accounts. Under his transaction. With HM Insurance Group, you can count on the consistent Greater Los Angeles. leadership, the technology practice has delivery of coverage that is designed to protect nancial well-being. You grown by more than 25% each year for the can rely on our responsiveness so you can focus on your business goals. last three years. And you can be con dent in the quality of protection that has expert risk evaluation, nancial stability and market knowledge at its core.
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SL 2018 National-Seal_EBA_4.5x7.375_Ad.indd 1 1/29/18 2:16 PM
025_EBA0318 25 2/6/2018 5:19:20 PM EBA: Are you referring to basic stocks/ bonds/cash allocation, or sub-alloca- tions? Gilliam: e asset allocation nu- ances now that are part of conversations are within stocks and within bonds — what are the actual components being used, how do those change over time, are they a static allocation, or are they How to best truly matching risk tolerance, not just at the stock/bond level, but within stocks.
understand TDFs EBA: So what are sponsors asking for, or what are you doing in that regard? BY RICHARD STOLZ Gilliam: Things like increasing large cap exposure for people nearing anks to the overwhelming popularity of target-date funds as a retirement to help limit their overall vol- 401(k) quali ed default investment alternative, competition among atility and really protect the accumula- retirement plan asset managers for TDF dollars has been sti . But as tion they worked so hard for during their the Department of Labor emphasized in guidance issued way back working years. ese asset allocation dif- in 2013, plan sponsors need to ask a lot of questions to be sure they ferences and what may seem like small understand how a TDF family is managed to know whether it’s ap- nuances during the selection process can propriate for their participants across the entire age spectrum. To really lead to signi cantly di erent out- gain an update on TDFs, Employee Bene t Adviser recently spoke to comes over time. Jake Gilliam, CFA, a senior multi-asset portfolio strategist for Charles Schwab. Highlights of that conversation follow. EBA: Can you expand on what kind of nuances you are referring to? EBA: How carefully are plan sponsors looking “under the hood” Gilliam: It’s actually more than nu- today to understand the inner-workings of target-date funds? Jake Gilliam: ere has been an increase in plan sponsors’ ef- forts to better understanding their target fund. ey know it’s some- TOP PRIORITIES FOR 401(K) PLAN SPONSORS thing that requires ongoing review and reevaluation to make sure Between an ever-changing regulatory environment and ongoing cost concerns, that their original choice is appropriate. retirement plan sponsors have a lot on their plate. Their biggest priorities:
EBA: How are they evaluating performance? Gilliam: Many sponsors are looking carefully at the actual driv- ers of performance, as opposed to seeing the numbers by them- selves. So that’s led to conversations about the glide path, the ac- tual components used to implement the glide path, ranging from the underlying strategies of the funds, the types of risk exposures, how asset allocation changes over time and more.
HEALTHY RETIREMENT FINANCIAL WELLNESS
RELATED ARTICLES Estée Lauder launches student loan contribution benefit Baby boomers increasingly interested in tuition benefits Fidelity, Vanguard fee arrangement causes stir in the RETIREMENT INCOME TACKLING LOW INTEREST IN PREP FINANCIAL STABILITY HELP 401(k) industry Providing education and access Global Benefits Aitudes Sur- Peoples Bank bumps up 401(k) match to lifetime income products vey finds room for improvement Source: OneAmerica, 2018 For these stories, go to employeebenefitadviser.com P. P.
26 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 27
026_EBA0318 26 2/6/2018 4:24:54 PM EBA: Are you referring to basic stocks/ ances, and these assets have very wide HEALTHY RETIREMENT bonds/cash allocation, or sub-alloca- variances in performance. Variances in tions? the U.S./international stock allocation Gilliam: e asset allocation nu- ratios can lead to double-digit perfor- ances now that are part of conversations mance di erences in any given year. at are within stocks and within bonds — can directly in uence the ultimate result what are the actual components being for the portfolio, but its impact on vola- used, how do those change over time, tility is also important from a participant are they a static allocation, or are they perspective. It’s important for the asset How to best truly matching risk tolerance, not just at mix to be appropriately aligned with the the stock/bond level, but within stocks. risk tolerance of an investor, to support good behaviors by participants. understand TDFs EBA: So what are sponsors asking for, or what are you doing in that regard? EBA: Obviously there’s a lot for spon- Retirement Gilliam: Things like increasing sors to think about. How much should large cap exposure for people nearing they try to dictate all the parameters anks to the overwhelming popularity of target-date funds as a retirement to help limit their overall vol- of performance when shopping for a income prep 401(k) quali ed default investment alternative, competition among atility and really protect the accumula- TDF family? BY PAULA AVEN GLADYCH retirement plan asset managers for TDF dollars has been sti . But as tion they worked so hard for during their Gilliam: ere is a practical limit. the Department of Labor emphasized in guidance issued way back working years. ese asset allocation dif- Most plan sponsors are using a target RETIREMENT PLAN SPONSORS need to focus in 2013, plan sponsors need to ask a lot of questions to be sure they ferences and what may seem like small fund that was designed by a target fund on three things, says David Ray, senior manag- understand how a TDF family is managed to know whether it’s ap- nuances during the selection process can family. One of the parameters that spon- ing director and head of institutional retirement propriate for their participants across the entire age spectrum. To really lead to signi cantly di erent out- sors also need to keep in mind is cost. sales at TIAA: how to help employees reframe their gain an update on TDFs, Employee Bene t Adviser recently spoke to comes over time. But generally they are by and large using thinking on retirement savings and guaranteed Jake Gilliam, CFA, a senior multi-asset portfolio strategist for Charles a target fund provider’s existing target- income streams; how to evaluate employee en- Schwab. Highlights of that conversation follow. EBA: Can you expand on what kind of date fund and they’re selecting the one gagement strategies and ways to manage their nuances you are referring to? that best matches their participant de- plan’s success; and how to encourage younger EBA: How carefully are plan sponsors looking “under the hood” Gilliam: It’s actually more than nu- mographics. ■ workers to think about retirement now. today to understand the inner-workings of target-date funds? A big part of that discussion, and what has Jake Gilliam: ere has been an increase in plan sponsors’ ef- changed the retirement conversation the past few forts to better understanding their target fund. ey know it’s some- TOP PRIORITIES FOR 401(K) PLAN SPONSORS years, is helping employees move from the accu- thing that requires ongoing review and reevaluation to make sure Between an ever-changing regulatory environment and ongoing cost concerns, mulation phase of retirement savings to turning that their original choice is appropriate. retirement plan sponsors have a lot on their plate. Their biggest priorities: that savings into a retirement income. Employers can help by providing education EBA: How are they evaluating performance? and access to lifetime income products, Ray says. Gilliam: Many sponsors are looking carefully at the actual driv- “We’re seeing more interest in this from ers of performance, as opposed to seeing the numbers by them- Providing participation education 69% many di erent generations, particularly millen- selves. So that’s led to conversations about the glide path, the ac- nials, who are far less likely to rely on Social Se- tual components used to implement the glide path, ranging from curity to nance their retirement vs. GenXers and the underlying strategies of the funds, the types of risk exposures, baby boomers,” he says. how asset allocation changes over time and more. Improving participation rates 67% Many millennials have embraced annuities because they don’t know where they are going to get a lifetime income without doing it, he adds. More retirement plans need to put tools in Fiduciary responsibilities 57% place to help plan participants measure income replacement, he says. TIAA has a plan outcome RELATED ARTICLES assessment that measures the income replace- ment rate for employees. Once an employee takes Estée Lauder launches student loan contribution benefit the assessment, the plan sponsor can use those Baby boomers increasingly interested in tuition benefits Administrative tasks 45% results to better target communications based on Fidelity, Vanguard fee arrangement causes stir in the the person’s goals for their retirement. 401(k) industry “What is the problem we are trying to solve Peoples Bank bumps up 401(k) match Source: OneAmerica, 2018 for? We have to do some diagnosis before you do a prescription,” Ray says. ■
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26 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 27
027_EBA0318 27 2/6/2018 4:26:13 PM FINANCIAL WELLNESS CASE STUDY The Counter Culture Coffee education plan
BY PAULA AVEN GLADYCH
SINCE BRETT SMITH STARTED Coun- ter Culture Coee 22 years ago in Dur- ham, N.C., the business has grown to 110 employees in 14 dierent markets across the country. As the wholesale coee company has grown, it has oered numerous bene- fits to help attract and retain great em- ployees, including paying 90% of em- Tackling low interest in ployee medical benefits, oering a 401(k) matching contribution and pro- viding a membership to a health club. financial stability help The one benefit that went underuti- BY PAULA AVEN GLADYCH lized was the 401(k) plan. That con- cerned Smith, who felt the 100% match THE FINANCIAL STABILITY OF U.S. em- what di erent groups are searching for when on the employee’s first 3% contribution ployees slid backward for the rst time since it comes to financial stability. That could and 50% match from 3-5% employee the Great Recession, according to a survey of mean di erentiating between generations, contribution was free money all em- employees by Willis Towers Watson. like millennials vs. baby boomers, or seeing ployees should be taking advantage of. Only 35% of workers surveyed say they how di erent genders approach the topic. Smith decided to do something are satis ed with their nancial situation now, “To get engaged, you have to personalize about it. In 2016, he contacted an a sharp drop from 48% two years ago. messaging and programming around where old friend from graduate school who e 2017 Global Bene ts Attitudes Sur- people are in their life,” Antonelli says. “A mil- had started a financial wellness com- vey is a biennial survey that gauges how work- lennial may or may not be dealing with stu- pany called BrightDime, which aims ers around the world are feeling nancially. It dent loan debt and rising home costs. Some- to change employee financial behav- found that more than one-third of U.S. work- one mid-career is looking to build wealth and ior through budget help and coaching, ers believe their current nancial concerns send their kids to college. Financial wellness says the firm’s CEO, David Stedman. are negatively a ecting their lives, compared means something di erent to them.” BrightDime’s platform can create a with just 21% two years ago; and 59% worry ose who are further along in their ca- budget for users and show them where about their future nances. In 2015 that g- reers are balancing retirement planning with they are spending their money. It gets ure was just under half at 49%. eldercare. Plan sponsors need to take an ap- participants started on the pillars of fi- The finding has big implications for proach that is “very nuanced to where peo- nancial wellness and allows them to employers: Workers who struggle finan- ple are in their particular life stage or career. track their own goals. cially tend to have lower job performance We’ve learned those lessons on the physical One of BrightDime’s unique coaching and aren’t engaged in their work, says Vin- wellness side of the house. Not everyone en- features is a chat window in each user’s cent Antonelli, a senior consultant in Willis gages in a wellbeing program the same way platform; when a user has a financial Towers Watson’s New York City o ce. at’s and you need di erent interventions and mo- question, the BrightDime coach can ac- why more employers are coming up with so- dalities to reach the broadest segment of your cess the employee’s account informa- lutions for the problem, including working population,” he adds. tion to decide the best way to answer to tackle low participation rates in nancial ere are many similarities between their inquiry. Because the coaches have stability programs. how companies have approached employ- access to the user’s personal informa- To combat low levels of engagement and ees about healthcare and how they can now tion on the platform, they don’t have to participation of these programs, plan spon- approach them about nancial stability, but ask about their financial background or sors need to do a better job of nding out there are some things that still need work. ■ net worth. ■ IMAGE: ADOBESTOCK IMAGE:
28 Employee Benefit Adviser | March 2018
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d34532_EBA_Full_Page_AD.indd029_EBA0318 29 1 2/5/20188/18/17 4:11:06 4:40 PM PM Personalizing health plans In order to identify best in class wellbeing programs, Uneasy about acquisitions advisers are utilizing digital analytics. BY CORT OLSEN With mergers such as CVS and Aetna, business
owners fear the deals may impact health plans. any advisers are using dig- BY CORT OLSEN ital monitoring to evalu- ate the status of wellbeing within a given employer’s ecent acquisition announce- formed decisions.” their long-term planning for healthcare employee population. ments in the healthcare indus- Jim Winkler, global chief innovation strategies. MCraig Schmidt, senior wellness con- try, if approved, could not only ocer for Aon’s health & bene ts groups, A majority of employers, 85%, think sultant for EPIC, says one of the ways he change the way U.S. employers says when it comes to healthcare strate- there will be either signi cant or moderate is able to identify the companies that are design their long-term health gies, employers tend to plan far ahead, changes to the way employees access care o ering strong digital wellness plans is planR strategies, but could also alter the working around a three-to- ve year cycle in the future: through their ability to integrate such pro- structure of how employees access health- of when to adjust their health plans based • 14% expect signi cant change in how grams with claims data. He utilizes a push care, according to a recent Aon survey. on cost, vendor, program design and or where employees will access health- style noti cation to a mobile device to in- While the majority of employers are health improvement standpoints. care. form individual employees about speci c taking a wait-and-see approach to high- “What changes, if any, do employers • 71% expect moderate changes in how plans that can coordinate well with their pro le mergers such as CVS/Aetna and need to make to their current program in or where employees will access health- conditions as a further enhancement. Optum/DaVita Medical Group, others are order to respond to changes in the market- care. Samantha Gardiner, director of prod- considering making immediate changes to place and in order to meet whatever their • 15% expect no real impact in how and uct management at Health Advocate, says healthcare strategies in wake of such news. broader objectives and human capital ob- where employees access healthcare. her company has combined wellness, One area of particular focus: how jectives are,” Winkler says. e survey also found that six out chronic condition management and client their prescription drug coverage operates of 10 employers say they are likely to outreach all into one program to improve in conjunction with their overall medi- Signi cant impact make changes to their healthcare strate- the health of employees and reduce claims cal plans. CVS says its combined company In its survey, Aon asked 450 employers gies, though there are di erences in how and pharmaceutical costs for employer- with Aetna would provide greater inte- from large and mid-size companies about quickly they think those changes will be provided health plans. gration of care, “empowering consumers potential implications the recently an- implemented: “We take the data and provide alerts and health professionals to make more in- nounced high-pro le deals could have on • 23% expect the changes will acceler- via our website, email or mobile push no- ate revisiting or adjusting their overall ti cations to keep employees informed healthcare strategy. about their personal health conditions,” • 38% expect the changes will delay re- Gardiner says. “If we have the data, we can visiting or adjusting their overall really target and personalize the program healthcare strategy. toward company goals and members’ per- • 39% expect the changes will have no sonal goals.” impact on their overall healthcare In order to identify the best in class strategy. among the programs o ered by wellness Winkler says these results con rm providers, Schmidt says he looks at the that employers think these deals, particu- number and quality of interfaces and out- larly for the potential CVS/Aetna combi- comes from the program as well as suc- nation, are meaningful and will have im- cess stories that employees can share that portant implications to the way employ- can esh out an employer’s return on in- ees and their families’ access healthcare in vestment. the future. “We can look at results six months “Certainly, the speci cs of how these or even a year after an employee has par- deals unfold will in uence how employers ticipated in the program to see if behavior respond,” Winkler says. “It will be impor- changes have taken place,” Schmidt says. tant for employers to monitor all of these “If the plan integrates and reacts to the situations as they take shape.” EBA systems the employer has in place for his IMAGE: BLOOMBERG NEWS BLOOMBERG IMAGE:
30 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 31
030_EBA0318 30 2/6/2018 11:36:10 AM Personalizing health plans In order to identify best in class wellbeing programs, advisers are utilizing digital analytics. BY CORT OLSEN
any advisers are using dig- or her employees, then we will know if the gift cards and cash rewards to funding a ital monitoring to evalu- program is a right match.” HSA or a HRA. ate the status of wellbeing Paul Sterling, vice president of emerg- within a given employer’s Integration ing products at UnitedHealthcare, says their long-term planning for healthcare employee population. Monika Majors, VP, marketing and com- users who are enrolled in the United- strategies. MCraig Schmidt, senior wellness con- munications, health plan products at Sutter Healthcare Motion program – an app pro- A majority of employers, 85%, think sultant for EPIC, says one of the ways he Health, says a digital wellness program grammed to encourage employees to re- there will be either signi cant or moderate is able to identify the companies that are needs to integrate with a multitude of per- main active throughout the workday using changes to the way employees access care o ering strong digital wellness plans is sonal devices. a smart phone or smart watch – rewards in the future: through their ability to integrate such pro- “ e site must be responsive to all employees by funding money into an HSA • 14% expect signi cant change in how grams with claims data. He utilizes a push technology, such as a mobile device, a tab- or HRA as a way to retain users. or where employees will access health- style noti cation to a mobile device to in- let, or for those who are deskbound, from “We have three daily walking objec- care. form individual employees about speci c their computer,” Majors says. “ e exibil- tives through our FIT criteria – frequency, • 71% expect moderate changes in how plans that can coordinate well with their ity of o ering individual trackers as well intensity and tenacity – that each of our or where employees will access health- conditions as a further enhancement. as key based activity challenges through members try to achieve,” Sterling says. care. Samantha Gardiner, director of prod- a wide range of activities will keep reten- “Each one of those objectives is tied to or • 15% expect no real impact in how and uct management at Health Advocate, says tion.” associated with an incentive amount.” where employees access healthcare. her company has combined wellness, e program can then o er a health For each objective the employee e survey also found that six out chronic condition management and client assessment that can be aggregated into an completes, UnitedHealthcare deposits $1 of 10 employers say they are likely to outreach all into one program to improve overall employer report, which can then into the user’s HSA or HRA, depending make changes to their healthcare strate- the health of employees and reduce claims serve as a basis for customization for that what they have. gies, though there are di erences in how and pharmaceutical costs for employer- speci c workforce. Each day, the employee can com- quickly they think those changes will be provided health plans. Marcia Otto, vice president of prod- plete each of the objectives. It resets daily, implemented: “We take the data and provide alerts uct strategy at Health Advocate, says her allowing the employee to continue to re- • 23% expect the changes will acceler- via our website, email or mobile push no- company o ers biometric screenings that ceive up to $3 per day. ate revisiting or adjusting their overall ti cations to keep employees informed can be done onsite, which can then factor Over the course of one year, Sterling healthcare strategy. about their personal health conditions,” into an employee’s health risk assessment says participation in the Motion program • 38% expect the changes will delay re- Gardiner says. “If we have the data, we can to further customize the personal health has held at a steady 67%. “If you think visiting or adjusting their overall really target and personalize the program program. about other products in the health and healthcare strategy. toward company goals and members’ per- “If we get biometric data from our wellness space, that’s arguably 10 times • 39% expect the changes will have no sonal goals.” biometric data collection or if the em- the level of engagement achieved over that impact on their overall healthcare In order to identify the best in class ployee sends us the data from a third period of time others would achieve,” Ster- strategy. among the programs o ered by wellness party, that is another data source we can ling says. Winkler says these results con rm providers, Schmidt says he looks at the look at to determine if they need further While Gardiner says she cannot pin that employers think these deals, particu- number and quality of interfaces and out- attention for diabetes, hyper tension or so point the number of employees engaged larly for the potential CVS/Aetna combi- comes from the program as well as suc- on,” Otto says. “We can also collect data on in her program for an extended period of nation, are meaningful and will have im- cess stories that employees can share that what their last blood test reported, right time yet, she thinks incentives do drive portant implications to the way employ- can esh out an employer’s return on in- down to how many fruits or vegetables continued engagement for some employ- ees and their families’ access healthcare in vestment. they eat, which is then prioritized based ees who need the extra push to be active or the future. “We can look at results six months on how sick the employee is.” engage in a healthier lifestyle. “Certainly, the speci cs of how these or even a year after an employee has par- “An incentive program that provides deals unfold will in uence how employers ticipated in the program to see if behavior Incentivizing at least a $300 incentive to participate is respond,” Winkler says. “It will be impor- changes have taken place,” Schmidt says. To in uence employees to remain on the where we see our most engagement,” Gar- tant for employers to monitor all of these “If the plan integrates and reacts to the wellness plan, employers have o ered diner says. “It all depends on the goals of situations as they take shape.” EBA systems the employer has in place for his incentives. ese incentives can range from the employer.” EBA IMAGE: BLOOMBERG NEWS BLOOMBERG IMAGE:
30 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 31
031_EBA0318 31 2/6/2018 11:36:12 AM BURDEN OF U.S. EMPLOYEES ARE DEALING WITH A STUDENT LOAN. Boomer tuition benefits TUITION.IO xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Parents looking to pay o kids’ loans are the fast- xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx est-growing category signing up for assistance. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxx BY PHIL ALBINUS XHead here xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx dvisers have discovered a new clients — which include Staples, Fidelity for this bene t. Employers are realizing xxxxxx EBA audience for bene ts that pay Investments, e City of Memphis and In- that there are essentially three populations o student loans: Older workers ternational Paper — have noticed that the within the workforce that have student debt with children still in college. older populations of their workforce are issues: Generation Y, millennials and now Due to the rising cost of col- now accumulating signi cant student debt Generation Xers, she says. Alege — where the average person with a decades after they have graduated from col- “ e fastest-growing is the parent seg- four-year undergraduate degree graduates lege. ment of the workforce and that’s a result of with $70,000 in debt — tuition bene t ex- “Employers are trying to help that portion either the parents taking out a Parent PLUS perts say workers are signing up for tuition of their workforce. It’s almost a universal loan or because they’re co-signers on their payment programs to help pay the student problem,” says ompson, whose research children’s loans,” she says. loans of their college-aged children. says that 25% to 35% of U.S. employees are Tuition.io CEO Scott ompson says dealing with a student loan. Clearing debt employers are hearing from their employ- Estée Lauder Companies unveiled a Stu- Taylor says that she presents data to em- ees about this bene t and more employers dent Loan Contribution program, which ployers that show as baby boomers retire are asking for a service that allows them to will be overseen by Tuition.io, that will con- and millennials become the majority of match monthly tuition payments. tribute $100 toward eligible employees’ stu- workers in their workforce, as is predicted Older workers are nding that their chil- dent loans each month, with a $10,000 life- for 2025, their needs will be di erent than dren are reaching the limits of their college time maximum contribution. the older generation of workers. loans much more quickly than they did two Laurel Taylor, founder and CEO of stu- O ering bene ts to pay o student loans or three years ago because of the rising cost dent debt relief and re nancing rm Fu- is more equitable to the workforce, says Tay- of higher education. tureFuel.io, says that more U.S. employ- lor, adding that a worker under the age of 35 ompson points out that some of their ers are seeing their older workers sign up with a sizeable student loan is most likely not saving up for a home or their retirement. Taylor says that retirement bene ts em- ployers o er are most relevant to employ- ees who are nancially well o and have the ability to save for the future. “Financial health and wellness, 401(k)s and many other bene ts are unlev- eraged by those who are not in a position of nancial health and wellness, and employ- ers are awakening to the fact that the ben- e ts they give their sta today is actually fairly biased.” ompson estimates that 4% to 5% of U.S. employers o er debt matching services to their employees, and adds that he expects this number to grow in 2018. Some employ- ers have plans to o er this bene t either starting July 1, 2018 or Jan. 1, 2019. “We’re starting to hear that employers are implementing this long-term bene t, thanks to tax cuts,” he says. EBA IMAGE: ADOBESTOCK IMAGE:
32 Employee Benefit Adviser | March 2018
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really focus a lot of attention,” says Keneipp. INCREASE IN AGENCY “What is their ability to move that agency for- MERGERS AND ward, rather than just let it sit and stagnate?” ACQUISITIONS FROM If the business is stagnating, it might in- TO . dicate a distress sale due to something like a health setback for the seller, adds Kwicien. Prep for a profitable sale Most buyers will be looking for the agency xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx owner to stay on at least one to three years xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx A key factor that makes for a strong agency to facilitate an orderly transition and keep xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx valuation is a demonstrated history of growth. clients, he says. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx erefore, Kwicien says, due diligence xxxxx BY ELIZABETH GALENTINE would include a strategy session with the X seller about their motivations: Why are they Head here selling? How long do they plan to stay around xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx he bene t advising industry had prior year commissions and fees, says Tommy ments, “to understand the seasonality of rev- post-transaction? Do they have family mem- xxxxxxxxx EBA a record-setting year of agency McDonald, vice president at leading M&A enue and expenses.” bers who want to stay in the business? Do mergers and acquisitions in 2017, consultancy MarshBerry. Most valuations would include the own- they have health issues? How old are they? as independent data from consult- McDonald recommends targeting 20% er’s compensation and remove any “prefer- “ e emotional sides of things in the ing rm OPTIS Partners show ben- new business as a percentage of prior year ence items,” such as cars, residencies, house- transaction are equally as important as the e tT brokerages accounted for 174 transactions growth, but adds that 10%-15% is closer to keeper expenses and college tuition that often nancial considerations,” Kwicien says, add- — a nearly 90% increase from 2016. the typical brokerage’s output. get run through the business, Kwicien says. ing that they are the precursors that drive the But, what makes for a strong brokerage “If you can produce 10% organic growth Any type of expense that the company construct of the terms of the sale agreement. valuation and a successful sale at the onset? regardless of the market cycle, the economic buyer would not continue gets added back Alera Group, a national bene t and P&C It starts with a record of stable recent impact or the retention impact on your busi- into the adjusted free cash ow of the com- brokerage that formed in December 2016 growth, say several industry consultants with ness, that’s a good metric to aspire toward,” pany. For example, if a brokerage spent when 24 independent companies united, decades of sales experience. at record is says McDonald. $100,000 on a new CRM product, about is looking to acquire as many as 40 addi- buoyed by seller motivation, revenue diver- As a marker for valuation, a brokerage $90,000 would be added back, as that CRM’s tional companies. More than half a dozen si cation and a business model that looks be- should establish the company’s adjusted yearly maintenance should only be about joined in 2017. CEO Alan Levitz says the rst yond the traditional sales approach. free cash ow by analyzing the pro t and $10,000 going forward. thing he looks for in a potential acquisition e rst thing a prospective buyer is loss statements of the past three years, says Ideally, Kwicien says, buyers are look- is a cultural t. “We spent nearly two years going to look for is a history of proven, strong Jack Kwicien, an agency consultant who has ing to acquire a business with at least a 10% planning and de ning our culture, and are growth and a positive outlook for the future. facilitated dozens of sales through his com- compounded annual growth rate in terms of protective of what we have built,” says Levitz. Noting that the market uctuates in often pany, Daymark Advisors. topline revenue as well as a 20%-30% cash “Our culture is an intentional and signi cant uncontrollable ways, a general rule of thumb Ideally, he says, this process would in- ow margin. Anything north of 30% would component of the success we experienced is to monitor new business a percentage of clude quarterly or even monthly P&L state- put the seller at the high end of the range of as we brought the original 24 rms together. valuations. In today’s market, he says, that We are looking for new partners that want would be anywhere from ve and a half to to collaborate with our existing partners to seven times adjusted free cash ow. continually improve the client experience across the entire organization.” Motivation However, regardless of how a book of business A less volatile book looks on paper, a buyer would be remiss to Beyond a lack of personal motivation in the discount the qualitative factors that come with owner or a cultural misalignment, another an acquisition. And that starts with the sell- risk for the buyer would be acquiring a bro- er’s motivation for o oading their company. kerage with too many eggs in one or two bas- There’s a lot of psychology that goes kets. Having a couple of clients make up a large into a sale, says consultant Wendy Keneipp percentage of revenue, around 5%-12%, is a of Q4intelligence, including the owner’s lead- big risk, says MarshBerry’s McDonald. ership style and how they’ll behave during Daymark’s Kwicien agrees, citing a re- an earn-out period. For example, are they cent transaction where a client had 67% of its burned out and not driven to maintain the total revenue coming from only ve compa- business, or are they excited and motivated? nies. e deal still went through, he says, but “If you’re going to count on the own- it aected the value of the business. ers to be in there and run the agency for the “If you’re on the buyer side of that equa- next two or three years, that’s where I would tion, you’re concerned about the concentra- IMAGE: ADOBESTOCK IMAGE:
34 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 35
034_EBA0318 34 2/6/2018 5:46:57 PM RECORD
really focus a lot of attention,” says Keneipp. tion of business in a handful of clients and look at how much control the agency has INCREASE IN AGENCY “What is their ability to move that agency for- the potential for loss,” says Kwicien. over its revenue stream. For example, Ke- MERGERS AND ward, rather than just let it sit and stagnate?” Moving away from a lot of individual and neipp says, are they still completely depen- ACQUISITIONS FROM If the business is stagnating, it might in- small business accounts and toward up-mar- dent on dwindling carrier commissions and TO . dicate a distress sale due to something like a ket companies would also indicate a less vol- bonuses, or have they moved into a more fee- health setback for the seller, adds Kwicien. atile book of business, says Q4intelligence’s based compensation model structured around Most buyers will be looking for the agency Keneipp, as it tends to be more dicult for consulting? owner to stay on at least one to three years larger companies to switch bene t brokers, Brokerages need a well-defined ap- to facilitate an orderly transition and keep creating more stability for the existing bro- proach to pricing additional services such clients, he says. ker of record. as HR consulting, data analytics consulting, erefore, Kwicien says, due diligence Another key indicator of stability is di- compliance services and technology imple- would include a strategy session with the versi cation of age in a bene t advisory’s mentation, so that they’re not just doing it as seller about their motivations: Why are they sta. In this people-driven business, buying part of their traditional brokerage fee, Mc- selling? How long do they plan to stay around a company with a lot of employees looking Donald adds. ments, “to understand the seasonality of rev- post-transaction? Do they have family mem- to retire in the next ve or even 10 years will is changing business model means enue and expenses.” bers who want to stay in the business? Do Most valuations would include the own- they have health issues? How old are they? er’s compensation and remove any “prefer- “ e emotional sides of things in the If you can produce 10% organic growth regardless ence items,” such as cars, residencies, house- transaction are equally as important as the of the market cycle, the economic impact or the keeper expenses and college tuition that often nancial considerations,” Kwicien says, add- retention impact on your business, that’s a good get run through the business, Kwicien says. ing that they are the precursors that drive the Any type of expense that the company construct of the terms of the sale agreement. metric to aspire toward. ... In this business today, buyer would not continue gets added back Alera Group, a national bene t and P&C having expertise and focus on data analytics, into the adjusted free cash ow of the com- brokerage that formed in December 2016 population health management, compliance and pany. For example, if a brokerage spent when 24 independent companies united, $100,000 on a new CRM product, about is looking to acquire as many as 40 addi- HRIS technology is very important. $90,000 would be added back, as that CRM’s tional companies. More than half a dozen yearly maintenance should only be about joined in 2017. CEO Alan Levitz says the rst impact the valuation, says McDonald. the quality of non-sales talent is also in- $10,000 going forward. thing he looks for in a potential acquisition “ at’s obviously an impact in value creasingly important, says McDonald. “In Ideally, Kwicien says, buyers are look- is a cultural t. “We spent nearly two years relative to one that has a rm that’s built a this business today, having expertise and ing to acquire a business with at least a 10% planning and de ning our culture, and are bench of people that can support it into per- focus on data analytics, population health compounded annual growth rate in terms of protective of what we have built,” says Levitz. petuity,” he says. management, compliance and HRIS tech- topline revenue as well as a 20%-30% cash “Our culture is an intentional and signi cant While Keneipp says this industry doesn’t nology is very important,” he says. ow margin. Anything north of 30% would component of the success we experienced tend to have a lot of bloat in internal sta Owning propriety technology is a ben- put the seller at the high end of the range of as we brought the original 24 rms together. makeup, it doesn’t hurt to take a look at sta e t as well, says Kwicien. As is a team with valuations. In today’s market, he says, that We are looking for new partners that want compensation and structure to improve cash demonstrated thought leadership that en- would be anywhere from ve and a half to to collaborate with our existing partners to ow, says McDonald. Also, he adds, producer ables brokerages to generate new business seven times adjusted free cash ow. continually improve the client experience contracts should be clear as to who owns their revenue through non-traditional sources, across the entire organization.” individual books of business: the company such as seminar selling, adds McDonald. Motivation or the producer themselves? While Kwicien, Keneipp and McDonald However, regardless of how a book of business A less volatile book In addition to producer and key em- all agree that agency owners should always looks on paper, a buyer would be remiss to Beyond a lack of personal motivation in the ployee agreements, other essential docu- run their businesses as if it’s already for sale, discount the qualitative factors that come with owner or a cultural misalignment, another ments that should be reviewed with the as- getting them to the point of true sell-abil- an acquisition. And that starts with the sell- risk for the buyer would be acquiring a bro- sistance of a lawyer include: nancial reports ity typically takes from about 30 to 90 days. er’s motivation for o oading their company. kerage with too many eggs in one or two bas- (with an emphasis on loans and debts), all But, Kwicien cautions, the end transac- There’s a lot of psychology that goes kets. Having a couple of clients make up a large insurance carrier contracts, compensation tion is never about price, but rather the nal into a sale, says consultant Wendy Keneipp percentage of revenue, around 5%-12%, is a and bonus arrangements, other vendor con- terms of the agreement. For example, a $10 of Q4intelligence, including the owner’s lead- big risk, says MarshBerry’s McDonald. tracts for things such as software, and the million valuation with $4 million in cash at ership style and how they’ll behave during Daymark’s Kwicien agrees, citing a re- operating agreement for the business (is it closing and a ve-year earn out issuing $1.2 an earn-out period. For example, are they cent transaction where a client had 67% of its an LLC, C Corp, Subchapter S Corp, etc.), million per year contingent on business per- burned out and not driven to maintain the total revenue coming from only ve compa- says Kwicien. formance is not as good for the seller as $6 business, or are they excited and motivated? nies. e deal still went through, he says, but million in cash at closing and $1 million per “If you’re going to count on the own- it aected the value of the business. Beyond traditional sales year for four years that is not contingent on ers to be in there and run the agency for the “If you’re on the buyer side of that equa- With an eye toward the future and how valu- business performance. e former, he notes, next two or three years, that’s where I would tion, you’re concerned about the concentra- ations may change over time, buyers should would put 60% of the risk on the seller. EBA IMAGE: ADOBESTOCK IMAGE:
34 Employee Benefit Adviser | Month 2018 March 2018 | employeebenefitadviser.com 35
035_EBA0318 35 2/6/2018 3:03:03 PM Using AI to personalize benefits Companies such as Aon utilize analytical technology to help participants find the plan that’s right for them. Costs no longer a top driver BY CORT OLSEN xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx In choosing a ben admin platform, HR execs are xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx more interested in empowering decisions. mployers are seeking more preci- xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx BY BRUCE SHUTAN sion in employee bene t options. xxxxxxxxxxxxx is requires brokers to be more X in tune with the data and analyt- Head here while 83.2% indicated that communication, ics behind every health plan and xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ost isn’t the primary driver for as- ts better, and for the rst time, they’re feel- sessing strategic health and wel- ing like there are tools and platforms avail- employee education and engagement are in- voluntary bene t o ered to clients. xxxxxxxxxxx EBA E fare bene ts administration and able that can deliver that experience.” tegral to overall bene ts delivery. Business owners want to combine the HR technology platforms, sug- He noted a growing emphasis on self- traditional elements of bene t planning, gests a recent survey of 91 senior service tools to select the right bene ts. Em- Rapid changes such as staying within budget, with what HRC and bene ts executives from primarily ployees are starting to see the value in ev- A key takeaway for bene t brokers and ad- employees deem to be important. Fortune 1000-ranked companies. In fact, it erything from sophisticated avatars and the visers is to understand the technology that’s Unfortunately, companies are often plummeted to just 23.9% of respondents this cloud-based design to more complicated al- available in the marketplace and how rapidly at a universal data disadvantage with their year from as many as 64.4% last year. gorithms, according to Judd. And by integrat- it’s changing, Judd observes. bene t plans, says Bob Gearhart Jr., part- e survey conducted by brokerage Pa- ing a technology platform with data ware- e research ndings show that many ner at DCW Group and co-author of Break- ci c Resources, which provides employers housing, he says it creates “the best possible employers are eager to make a move. For ing rough the Status Quo. ey typically with an independent assessment of technol- tools to make an educated decision” about example, fewer than half of survey respon- make very expensive insurance decisions ogy options, noted the importance of a more the bene ts package. dents said they were likely to remain with with limited data. “Reducing the overall holistic approach. Leading the charge were Among the top outcomes the survey re- their current bene t platform vendor. premium by a few percentage points is far administrative ease at 61.4%, which was up spondents have found with ben admin plat- ere’s also “a real opportunity to edu- less important than making sure those dol- from 38% in 2016, and empowering employ- forms are best-in-class employee user expe- cate employers on what might be available,” lars are being spent e ectively by your part- ees to make informed bene ts decisions at rience (49%) and the ability to integrate ben- he says, noting that only about 40% of the re- ners,” Gearhart says. 51.5%, which was up from 24.4% in 2016. e ts technology with HR functions (37%). spondents said they had a thorough under- Aon is one brokerage working to What the ndings suggests to Chris Judd, In addition, 88.8% felt that guided deci- standing of exchanges. change that. Tim Nimmer, global chief ac- EVP of Paci c Resources, is that employers sion support, cost calculators and plan com- Employers increasingly are turning to tuary, says the rm’s databases, ability to “want employees to understand their bene- parison tools were at least somewhat e ective, experts, the survey also shows. For example, utilize machine learning and arti cial intel- outsourcing of employee eligibility and en- ligence all provide real-time data on ben- rollment processes last year soared to 58% e t trends. rough a combination of data Tech features from 36% in 2016. ey’re also being more submitted by brokers to Aon and third HR and benefit executives look for these options in their discerning about with whom they strike part- party surveys where employers explain the ben admin platform. nerships. Although employers indicate a con- thought process behind their bene t o er- dence and reliance upon technology to de- ings, Nimmer says he is able collect data on liver bene ts, there’s a reluctance to make the o erings advisers are recommending long-term commitments. Consider, for in- to their clients as well as determine the rea- 60% stance, that 45.5% say they are likely to re- sons why an employee is choosing one plan 61% main with their current ben admin platform over another. 52% vendor, while 29.5% are unsure and 25% are Beyond revealing how many employ- 40% likely to bid out those services. ees are enrolling in a healthcare plan, Aon’s Moving forward, Judd believes “it’s going analytics determine why an employee to be increasingly di cult to be a bene ts chooses a high-deductible health plan over 20% 24% broker or consultant and not have an under- a standard PPO, where employees are seek- standing of the technology aspect. ey’re be- ing care and how often they are going to a 0% coming so intertwined that you have to know healthcare provider. Low cost Employee Administrative the technology well to understand which ben- “Many of our clients are trying to be e ts you can and can’t put on a platform and more sophisticated and intelligent when Source: Pacific Resources empowerment ease what the limitations might be.” EBA they make their bene t o erings,” Nimmer
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036_EBA0318 36 2/6/2018 4:23:09 PM Using AI to personalize benefits Companies such as Aon utilize analytical technology to help participants find the plan that’s right for them. BY CORT OLSEN
mployers are seeking more preci- says. “Are they throwing bad money into a the clients and involved brokers to discuss sion in employee bene t options. good pot by giving [employees] something what is seen in the data.” is requires brokers to be more that they don’t appreciate as much, or can Once Health Plan Manager identi es in tune with the data and analyt- the employer take those same dollars, nd the variables e ecting healthcare spend, while 83.2% indicated that communication, ics behind every health plan and bene ts that employees appreciate more Hankins says the program can then drill employee education and engagement are in- voluntaryE bene t o ered to clients. and have a bigger impact on their sta ?” down to the overall clinical trend drivers to tegral to overall bene ts delivery. Business owners want to combine the determine if healthcare patterns within the traditional elements of bene t planning, Carrier role company expand out into multiple loca- Rapid changes such as staying within budget, with what DCW Group’s Gearhart says an employer tions or if the trend can be narrowed down A key takeaway for bene t brokers and ad- employees deem to be important. should always demand more data. If a to a single location or a group of employees. visers is to understand the technology that’s Unfortunately, companies are often carrier partner is unwilling to disclose the “Even if it is a matter of doing an email available in the marketplace and how rapidly at a universal data disadvantage with their level of information that the employer campaign to a set of employees because it’s changing, Judd observes. bene t plans, says Bob Gearhart Jr., part- deems acceptable, it’s time to nd a new there is a trend of employees going to free- e research ndings show that many ner at DCW Group and co-author of Break- partner. “Insurance carriers, brokers and standing ERs, for example,” he says. “We employers are eager to make a move. For ing rough the Status Quo. ey typically wellness providers must earn their revenue can identify these opportunities and rapidly example, fewer than half of survey respon- make very expensive insurance decisions by reducing the business owner’s expense act on them to see if it can impact cost.” dents said they were likely to remain with with limited data. “Reducing the overall and not simply going through the motions,” their current bene t platform vendor. premium by a few percentage points is far Gearhart says. Consumers also bought… ere’s also “a real opportunity to edu- less important than making sure those dol- One platform that is utilizing data to Derek Rine, vice president and bene ts cate employers on what might be available,” lars are being spent e ectively by your part- interpret employee reasoning behind plan practice leader at David Rine Insurance, es- he says, noting that only about 40% of the re- ners,” Gearhart says. enrollment is UnitedHealthcare’s Health timates that 95% of employees at an average spondents said they had a thorough under- Aon is one brokerage working to Plan Manager. Craig Hankins, vice presi- company approach their healthcare dif- standing of exchanges. change that. Tim Nimmer, global chief ac- dent of digital products, says the program ferently from the informed way they price Employers increasingly are turning to tuary, says the rm’s databases, ability to combines all of the information on a par- shop for cars or groceries. “ ey need some experts, the survey also shows. For example, utilize machine learning and arti cial intel- ticular employer’s employee population guidance and education on how to become outsourcing of employee eligibility and en- ligence all provide real-time data on ben- to determine the demographics within the smarter consumers of healthcare in areas rollment processes last year soared to 58% e t trends. rough a combination of data company and how their sta is organized that are well within their control,” he says. from 36% in 2016. ey’re also being more submitted by brokers to Aon and third based on health plan enrollment. “[It] also Aon’s ability to gather data on the in- discerning about with whom they strike part- party surveys where employers explain the combines claims analytics into its data con- dividual level is similar to the way Ama- nerships. Although employers indicate a con- thought process behind their bene t o er- sumption,” Hankins says. “We can look at zon identi es shopping patterns. Nimmer dence and reliance upon technology to de- ings, Nimmer says he is able collect data on medical claims, behavioral claims and even says when an employee enrolls in a particu- liver bene ts, there’s a reluctance to make the o erings advisers are recommending pharmacy claims as well.” lar plan the demographic of that employee long-term commitments. Consider, for in- to their clients as well as determine the rea- Hankins adds that the platform can is stored and their bene t choices are then stance, that 45.5% say they are likely to re- sons why an employee is choosing one plan also identify clinical information from em- submitted as options to other employees main with their current ben admin platform over another. ployees, such as health risk assessments, with similar demographics. vendor, while 29.5% are unsure and 25% are Beyond revealing how many employ- and where employees are most commonly “It is a form of pro ling based on cer- likely to bid out those services. ees are enrolling in a healthcare plan, Aon’s seeking treatment, either from a hospital or tain data elements we already know about Moving forward, Judd believes “it’s going analytics determine why an employee a private physician. an individual, such as basic information to be increasingly di cult to be a bene ts chooses a high-deductible health plan over “Employers are looking at their health from human resources,” Nimmer says. broker or consultant and not have an under- a standard PPO, where employees are seek- plans from the lens of what is driving health “When you start to combine these data sets standing of the technology aspect. ey’re be- ing care and how often they are going to a cost and what can they do to bring costs together I wouldn’t be able to identify an coming so intertwined that you have to know healthcare provider. down,” Hankins says. “If there are oppor- exact individual, because that would violate the technology well to understand which ben- “Many of our clients are trying to be tunities to improve tactics and address privacy laws, but when an employee inputs e ts you can and can’t put on a platform and more sophisticated and intelligent when emerging issues, that can lead to informed self-identi ers, that AI or machine learning what the limitations might be.” EBA they make their bene t o erings,” Nimmer conversations between our account teams, will store that information.” EBA
36 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 37
037_EBA0318 37 2/6/2018 4:23:10 PM Unexpected partners Don’t be afraid to look past typical health brokers to make client introductions. BY ERIC SILVERMAN xxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxx orking late one evening, serve for employers and employees alike, and than 450 combined lives. While my enroll- xxxxxxxxxxxxxxxxxxxxxxxxxxx my office cleaning guy, how they don’t cost an employer anything. ment team went to work on our new cases, xxxxxxxxxxxxxxxxxxxxxxxxx Je , popped in to tidy up. I I shared with Je how the most challenging Je continued his day job, and over the next X never see him since he does part of my job is simply getting employers to month or so, we wrote nearly $300,000 in Head here my space last. I struck up a see me as someone other than some cold- new business which resulted in more than xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx conversation with him about how his busi- calling salesperson o the street. $40,000 in rst year commissions directly to xxxxxxxxxxxxxxx EBA W ness operates and found out that he works I explained that I could pay him consid- Je , not including renewals. I found out that alone and has been cleaning all of the o ces erably well for a simple introduction. I made Je ’s annual cleaning business income was in my building and the building next door for it clear that his introduction would greatly just over $35,000. more than a decade. shorten my sales cycle, as he’d be eliminat- Je said that cleaning nearly every of- ing virtually all of my prospecting. Did you catch what happened? ce within two buildings — his only source Flash forward three months: Je intro- One, Je turned out to be a terri c “broker of income — kept him very busy. He men- duced me to 19 businesses in two buildings. partner” and he never considered himself a tioned he knew every one of his client busi- We were able to meet 17 by randomly stop- broker at all. He’s a great cleaning guy with ness owners and many of their sta . ping in, and of those 17, we were able to se- a very loyal and trusting client base who was I thought, if the owners trust him enough cure appointments with 14 of them — nine smart enough to know that his existing “re- to go into each o ce with expensive equip- on the spot. Of the 14 we met with, we were lationship capital” was enough to dramati- ment everywhere, perhaps they’d trust him able to secure 12 new accounts and only had cally increase his annual income. with a simple introduction. one given us a rm “no.” We still have more Two, I didn’t need a text book “health I pitched Je on the idea of what I do with to follow up with. broker” to make the introduction — all it enhanced bene ts, the incredible value they ose 14 new group accounts had more took was someone the business owners in the building already knew, liked and trusted. Are you a status quo health broker who turns a blind eye, daily, to how your clients are meeting enhanced bene ts professionals, whether it be a cold-calling carrier rep or a warmly introduced carrier agnostic boutique like myself? I urge you to open your eyes wide, and break out of the health broker status quo that allowed Je to so easily walk me in with zero prior bene ts experience. I realize my story may be a bit unique, but if my clean- ing guy can disrupt the status quo, then who else has relationships with your clients who could do the same thing? Was Je my knight in shining yellow gloves or was I Je ’s knight in a shining suit? Expand beyond traditional broker relation- ships and start maximizing the relationship capital that already exists right beneath your very nose. EBA IMAGE: ADOBESTOCK IMAGE:
38 Employee Benefit Adviser | March 2018
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039_EBA0318 39 2/5/2018 4:11:08 PM Top 50 large-group brokerages in the U.S.
1) Mercer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 2) Willis Towers Watson xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Industry leaders 3) USI Insurance Services xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Mercer is No.1 on EBA-miEdge list of large-group 4) Arthur J. Gallagher & Co. xxxxxxxx advisers for the fourth straight year. 5) Aon 6) Marsh & McLennan Agency X BY BRUCE SHUTAN Head here 7) Lockton Companies xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxx EBA 8) HUB International arge national rms and indepen- which came in at No. 7 and 13, respectively, teams with a keen understanding of their re- 9) Alliant Insurance Services dent practitioners alike are nding for choosing a similar approach that favors gional healthcare market with support from 10) NFP strength in numbers amid deepen- hiring new producers, retaining clients and national and global resources, a deep bench of 11) Brown & Brown Insurance ing industry consolidation, sug- chasing new business over acquisitions. more than 50 experts in the life, accident and gests the fourth annual ranking of However, with large players squeezing disability areas, and 28 compliance o cers. 12) BB&T 50L largest employee bene t brokers by Em- smaller brokers, Smith has seen an accelera- A nal piece of the puzzle involves ex- 13) OneDigital ployee Bene t Adviser. tion of acquisitions and partnerships. ing what’s known internally as Mercer muscle. 14) EPIC Insurance Brokers & Consultants e list is produced in partnership with One such example involves Alera Group, “Because of our size,” he explains, “we 15) Assured Partners business intelligence data analytics rm an amalgamation of smaller boutique rms have a lot of leverage with carriers, create pur- 16) Hays Group miEdge. that didn’t exist a year ago and debuted at chasing collectives, bring volume and scale 17) Alera Group These firms serviced and adminis- No. 17 in 2017 with $37 million in revenue. down to the middle market and improve the tered 68% of the marketplace last year, up Another notable development was USI price point.” 18) Sequoia from about 60% in 2010, reports Mark Smith, landing at No. 3 after acquiring Wells Fargo In- e brokerage’s comprehensive toolbox 19) Acrisure founder and CEO of miEdge, whose data is surance Services USA, which Smith says had includes a stop-loss center of excellence and 20) CBIZ Bene ts & Insurance Services based exclusively on health and welfare rev- been declining dramatically in recent years. stop-loss coalition to help manage high-dol- 21) Holmes Murphy & Associates enue involving large-group employers with USI posted a 73.80% revenue growth, mov- lar claimants. 22) Corporate Synergies Group 100 or more employees. ing up four spots from the previous ranking. It also o ers group purchasing options in “Premium volume has increased dra- In addition, he says NFP claimed the No. 10 the pharmacy area to help drive greater dis- 23) Woodru -Sawyer & Co. matically in that period of time, but so have spot with the help of both acquisitions and counts and technologies that produce high- 24) Conduent HR Consulting Inc. commissions and fees,” he says, predicting organic growth. quality, low-cost employee bene t commu- 25) Associated Financial Group more consolidation on the way. A closer look at some of the year’s big- nication material for midmarket clients. Indeed, there was a 90% increase in em- gest success stories reveals deeper insight into ployee bene t rm acquisitions in 2017 over what makes some of the nation’s top bene t OneDigital’s partnership As part of that e ort, OneDigital is align- the previous year, Optis Partners found. brokerages tick: Like Mercer, OneDigital also earned a sig- ing teams to handle various silos from sales With data gathered through the Depart- ni cant amount of middle-market business. to technology deployment to bene ts con- ment of Labor’s Form 5500 process, Smith Flexing Mercer muscle Mike Sullivan, the company’s chief growth sulting. says miEdge’s data is “the only marketplace Todd Renner, U.S. health and bene ts enter- o cer, credits a strategic partnership with OneDigital invests in a broad spectrum ranking that’s truly independent.” prise and midmarket leader for Mercer, attri- Zene ts involving an HR and bene ts tech- of speci c solutions aimed at this segment, Mercer Health and Bene ts was No. 1 for butes his rm’s consistent ranking atop the list nology solution. acquiring a pharmacy consulting practice the fourth straight time with 12.46% annual to a strong midmarket penetration involving It was an organic move considering One- that’s supported by an analytics team, ac- revenue growth to more than $255 million groups of 100 to 5,000 employees. Digital started as an outsourcer that part- tuaries and underwriters. in 2017 from $227 million in 2016. Rounding “What makes us successful is our abil- nered with others and acknowledgement of Sullivan believes it’s easier to move up out the most recent top ve spots were Willis ity to translate the successes that we’re see- the challenges associated with brokers tak- market, which OneDigital has done, rather Towers Watson, USI Insurance Services, Ar- ing in the jumbo market and bring that to ing a one-stop shop approach. A strong be- than down market like some of the indus- thur J. Gallagher & Co. and Aon Consulting. the midmarket,” he says. lief in partnerships is part of the brokerage’s try’s largest rms and involves more authen- “What makes Mercer particularly im- Driving forces include a down-market DNA, he explains. ticity for clients. “We’re trying to build a dif- pressive is that they have maintained their ow of intellectual capital and practical inno- The Zenefits pairing has produced ferent kind of employee bene ts company market-leading position, but they haven’t vation, as well as the technology and consum- newer, more user-friendly tech platforms in- with fresh thinking,” he says. “Our middle- been anywhere near as acquisitive as some erism embedded in Mercer Marketplace, the volving signi cant investments to the sta ng market business is the majority of our rev- of their smaller competitors,” Smith says. brokerage’s private health exchange solution. and deployment of technology downstream, enue today, and it really is a signi cant part He also cites Lockton and OneDigital, Renner also references strong local according to Sullivan. of our focus going forward.”
40 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 41
040_EBA0318 40 2/6/2018 11:43:23 AM Top 50 large-group brokerages in the U.S.
1) Mercer 26) Hylant 2) Willis Towers Watson 27) Assurance Agency 3) USI Insurance Services 28) ABD Insurance & Financial Services 4) Arthur J. Gallagher & Co. 29) Leavitt Group 5) Aon 30) LSG Insurance Partners 6) Marsh & McLennan Agency 31) True3 Bene ts 7) Lockton Companies 32) Risk Strategies Co. 8) HUB International 33) KELLY teams with a keen understanding of their re- 9) Alliant Insurance Services 34) Filice Insurance gional healthcare market with support from 10) NFP 35) Regions Insurance national and global resources, a deep bench of 11) Brown & Brown Insurance 36) Higginbotham Insurance more than 50 experts in the life, accident and disability areas, and 28 compliance o cers. 12) BB&T 37) Burnham Bene ts A nal piece of the puzzle involves ex- 13) OneDigital 38) Oswald Companies ing what’s known internally as Mercer muscle. 14) EPIC Insurance Brokers & Consultants 39) Bene tMall “Because of our size,” he explains, “we 15) Assured Partners 40) Capital Bene t Services have a lot of leverage with carriers, create pur- 16) Hays Group 41) Bolton & Co. chasing collectives, bring volume and scale 17) Alera Group 42) Northwestern Bene t Corp. of Georgia down to the middle market and improve the price point.” 18) Sequoia 43) AmWINS Group e brokerage’s comprehensive toolbox 19) Acrisure 44) Marsh USA includes a stop-loss center of excellence and 20) CBIZ Bene ts & Insurance Services 45) Integro Insurance Brokers stop-loss coalition to help manage high-dol- 21) Holmes Murphy & Associates 46) IMA lar claimants. 22) Corporate Synergies Group 47) Cottingham & Butler Insurance Services It also o ers group purchasing options in the pharmacy area to help drive greater dis- 23) Woodru -Sawyer & Co. 48) Hodges-Mace counts and technologies that produce high- 24) Conduent HR Consulting Inc. 49) McGohan Brabender quality, low-cost employee bene t commu- 25) Associated Financial Group 50) M3 Insurance Solutions nication material for midmarket clients.
OneDigital’s partnership As part of that e ort, OneDigital is align- Alera Group sums up its parts He stresses the importance of having Like Mercer, OneDigital also earned a sig- ing teams to handle various silos from sales A year ago at this time, 24 independent agen- a diverse revenue model to sustain organic ni cant amount of middle-market business. to technology deployment to bene ts con- cies with like-minded cultures formed Alera growth driven by cross selling of retirement Mike Sullivan, the company’s chief growth sulting. Group, which is poised to announce more plans, life insurance, property and casualty, o cer, credits a strategic partnership with OneDigital invests in a broad spectrum M&As in the next month or two. loss control, work comp, employee bene ts, Zene ts involving an HR and bene ts tech- of speci c solutions aimed at this segment, ey were united in a desire to see captive insurance, etc. nology solution. acquiring a pharmacy consulting practice the sum of their parts grow beyond bou- e sharing of best practices is a to- It was an organic move considering One- that’s supported by an analytics team, ac- tique practices in employee bene ts, prop- tally open and transparent process, Clark Digital started as an outsourcer that part- tuaries and underwriters. erty/casualty, risk management and wealth adds, which generates excitement among nered with others and acknowledgement of Sullivan believes it’s easier to move up management. e goal was to build on spe- the rm’s managing partners and yielding the challenges associated with brokers tak- market, which OneDigital has done, rather cialty services and skill sets within each positive results. ing a one-stop shop approach. A strong be- than down market like some of the indus- agency and scale it in a collaborative orga- One such example is the development lief in partnerships is part of the brokerage’s try’s largest rms and involves more authen- nization. of a self-funded product with bundled solu- DNA, he explains. ticity for clients. “We’re trying to build a dif- “If truly you want to elevate your abil- tions called lead2health whose backbone is The Zenefits pairing has produced ferent kind of employee bene ts company ity to deliver service, performance, grow and a care coordination model. He describes it newer, more user-friendly tech platforms in- with fresh thinking,” he says. “Our middle- have capital to reinvest, it’s di cult to do by as “health advocacy on steroids.” volving signi cant investments to the sta ng market business is the majority of our rev- remaining independent,” says John Clark, the Not only does it help bend the health- and deployment of technology downstream, enue today, and it really is a signi cant part company’s employee bene ts practice leader care curve, Clark explains, but also produces according to Sullivan. of our focus going forward.” who used to be with Assurex Global. high patient satisfaction scores. EBA
40 Employee Benefit Adviser | March 2018 March 2018 | employeebenefitadviser.com 41
041_EBA0318 41 2/6/2018 11:43:25 AM OPEN ENROLLMENT Sponsored by: READINESS BENCHMARK DECEMBER 2017 Low readiness scores signal need for better open enrollment planning Advisers should present clients with a 12-month map so employers can better prepare for sign-up periods.
he December composite Open bene t advisers that their clients, regard- products, and reviewing compliance Enrollment Readiness Benchmark less of size or industry, nd open enroll- and eligibility issues. T score came in at a startlingly low 38 ment preparation a persistent challenge. Developing such a month-by-month for employers with rst-quarter bene t For advisers, this presents an opportu- plan, says Nelson Griswold, founder and start dates. Granted, by the time the last nity to work more closely with employers president of Bottom Line Solutions, a month of the year rolled around, many to ease their open enrollment burden. e consultancy that helps benefit advis- organizations had concluded their bene t best strategy, according to numerous ben- ers, allows a company to better engage sign-up preparations and conducted e ts industry experts, is to break down the employees and to realize the full value enrollment. However, marks were low process into small sets of related activities of its investment in employee benefits. throughout 2017, with October’s 59 being to be carried out monthly. ese would It also gives the adviser greater access the highest monthly number reached. include steps like designing a bene t plan, and more influence at all levels of the e low scores are a clear indication to selecting health insurance and retirement organization. ■ 0102030405060708090100 EMPLOYERS STARTING BENEFITS IN Q1 2018 Overall Readiness (as of December 2017) 38 PHASE ACTIVITY ACTIVITY SCORE PROGRESS PHASE SCORE 0102030405060708090100 Selecting benefit brokers/advisers 61 Selecting health plans 53 Phase 1 Selecting voluntary plans 49 Benefit Plan 55 Selecting pharmacy plans 53 0102030405060708090100 Design 0102030405060708090100 Selecting retirement plans 66 Selecting wellness plans 47 0102030405060708090100 Enrollment timing 48 Phase 2 Planning/designing employee communications 24 0102030405060708090100 Open Enrollment Reviewing compliance/eligibility issues 26 31 Preparation Setting goals 28 Documenting processes/procedures 27 0102030405060708090100 Managing meetings with advisers/brokers 35
Enrolling employees 27 0102030405060708090100 Phase 3 Answering employee questions 30 Open Enrollment 29 Documenting worker feedback 28 0102030405060708090100 Management Measuring enrollment engagement metrics 27 Boosting enrollment engagements 29 0102030405060708090100 Reviewing enrollment engagement metrics 36
Reviewing worker feedback 36 0102030405060708090100 Soliciting additional feedback 30 Phase 4 Reviewing plan design 43 Open Enrollment Reviewing communications strategy 40 Design Analysis & 37 Follow-up Tracking benefit usage 38 Reviewing enrollment engagement analytics 35 0102030405060708090100 Reviewing/improving the process 37 Planning year-round employee engagement 38 0102030405060708090100 *Source: SourceMedia Research, Open Enrollment Readiness Benchmark Survey, December 2017
ABOUT THE OPEN ENROLLMENT READINESS BENCHMARK The Open Enrollment Readiness Benchmark is a composite score (out of 100) of employer readiness for open enrollment activities across the four critical stages of the open enrollment process: benefit plan design, preparation, process management, and program analysis and updates. The OERB is based on SourceMedia Research’s quantitative survey of more than 400 pre-screened HR and benefit executives and decision makers representing employers with greater than 50 employees from various industry sectors. For more details on the OERB, go to http://www.employeebenefitadviser.com/. 0102030405060708090100
0102030405060708090100
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0102030405060708090100 043_EBA0318 43 2/5/2018 4:20:22 PM 78563
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