Partner reflects on Employee Benefit Design

Three years ago, Chance Potts and his partners Ken Stephens, Dan Burns and Dan Ruggeri consolidated their knowledge and skills to form Employee Benefit Design LLC, 3126 S. Pickwick Place.

Potts, the youngest of the four, graduated from Southwest Missouri State University in 1992 with a degree in physical education and an emphasis in exercise physiology.

He started out assisting several different physicians, then began marketing health care services for workers' compensation.

"I took the step from being hands-on to acting as a liaison between health care providers and companies," he said.

In the fall of 1995, Potts was offered a position with Ollis & Company, where he began working as an independent agent specializing in group health insurance.

"My focus was on working for clients and educating them about what changes were taking place in the marketplace," he said.

After a year and a half at Ollis & Company, Potts decided he wanted to be self-employed. For six months he worked independently in the employee benefits field, sharing an office with Stephens.

During those six months, Potts, Stephens, Burns and Ruggeri talked about developing Employee Benefit Design, and Oct. 1, 1997, their idea became a reality.

"We felt that there was a real need for an employee benefit agency that could provide a full range of services to employers," Potts said. "We are securities registered, and we provide medical, dental, disability, long-term care, life insurance, retirement plans and financial planning for groups and individuals."

In the tight labor market, many more employers, including small employers, are considering implementing employee benefits, he said.

"We have a very diverse group of clientele," including about 400 clients with two or more employees, as well as a few hundred who are self-employed, Potts said. "To small employers, we become an outsourced HR employee benefit department. To a large employer, we become a resource for their HR employee benefit department."

Keeping up with change is a big part of the job.

"There has been a continual avalanche of change the last five years," Potts said, leading to continual changes in plan design. "Many companies have changed their insurance benefits one to three times in the past five years, and some companies change every year."

Another major issue is government legislation on health insurance.

"We help our clients understand what the changes mean to them, and what their responsibilities and liabilities are," he said.

Technology also is affecting the insurance and benefits industry, Potts said. "We are dealing with a much more sophisticated buyer in today's information age."

Clients expect to receive a lot of information about products and services, he said.

And information means more than just rates.

"We try to focus on clients' needs and objectives instead of just discussing rates and cost," he said. "We believe that there are other important issues as well as cost. We do cost comparisons, but we also do quality comparisons."

Another part of the job, Potts said, is servicing the plan, solving any problems that might arise. "And we review. We review ourselves, how we are doing. We review the benefits, on an annual basis or more often."

As reviews take place, clients are often faced with increases from health insurance companies.

"One of the biggest concerns right now is health insurance renewal rates," Potts said. "In the past two years, we have seen 20 to 90 percent increases on group health plans."

Insurance companies attribute the increases to escalating health care costs, Potts said. Prescription costs and utilization also have increased, he said, with prescription costs leading the way.

"We do an annual review with every client," Potts said. "They may be taking a 25 percent increase, but it still may be the best option for them."

Sometimes, if one or two employees have serious health problems, employers cannot continually switch plans, he said. "When we place a carrier with a client, if they're going to be stuck with that carrier, we want them to be stuck with somebody good. We have to look at the long term."

Sometimes that means making difficult choices, he said, such as high deductibles and high or no copays. However, these options aren't for everyone. "Some employers feel they really need to offer low copays and deductibles to attract good employees."

It can be challenging to determine the best long-term plan, but by continually analyzing what has happened in the past, studying what is being done now, and keeping up with industry, Potts said his company is able to provide its clients with the information they need to make good decisions.

The four partners don't do it alone, though. "Our best asset is our employees," Potts said.

All 12 members of the staff specialize in employee benefits.

"If we are away from the office, we have a knowledgeable staff here at the office to take calls and answer questions."

Potts added that the firm's broker dealer, MassMutual, is a constant source of information about financial services and products being offered. "We don't try to do everything on our own; we use a team approach." By utilizing specialists and tapping into the best resources, the clients receive the best service available, he said.

Potts said he loves his job. "I don't see myself ever fully retiring from this," he said. "I love the relationships I develop with clients, and helping them to understand their choices as they plan for the future."