Future of Small Group Benefit Brokers/Advisors

Nov 5, 2018

  1. PCBI
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    PCBI Super Genius

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    well said
    id rather have 500 clients than 1 group of 500.
     
    PCBI, Nov 16, 2018
    #21
  2. Madden9
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    Madden9 New Member

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    Thank you to everyone who responded to my original question.

    Any thoughts on why there continues to be so much M+A activity? What is attractive from a buyer's perspective if the future of group health is so unknown?
     
    Madden9, Nov 27, 2018
    #22
  3. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    Because if it does survive long term, only the big players will be left in the game. Market-share is key for them.
     
  4. somarco
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    somarco That Medicare Expert Guy

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    In a similar situation, prior to 2014 we had roughly 25 carriers writing U65 health insurance. Now I believe there are 3 and two of them are regional. Only BX is state wide.

    Ambetter is primarily a Medicaid carrier with a tiny network.

    KP is an HMO with even smaller network
     
    somarco, Nov 28, 2018
    #24
  5. nonie
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    nonie Expert

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    Are any of you getting retirement planning business from your groups? Also what are some good group FMO's?
     
    nonie, Dec 15, 2018
    #25
  6. somarco
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    somarco That Medicare Expert Guy

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    I left the group business 15 yrs ago.
     
    somarco, Dec 15, 2018
    #26
  7. Matt Weiss
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    Matt Weiss New Member

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    Alot of small benefit brokers, mostly in ny but all over the country have been transitioning their books into PEO's.
    By moving their clients into a peo, they can offer more competitive pricing usually at 40% less cost for much better coverage by leveraging the buying power of over 500,000 work site employees in the pool. Also alot of PEO'S especially ADP and PAYCHEX are targeting their payroll clients and moving them into PEOs to get them out of community rated plans.

    I have partnered with some small and a few very large agencies who have worked with my general agency to safe guard their clients. Their are 2 strategies the benefit brokers use.

    1) Some work with me to cross sell their book and carve out the health insurance so they can keep that product, but make commission on the payroll, workers comp and other products. They now keep their current plan but add a new sticky product to keep out competitors and if someone trys to remove them from the community rated plans you offer, we can offer through a PEO. Most brokers make more commission than they currently ar with no service work.

    2) Some of my larger benefit firms in NY with mostly community rated clients have rolled their entire books into PEO'S and enjoyed the 97% retention rate, 0% service work, and higher than standard commission.

    If you had any questions, Id be more than glad to offer advice.
     
  8. somarco
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    somarco That Medicare Expert Guy

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    Why does this sound like an ad for an offer that cannot be refused?

     
    somarco, Jan 1, 2019
    #28
  9. Matt Weiss
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    Matt Weiss New Member

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    Lol its a good offer and alot arent familiar with the PEO marketspace.
    The couple of kinks in the sale process are

    The client has to switch payroll. This is what makes the coemployment relationship.
    Some clients with 2 or 3 employees dont want to pay an admin fee for payroll.

    PEOs charge an admin fee. The admin fee covers having a full payroll, HR, risk management and compliance team. The client gains alot of benefits but at a cost of an average 1-3% of payroll.

    Most clients who use adp or paychex are paying 1% for payroll including tax administration and w2’s

    For the additional 1-2%, they gain pay as you go workers comp with no audits, attorneys to fight unemployment claims and workers comp claims, human resources department, employee handbooks, technology for online onboarding and benefits administration and so much more!

    But alot of small business owners need to understand the value, which is hard for them to realize they pay a little more for payroll, save alot on health, and have the extra value.
     
  10. somarco
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    somarco That Medicare Expert Guy

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    somarco, Jan 1, 2019
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