Benefits Advising In The Age Of COVID-19: 3 Questions For You
By Jennifer Berman
Spring 2020 has not been what any of us thought it would be. The season of stewardship reporting and strategic planning has become something entirely different and wholly unexpected.
Now that we’ve all at least had some opportunity to get our feet back under us, a new set of questions arise: In this “new normal,” how do we, as advisors, continue to bring value to our clients? From both a tactical and strategic perspective, we will have to make changes to meet our clients where they are now in order to bring that value. In doing so, advisors should be asking themselves the following three key questions:
How has the changing world impacted each individual client specifically, and how has that changed their benefit needs?
Seemingly all of humanity has been impacted by the COVID-19 pandemic. But, as we all know, that impact has not been uniform. Many lost their lives, others lost their jobs and still others lost their freedom of movement. Our clients are experiencing this crisis differently. Many small businesses (and many larger businesses) will not be able to survive the pandemic. Others will find new and innovative ways to thrive.
As such, there is no one-size-fits-all model for advising in today’s world. Let’s take the construction industry as an example. Is the industry in distress? Yes, particularly in states where construction isn’t deemed to be essential. However, others in the industry are doing better than ever (anecdotally, I’m told commercial flooring is booming while offices are empty). The point here is that each and every client will need to be separately evaluated and serviced.
Now is the time to listen carefully to what clients are saying, and what they’re not saying, in order to help them develop the best possible strategy. Does the client mostly need to focus on cost management, employee retention or return-to-work strategies? In light of those answers, how can you help develop solutions?
How has the changing world impacted the needs that benefit plans are designed to meet, and how does that impact conventional wisdom regarding those plans?
It wasn’t so long ago that federal regulations dramatically limited telemedicine solutions. Employers struggled with how to encourage telemedicine while maintaining health plans that met the health savings account compatibility rules, and telemedicine visits with established treating physicians simply weren’t covered by most health plans. Times have certainly changed on this front and many others.
This begs the questions: What other unwritten rules have changed, and how do such changes impact our advice? At the moment, two specific areas worth particular attention are plan eligibility rules and changes in medical spending.
Fully insured carriers and stop loss carriers nationwide have relaxed their eligibility criteria dramatically in light of COVID-19. Many have waived hours requirements, suspended actively-at-work provisions and eliminated waiting periods to help maintain the existing system. That said, each carrier’s rules will be different, and most of these changes are temporary. This means that eligibility rules will need to be reviewed and confirmed for each client, for each line of coverage, and that old assumptions likely no longer apply. Also important will be carefully documenting any changes that are made, both to ensure accuracy and to meet the employee disclosure requirements under the Employee Retirement Income Security Act.
Changes In Medical Spending
Medical claims are down this spring - and down big. Evidence is beginning to suggest that claims may 30% less than normal during the strictest phases of nationwide lockdown. This reduction in claims is certainly predictable in light of movement restrictions, prohibitions on elective procedures, etc. But it leaves open the question of what the impact of the boomerang effect will be.
How much pent up demand is currently in the system and what will be the long-term impact on claims? Certainly, some “lost” emergency room claims will never hit plans, but what about the impact of delayed diagnostic testing? We don’t have the answers to these questions yet, but we do know that none of the traditional rules apply. It’s time to dig into the data, rely deeply on analytics, and maybe send an extra bottle of wine to your favorite underwriter, because they are going to be very busy indeed.
How has the changing world not changed things, and how do we rely on tried and true strategies and advice to continue to bring value to our clients?
Now is a time to remember that the more things change, the more they stay the same. A few of the basics that are critical to keep in mind at a time like this include the fact the relationships count, that innovation and creativity are immensely valuable, and that compliance matters.
Benefits advising is a people business. Our collective goal is to help employers provide benefits to their employees. Fundamentally, that means helping people: both the businesses we serve and their employees. In times of challenge and stress, it’s important to remember that we are in a business driven by relationships. Yes, we will all lose revenue during this crisis, but remember that the ups and downs of the balance sheet are temporary. Keep up your relationships. Help people even when the immediate return on investment isn’t apparent. We are playing a long game.
Innovation And Creativity Win
Times of crisis breed opportunity. Over the coming months, there will be new products in the marketplace and innovative uses of existing products. Keep an eye out for these and find ways they might be able to bring value to your clients and your prospects. You’ll be glad you did!!
The COVID-19 crisis has led to the relaxation of many of the rules governing our industry. One such change, mentioned above, was the relaxation of high-deductible health plan rules for telemedicine. But, did you realize this change only lasts through the end of 2021? After that, without additional rules changes, it will once again be unclear if a plan can waive the deductible for telemedicine and remain HSA-compatible. This is one tiny example — there are dozens and dozens. Remember that this is a highly regulated industry and your clients are counting on you to keep them out of trouble.
As you navigate the year, focus back on these questions: What’s different for our clients? What’s different about our product? What’s not different at all? Use these questions to establish your guideposts before implementing your plans. Most important, keep in mind that we are all in the business of helping people — and now is our opportunity to shine.
Jennifer Berman is CEO of MZQ Consulting and senior vice president of compliance for KELLY Benefit Strategies. Jennifer may be contacted at [email protected].