What is the role of the local broker under PPACA?

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November 22, 2011

In the current broker/client business model local relationships are clearly preferred. However, that does not take into account the new health care landscape. Consider the advent of insurance exchanges. If Massachusetts is an example, a state’s exchange could gain a 30% market share in 3-4 years. So the client may purchase a health plan online without a local broker; the broker won’t necessarily be the only access point for products. So the question becomes, what…


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6 Comments

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Posted by: okhan s | September 9, 2012 12:07 PM

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There is so much that you can get from a local broker like this. You are able to get all the info that you can get from them. Take advantage of it. Quickbooks training

Posted by: james k | July 5, 2012 11:13 AM

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Thanks for the blog here Beverly. I agree. Some of my posts have made this same point about becoming 'strategically valuable' to our clients. I do, in addition, think that benefits advisers have limited themselves to thinking about products as solutions. That is, I think there are solutions (e.g. a communication strategy) that clients will pay for that is not a product per se. The question is who is willing to get out of the product trap?

Posted by: Mark L | November 28, 2011 12:14 PM

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To your point, with all of the added compliance demands that are being placed on employers, companies will require a best practices approach in all areas relating to managing human capital.

Posted by: Beverly B | November 28, 2011 9:30 AM

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Agree with your comments. The analogy of what happened to travel agents is a good one. They had a "lock" on the system because the airlines had no other effective way of selling seats until the internet came along. The PPACA loss ratio rules are ill conceived, but they do accelerate the trend towards direct purchase of health insurance - breaking the "lock" on a system that insulated brokers from justifying their compensation directly with the customer. To be successful, "advisers" will have to compete based on the value they bring to the customer for the fee that they propose to charge,not an arbitrary commission rate that is the same for everyone.

Posted by: Tom D | November 22, 2011 5:05 PM

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I so agree with Ms. Beattie & her perspective. I am an HR consultant in the St. Louis area and work with many local brokers to provide this type of added service and advisement value to our shared clients. As a result of PPACA employers will be very tempted by the PEO & ASO models & local brokers will need to provide similar services but preferably with more expertise & personalization, due to their knowledge of their clients. The exchanges will not be equpped to provide trusted advice, just a "product".

Posted by: Diane F | November 22, 2011 4:17 PM

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