April 2   4 15pm - don cooper
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  • 1. “Is Fee-Based Planning In Your Future?” Don Cooper, MBA, ACBC TRIFLEX Corporation © TRIFLEX Corporation, all rights reserved
  • 2. What Will Be Covered In This Course I. Why Charge Fees? II. The Legal Basis and Best Practices III. Laying the Foundation, Best Practices IV. Fee Based Planning Opportunities V. Q & A © TRIFLEX Corporation, all rights reserved
  • 3. DISCLAIMER This presentation is for educational purposes only. It does not constitute legal advice, nor does it constitute advice about any particular set of facts or issues. If you have questions about a particular set of facts or issues, consider independently consulting an attorney or other professional. © TRIFLEX Corporation, all rights reserved
  • 4. I. Benefits compliance issues will likely: a) Becoming more complex b) Becoming less complex c) Not change PPACA Pop Quiz: © TRIFLEX Corporation, all rights reserved
  • 5. II. Insurance requirements will likely: a) Become more complex b) Become less complex c) Not change Pop Quiz Continued: © TRIFLEX Corporation, all rights reserved
  • 6. III. Commissions will likely: a) Increase b) Decrease c) Not change Pop Quiz Continued: © TRIFLEX Corporation, all rights reserved
  • 7. Why Charge Fees? I. PPACA – “Commission Compression” a. Individual mandate b. Employer mandate “Shared Responsibility” c. “Marketplace” assisters/navigators d. Medical Loss Ratios “MLR” © TRIFLEX Corporation, all rights reserved
  • 8. II. New opportunities a. ACA Marketplace notice.  Educating  employees, part‐time & full time. b. Creative plan designs = market  expansion opportunities. c. Compliance & Budgetary analysis. d. Long‐range planning. © TRIFLEX Corporation, all rights reserved
  • 9. The Legal Basis Can You Charge Fees? I. Check with your state Department of  Insurance a. Check the DOI Code and any regulations. b. Consult with legal council (Statewide  AHUs). © TRIFLEX Corporation, all rights reserved
  • 10. The Legal Basis Can You Charge Fees? II. What justifies charging of fees? a. To offset reduced commissions. b. To help clients comply with the complexities of  PPACA and other IRS, HHS & DOL regulations. c. Expansion of available client services. d. Budgetary analysis and design services. © TRIFLEX Corporation, all rights reserved
  • 11. Best Practices In All States a. Producers should not charge fees for  transacting insurance. b. Fees should only be charged when not  transacting insurance. c. Utilize a separate contract between the  producer and the client. © TRIFLEX Corporation, all rights reserved
  • 12. When Are You Transacting Insurance? California Insurance Code gives a good definition: a. Solicitation; b. Negotiations preliminary to execution; c. Execution of a contract of insurance; and d. Transaction of matters subsequent to  execution of the contract and arising out of it. © TRIFLEX Corporation, all rights reserved
  • 13. When Are You Transacting Insurance? a. The concepts of solicitation, negotiations prior to  execution, and execution of a contract of insurance, are  relatively straightforward. b. Matters arising out of must be distinguished from  matters which simply relate to a policy of insurance. o A service arises out of an insurance policy if the need  for the service exists only if that specific policy exists. o A service merely relates to a policy if the service  could be of value regardless of the existence of that  policy. © TRIFLEX Corporation, all rights reserved
  • 14. Other Things You Need To Know A fee should be agreed to in advance by the client  after full and accurate disclosure by the producer of  the service(s) which will be provided in exchange for  that fee. The contract should be in writing.  A written  agreement reduces the potential for  misunderstanding by the consumer, and also  documents for the producer that the appropriate  disclosures were made and the consumer’s consent  obtained. © TRIFLEX Corporation, all rights reserved
  • 15. Engagement Agreements The contract should identify, at a minimum: 1)The parties to the contract; 2)The services to be performed; 3)A plain statement that those services are  outside the scope of any agency relationship the  producer might have with any insurance  company; © TRIFLEX Corporation, all rights reserved
  • 16. Engagement Agreements The contract should identify, at a minimum: 4) The fee to be charged;  5) Any other conditions to be enforced (such as  limitations, if any, on the refunding of fees);  and 6) The signature, or some other expression of  consent, of the consumer.” © TRIFLEX Corporation, all rights reserved
  • 17. One Other Point to consider Do not reduce, waive or alter a fee for placement of  insurance products or a Broker of Record (BOR)! It may violate your DOI Anti‐rebating Laws © TRIFLEX Corporation, all rights reserved
  • 18. How many of you agree with the statement “Knowledge is Power”? Laying the Foundation “Application of Knowledge is Power” WRONG!! © TRIFLEX Corporation, all rights reserved
  • 19. Fee Based Planning Essentials For The Broker: 1. To charge fees you must add value beyond transacting insurance. 2. Earn a professional designation (ChHC, RHU, REBC, CEBS, CBC, etc.). 3. Never stop expanding your knowledge base. 4. Join the National Association of Health Underwriters (NAHU) © TRIFLEX Corporation, all rights reserved
  • 20. Fee Based Planning Essentials For The Broker: 5. Own a quality resource library (NAHU Guidebooks, Thomson Reuters Checkpoint, EBIA, RIA, etc.). 6. Find a mentor. 7. Establish strategic alliances (TPA’s, Lawyers, Accountants, and other benefits professionals). © TRIFLEX Corporation, all rights reserved
  • 21. Fee Based Planning Essentials For The Presentation: 1. The Presentations must be to C‐office decision  makers to effect a fee‐based sale. 2. The presentation must be condensed in a 2  page or less Executive Summary. 3. Provide adequate technical support to  substantiate claims. © TRIFLEX Corporation, all rights reserved
  • 22. Opportunities 1. Educating full & part-time employees. 2. Compliance evaluation and analysis 3. Discrimination testing 4. Comprehensive strategic planning © TRIFLEX Corporation, all rights reserved
  • 23. Educating Employees 1. Health insurance basics 2. Qualifying for subsidies 3. Navigating the Marketplaces © TRIFLEX Corporation, all rights reserved
  • 24. Compliance Evaluation 1. ACA (duh!) 2. Section 125 3. ERISA 4. HIPAA 5. COBRA © TRIFLEX Corporation, all rights reserved
  • 25. Discrimination Testing 1. Section 125 (3 tests) 2. Health FSAs (2 tests) 3. Dependent Care FSAs (4 tests) 4. Section 105(h) (ACA, waiting on the Regs.) © TRIFLEX Corporation, all rights reserved
  • 26. Comprehensive Strategic Planning Engaging the Employee is Critical © TRIFLEX Corporation, all rights reserved
  • 27. 10 Healthcare inflation Drivers 1. Over-utilization 2. Defensive medicine 3. Lifestyle abuses 4. Demographics, aging population 5. Uninsured & underinsured care 6. Medical malpractice litigation 7. Administrative costs 8. Technology advances 9. Pharmaceutical advances 10. Government regulations Employee Engagement Influences © TRIFLEX Corporation, all rights reserved
  • 28. Consultative Fee‐Based Planning is Partnering Benefit Needs Assessment • Plan information • Risk exposure • Employer objectives Strategies Proposal (no product) EmployeeEmployer Shared Responsibility • Competitive benefit options • Adequate contribution • Benefit Support Services for EEs • Educate employees • Learn to make wise benefits choices • Be a prudent consumer • Adopt a healthy life style • Pay their fair share Presentation Goals: o Confirm priority of objectives o Identify compliance risks o Present Strategies to evaluate o Propose an employer/employee partnership in benefits KEY DIFFERENCES: o One page fact finder o No census information o No payroll information o Begin 60 to 120 days  prior to renewal Executive Summary (2 pages or less) Option A Fee Based Three Year Strategic Plan Option B Traditional Product/Service Plan Option A Value Added Service Three Year Strategic Plan © TRIFLEX Corporation, all rights reserved
  • 29. All Necessary Group Proposal Information Plus Enhanced Fact Finding o Ownership & HCE o Section 125, 105, etc. o ERISA, COBRA, HIPAA, etc. 3 Year Strategic Plan Benefit Needs Assessment • Plan information • Risk exposure • Employer objectives Strategies Proposal (no product) EmployeeEmployer Shared Responsibility • Competitive benefit options • Adequate contribution • Benefit Support Services for EEs • Educate employees • Learn to make wise benefits choices • Be a prudent consumer • Adopt a healthy life style • Pay their fair share “Option A” © TRIFLEX Corporation, all rights reserved
  • 30. BROKER BENEFITS I. Increase existing client revenue A.Market expansion B.Improved product penetration C.Fee based revenue © TRIFLEX Corporation, all rights reserved
  • 31. II. Win new business – differentiate yourself A. Compliance risk analysis B. Employee engagement C. Long range strategic planning III. Lock out the competition – 3 Year Planning Strategy BROKER BENEFITS © TRIFLEX Corporation, all rights reserved
  • 32. What We Have Covered In This Course I. Why Charge Fees? II. The Legal Basis and Best Practices III. Laying the Foundation, Best Practices IV. Fee Based Planning Opportunities V. Q & A © TRIFLEX Corporation, all rights reserved
  • 33. Questions & Answers Don Cooper TRIFLEX Corporation www.triflexcorp.com don@triflexcorp.com 866.874.3539 Everyone, Please Take Out A Business Card B – Benefit Needs Assessment Form W – To be put on our webinar list C – To discuss a case address a specific issue No letter, put your card back in our pocket © TRIFLEX Corporation, all rights reserved