What Brokers are Thinking

brokers

Wrangle’s COO Lynda Taylor attended the BenefitsPro Expo this past week. Although her main objective was to speak on a panel covering ERISA compliance, she took full advantage to listen intently to other sessions and to the various conversations held between brokers within the Exhibitor’s Hall.

Here are Lynda’s Top Five Findings on What is on Brokers’ Minds Today 

1. Data is King.

The ability to access data and understand it will make all the difference to a broker.  They rely on data to dictate who to approach, how to approach them and the type of programs to set up for them.Most of the data available in the insurance industry is for groups with 100+ employees. Brokers can easily find this data to help obtain new clients and enhance their understanding of their current clients and where they stand on the horizon with others.

For groups with 50-100 employees and the small groups with less than 50, there is very little data available. If one could find a way to collect information on this group, he/she would be able to run their own race under their own standards and approaches.

The DOL proposal to expand the opportunity to offer employment-based health insurance to small businesses through Association Health Plans was rarely if ever discussed at the conference. Although over 720 comments were submitted to the DOL on the proposed AHPs, a final decision has not been made, and brokers are continuing to take their same approach in evaluating if working with those small businesses is still the best fit for them and what their agency is able to offer.

2. Brokers Main Concerns: Managing Growth, Finding Talent and Overseeing Technology and Compliance.

Does the following resonate with you?

    • With everything growing and changing rapidly, brokers struggle to manage the day to day and keep current on the knowledge base.
    • The millennials are looking for fulfillment in very definitive ways. Hiring managers are exponentially challenged to locate talent who are willing to put in the hours as well as develop strategies to keep them engaged and find meaning in their work.
    • Better technology can make a difference. However, the transition to implement is difficult. There are always bugs and glitches to trouble-shoot.
    • The account manager’s role is ever-changing. Compliance understanding is a must. Never the less, brokers have difficulty “knowing it all” and finding ways to be able to meet their clients’ expectations.

Lynda mentioned that a quote from the Broker of the Year was one for those struggling with concerns, “Don’t let perfect stand in the way of progress.”

3. Trying to Anticipate the DOL’s Next Move:

More than ever, the DOL seems to be shrouded in mystery. As a result, there is a definite split in opinion on whether the proposed changes for Form Year 2019 will go through and in what time frame.

Both Lynda Taylor and her fellow panelist, Dr. Kristin Kahle, the CEO and Founder of NavigateHCR, believe some of the changes are to come, albeit more so with the 2020 Form 5500. Dr. Kahle also believes that the DOL and IRS may collaborate and blend forms together such as the 5500 with the 1094/1095 or have the aspects of the Proposed Schedule J to be added to the 1094/1095. The other panelist Eric Ryles, the Vice President of Customer Solutions, ALM Intelligence, believes that there is little chance for the proposed changes as currently written. Per Eric no one has been chatting on this subject in Washington D.C. for quite some time; there is also an anti-regulations movement as seen with the fiduciary rule. [Wrangle’s source not too long ago noted that if Congress does not repeal the proposed changes to the 5500, they could in fact go through].

4. Does the DOL Impose Penalties?

We have all seen the staggering penalty amounts the DOL and IRS can impose. For instance the Secretary of Labor can impose on a Plan Administrator, up to $2,140 per day penalty fee with no limit/maximum. Do the federal agencies actually do it? Dr. Kahle answered with a firm and unwavering, “Yes” for the 1094/1095 forms. The IRS is currently going through submissions of these forms via alphabetical order of the company names; the IRS is currently at the letter “D.” There is no warm up or warning. Imposing penalties is in motion. One of her clients, which does have thousands of employees received a penalty notice for $2+ M for mistakes made on the form.  These errors will certainly turn into an expensive learning lesson.

For the Form 5500s, Wrangle has not seen these types of penalties. We do witness many Plan Administrators be proactive and use the DOL’s Delinquent Filer Voluntary Compliance (DFVC) Program to proactively avoid such costly penalties. True with budget cuts to both the IRS and DOL, audits may not be as plentiful. In contrast the collection of penalties is a money maker for the agencies.  EBSA (an office within the DOL that is the enforcer of the mandates) reported collecting $682.3M from its 1,707 audits held during 2017. Hedging a bet that there could be a penalty fee imposed would be a wise move.

5. What is To Be Done If a Client Never Had Plan Documents?

The approach repeatedly heard is to be proactive and have the Wrap Plan Documents in place going forward (same advice Wrangle’s ERISA Desk states). To out the Wrap Document in place retroactively could backfire since the DOL does review history. They may witness Wrap Plan Documents in place, but they will also review the distribution of the SPD and disclosure documentation to the Plan Participants; one cannot retroactively distribute. Overall for the Plan Administrator to make a good faith effort going forward could make a positive impression on the DOL.

In closing, Wrangle will continue to monitor the conversations and actions by the DOL and other federal agencies and report back here of what is to be in place going forward. This may not be as lively and fast-paced as a Friday night hockey game; never the less, these are certainly out of the ordinary times for us in the world of health and welfare benefits.

2018-04-25T12:13:23+00:00 By |Categories: Uncategorized|