Future of Small Group Benefit Brokers/Advisors

[PCBI]

well said
id rather have 500 clients than 1 group of 500.

 

[Madden9]

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?

 

[scagnt83]

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?

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

 

[somarco]

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

 

[nonie]

Are any of you getting retirement planning business from your groups? Also what are some good group FMO's?

 

[somarco]

I left the group business 15 yrs ago.

 

[somarco]

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.

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

 

[somarco]

alot of small business owners

alot is not a word

 

[JNJcannon]

Everyone saying "Group will die with Single Payer," go look at Canada. Group health insurance is still a very lucrative market.

 

[leevena]

Everyone saying "Group will die with Single Payer," go look at Canada. Group health insurance is still a very lucrative market.

That is somewhat true, most of this coverage is a type of gap coverage. The Canadian health plan does not cover everything, such as RX, most mental health, some infertility, nursing.