SELLING SOLUTIONS FOR BROKERS

INSIDE: 2016 industry timeline

The three Rs of 2016 —recruitment, retention

and regulation– and how they will shape the future.

HR PERSPECTIVES

Vol. 14, No. 12 | December 2016 | BenefitsPRO.com

Are you sending the right signals to potential job

candidates?

The ACA as we know (and love?) it is gone. So what’s next? That’s anybody’s guess. Here’s what we know so far—along with prognostications from industry experts.

PLUS:The gender

pay gapdiscrimination

at work?

Best and worst industry trends of 2016

WELCOME TO THE TRUMP ERA

BPRO 12.16 cover.indd 2 11/16/16 3:28 PM

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What is Craftsmanship ?To be crafted is to meet exacting standards.

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DECEMBER 2016 2

BenefitsPRO.com DECEMBER 2016 17

HRPERSPECTIVES

PLUS: ARE YOU SENDING THE RIGHT SIGNALS TO POTENTIAL JOB CANDIDATES?

REGULATION

RECRUITMENT,RETENTION &

The three Rs of 2016—and how they will shape the future

12.16 HR Frontis.indd 17 11/16/16 12:08 PM

c o n t e n t s BenefitsPRO Magazine

BenefitsPRO™ (ISSN #1942-3551) is published monthly by ALM Media, LLC, 4157 Olympic Blvd Ste. 225, Erlanger, KY 41018-3510. Subscriptions are available by request. Periodical Postage paid at Covington, KY and additional mailing offices. POSTMASTER: Send address correction to BenefitsPRO™, PO Box 3136, Northbrook, IL 60065. Phone (800)458-1734. Fax (847)763-9587 Email benefitspro@

halldata.com. For change of address include old address as well as new address with both ZIP codes. Allow four to six weeks for change of address to become effective. Please include current mailing label when writing about your subscription.

Vol. 14, No. 12 December Copyright © 2016 by ALM Media, LLC. All rights reserved. No part of this magazine may be reproduced in any form without consent.

17

18HR 2016: a year in review by Scott Wooldridge

Three “Rs” dominated the HR world in 2016: recruitment, retention, and regulation.

24The right signals by Diane Nicholas

Are you sending the right signals to prospective employees during the interview process?

6Opening dialogueby Paul Wilson

8 Plot pointsby Gil Lowerre and Bonnie Brazzell

14Navigating retirementBy Christopher Carosa

16 What works by Marty Traynor

38 Paradigm shift by David Contorno

40 Action reaction by Paul Wilson

Vol. 14Issue 12

December

2016

10The gender pay gap

by Nick Thornton

There may be disagreement on the cause, but there’s little dispute over the reality of lower average wages for women and how this will hurt them in the long run.

HARD RESETWhat’s next for health care in the Trump era?

COVER STORY:

26

27 5 Trump-era health policy winners and losers. by Allison Bell

President-elect Trump has big plans for the ACA. Here’s how his ideas could hurt or help health insurance industry players over the next two years.

30 The election is over: 3 health care predictions by Eric Johnson

Be honest. Most of us didn’t expect this. Here are three post-election predictions related to the benefits industry.

33 The future of the ACA: what’s next? By J.D. Piro

For the second time in less than a decade, Congress and the president are set to debate the future of the health care system of the United States.

36 2016 industry timeline by Erin Moriarty-Siler

The past year has been eventful, to say the least. Let’s take a look back at the many ups and downs our industry experienced in 2016.

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DECEMBER 2016 4 BenefitsPRO magazine

EDITORIALEditor-In-ChiefPAUL WILSONpwilson@benefitspro.com

Managing EditorERIN MORIARTY-SILERemoriarty@benefitspro.com

BenefitsPRO Managing EditorCAROLINE MARWITZ cmarwitz@alm.com

CONTRIBUTING WRITERSChristopher Carosa, David Contorno, Marty Traynor, Kevin Trokey, Alan Goforth, Nathan Solheim, Katie Kuehner-Hebert, Scott Wooldridge, Amber Taufen

GROUP PUBLISHERTAMARA PATTERSONtpatterson@benefitspro.com

ADVERTISING SALESAccount ExecutiveMARIANA ROSARIO-GONZALEZmrosario@benefitspro.com

Account ExecutiveALICIA ROBLEDOarobledo@benefitspro.com

MARKETINGeMarketing Community ManagerJAMIE SNOWjsnow@alm.com

Marketing ManagerJILL SHECKELSjsheckels@alm.com DESIGN & PRODUCTIONDesign Lead JOE SCHLUEjschlue@alm.com

Client Services ManagerCHRISTOPHER GIBSON cgibson@alm.com

Director of ManufacturingSTEVE JOHNSTONsjohnston@alm.com

President/CEOBILL CARTER

President/Finance and Insurance GroupsMATT WEINER

Chief Content OfficerMOLLY MILLER

Chief Financial OfficerDEBRA MASON

President, ALM IntelligenceANDREW NEBLETT

Chief Digital OfficerDAVID SAABYE

General CounselDANA ROSEN

Senior Vice President, Global EventsJOHN STUTTARD

Something to talk about

The health care industry’s security system is apparently in need of major repair. Two reports recently offered evidence of cybersecurity issues in the industry. Although one notes stolen health care information isn’t nearly as valuable on the black market as is financial industry data, thieves can still get key personal information by breaching a health care database. The more alarming report was issued by SecurityScorecard, a provider of security risk information. The company summarized its findings in its 2016 Healthcare Industry Cybersecurity Report this way: “Security breaches in this industry pose devastating consequences because they can render an entire system or network inoperable, creating a life or death situation that needs immediate attention.”

Comment of the month“While many are not in favor of the ACA, it attempted to solve a complex and costly problem for millions of Americans. I would rather try and fail than not try at all. I hope any plan that succeeds ACA addresses the root cause, learns from past attempts and truly makes health care accessible and affordable to the majority of Americans. There is nothing parents want more than to take care of the health and welfare of our children.”

– Hal Incandenze, “The election is over: 3 health care predictions”

ACCORDING TO A NEW STUDY BY AARP, the emotional toll of caring for an ill loved one is just part of a bigger problem faced by American caregivers. The study says caregivers are spending roughly $7,000 per year on out-of-pocket costs related to care. The report also highlights other figures associated with caregiving:

.comFeatured blogs

The 5 states of (overtime) grief

by Alex Tolbert

facebook.com\BenefitsPRO twitter.com\BenefitsPRO BenefitsPRO

Conversation piece

78%of caregivers are incurring these out-of-pocket costs

41%of costs goes toward household expenses

20%the average percentage of a caregiver’s income that goes toward caregiving duties

25%of costs goes toward assisted living or skilled nursing facilities

3 startup values brokers need to adopt

by Sally Poblete

Corporate culture, chronic disease and the care continuum

by Dr. Kit Farr

Using the income replacement ratio to measure plan health

by Doug Johnson

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DECEMBER 2016 6

IN 2012, THE DENVER BRONCOS signed an injured, aging quarterback whose future was very much in doubt. At Peyton Manning’s introductory press conference, John Elway was asked about his backup plan in case the risky move didn’t go well. “I don’t have a Plan B,” Elway said. “I’m going with Plan A.”

Plan A paid off last year with the Broncos winning it all—Elway’s lack of a contingency plan was rewarded in a big way. But there’s a reason their season is labelled as a storybook ending—this approach rarely works in real life.

Few thought Donald Trump had a realistic chance of becoming the 45th president of the United States, so it’s somewhat understandable that many Democrats were confident leading up to Election Day. According to Buzzfeed’s Kate Nocera, many Dems found “the idea of Trump actually winning so unimaginable, no one [had] given much thought to how they’d handle him winning the election.”

Texas Rep. Marc Veasy said, “It’s never talked about in much depth or detail because the guy is such a joke. We can’t fathom it and therefore are not planning for it.”

One senior Democratic Senate aide told BuzzFeed, “No one is sitting around planning for a President Trump. No one is meeting, no one is contemplating, no one

is meditating about this.”To be fair, some

interviewees specified that no plan was necessary “because they disagree with everything he says,” so their course was already laid out. Still, some are likely ruing their lack of planning as they scramble to make sense of the new political landscape.

Meanwhile, many are celebrating the forthcoming Trump presidency and impending ACA repeal. But Eric Johnson, a broker sales executive for freshbenies, (who shares three of his health care predictions on page 30), advises caution and circumspection.

“Before criticizing one side and assuming the other side will fix everything, I recommend studying the history of the ACA. We know it was based on a program that was put in place under a Republican governor, but many don’t realize that the Massachusetts bill had its origins in a 1993 bill with 20 Republican co-sponsors that was introduced as an alternative to Hillarycare. One reasons Republicans have had so much trouble introducing a replacement plan is because nearly every idea they had was embedded in the ACA.”

Whatever your current mood, this election offers a good reminder of the importance of Plan B. Because no matter which side of the aisle you sit on, there will never be a happily ever after.

Grim fairy tales

OPENING DIALOGUEby Paul Wilson

“Some on the left are likely

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they scramble to make sense of

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DECEMBER 2016 8 BenefitsPRO magazine

NEARLY 50 PERCENT of carrier re-spondents in a 2016 Eastbridge survey indicated that hospi-tal indemnity (HI) will be a growth product for their com-panies in the next one to two years, more than double the number from the same survey in 2014. Employers participating in a separate study ranked hospital indemnity second in terms of new sales product potential. This jump in expectations at both the carrier and employer levels suggest that many carriers may be preparing to bring more HI plans to market or at least focus on them more, and employers will be open to adding these products to their employee benefits offering.

Despite this trend, however, most brokers have yet to consider hospital indemnity as a “go-to” product. A recent broker survey conducted jointly by Eastbridge and BenefitsPRO found both voluntary and employee benefit brokers did not rank HI plans among their top five most commonly sold voluntary products, but did list four of the top five products the same. With both voluntary and benefit brokers sell-ing such similar portfolios, exploring HI products with clients may give you some welcomed differentiation.

Brokers who have chosen to capi-talize on today’s HI plans find they can become better solution provid-

ers, given the product’s ability to fit with an employer’s medical plan

and its flexibility to custom-ize the design for a specific employee. Today’s hospital indemnity plans are more like supplemental medical plans,

as they are much broader than a simple daily hospital confine-

ment benefit. The new plans are structured to help cover deduct-ibles and out-of-pocket expenses when someone is hospitalized and include benefits such as hospital admissions, imaging and diagnos-tics, surgery, physician visits and outpatient treatment, and wellness or preventive/screening procedures. Some HI plans also contain cover-age options for prescription drugs, daily inpatient treatment, daily skilled nursing and private nurse care—and all on an indemnity basis so as to remain an “excepted” plan under ACA.

As the expectations for growth in hospital indemnity plans continue, those who explore these products with current and potential employer clients could set themselves apart from other brokers. These plans not only bring more options and customizable solutions to each employer’s specific medical plan, but allow employees to offset some of the high out-of-pocket medical expenses associated with inpatient and outpatient hospital care.

Gil Lowerre and Bonnie Brazzell, Eastbridge Consulting Group, Inc.

Hospital indemnity: Do you know what’s new?

PLOT POINTSBy Gil Lowerre and Bonnie Brazzell

Growth Products for Carriers

201620142012

Product Percent interested Not offering Potential index

Long-term care 14% 72% 10.21

Hospital indemnity/Supp medical 14% 68% 9.87

Critical illness 15% 62% 9.59

Cancer 14% 66% 9.14

Whole/Universal life 13% 65% 8.85

Legal 11% 76% 8.42

ID protection 10% 80% 8.18

Pet 10% 81% 8.06

HIP

20% 18%

45%

Term

23%

39%

24%

Dental

18%21% 19%

STD

35%

25%

14%

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DECEMBER 2016 10 BenefitsPRO magazine

genderpaygap

the

shutterstock

12.16 gender pay gap.indd 10 11/16/16 11:34 AM

BenefitsPRO.com DECEMBER 2016 11

By Nick Thornton

Women’s lower earnings

mean reduced Social

Security benefits, smaller

accruals in defined

benefit plans, and more

difficulty saving enough for

retirement.

IN JULY, the U.S. Department of Labor’s Bureau of La-bor Statistics released the most recent data highlight-ing the gap in pay between women and men.

For all workers, median full-time weekly earnings were $824. For men it was $909, and for women it was $744, or 81.8 percent of median earnings for men.

Social scientists, economists, lawmakers and equal rights activists have been tracking the gender pay gap for decades. Certainly, it has narrowed since President John F. Kennedy signed the Equal Pay Act into law in 1963, when women earned about 59 percent of what their male counterparts did, according to the National Committee on Pay Equity, a nonprofit advocacy group based in Washington.

Between 1980 and 2001, the percentage of pay in-creased substantially, from 60 percent to just over 76 percent. Much of what economists call the traditional rationales for explaining the gender pay gap—such as workforce participation and education rates—also shifted substantially in that time. In 1963, women accounted for 34.4 percent of the workforce; in 1990 it was 45.2 percent; by 2015, women accounted for nearly 47 percent of the workforce.

But since the strides made in the 1980s and 1990s, the income gap has proven to be stubbornly persis-tent. In 2007, women earned about 78 percent of what men earned. For the next five years, their pay as a percentage of men’s actually dropped marginally.

Meanwhile, the traditional rationales used to, in part, explain the gap may be providing less ballast for those who challenge the presence of systemic pay inequality.

Not only are women participating in the labor force at equal rates to men, but in 2015, more women held a bachelor’s degree than men, marking a first since the Census Bureau began tracking data on higher educa-tion.

12.16 gender pay gap.indd 11 11/16/16 11:35 AM

DECEMBER 2016 12 BenefitsPRO magazine

HOW MUCH OF THE GAP DOES SEXISM EXPLAIN?To date, women have failed to reach pay parity in all fields of employ-ment. In all 22 industries tracked by the Labor De-partment, women made less than men in 2014. In some industries the dif-ference is glaring:

• In the legal field, women make less than 57 percent of what men make;

• In business and financial operations, they make 75 percent of what men make;

• In management, they make about 78 percent of what men make.

The highest level of parity is in construction, where women make 91 percent of what men make—some economists have attributed the latter to women’s increased inclusion in collective bar-gaining agreements.

All of that data raises the question: How much of the pay gap is attrib-utable to gender bias in the workforce, be it in implicit forms or out-and-out sexism?

Early in 2016, two economists from Cornell University published an exhaustive analysis of decades’ worth of data exploring the pay gap. Beyond labor participa-tion rates and levels of higher education, the studies attempt to factor how professions tend to attract women, such as nursing and education,

and how their academic choices—women still study math, science and technology at lower rates than men—affects the wage gap.

The studies also factor time in the workforce, attempting to account for the degree to which leav-ing a job to start a family affects women’s wages.

That data, and reams of other analysis, can be chalked up to the knowable information economists have used to explain the wage gap.

But to the question of the impact of bias on the wage differences between the sexes, economists also account for what is called the “unexplained” effect on the gap.

In the “Gender Wage Gap: Extent, Trends, and Explanations,” authors Francine Blau and Law-rence Kahn note that the “unexplained” feature

of pay gap analysis has been a standard compo-nent of much of the dis-section of the issue over the years.

“Such an unexplained or residual wage gap is often taken as an esti-mate of labor market discrimination,” write the academics. “However, as is well known, such estimates are suggestive, but not conclusive.”

Over time, the impact of the unexplained—or the potential that gender discrimination is affect-ing the wage gap—has decreased, as the overall pay gap has closed, con-cluded Blau and Kahn.

Nonetheless, the hard data still fails to fully explain the gap. “The persistence of an unex-plained gender wage gap suggests, though it does not prove, that labor mar-ket discrimination contin-ues to contribute to the gender wage gap,” just as the decrease in the un-explained gap over time “suggests, though it does not prove, that decreases in discrimination help to explain the decrease in the gap.”

Translation: Blau and Kahn presume that dis-crimination—be it implicit or out-and-out sexism—has some effect on the wage gap, but less than it likely did in the past.

OBAMA: GENDER PAY GAP AN ‘EMBARRASSMENT’Others make less dip-lomatic assessments of the impact of bias on the

wage gap.During his 2014 State

of the Union address, President Obama refer-enced the gender pay gap, calling it an “embar-rassment,” and adding, “Women deserve equal pay for equal work.”

In an issue brief published in April of 2015 on the pay gap, the White House’s Council of Economic Advis-ers acknowledged the difficulty in taking an accurate measure of bias, but said “there is little beyond discrimination” to account for economists’ “unexplained” portion of the pay gap.

Still, not everyone is convinced of discrimi-nation’s impact on the gender pay gap.

Claudia Goldin, who in 1990 became the first ten-ured professor in Harvard University’s economics department, and whose research was frequently cited in Blau and Kahn’s research, does not think blatant discrimination explains the gender pay gap.

“Does that mean that women are receiv-ing lower pay for equal work—that is possibly the case in certain places, but by and large, it’s not that,” said Goldin, in an interview on the Freako-nomics podcast. “It’s something else.”

Goldin suggested those occasions of pure discrimination are “pretty small,” and that the fact that women assume greater responsibilities

the gender pay gap

How much of the pay gap is attributable to gender bias in the workforce, be it in implicit forms or out-and-out sexism?

12.16 gender pay gap.indd 12 11/16/16 11:35 AM

BenefitsPRO.com DECEMBER 2016 13

outside the workplace, raising their own families and often filling in as care takers for aging parents, explains more of the gap.

“The answer is that we don’t have tons of evi-dence that it’s (the wage gap) true discrimination,” Goldin told Freakonomics.

LOWER WAGES, LESS FOR RETIREMENTWhile economists may disagree on the causes of the pay gap, there is little to dispute the reality that the lower average wages women earn will impact their retirement.

Lower earnings trans-late to lower Social Securi-ty benefits, lower accruals in defined benefit plans, and it also makes the 10 percent to 15 percent sav-ings rate recommended by financial advisors more difficult to achieve, given

there is less money to save. In 2014, Wells Fargo found about half of men were enrolled in their workplace retirement plans, compared to 43 percent of women. When including an employer’s match, only 39 percent of women were saving the 10 percent of their salary.

Complicating those low savings rates for women is the reality of longevity. Recently updated mortality tables from the Society of Actuaries show the aver-age 65-year-old woman will live 88.2 years, almost two years longer than the average man.

WOMEN NEED MORE THAN ‘REMEDIAL’ FINANCIAL EDUCATIONSallie Krawcheck, co-found-er and CEO of Ellevest, a new robo advisory plat-form marketed specifically

to the needs of women investors, says women’s investment needs are different from men’s, and women “have not felt welcome” in the traditional financial services market.

“We certainly do make less—that bugs the crud out me,” said Krawcheck in an interview with CNBC.

Women currently suf-fer a major investment gap, says Krawcheck. But the solution is not to wait for the gender in-come gap to close, nor is it better targeted mes-saging from Wall Street or getting more women “remedial” financial education.

Like other automated investment platforms, Ellevest personalizes an investment strategy, but unlike other robo-advi-sors, it factors average

lifetime salary curves for women, which are dif-ferent than for men. And it incorporates women’s risk preferences and lon-ger lifespans, according to the firm’s website.

Krawcheck thinks every woman who has retired her high interest debt should be investing. Ellevest has no minimum account balance require-ments.

For women, investing tends not to be about picking the right fund or even outpacing broader market indices, according to Krawcheck.

“It’s about I want to start a business, I want to retire well, I want to have a baby,” Krawcheck said. “How much do I need to get there and can you put together an investment portfolio to get me there?”

If the gender pay gap were applied to America’s highest office, a female president would make $72,800 less than a male president.

$400,000

Presidential salary

$327,200

shut

ters

tock

12.16 gender pay gap.indd 13 11/16/16 3:30 PM

DECEMBER 2016 14 BenefitsPRO magazine

IT’S NOT OFTEN anything so unclear can be so clear. No, I’m not talking about the amaz-ing presidential election. Wait. Yes I am. In a way. As a long-time securities analyst and portfolio manager, I’ve had to dig deep into business trends of various industries and learn how to read the otherwise random patterns of economic tea leaves. Hmm, patterns. That’s an apt description. Here’s why:

Years ago, I wrote a paper on the psychology of winning chess. In my research I discovered why it’s surprisingly easy for hu-mans to consistently checkmate supercomputers with sophis-ticated programming: pattern recognition. The more games of chess a grandmaster plays, the more patterns he can quickly and efficiently recognize. This is the key to winning chess (especially against a computer, where non-verbal techniques go unnoticed).

When it comes time to identify the three least expected trends that 2017 will shortly reveal to us, it comes down to pattern recognition. This is most acutely true given today’s unpredictable political and regulatory environment. Or, is it that unpredictable?

Unexpected development #3: The cur-rent version of the DOL’s fiduciary rule will be DOA. Many fiduciary thought leaders feel, despite President-elect Trump’s opposition to the new rule, the regulation will go unchallenged for sev-eral reasons. First, the industry is already moving toward acceptance. For example, several brokerage firms have already announced they will eliminate commis-sions for IRAs. Second, repealing the fiduciary rule is simply not a priority for the new administration (it failed to make

the list in Trump’s “New Con-tract with America” speech in Gettysburg.) What many fail to recognize, though, is that Trump is a deal maker and there are plenty in Congress who want to see the fiduciary

rule go away. It’s therefore safe to assume repealing the fiduciary rule will be one of those “players to be named later” in the many deals Trump will make with Congress to realize his stated priorities.

Unexpected development #2: The fiduciary battle begins in earnest among top financial service providers with deep ad-vertising budgets. The clue here is something I said above: “Sev-eral brokerage firms have already announced they will eliminate commissions for IRAs.” Well, sev-eral other brokerage firms insist they will keep commissions on IRAs. All I have to say is “Let the advertising war commence!” The marketplace has long anticipated this inevitable conflict and 2017 will be the year we finally wit-

ness it. Unexpected development #1: The

need for state-sponsored IRAs rapidly diminishes. Speaking of competition, once Congress passes (as expected) legislation allowing open 401(k) MEPs, you’ll see an avalanche of these plans coming from the private sector. They will be competitively priced compared to their state-sponsored counterparts, but will have the added advantage of ERISA protection and broader savings and investing features. Retirement savers will look back and wonder “Why didn’t anyone think of this before?”

There you have it. Wasn’t that easy? Now, if we only had room for a child IRA …

Three unexpected retirement

savings plan develop ments 

to watch for in 2017.

Fiduciary is dead! Long live fiduciary!

NAVIGATING RETIREMENTBy Christopher Carosa

Whatever we think the DOL’s fiduciary

rule means right now, it won’t apply in a

few months.

Speaking of what we don’t need, you can

add state-run private employee retirement

plans to that list.

How many will be surprised to discover

we didn’t need the fiduciary rule in the

first place?

Christopher Carosa, CTFA, is chief contributing editor for FiduciaryNews.com and author of the new book, “401(k) Fiduciary Solutions.”

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Broker Innovation Lab

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DECEMBER 2016 16 BenefitsPRO magazine

TO COMMEMORATE the ceremo-ny awarding the 2016 Nobel Prize for Literature to Bob Dylan, let’s celebrate with a tribute to the business insights we can garner from his work.

Your first thought may be: “The Times They Are A’Changin,” but what does Bob Dylan have to do with business? While Bob Dylan is generally viewed as a rebel, he is also an astute busi-nessman. So let’s consider his cre-ative output as products created and marketed by a successful company.

Branding: “Bob Dylan” is a brand name, created by Bobby Zimmerman in the late 1950s. This brand rose to the top of its business in a brief period of time. It was internation-ally acclaimed before the founder reached age 25. “Like a Rolling Stone,” released when Dylan was 24, was rated the No. 1 rock song of all time by the editors of Rolling Stone magazine in 2014.

Business development and continuous improvement: To keep the brand vital, Dylan has created new prod-uct flow for over 50 years. He has written and performed songs in multiple styles. “Shadows in the Night” and “Fallen Angels” are not only new products, they serve to “uncover” neglected sections of the “great American songbook,” the Nobel committee noted in their selection announcement.

Dynamic and involved business lead-ership: As the company’s founder, Dylan is still active and has relentlessly pro-moted his products for years. In 2015 and 2016, he performed (or has booked) 164 shows covering 35 states and 15 coun-tries. He has been on the road, averaging 100 shows annually, for 30 years.

Attracting talent: Every successful executive builds their organization by recruiting and retaining great talent. Dylan’s touring band has featured many

terrific musicians. His current band is extremely well regard-

ed by musicians and the pub-lic. They have been together for over 10 years, playing over 1,000 concerts on five continents. Great talents

have covered Dylan songs for decades, including Peter, Paul

& Mary, Joan Baez, Jimi Hendrix, Guns N’ Roses, Miley Cyrus, and Adele, to name a few.

Customer development: Every lasting business must retain current customers along with constant mar-ket development and a flow of new customers. Dylan has consistently kept prices for his shows more af-fordable than many of his contem-poraries. He has taken his show to small towns like Salina, Kansas, and Oshkosh, Wisconsin, as well as New York, London, and L.A. Dylan has performed for world leaders as di-verse as Pope John Paul, presidents of the U.S. and France, and Frank Sinatra.

Willingness to change: Dylan often changes at the risk of offending his audience. In the 1960s alone, he was a folk singer, a rock star (alienating many folkies), then retired from touring. Within a couple of years, he was recording coun-try songs in Nashville with Johnny Cash. He has also recorded Christian music, blues and standards.

Influencing others: Almost every mod-ern musician bears some debt to Dylan. Some have even been called the “new Dylan.” In business at large, Steve Jobs found great influence in Dylan’s works, as have many others. Songs like “Blowin’ In The Wind” influenced countless people as they became anthems for human rights.

As you have figured out, I am a Dylan fan. But as you can see, his career has not just been about music. Much of his success is due to the same principles that underlie a successful business—principles we can all learn from.

WHAT WORKSby Marty Traynor

Marty Traynor is vice president Voluntary Benefits and Group Products at Mutual of Omaha. He can be reached at marty.traynor@mutualof omaha.com.

Business and Bob Dylan

Diverse media exposure

Dylan has provided music for movies as diverse as

“Jerry McGuire,” “The Big Lebowski,” “Selma,” “Hamlet”

and “Easy Rider.” And who can forget Bill Murray’s

version of “Shelter from the Storm” in “St. Vincent?” In 2015, Dylan was featured in a lengthy cover story in

AARP magazine.

“While Bob Dylan is

generally viewed as a rebel, he is

also an astute businessman.”

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BenefitsPRO.com DECEMBER 2016 17

HRPERSPECTIVES

PLUS: ARE YOU SENDING THE RIGHT SIGNALS TO POTENTIAL JOB CANDIDATES?

REGULATION

RECRUITMENT,RETENTION &

The three Rs of 2016—and how they will shape the future

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DECEMBER 2016 18 BenefitsPRO magazine

HR

HRHR overview

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BenefitsPRO.com DECEMBER 2016 19

HR

HRHR overview

THREE RS DOMINATED THE HR WORLD IN 2016: recruit-ment, retention, and regulation. Although there were other important trends as well, experts say competition for good workers and the challenges created by new fed-eral rules were at the top of most employers’ list when it came to HR topics.

The election of Donald Trump as president may or may not have an impact on some of those regulatory issues in the long run, but for now, it’s probably safe to assume that

workplace regulations won’t be immediately changed. Many top issues for HR specialists in 2016 were famil-

iar: wellness programs, wearable technology, and the continuing growth of health savings accounts (HSAs), for example. But even familiar trends have developed new wrinkles and innovations. And some areas, such as attracting employees, have become more urgent, as the unemployment rate drops and it becomes more difficult to find quality workers.

By Scott Wooldridge

TRENDS

Trends reflect younger workers, changing technolgy

HRIN 2016

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DECEMBER 2016 20 BenefitsPRO magazine

HR

HRHR overview

YOUNGER WORKERS CREATE A NEW WORLDThe U.S. labor pool is changing. In the past three years, millennials surpassed both boomers and Gen Xers to become the largest age demographic in the workforce. Accord-ing to Pew Research, 1 in 3 workers is now a millennial.

“In 2015, millennials became more than 50 percent of the workforce,” says Susan Heath-field, a management consultant and human resources expert at The Balance.com.

“The boomer population is exiting, and even if they stay in the workforce, the chanc-es of them reporting to someone half their age are really high,” she adds. “It’s creating big changes.”

According to Heathfield, the younger workforce is making demands for more flex-ibility, such as telework and career devel-opment opportunities. They also see the workplace differently than earlier genera-tions. “They make friends at work, and their social life goes on in the workplace,” she says. “They want to get to know the families of the people they work with.”

“[The workplace] is becoming more of a meritocracy—judge me on the work, not where I do it or how many hours I put into it.”– Tom Wimer

WORK/LIFE INTEGRATIONHR officials used to talk about work/life bal-ance. But with telework and other trends toward remote work options, officials have begun to use a new phrase: work/life inte-gration.

“From where we were 10 or 15 years ago to today, it’s a lot different,” says Tom Wimer, principal of OneDigital’s Human Capi-tal Solutions. “With the demand for more flexible schedules, the way that people work has changed. It’s becoming more of a meri-tocracy—judge me on the work, not where I do it or how many hours I put into it.”

Julie Stich, director of research at the In-ternational Foundation of Employee Benefit Plans, notes this change has stretched the concept of the workday, with many doing work from home in the evenings and on weekends. “They’re doing personal stuff at work and getting work messages when they’re at home,” she says. “It all does blend together.”

Wimer says workplace interaction has changed dramatically. “The old weekly team meetings just don’t happen much anymore. It’s just not the way a lot of folks communi-cate anymore. We’re on a 24/7 communica-tion cycle.”

“It’s a brave new world in many ways,” says Heathfield. “And employers who do not adjust to this are not going to attract the best employees, because those employees know they can go somewhere else and get what they want.”

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HR

HRHR overview

EMPLOYER BRAND AND CULTUREWith the blending of work and personal life comes higher expectations for the employer, experts note. Employers are not just expected to make mon-ey—they have to make a difference.

“Millennials say philan-thropy is really important to them,” says Heathfield. “The employer brand has to stand for something. They have very high ex-pectations for the work-place.”

Some in the HR world speak of a company “brand” that can help attract and retain work-ers; Wimer says he prefers to think of it as question of corporate culture. But either way, workers want employers to emphasize social responsibility. “This is a big item for compa-nies that want to reflect a sense of social responsibil-ity and a sense of commu-nity,” Wimer says.

REGULATION: TWO CHANGES HAVE EMPLOYERS SCRAMBLINGThe two big regulatory issues that affected businesses in 2016 were the overtime rules and a new fiduciary rule, though both will see changes with the election of Republican Donald Trump to the White House. Much will depend on what the new administration chooses to make a priority. Some observers think the Trump admin-istration will have bigger fish to fry (think repealing and replacing the Affordable Care Act), so it’s possible these regulations will stay in place, at least for the short term.

The Department of Labor changes to overtime will result in overtime protections going to an additional 4.2 million workers, federal agencies have estimated. In addition, new rules on fiduciary responsibility would require brokers to certify they were working in the best interests of their clients. The rule would cause compa-nies to look closely at their employer-sponsored retire-ment plans to make sure all policies and agents were in compliance. Many think that although Trump has spoken against the rule, it will stay in place for the foreseeable future. “I can’t imagine this is going to be on the top of his hit parade,” says Marcia Wagner, a lawyer with the Wagner Law Group, in a recent story on MarketWatch.

One thing that both Hillary Clinton and Donald Trump talked about during the campaign was paid mater-nal leave. Although it’s too soon to know whether the federal government will mandate policies around fam-ily leave, many companies are already expanding their family leave and sick leave policies. And some state and local governments have passed legislation in this area. “I think the proliferation of family medical leave legislation by state and local jurisdictions has become a big devel-opment in the last year,” Wick says.

TECHNOLOGY CONTINUES TO OPEN NEW POSSIBILITIESContinued innovation in on-line offerings and technolo-gies were another trend HR experts watched in 2016.

Rodney Alvarez, who serves on the HR Disciplines panel for the Society of Human Resource Manage-ment, notes online benefits and services have exploded, which he says has been a great help with recruiting. He says the biggest trend he saw in 2016 was the use of online clinics, which allow employees to see a health care provider via Skype.

“It allows employees to have immediate service, without having to wait for an appointment, and it’s open 24 hours a day,” he says. “We’re seeing a grow-ing trend of those services in the past year.”

Alvarez say he has also seen other online benefits, often delivered via apps, such as family planning resources and help with student loans. “Especially with millennials, we’re see-ing companies, instead of a 401(k), they make match-ing payments on a student loan,” he says. “For workers coming out of college with a huge debt, being able to find an employer who will do a match is fabulous. It’s a really great recruiting tool.”

Wimer agrees there has been a lot more interest in online platforms for HR benefits. “We’re seeing a lot more employers, even small- and middle-market companies, looking to lever-age technology solutions for their HR processes.” HR

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14

The finalists for the 2016 Benefits Selling Broker of the Year all have a few things in common. They

work hard for their clients. They think strategically. They encourage long-term planning. They don’t let

regulations get in the way of success. They give credit to the people who work with them. Indeed, they’ve all done more than just survive

today’s uncertain and unpredictable business climate. They’ve thrived.

TReed Smith’s formula for success consists of a few key ingredients that set him apart from other brokers and agents. For starters, he doesn’t just sit down with a client and review a spreadsheet to see where he can save them money. He takes it a couple steps further by devising a strategy for his clients to compete in their marketplace. Like other brokers and agents, he has been a leader in encouraging consumer-driven health care. But in order to do so, Smith has embraced technology to engage employees and reduce costs. When the Affordable Care Act (ACA) was passed, Smith conducted webinars for his clients to learn about the law. During those webinars, more than a few employers realized that Smith was way ahead of the game. Those are just a few reasons why Smith, a senior vice president and practice leader at CoBiz Insurance in Denver, is Benefits Selling’s 2016 Broker of the Year.

“He’s got a lot of great strengths,” says Todd McLean, president of CoBiz Insurance.

“He’s a passionate champion for employee benefits and how they impact people. He’s also an exceptional team player; he goes 24-7 and will be anywhere for his team and his clients. He gives great guidance to the team, he’s articulate and he has all the qualities you want to see from someone in control. He’s our practice lead to the entire team and he’s an individual everyone on the team feels comfortable going to.” The 37-year-old Smith joined CoBiz in 2009 and has helped grow the company’s employee benefits business from $2 million at that time to $6 million last year. Smith works with about 50 small- to mid-size companies, and his strategies have helped CoBiz’s clients keep their health care costs significantly below inflation for four years running.“We are always pushing ourselves to think about the help our clients need to make sure they’re outperforming the national average and their competitors in attracting and retaining talent because they have a better benefits plan that is more cost effective,” Smith says.

Actionable intelligenceWhile he’s helped his clients manage health care

costs, Smith sees his role as much more than acting

as a spreadsheet analyst. He talks with his clients

about health insurance and benefits packages in

competitive terms. The way Smith sees it, helping

clients attract and retain top employee talent enables them to beat their competition.

“We spend a lot of time in up-front discussions

with new clients, talking about how we can align

benefits strategy with their business strategy,” Smith says. “We use analytics, employee education

and long-term strategic planning—that’s not how insurance and benefits are managed in a lot

of places. So when we talk to a new client about whether there are any disparities between their business and how they manage their health care

benefits, we tell them we want to be the company

that lives in the benefits world and brings them actionable intelligence.”Smith has worked with Cochlear—an

international manufacture of implantable hearing

devices with offices in Centennial, Colorado—for the

past four years. Kim Coleman, a senior director of

human resources with the company, points toward

Smith’s understanding of her company’s culture and

business objectives as attributes that have set him

apart from other brokers and agents. In fact, Smith’s

contributions to Cochlear were deemed so valuable

that CoBiz was able to retain the company as a client

after the company changed CEOs.“He looks at and listens for what’s going on in the

market and what’s going on in the organization—what we’re trying to achieve from a benefits perspective,” Coleman says. “We have a very close

partnership to align Cochlear’s benefits strategy with

what’s going on in the local and national market.”“We’re very fortunate to have a base in Colorado,”

Smith says, “which is continually recognized as one of the fastest growing economies and one of

the best places in the country to live and work, so employers are moving here all the time. There

are huge national employers that are building infrastructure here, but we also have these small and

mid-size clients who are competing for talent. We

tell employers—whether you’re a customer today or

a future customer—that if you don’t view health care

as an advantage today, it will become a disadvantage

down the road.”

of the year

broker

BSL 5.16 cover story.indd 14

April 2016 | Benefits Selling | BenefitsPro.com3

of the yearbroker

“It’s easier now to change than it ever has been.”

Selling SolutionS for brokerS Volume 14, No. 5 | May 2016BenefitsPro.com

reed smith

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DECEMBER 2016 24 BenefitsPRO magazine

HR

HRsignals By Diane Nicholas

FIRST IMPRESSIONS7 ways to send the right signals when interviewing job candidatesI TELL EXECUTIVE JOB CANDIDATES all the time the interview process is as much about them learning about an organization as it is about the organization learning about them. It is a part of the process that many candi-dates—and hiring organizations—fail to realize.

If a candidate encounters a smooth interviewing process with informed, welcoming team members, they walk away with a positive impression of the opportunity. If they are bounced around in a disor-ganized fashion and there are multiple delays with

different team members communicating different messages, they walk away confused or even no longer interested.

As the demand for skilled talent increases, candidate experience is going to be a big factor in an organization’s success or failure to bring in top employees. That is why your interviewing process needs to be one that convinces candidates to join your firm.

Here are some ways you can protect your talent brand and hold on to top candidates as they interview.

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HR

HRsignals

1.Make sure everyone is on the same page.Once you have identi-fied who is going to be involved in the interview process, make sure every-one has a clearly defined idea of the job description. It is important the candi-dates get a clear picture of not only the responsibili-ties, but the expectations of the role.

I have seen top can-didates walk away from a role because they saw confusion in the interview process. To avoid this, I have a client who holds a meeting at the beginning of the search and dis-cusses the details with the search committee.

2.Make the interview schedule work. Once you have candidates in the pipeline, you will want to move quickly to get them into the inter-view process. Make sure everyone involved is will-ing to make room in their schedule on designated interview days.

I have witnessed a search in which a candi-date dropped out because the onsite interviews were scheduled, cancelled, rescheduled, and cancelled again. If individuals on your team cannot make time, schedule them for finalist interviews only.

3.Instill a sense of urgency in your interview team.Life changes for people in a heartbeat. You can talk to a candidate one week who isn’t really looking and the next they have accepted another offer. While you are waiting two weeks for feedback from your entire team, your top candidate can be accept-ing another offer because they thought you weren’t interested.

If candidates don’t hear from you shortly after their interview, they will assume you are not mov-ing forward with them. Each day that passes after their interview reduces your chance of secur-ing that candidate. It’s so important to get your interview team to commit to providing feedback on a candidate within a short window of time.

Make it easy for them to rate and rank their experi-ence with the candidate. Give them a short form that they can complete quickly and easily.

4.Define what you want the interviewers to explore with a candidate.

If you don’t provide guidance, an interviewer may not get the most from a candidate or explore things that they should have discussed. Providing a list of ideal questions is one solution.

However, you may want to mix it up and give differ-ent questions to different people. I once had a client who distributed a set of questions to the interview team and every inter-viewer asked the same questions. The candidate feedback I got was, “They should have had everyone in one room and had me answer the set of ques-tions once. It would have saved a whole lot of time.”

5.Make sure a candidate feels welcome.Have someone meet him or her in lobby when they arrive. Arrange a tour of the building. If they are going to be on-site for an entire day, make sure they have breaks for comfort needs and refreshments. Don’t leave them sitting unattended in a hallway or waiting area for long pe-riods of time. It gives the candidate the impression that you don’t feel their time is valuable.

7.When you are ready to make the offer, don’t delay.I have seen employers drag the process out for two weeks or more, risking losing the top candidate. It is important to get the specifics of an offer right but to do it quickly.

If you plan ahead and take just a few precau-tions, you will increase your chances of getting the candidate you want for a role. If not, that candi-date may be inclined to go elsewhere. HR

6.Be careful about having candidates meet with potential colleagues.It is a good idea that can go wrong. If you are going to have a potential leader meet the team they would be leading, the team should be given guidance on what questions to ask and how to act appropri-ately.

They need to under-stand that they are not interviewing the candi-date, and there are some things—for example, issues about salaries or personal lives—the team should not be asking their possible future boss.

While you are waiting two weeks for feedback from your entire team, your top candidate can be accepting another offer because they thought you weren’t interested.

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DECEMBER 2016 26 BenefitsPRO magazine

HARD RESET

RESETHARD

WELCOME TO THE TRUMP ERA.The ACA as we know (and love?) it is gone. So what’s next? That’s anybody’s guess. Here’s what we know so far—along with prognostications from industry experts.

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LIKELY LOSERS1. The term “Affordable Care Act.”

The incoming Trump administration may find actually killing the ACA is time-consuming, or even impossible. Some major Republican ACA replacement plans have included many popular ACA provisions.

But the rapid growth

of ACA jargon has con-fused even the friends of the ACA, and the new administration may be eager to rid itself of as much of that terminology as it can, as quickly as possible.

2. The consultants and think tanks who shaped the ACA.The ACA idea people might have been right about what they pro-posed. ACA defenders might say ACA world problems have had more to do with the rushed, secretive process Demo-crats used to get the legislation through

INSURANCE AGENTS, BROKERS AND OTHERS are starting to wrap their brains around an amazing real-ity: A Republican administration will be in charge of administering the Affordable Care Act.

The fourth-annual ACA open enrollment period for 2017 started Nov. 1 and is set to end Jan. 31, 11 days after Donald Trump is to be sworn in as the next president of the United States of America.

Barack Obama had to work hard to get anything big passed during his first term in the White House, even though he started with personal experience as a sena-tor, a Democratic majority in the House and what was regarded as a “filibuster-proof” Democratic majority in the Senate. The most liberal Democrats gave him almost as much grief as the Republicans.

Trump appears to be on track to enter the White House in what could be a weaker starting position. He has no personal experience serving in the federal government, and he will start with only a narrow Re-publican majority in the Senate.

To get ordinary legislation through the Senate, Trump will have to hold on to what are regarded as the most moderate Republican senators, Dean Heller of Nevada and Susan Collins of Maine, and at least seven of the Democratic senators who are at least as close to the neighborhood of the center as Sen. Charles Schumer (D-N.Y.), who was recently elected the next Senate minority leader. One of those mod-erately liberal senators Trump might need to court is Sen. Tim Kaine (D-Va.), Hillary Clinton’s running mate.

Kaine lost, but he helped his ticket win in Virginia, on a difficult night for Democrats, and that might give him some extra clout in the Senate.

Meanwhile, Trump knows about insurance and benefits issues mainly through his role as a business owner, and through his interaction with campaign advisors, such as Dr. Ben Carson, a former Johns Hop-kins neurosurgeon.

Trump has said he wants to repeal the ACA and replace it with a combination of an expanded health savings account program and interstate insurance sales, but he has also indicated interest in keeping some key provisions of Obamacare as well.

Here are some ideas about how that could hurt some health insurance industry players and help oth-ers over the next two years:

By Allison Bell

Trump’s health policy losers, winners5 possible losers and winners as the Trump era begins

L

RESETHARD

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DECEMBER 2016 28 BenefitsPRO magazine

HARD RESET

Congress, and with fierce Republican opposition to the law, than with the ideas inside the law.

But, in the end, the ACA legislation cre-ated a framework so complicated and market upheaval so severe that many Democrats, includ-ing Clinton and Kaine, avoided talking much about it on the campaign trail. The fourth open en-rollment period became a topic to avoid, rather than a triumphant event to celebrate.

3. Bernie Sanders and other advocates of single-payer health care.Some of Vermont Sen. Bernie Sanders’ allies say Clinton was simply too corrupt, and too friendly to big corporations, and that conspirators inside the Democratic Party ap-paratus kept him off the general election ballot. But his supporters did get a government-run health care system proposal on the ballot in Colorado, a state that often votes for Democrats. In a way, the measure could be consid-ered a stand-in for Sand-ers himself.

But Sen. Michael Ben-

net and other prominent Democrats in Colorado opposed the measure, and Colorado voters defeated it by a margin of 20.3 percent to 79.7 percent.

4. Single-state Blue Cross and Blue Shield gorillas.Some of the remaining Blues are giant, nonprofit companies that cover half or more of the commercial health plan enrollees in their markets.

Efforts by Trump to allow interstate sales of health coverage could ap-peal to some Democrats. State insurance regula-tors contend that letting insurers choose their own home-state regula-tor could lead to insurers having no real choice but to flock to the weakest regulator.

Interstate health cov-erage sales could also benefit the big national carriers at the expense of carriers that have not had to face serious competi-tion in years.

5. Nonprofit ACA ex-change plan helper programs.The Trump administra-tion may see grants for state ACA exchange navigator programs and certified application counselor programs as love notes to Democratic-supported health policy organizations.

POSSIBLE WINNERS

1. Trump’s own insur-ance and benefits advi-sors.Trump may be someone who avoids reading long policy position papers or listening to long policy presentations. Instead, he may develop ideas about who to trust, and what to think about health policy, by talking to people he

already trusts, or thinking about his own experienc-es as a benefits buyer.

That means that, in some cases, a brief Trump entity employee benefits update included in an ordinary employer newsletter five years ago, just to fill space, might have caught Trump’s eye and have more influence over him than a 200-page paper a centrist think tank rolled out.

Carson and Indiana Gov. Mike Pence, his vice president-elect, could be two major sources of health policy advice, and his own company’s top-level benefits managers might be other sources.

The fourth open enrollment period became a topic to avoid, rather than a triumphant event to celebrate.

W

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BenefitsPRO.com DECEMBER 2016 29

For his payroll com-pany based on Fifth Avenue in New York City, for example, the names of Jeffrey McConney, the Trump Organization controller, and Ronald Li-eberman, the company’s executive vice president for management and development, appear on benefit plan Form 5500 filings for 2015.

2. HSA Bank and other HSA providers.In the past, both Demo-cratic and Republican budget economists have wondered whether Has tax breaks and similar tax breaks do enough to help struggling people to justify their cost to the Treasury.

But Carson and many other Republican ACA replacement drafters have included expanded health savings account program proposals in their proposals, and Trump has briefly men-tioned health savings accounts during many campaign stops.

That could be good news for major health savings account ser-vices providers, such as Sheboygan, Wisconsin-based HSA Bank and the health savings account banking unit at Min-netonka, Minnesota-based UnitedHealth Group.

3. CNO Financial, Gen-worth Financial and other private long-term care insurers.

One reason private

long-term care insurance is struggling is because of bad product design, pricing and underwriting decisions that were made long ago.

A second reason is court-imposed changes in how long-term care insurance issuers pay out benefits.

A third reason is low interest rates.

But a fourth reason is that many of the types of policymakers who have advised the Obama administration hate long-term care insurance issu-ers because of past wars over a proposed Medicare long-term care benefits program and over an ACA provision that was sup-posed to create a univer-sal voluntary long-term care benefits program.

Those health policy

shapers will no longer have much clout in Wash-ington.

Another reason long-term care insurance issu-ers could benefit is that the Trump payroll ser-vice has offered a group long-term care insurance program.

Pence is the governor of CNO Financial’s home state, and has helped promote his state’s Long Term Care Partnership program, which uses Medicaid-related incen-tives to encourage people to buy private long-term care insurance.

Meanwhile, Kaine has been governor of Virginia, which is the home state of Richmond, Virginia-based Genworth Financial. Kaine has also helped start his own state’s Long Term Care Partnership program.

If anyone could put in a good word for private long-term care insurance, it might be Pence and Kaine.

4. Anthem.Indianapolis-based Anthem has been warm to the ACA public ex-change system, but it’s also based in Pence’s home state. It might have an opportunity to be on good terms with the Trump admin-istration’s secretary of Health and Human Services.

5. Consumer oper-ated and oriented Plan carriers and carriers waiting for payments from troubled ACA risk programs.

Trump administration officials could simply tell the CO-OP manag-ers and ACA risk pro-gram creditors, “You’re fired, bozos,” but one way the Trump admin-istration might be able to move a major ACA changer or replacement bill through the Senate would be to help insur-ers and other coverage issuers that are facing financial problems be-cause they believed the Obama administration when officials said the ACA risk corridors and risk-adjustment program smoney would be com-ing soon.

In September, the Republican staff of a House committee put out a CO-OP report in which the staffers wrote sym-pathetically about how the CO-OPs appeared to be the victims of Obama administration officials’ incorrect statements about how ACA programs would operate.

The Trump administra-tion may have an easier time getting bipartisan support for legislation to fix the ACA risk pro-gram than a Democratic administration would, and Trump, who has been through bankruptcy reorganizations and faced infuriating government policy changes himself, could see remedying the risk program problems as more fair to the carriers and better for minimizing the federal government’s total ACA risk program-

related failure costs.

If anyone could put in a good word for private long-term care insurance, it might be Pence and Kaine.

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DECEMBER 2016 30 BenefitsPRO magazine

AS WE ALL WAKE UP to this strange new post-election world, two things seem certain:

1. Very few, if any, of us saw this coming.

2. This changes every-thing.

For the past couple months, I’ve had it on my calendar to write a post-election wrap-up, but this definitely wasn’t the outcome I

was expecting, so I’m really not sure what to say. Like most of you, I’ve spent the last seven years trying to understand the health reform law, and while I guessed completely wrong about the out-come, I do have a pretty good record in my side gig as a continuing education instructor of predicting where the market is going and

explaining it in a way that normal people can understand. With that in mind, here are my top three predictions related to our industry:

1. President Trump (wow, that sounds weird) and

the Republican House and Senate will complete-ly repeal the Affordable Care Act in the first 100

days.Opponents of the law

have said they want to do it for years, and they’ve tried unsuc-cessfully over 50 times. There’s no reason to be-lieve they wouldn’t take this opportunity to get the job done. Because Trump has promised it to his followers, he’ll certainly sign the bill when it crosses his desk.

By Eric Johnson

This changes everythingThe election is over: 3 health care predictions

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BenefitsPRO.com DECEMBER 2016 31

2. Trump, Speak-er Ryan, and the Republi-can majority

will then replace the ACA with _________________.

There’s a blank there because I don’t know what they’ll put in its place. Neither do they. Trump has, however, promised to fill the hole with “something ter-rific.” Here are a few of their ideas:

Trump has suggested allowing for the sale of health insurance across state lines, which is al-ready permissible under the ACA and will do ab-solutely nothing to solve the problem. Nonethe-less, this suggestion also appears in Paul Ryan’s “A Better Way” proposal, so it’s almost certain to make it into the final legislation.

Trump and Ryan have also made it clear that they’re big fans of health savings accounts, which is good since they’ve been around for more than a decade and have grown rapidly under the ACA. Perhaps they’ll entertain the thought of separating them from high deduct-ible health plans.

They’ve also floated the idea of an individual tax credit for people with health insurance. Unfortunately, this will be more beneficial to people who can afford to pay the premium and wait to be reimbursed than it will for people

who currently rely on an advance tax credit to help pay monthly bills.

What will happen to the guaranteed issue provision is anyone’s guess. Ryan has sug-gested eliminating the individual mandate and creating risk pools as a safety net for people with medical conditions. Of course, the prices for these plans would be sky high (yes, even higher than current mar-ketplace coverage), so I assume we’d need to support the pools with tax dollars.

Finally, the Cadillac Tax will no longer be a concern, but Paul Ryan strongly supports a cap on the employer exclu-sion, which will have similar negative impacts on ancillary benefits

and tax-advantaged accounts like FSAs. It’s a bad idea that the National Association of Health Underwriters (NAHU) opposes.

3. And now for the prediction I feel most confident

making: In the same way that we knew the Demo-crats wouldn’t be able to solve the health care and health insurance crises in this country with the Affordable Care Act, the Republicans will not be able to solve our clients’ problems with their pro-posals.

In fact, I would strongly argue that the ideas suggested so far will likely make the problems worse. For that reason, the market will be left to solve the problems largely on its own. So how do we do that? By getting con-sumers more involved in their health care deci-sions; letting them buy plans they feel provide an adequate amount of coverage based on their health conditions and financial situations; giv-ing them a way to save for a rainy day; provid-ing them with trans-parency tools so they can see the true cost of health care services; and giving them alternatives so they can receive care in new, alternative, cost-saving ways.

Here’s the good news (finally!). First, you’re probably already recom-

mending these solutions to your clients. Second, the solutions are getting better every day, partly because of technologi-cal advances and partly because increased demand has encouraged the market to innovate. Third, if Trump keeps his promise of relaxing some of the regulations that he says are choking business (and, admit-tedly, repealing the ACA is a good start), then even more solutions will emerge. The market is pretty good at solving people’s problems when the government gets out of the way.

ONE FINAL THOUGHT...As you’re talking with your clients about these very unexpected elec-tion results, try to focus on the various ways the election could impact their health plans and stay as far away from the political discussion as possible. While this historic presidential and congressional election will have a huge impact on the health insurance industry, there are even bigger issues out there. Whatever side you’re on, you’ve probably “unfriended” or at least stopped talking to some people already because it became clear you’d never be able to have a normal conversation with them again. Just make sure you don’t say something that might cause your clients to unfriend you.

While this historic presidential and congressional election will have a huge impact on the health insurance industry, there are even bigger issues out there.

12.16 HC predictions.indd 31 11/16/16 3:33 PM

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WITH THE RESULTS of the 2016 election now in the record books, Congress and the president are set to engage, for the second time in less than a decade, in a debate over the future of the health care system of the United States.  

Donald Trump will be the fourth president in a row to enter office with his political party in at least nomi-nal control of both houses of Congress. For the first time since Dwight Eisenhower was elected in 1952, an incoming Republican president saw his party win an

By J.D. Piro

The future of health care reformWith a Trump presidency around the corner, what happens next?

12.16 future.indd 33 11/16/16 1:31 PM

DECEMBER 2016 34 BenefitsPRO magazine

absolute majority in both the U.S. Senate and the U.S. House of Representa-tives. And one of the first items on President-elect Trump’s agenda will be the future the Patient Protection and Affordable Care Act.  

The Affordable Care Act (ACA) is the result of more than a year of intense legislative de-bate that produced a bill that ran more than 1,000 pages and has spawned tens of thousands of regulations, rulings and releases over the seven years since it was signed into law. It constitutes an intricate web of inter-related and interdependent laws, regulations, mandates and subsidies that have affected health care stakeholders such as employers, providers, insurers, drug manu-facturers, government programs and private insurance, to name just a few. Although Presi-dent-elect Trump cam-paigned on a promise to “repeal and replace” the ACA, achieving con-sensus again on how to reform the health care system will not be an easy task.  

The Trump admin-istration will have to consider the impact of repeal on the federal budget, as well as the level of congressional support for repeal and replace. Will there be congressional consensus on all aspects of repeal and replace? Or will

some provisions remain in place, such as the ban on pre-existing condi-tion exclusions and cov-erage of adult children in employer plans to age 26? President-elect Trump recently said he’s open to leaving both provisions in place, sug-gesting that “repeal and replace” might become “amend and modify.” 

The Senate’s Demo-crats, who are support-ers of the ACA, might attempt to filibuster any attempts to dis-mantle it. In that event, the Republican major-ity might attempt to

enact changes via the reconciliation process, a complex parliamentary maneuver that limits the kinds of changes that can be made. In addi-tion to political support, the support of health care industry stakehold-ers, such as employers, providers, insurers, manufacturers of drugs and medical devices and consumer advocates, will be crucial to any significant health care legislation.  

The full outline of the Trump administration’s plans for health care reform will become clear over the coming weeks and months. Congres-sional Republicans have already issued a 37-page outline regarding what they view as a possible replacement for the ACA. Changes could include: • Repeal of the indi-

vidual and employer mandates. Although these are likely to be the first of the ACA provisions to be targeted, employers should realize that the mandates—and the ACA reporting obliga-tions and penalties—remain on the books.  

• Portability of health insurance. Financial support for portable health care coverage, including a universal refundable tax credit for individuals and families to purchase a health care policy; 

• Repeal of the Cadil-lac Tax. Preserving

employer-provided health insurance, including a repeal of the Cadillac Tax and enactment of a refundable tax credit coupled with a cap on the employer health care exclusion;   

• Medicaid reform. Con-verting federal Med-icaid funding to block grants and ending the expansion of Medicaid under the Affordable Care Act; 

• Association health plans. Expanding op-portunities for small businesses in volun-tary organizations to band together to offer small business health plans; 

• Wellness programs. Preserving employee wellness programs and opposing EEOC regulations that hin-der and obstruct their implementation;   

• Stop loss insur-ance. Preserving the current definition of stop loss insurance; and 

• Liability reform. Medi-cal liability reform including caps on non-economic dam-ages and adoption of the loser pays rule.  

OTHER POSSIBLE HEALTH CARE REFORMSCongress may also consider the following proposals from the Trump campaign in the coming year:  • Allowing all individu-

als to deduct health

Although President-elect Trump campaigned on a promise to “repeal and replace” the ACA, achieving consensus again on how to reform the health care system will not be an easy task.  

HARD RESET

12.16 future.indd 34 11/16/16 1:31 PM

BenefitsPRO.com DECEMBER 2016 35

insurance premiums paid on a post- tax basis;   

• Negotiating Medi-care prescription drug prices; 

• Removing barriers to entry into free mar-kets for drug provid-ers that offer safe, reliable and cheaper products; and 

• Revising and possi-bly withdrawing the contraceptive regu-lations for religious organizations. How quickly all of

this—or any of it—can be accomplished will be one of the first tests of the new president’s administration.  

For now, the status quo remains. The em-ployer mandate to offer affordable, minimum value health insurance to full-time employees stays in effect with all its compliance and re-porting obligations for the 2016 year, including the requirement to file Forms 1094 and 1095 in early 2017. The indi-

vidual mandate to carry health insurance or pay a penalty also remains in effect. The public exchanges, which cover almost 13 million people and subsidize coverage for 85 percent of those enrollees, are conduct-ing open enrollment for 2017 and have seen a surge of enrollment im-mediately following the election. Employers are likely to continue stay-ing the course as things shake out in Washing-ton.

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WILL HE OR WON’T HE?In his first televised statements since winning the presidential election on Nov. 8th, President-elect Donald Trump stepped back from his pledge to completely repeal and replace the Affordable Care Act. During a 60 Minutes interview with CBS News’ Lesley Stahl, Trump expanded on his health care plans, noting he definitely wants “to focus on health care” once he takes office. Stahl: Let me ask you about Obamacare, which you say you’re going to repeal and replace. When you replace it, are you going to make sure that people with pre-existing conditions are still covered?Trump: Yes. Because it happens to be one of the strongest assets.Stahl: So you’re going to keep that?Trump: Also, with children living with their parents for an extended period, we’re gonna—Stahl: You’re gonna keep that—Trump: Very much try and keep that. Adds cost, but it’s very much something we’re going to try and keep. Coverage for those with preexisting health conditions and allowing children to remain on their parents health insurance plans until the age of 26 are two of the ACA’s most popular mandates. Stahl: And there’s going to be a period if you repeal it and before you replace it when millions of people could lose – no?Trump: No, we’re going to do it simultaneously. It’ll be just fine. We’re not going to have, like, a two-day period and we’re not going to have a two-year period where there’s nothing. It will be repealed and replaced. And we’ll know. And it’ll be great health care for much less money. So it’ll be better health care, much better, for less money. Not a bad combination. Experts have estimated Trump’s health care plan would leave anywhere from 18 million to 25 million Americans uninsured.

12.16 future.indd 35 11/16/16 3:34 PM

DECEMBER 2016 36 BenefitsPRO magazine

By Erin Moriarty-Siler

Associate Justice Antonin Scalia died unexpectedly on February 13. President Obama nominated Merrick Garland for the open position in March, but Garland still hasn’t received a confirmation hearing, with GOP leaders continually blocking attempts to fill the ninth position. The future of the Supreme Court will be up in the air, presumably, until Donald Trump takes the White House in January 2017, and even then, nothing is certain.

In an effort to assuage Ber-nie Sanders supporters, Hillary Clinton said she would push for a state public option that would give states the ability to pursue a single-payer health system.

The Zenefits drama con-tinued in 2016. CEO Parker Conrad was ousted, David Sacks took over, and California regulators began investigating. Despite attempts to right the ship, Zenefits struggled to re-cover fully, cutting its valuation in July to $2 billion, more than half of its previous $4.5 billion value. In October, reports surfaced of flailing revenue goals—only $60 million, despite projections of $450 million.

Donald Trump kicked off March by unveiling his seven-point health care plan, with the first point being “Completely repeal Obamacare.” Shortly thereafter, the bipartisan group Committee for a Responsible Budget estimated 21 mil-lion people would lose health coverage under Trump’s plan. In September, the Common-wealth Fund upped that esti-mate to 25 million Americans.

Insurance companies offering coverage through the ACA began penalizing agents for low-performing plan sales.

The Department of Labor finalized the fiduciary rule, requiring financial advisors to be fiduciaries. This was done by expanding the “investment advice fiduciary” definition un-der ERISA. The response was swift, with many financial advi-sors arguing the rule would create significant challenges for their firms.

Jan. Feb. Mar. Apr. May2016Early in 2016, President Obama blocked a Republican-led measure that would have repealed the Affordable Care Act. Just a month later, the House failed to override the president’s veto. Speaker Paul Ryan still called the effort a success, saying, “We have now shown there is a clear path to full repeal without 60 votes in the Senate.”

Bernie Sanders, vying for the Democrat presidential nomination, revealed his “Medicare for all” plan, which would have built on the ACA to distribute a single-payer health system across the country. The call for single payer echoed throughout 2016, with Colorado adding a ballot measure to its Novem-ber election, hopeful its pas-sage would encourage other states to follow suit; however, Amendment 69 was defeated during the Nov. 8 elections.

UnitedHealth began its ACA exit, starting a domino effect of other insurers leaving the marketplaces. Humana reduced its sales in May, while Aetna exited state exchanges that same month, and then quit most of its remaining mar-kets in August. In November, Anthem threatened to leave the ACA in 2018 if financial returns didn’t get better. On the other hand, in July, Cigna indicated interest in expanding to more ACA marketplaces.

The CDC said opioids should be a “last resort.” The spotlight on opioid addiction continued throughout the year, with many government lead-ers, insurers, and Americans calling for solutions.

Etsy and Fidelity jumped on the growing bandwagon of companies offering paid parental leave. In April, San Francisco and the state of New York passed parental leave laws. Barclays expanded its parental leave benefits in June by offering six weeks to non-primary caregivers and 16 weeks to primary caregivers. In October, Chobani began offer-ing six weeks of paid leave to parents.

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BenefitsPRO.com DECEMBER 2016 37

Worry surrounding the Zika virus built as the Olympics ap-proached; however, there were zero reports of any Zika infec-tions in Rio. Still, WHO and CDC issued travel warnings and advised pregnancy delays. The virus eventually made its American debut in Florida, but no widespread occurrence has occurred. Currently, no viable vaccine is available.

Another ACA co-op failed, leaving only 10. This number continued to fall, reaching seven by August.

The state of Missouri denied the Aetna-Humana merger in some of its markets, with the state department of insurance saying the merger would hurt sales of individual, small group, and group Medi-care Advantage. In June, the state of California called for the federal government to stop the Anthem-Cigna merger. Perhaps an inkling of things to come for insurance mega-mergers?

President Obama vetoed reso-lutions passed by the House and Senate to kill the fiduciary rule, much to the chagrin of Rep. Phil Roe, R-Tenn., who said the veto “threatens the retirement security of millions of working families.”

After much anticipation, House Republicans revealed their own plan for health care reform. Some of the plan’s highlights include: removing the ACA insurance mandate for individuals and businesses, transforming Medicaid into a block grant program, creating high-risk insurance pools, and raising the Medicare eligibility age from 65 to 67.

Both Donald Trump and Hillary Clinton picked running mates—Mike Pence and Tim Kaine, respectively—and confirmed their party’s nomination at the RNC and DNC.

Hillary Clinton showed off her new health plan, chock full of ideas to sway Bernie sup-porters to her side. It included proposals to allow the over-55 crowd to opt into Medicare early and for a federally-run public option insurance program. In a show of support, Bernie Sanders encouraged his staunch followers to trust Clinton on health care.

The Department of Justice sued to block the Aetna-Humana and Anthem-Cigna megamerger deals. The fight continued between the insur-ers and the feds, with Aetna CEO Mark Bertolini threaten-ing to abandon ACA mar-ketplaces in response to the DOJ’s antitrust case in August.

The Obama administration issued guidance on Affordable Care Act improvements for the next president. The sugges-tions largely focused on the stability of ACA private insur-ance exchanges, and were critical of special enrollment abuse.

The uninsured rate dropped to an unprecedented 8.6 percent, a historic low. However, a report written by House Re-publicans claimed 12 state-run ACA exchanges were poised for collapse, saying Oregon, Hawaii, New Mexico, and Ne-vada have already given up on running their own exchanges due to financial problems.

The ACA took center stage, beginning with former president Bill Clinton calling Obamacare “the craziest thing in the world.” Days later, news surfaced that ACA enrollment would slow significantly in 2017. Then, the big hit: Rising ACA premiums were con-firmed at a 25 percent hike, opening an opportunity for repeal-and-replace proponents to pounce on the failures of the ACA.

In a stunning upset, Donald Trump won the general elec-tion to become the 45th Presi-dent of the United States.

With a Donald Trump presidency around the corner, America pondered a future without the ACA, a staple claim of Trump’s campaign. While some outside of his inner circle have said a total repeal-and-replace strategy is unlikely, Trump advisors and members of GOP leadership indicated the ACA’s repeal would be a priority within the President-elect’s first 100 days. Its replacement has remained unclear.

June July Aug. Sept. Oct. Nov. Dec.

Despite exit polls indicat-ing the opposite, the United Kingdom voted to withdraw from the European Union. Not only did Brexit draw parallels to America’s own presidential election, it also stirred debate about U.S. financial markets and trade.

12.16 round up.indd 37 11/16/16 3:35 PM

DECEMBER 2016 38 BenefitsPRO magazine

AS I WRITE THIS, I am exactly three weeks away from my 40th birthday. Some readers may be jealous of my rela-tively young age, but to be completely honest, I’m strug-gling with it.

I started in this business when I was 17, and I have been saying for a long time that at some point, I will go to an industry function and no longer be among the youngest in the room. Well in almost 23 years, that hasn’t happened yet. I feel a responsibility to the future of our industry. I have two amaz-ing and beautiful children, but I have failed miserably at exciting young people to join our ranks. Let’s face it: We all have.

Insurance is among the most disliked of industries, but for most of us, it has provided a pretty good lifestyle. I would even argue that for a very long time, we did less work than most and were better compensated than most. It may be in that very equation that we lost the younger generations.

Although not a millennial myself, I feel more aligned with that mindset (certain-ly more so than that of the baby boom-ers) and perhaps it’s the very lack of a challenge that has created apathy and lack of interest for our industry. When I look at all the companies that attract the type of people I would like to see more of, they all upset the status quo, challenge individuals to think outside the box, and assign tasks of enormous proportions and implications. Can we say that opportunity has existed in our industry for the last 20 years?

What if we told the public that our industry is more challenging than ever? We hold influence over what is one of the top three expenses on a company’s P&L, and one of the top expenses in nearly

every household in America. Our industry is one in which the technology age is still at the same stage as when the internet first came to our homes and smart phones.

What if we convinced mil-lennials we are on the preci-

pice of not only fundamentally changing an industry that is so large, if it stood on its own is would be one of the largest economies in the world, but one that has a huge impact directly on the overall health and well-being of the tens of thousands of people we serve?

I truly feel this way, but it doesn’t reflect the attitude I see among many others. Let’s be excited, optimistic, challenging, innovative, thought-provoking, and impactful. This may require a change in how some conduct their business. If your primary role is putting together a spread-

sheet once a year and putting out ser-vice issues in between, I can understand how there may be a lack of passion. But if you are solving problems, lowering costs, rolling out technology, manag-ing compliance, partnering with your clients, improving their bottom line and their ability to attract and retain talent, isn’t that far more valuable and exciting?

Here is the litmus test I use: How willing am I to tell a client exactly what I get paid? Can I sit there and feel worth that amount or even more? If the answer is yes, then I feel good about the value I bring. If I can’t honestly say yes, I reeval-uate and re-strategize. Sometimes, they are not the right fit for my agency. Other times, I need to step up to the plate and deliver more value.

I hope to inspire more enthusiasm among my brethren and more interest in what we do among the young people. Will you join me in this effort?

“I have failed

miserably at exciting

young people to

join our ranks.

Let’s face it: We all

have.”

Where all the young people at?

PARADIGM SHIFTby David Contorno

David C. Contorno is president and CEO of Lake Norman Benefits, Inc.

12.16 paradigm shift.indd 38 11/16/16 1:54 PM

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DECEMBER 2016 40 BenefitsPRO magazine

Compiled by Paul Wilson

Year-end reflections

ACTION REACTION

“What were the best and worst industry trends in 2016?”

Illustration by Gary Musgrave

LARGER TOOLBOXFrom the production of 1094s and 1095s and the continued movement by employers to streamline their business processes to the introduction of tools and resources to support employees, technology is an increasingly important topic in the industry. The industry saw a tremendous number of new entrants as well as business model changes from established players as they fight for market share.

For the advisor, it is important to stay current on the companies in the technology space and their strengths and weaknesses. Further, it is important to have a process to work through with clients, specifi-cally, to understand what business objective they are trying to solve, what people are involved, and what pro-cesses are involved so that a clear set of specifications are developed to match the best technology to the need.Perry Braun, executive director of the Benefit Ad-visors Network (BAN)

RETIREMENT MATTERSBy far the best indus-try trend in 2016 is the

growing acceptance that conflict-of-interest fees represent a real problem when providing invest-ment advice. With the trend toward eliminating conflict-of-interest fees for investment advice given a kick-start by the DOL’s new “conflict-of-interest” (aka “fiduciary”) rule, we can see a time when this confusion finally unravels.

The worst industry trend in 2016 has to be the advent of state-sponsored private employee retire-ment plans. It just can’t get any worse, can it? Oh, wait, it can. The DOL wants to make states exempt from ERISA oversight. So now private employees can have the worst of both worlds. Not only do they get plans that are poorly run, offer inadequate savings, and

severely limit investment options, but they also lose all the protections they currently receive in private company sponsored plans and their own IRAs. Chris Carosa, author, chief contributing editor for FiduciaryNews.com

OPIOID EPIDEMICAmong the worst aspects of health-related news this year is the CDC’s recogni-tion of the growing opioid epidemic and its direction to doctors to curtail pre-scriptions. In discussions with workers’ compensa-tion executives, there is growing evidence that individuals are filling jobs, then feigning work-related injury so as to access opioid painkillers. With the volume of noise increasing about the epidemic, so too is increased awareness of

alternative therapies such as yoga, acupuncture and PEMF therapies that can help mitigate pain for em-ployees, even when they are at work. This is one of the biggest “pros” to come out of this year. Greg Houlgate, CEO of Oska Wellness

GAINING RELEVANCEAs an industry, we contin-ue to roll out technological advancements and build relationships with cus-tomers through e-apps, e-delivery, and assisted un-derwriting rules engines. This all places a greater focus on service and value to our customers.

Another pro is the mac-ro industry trend of deliv-ering a powerful customer experience, prompting carriers to reconsider their business models. Carriers need to adapt quickly to develop a seamless pur-chase experience online—learning, quoting, applying and even having a policy delivered, all online.

As for the worst: The impact on the industry of economic instability and low interest rates. Andrew Gordon, VP, head of life product & pricing, individual markets and Lawrence Hazzard, VP, product strategy, disability incomeThe Guardian Life Insur-ance Company of America

12.16 reactions.indd 40 11/16/16 1:57 PM

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