By Barry Cohn
What kind of health insurance agent or broker are you? Do you just sell group health insurance and visit them nine months later to discuss their renewal? Do you help them with issues or tell them to call the carrier? Do you provide assistance with HR, employee benefits and ACA compliance?
In 1997, my wife decided to leave Blue Cross of California, now Anthem Blue Cross, and start her own health insurance agency focusing on businesses. She believed that agents were not providing great service to their clients, only signing up new groups and seeing them at renewal time. She thought agents should help employers and their employees with all types of issues from new ID cards to claims payments. In three years, she grew her agency to 60 employer groups and convinced me to join her and grow the agency. At this point, we both knew that she was correct with her analysis of what most brokers did or did not do for their clients. Therefore, I left a 25-year career in middle market banking to join her. We never looked back, growing the agency to 400 group clients, 1,000 Medicare clients and 600 individual clients before we sold the agency two years ago. Along the way we started an HR consulting firm to assist our clients and three years ago we acquired JorgensenHR, a 38-year-old HR consulting firm with 150 clients.
Compliance requirements need to be addressed
The Affordable Care Act forced employers to focus on new compliance with health marketplace notices, Medicare Part D notices, Notice of Special Enrollment Rights and the list goes on. On the health insurance side employers were now required to give their employees six new notices along with the existing COBRA notices and Summary Plan Descriptions. A couple of years into the ACA, the Department of Labor started to audit employers that offered health insurance to their employees to make sure they were compliant with ERISA, with additional compliance requirements.
The health insurance agencies that focused on selling insurance and renewing insurance began losing clients to agencies that offered ACA compliance assistance, ERISA help and HR assistance.
Our agency, Really Great Employee Benefits, changed our sales process and focused first on employee benefits and HR assessments to ascertain what the companies were missing and where they had compliance issues. We did not ask for a census, permission to quote health plans, provide a proposal and ask for a Broker of Record. We focused on learning about their HR and employee benefits policies, procedures, benefits administration & communication and compliance.
After performing over 150 assessments from 2015-2020, we never found an employer 100% in compliance. Over 60% of these employers were still using paper enrollments and did not have vibrant HRIS systems. They were treading water when it came to benefits and compliance.
In California, if you have less than 25 employees, when you hire a new employee, you are required to give the new employee the following 12 forms, notices and brochures. If the employer has 25-49 there is another notice and if they have 50 or more employees, all FMLA notices are added.
• Form I-9 – new employees only
• W-4 Form – new employees only
• DE-4 Form – new employees only
• DLSE-NTE Notice to Employee Wage & Workers Comp Information
– new employees only
• DWC 9783 Personal Physician Designation Form – new employees only
• Notice of HIPAA Privacy Practices– all employees
• DE 2511 Paid Family Leave Notice – all employees
• DE 2515 Disability Insurance Brochure – all employee
• DFEH 185 Sexual Harassment – Brochure – all employees
• DE 2320 Unemployment Insurance Brochure – all employees
• AB 1487 Notice of Eligibility for Earned Income Tax Credits – all employees
• Health Insurance Marketplace Coverage Notice – all employees
• Rights of Victims of Domestic Violence, Sexual Assault, or Stalking – (25+ employees)
• FMLA Notice (Family Medical Leave Act) – (50+ employees)
• Notice of FMLA Eligibility Rights –(50+ employees)
• FMLA Designation Notice – (50+ employees)
When you add on the ACA and health insurance notices, employers have another 8-10 documents to provide employees depending on whether the employer is changing health insurance coverage.
Employers need your help!
How can employers know all these rules and requirements? We are not even counting the wage and hour laws, meal and rest break regulations among a multitude of others.
Health insurance agents can not only help their clients purchase and renew insurance but assist them with compliance whether it be labor law, ACA, city, county, state and federal requirements.
I am not talking about giving clients HR and compliance service platforms like Mineral (ThinkHR) or other such services or referring them to an ERISA Wrap vendor. I am talking about providing real value and charging fairly for it.
When our agency purchased a master license for ThinkHR 10 years ago we gave it to all our clients for free and sent them a ThinkHR video to show them how to use it. No one used it! Eight years ago, when we changed our sales process, we started to charge for the HR services such as ThinkHR, ERISA Wraps, POP plans, etc. We taught each client how to use it with a one-to-one session and priced it just below the market. In a couple of years, this new revenue stream grew to $80,000 and we decided to acquire JorgensenHR to further assist our clients.
As a closing example, I am currently speaking with an 80-employee law firm about their employee benefits. Their agent is earning over $45,000 a year in commissions. You guessed it paper enrollment, missing five health insurance/ACA notices, no Part D reporting to CMS and not assisting the employer or their employees. In addition, their dental plan is priced at 35% above other carriers in the market. In other words the broker is not providing $45,000 in services and with the dental plan priced in the mid-$80 range you have to wonder if they take their ethics CE training every two years.
It was this easy to grow our agency before deciding to sell and focus on our other company. Take advantage of opportunities to help your clients and their employees. Most importantly help your clients become compliant with new hire packages, annual employee notices, ACA notices and reporting and ERISA compliance.
Inspirational speaker and author Simon Sinek always focuses on the question “What is Your Why?” Why are you really in business? It is not just to make money or grow. If you asked any of our current 14 employees what our why is and why we are in business they would respond: “We Help People.” What is your Why?
BARRY COHN CEO and Chief HR Guy at JorgensenHR (JHR) was listed as one of The Valley 200, Most Influential Leaders in the San Fernando Valley area for 2021 and 2022. Cohn also leads the LA and Ventura County Employee Benefits practice for Really Great Employee Benefits (RGEB), a division of Heffernan Insurance Brokers. He is very active in his community, both professionally and personally.
“You make your living by what you earn, but you make your life by what you give.”