By Linda Koco
Annuity professionals may not view health care reform as relevant to the work they typically do with clients — needs analysis, sales, service, income planning and the like. In fact, most annuity specialists don’t sell health insurance or, if they do, it’s typically done as a sideline or as an accommodation.
It’s easy to see why annuity specialists steer clear of health insurance, but they might want to reconsider.
It’s a given that the annuity tribe isn’t going to think of health insurance as their main hunting ground. Health insurance is a specialty in its own right. Its producers have their own credentials and designations, carriers, products, underwriting issues and the like, and they often keep abreast of medical advances and concerns, too.
Many annuity practitioners don’t have time to add all that to their existing expertise. Just keeping up with their own credentials, products and the rest has them hopping. Besides, many already offer certain closely allied product lines such as life and long-term care insurance, so the idea of adding health insurance might seem overwhelming.
Even learning about health reform will put annuity specialists outside their comfort zone. That’s not unlike asking a pastry chef to bone up on new regulations for handling meat. Since the chef does not work with meat, the chef would find the request onerous and pointless. People who are good at something like to do that something, not the other thing.
Controversy stymies interest, too. The 1,000-page Affordable Care Act (ACA) and its ensuing litigation and repeal efforts have made the health insurance world look like a churning sea of dispute and uncertainty. Annuity professionals already have dicey issues on their plates — major product and carrier changes, standard of care issues, private equity players in the marketplace and economic uncertainty, to name a few — so why add more fuel to the fire?
This is not to say annuity professionals are living in the dark with regard to health reform. Annuity folks have opinions about ACA just like everyone else. Many are independent business people and so may be wondering how the law will affect their firms’ health benefits. Some may have commiserated with health insurance colleagues who saw their commissions cut in the wake of implementation of ACA’s medical loss ratio provisions. Some may even be supporting efforts to repeal — or preserve — the ACA.
But you don’t hear many say they’re going after information about the new public health insurance exchanges created by ACA, or the SHOP exchanges, or the so-called private exchanges that are springing up as an alternative to public exchanges. They may be vaguely familiar with the “navigators” created by ACA but clueless about ACA-related issues and options their employer clients are facing.
They just draw the line at going face-to-face with clients about health reform and health insurance. “I’m sorry, but that’s not my field…”
Yet the hubbub around ACA will surely open up fetching education and door-opener opportunities, especially with business clients. That is why annuity advisors might want to learn about ACA after all.
That point became apparent at a workshop during this year’s annual meeting of National Association of Insurance and Financial Advisors (NAIFA). It was led by Anthony Boquet, who is vice president and executive director of the Penn Mutual Center for Veteran Affairs through The American College and a person who is making ACA inter-workings one of his pet projects.
The workshop was notable for two things regarding this topic:
First, the people who attended were insurance and financial advisors, although not necessarily health insurance specialists. That’s not a group one might expect to attend such a session, yet there they sat, hearing about ACA issues, asking questions and trying to pierce the veil. Those who don’t sell health insurance, or don’t sell much of it, were there to learn what’s going on — so they don’t have to tell clients “I don’t know,” so they have some idea of resources to consult, and so they can check out possible opportunities. They said so, in the hallway conversations.
[Speaking of resources, NAIFA has put up an ACA resource website for members and clients. It includes frequently asked questions about the exchanges, essential benefits, taxes, the individual mandate, Medicare Advantage and other ACA provisions. It even has a clock showing the number of days, hours, minutes and seconds until the ACA’s individual mandate goes into effect — 89 days as of this writing.]
The second notable item from the workshop is that, because of intricacies in the ACA, employers are weighing various health benefit strategies. Some of the key strategies that Boquet highlighted appear here. The jumbo and large size employers will no doubt turn to benefits consulting firms for assistance with sorting out these and other options. But many mid-sized and smaller employers are likely to turn to their health insurance broker and/or their other insurance and financial experts.
Therein lies the opportunity for the annuity practitioners, most of whom have at least some business owners among their clients.
Those owners will continue to have questions as the ACA story unfolds. Many will raise these questions with any and all of their financial advisors, annuity or otherwise, because they are clamoring for support and perspective.
If the annuity professionals get up to speed on the law and the key issues, they will at least be able to understand the concerns raised in this fashion and perhaps suggests appropriate resources. The annuity professional won’t be writing health business that way, but the conversation should help bolster the practitioner’s position as a trusted advisor.
There is always the possibility that the conversation could open the door to discussing other needs of the business owner -- needs that are in the advisor’s own field of expertise.
In addition, some annuity specialists may want to partner up with a health broker to accept referrals upon mutually-agreed-upon terms.
The advisor and broker could even team up to offer ACA sessions to business clients, either online or seminar style, with the purpose of providing information, sparking idea exchange and, yes, prospecting for new business —a gain, on mutually-agreed-upon terms.
Some annuity experts will stay away from talking about ACA no matter what. They are landlubbers who prefer the solid ground of annuities. But health reform is making waves now, and some annuity pros just might want to find a way to ride those waves.
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at email@example.com.
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