Selling Individual Programs in Traditional Group-Oriented Markets: An Interview with a Pioneer: Part 1

Drew Reardon and Innovative Benefits Consulting are blazing new trails with individual health insurance in the Southeast, using technology, a commitment to educating consumers and a belief in the future of individual policies.

This is part 1 of an informative two-part interview.

Interviewer: Please tell us about Innovative Benefits Consulting.

Drew Reardon: We're based in Alabama, but we've got offices all over the Southeast. We have about 100 years of combined experience within our organization, adding a little bit more all the time with new and experienced agents. We started off basically doing individual, but we have kind of pioneered the defined contribution setup here in the Southeast. We've actually been working on that over the last couple of years.

That's our big push now. Even though we still do individual health insurance, life insurance, supplemental policies, Medicare and that sort of thing, our main goal right now is to really try to help solve the healthcare issue here in America. We're doing it by partnering with the nation's leading carriers to be able to offer the best products to people and really trying to take it more towards defined contribution.

It lets people have their own policies, get a tax-free allowance from their employers and be able to have their insurance set up separate from their employer - which is definitely in their best interest.

Interviewer: What's your view of the current health insurance marketplace?

Drew Reardon: We're finding that in the Southeast it's kind of behind the times, especially here in Alabama. Alabama is in a unique situation where it's really dominated by a monopoly that's set up by one carrier. And they own up to 85 percent of the market in Alabama. But in the surrounding states, it's a little bit different.

We've found that when we're going out and talking with employees and companies, they're very excited about the opportunity to have their own policy, to be able to take savings over the pure price reduction. They're excited about the chance to switch to an individual policy from a group policy and put money into an HSA for their future costs - and even build up a retirement account.

So it's a very, very exciting situation whenever we meet people who don't already know about or have even heard about an HRA or an HSA. We let them know how it works, why it's a great thing for them, and then take people through the enrollment process. We handle it from point one all the way to the end.

Interviewer: How do you handle consumers who are hesitant about non-traditional plans?

Drew Reardon: Obviously, people still have the choice as to what they want to do. If they want to maintain a traditional co-pay plan or something like that, we're more than happy to take care of that for them. But we do feel that HSA, HRA and similar programs are the future of healthcare and definitely in their best interest. So we do spend a great amount of time educating them on HSA and HRA options.

With individual clients, that's normally where I start. Many people say they've been waiting their whole lives for something like this, and they're just the perfect candidate for an HSA. Once people understand how it works, most consumers are often eager to get started.

Interviewer: When arranging individual policies for group members, do you promote HRAs or HSAs?

Drew Reardon: We do both. It just depends on how the employer wants to set it up. We can do a group HRA or a group HSA, depending on if the employer wants the employee to have the money that they're saving for themselves or if employees want to try to keep it for the future.

Employers are basically saying "Okay, look, every year we're going to give you X amount of dollars to go towards your medical expenses so that you don't have to pay as much out of your own pocket. Each year that you work here, whatever you don't use will go over to the next year."

So then they can accumulate a huge amount of money, while the company will have a very limited amount of risk. If the employee has a few thousand dollars in deductibles, employers know that in any given year, that's a maximum amount they're going have to spend.

For employees who have been there for ten years or so without any major medical issues, they know they've got at least $20,000.00 in future medical expenses that are paid for.

That's a huge thing to be able to tell the employer: "Look, we're going to get you this amazing tool so you'll be able to attract and retain the greatest employees that you can find, a program that other companies aren't doing out there."

And employees are saying, "Wow, that's just amazing. If my employer is going to give me all this money, that's better than a raise, that's better than standard benefits."

It's really just a great tool for consumers all the way around.

Interviewer: Is the potential retirement savings a big draw?

Drew Reardon: Absolutely. If the company is in the mindset of "Look, we want to just have those savings belong to employees, to be their money, to basically double as a retirement account," then that's where we would set up the HSA program.

Their unused money would become retirement savings.

Obviously, there's a great tax advantage for both the company and for the individual. The company gets to write off a huge break on their income tax. And if the employee wants to contribute even more to their HSA, that's helping even more with their end-of-the-year taxes.

But again, the company pays less income tax, and because they have lower taxes, they've got more income coming in. Once people see these benefits, they're amazed.

Interviewer: What areas do you cover and which carriers do you use?

Drew Reardon: It's kind of spread out. I represent four major carriers right now. That would be Assurant, Aetna, Humana and Golden Rule here in Alabama. I also service Mississippi, Georgia, and Tennessee. However, the majority of my business is here in Alabama.

As for the carriers I use, it just depends. That's the beauty of being able to represent multiple carriers. An Aetna drug policy might be ideal for a 30-year-old single guy, but the same policy that does the exact thing on Assurant or Golden Rule or Humana might be a different product.

It's great to be able to have that flexibility and say to your client, "I'm comfortable with all these carriers. Let's find the one that fits your situation best."

Interviewer: What has been your experience with your Norvax/ProspectZone leads?

Drew Reardon: The sales process is a little bit different. Sometimes it might take a month or two. I've had a couple of times where people have gone straight to my online application and applied.

Before I could even talk to them, they'd gotten my autoresponder email, went online, applied and had their policies lined up. That's fantastic.

But I honestly would like to be able to talk to people to make sure that they fully understand what they're getting, that they know exactly what they're doing and that they've got the right program for them. But hey, if you feel like you know what you're doing, go right ahead and I'll get out of your way.

Check next month's newsletter for Part 2 of the interview and Drew's review of email autoresponders, quote engines and the best way to call new leads.