A new model is quickly making inroads south of the border. Could it succeed in Canada?
A new model is quickly making inroads south of the border. Could it succeed in Canada?
An industry changing benefits system that would see employers stop offering health insurance could completely alter the job of advisors.
“It’s a total reimagining of advisors’ role,” said Rick Lindquist, President and CEO of Zane Benefits, a company that specializes in individual health insurance reimbursement for small businesses.
In their book “The End of Employer-Provided Health Insurance: Why It's Good for You and Your Company” authors Paul Zane Pilzer and Lindquist advocate switching to a system that sees employers getting rid of insurance but still offering benefits.
Companies would give employees a tax-free cash stipend – $500 for example – and they would buy health insurance with it.
But this shift isn’t a death knell for advisors.
“It’s a threat to financial advisors and employee benefit advisors that are not able to adapt to change; those individuals or entities or going to struggle,” said Lindquist. “But if you’re able to look at this and say, ‘Wow, when change happens there’s also great opportunity,’ you’re going to be able to grow your business and this will be a boon versus a threat.”
For the advisor that serves a business right now with 10 employees, in the new model they could keep that relationship with the employer and also service 10 people on individual policies.
“One of the nice things is you get to have individual consumers and when they leave the company you continue to have them as a client,” he said. “When new employees come into the firm you get to service new clients.”
Zane Benefits, just one of the companies offering this system, already has 3,000 clients. But with 2 to 2.5 million small businesses that don’t offer coverage because of cost there are opportunities to grow even further.
Research is showing the potential windfall for employers.
The new system would save the largest American companies $700 billion between 2016 and 2025, or about four per cent of the total value of those companies, according to S&P Capital IQ, a research firm serving the financial industry.
The total could reach $3.25 trillion for all companies with more than 50 employees.
“If I have a business – whether I’m in Canada or the US – if I have a choice between picking a policy for all my employees and simply giving them the money to go buy whatever policy that best fits their needs I would rather do the latter,” said Lindquist. “It’s going to cost me less time to administer and the employee is going to get exactly what they want and gets to keep when they leave the company.”
An industry changing benefits system that would see employers stop offering health insurance could completely alter the job of advisors.
“It’s a total reimagining of advisors’ role,” said Rick Lindquist, President and CEO of Zane Benefits, a company that specializes in individual health insurance reimbursement for small businesses.
In their book “The End of Employer-Provided Health Insurance: Why It's Good for You and Your Company” authors Paul Zane Pilzer and Lindquist advocate switching to a system that sees employers getting rid of insurance but still offering benefits.
Companies would give employees a tax-free cash stipend – $500 for example – and they would buy health insurance with it.
But this shift isn’t a death knell for advisors.
“It’s a threat to financial advisors and employee benefit advisors that are not able to adapt to change; those individuals or entities or going to struggle,” said Lindquist. “But if you’re able to look at this and say, ‘Wow, when change happens there’s also great opportunity,’ you’re going to be able to grow your business and this will be a boon versus a threat.”
For the advisor that serves a business right now with 10 employees, in the new model they could keep that relationship with the employer and also service 10 people on individual policies.
“One of the nice things is you get to have individual consumers and when they leave the company you continue to have them as a client,” he said. “When new employees come into the firm you get to service new clients.”
Zane Benefits, just one of the companies offering this system, already has 3,000 clients. But with 2 to 2.5 million small businesses that don’t offer coverage because of cost there are opportunities to grow even further.
Research is showing the potential windfall for employers.
The new system would save the largest American companies $700 billion between 2016 and 2025, or about four per cent of the total value of those companies, according to S&P Capital IQ, a research firm serving the financial industry.
The total could reach $3.25 trillion for all companies with more than 50 employees.
“If I have a business – whether I’m in Canada or the US – if I have a choice between picking a policy for all my employees and simply giving them the money to go buy whatever policy that best fits their needs I would rather do the latter,” said Lindquist. “It’s going to cost me less time to administer and the employee is going to get exactly what they want and gets to keep when they leave the company.”
