Insurance agents have made for popular punching bags in recent weeks. TIME magazine posted that agents may be the first victims of health reform. But the extinction of the insurance agent has been greatly exaggerated.
Millions of small businesses depend on agents to help them find policies that suit their needs and budget. And with the new health reform law ready to make the insurance market even more complicated, consumers will need the expert advice of agents and brokers more than ever.
Professional agents and brokers are trained to help individuals and businesses select plans that are right for them. They must complete courses and pass state licensing exams in order to become licensed. New York State also requires agents and brokers to take continuing education courses to maintain their licenses.
Agents do more than just sell policies. Many, like Benefit Counseling Associates, function as virtual human resources departments for small businesses.
As the Congressional Budget Office put it, agents and brokers often “handle the responsibilities that larger firms generally delegate to their human resources departments — such as shopping for plans and negotiating premiums, providing information about the selected plans, and processing enrollees.” Small employers rely on agents to help their employees with claims problems, too.
Without the assistance of an insurance agent or broker, many small businesses would spend time and money on coverage for their employees than necessary while they could be running their own business. Individuals and businesses appreciate the high level of service that brokers provide.
Critics of agents claim that they force insurers to spend money on administration that should instead be spent on medical care. However, according to the Centers for Medicare and Medicaid Services, 86 percent of premium dollars are already spent on medical expenses.
Much of the spending classified as “administrative” actually helps fund fraud-prevention and wellness programs. Such initiatives help keep premium costs down for individuals and businesses.
The new health reform law aims to lower health costs for consumers. Agents have decades of experience doing exactly that for their customers. It’s no wonder that the National Association of Insurance Commissioners has explicitly stated that health reform must “protect the indispensable role that licensed insurance professionals play in serving consumers.”