Today we’d like to introduce you to Michael McCullom.
CBG is an Independent Employee Benefits Brokerage firm that was founded in Boston, MA. in 1998 and has been recognized by the Boston Business Journal, ” as one of the fastest growing Employee Benefits Brokerage Firms in New England.” (BBJ 2/16). We are a full-service brokerage firm that offers a suite of complimentary administrative, marketing, and compliance services for ALL of our clients.
What makes CBG unique is that we operate like a quant investor and use proprietary actuarial algorithms to perform a deeper dive on the many subjective parts of the healthcare brokerage process. We break down your data and assign more realistic assumptions to a Provider’s incurred claim assumptions, coverage values, and Incurred But Not Reported (IBNR) claims. This top to bottom analysis allows us to negotiate a much better deal for our clients.
CBG has been so successful in their innovative and unique approach to curbing healthcare costs, that the Insurance Providers have asked that our Agency sign a Non-Disclosure Agreement (NDL) with them. The Insurance Providers recognize just how potent our data is in the negotiation process and have endeavored to limit the number of brokers that could adopt a similar approach.
CBG strives to work with “business partners” as opposed to clients and while a group may initially become a client, they soon understand our value proposition and ultimately they transition into “business partners” who understand that CBG is the ONLY firm that can negotiate the best possible renewal for their firm.
CBG seldom loses an account and our overall retention rate is 96.4% of our “business partners” over a five year period. CBG consistently delivers THE most competitive renewal rates and our average renewal increase is more than 50% lower than the renewal rates being delivered by The Massachusetts Insurance Connector.
Great, so let’s dig a little deeper into the story – has it been an easy path overall and if not, what were the challenges you’ve had to overcome?
The steady march of healthcare premiums over the past few years has been the most aggressive increases this industry has ever encountered. It is more important than ever to align yourself with a tenured and professional Employee Benefits Broker. There are many ways in which you can reduce your renewal rates (even in the Under 50 regulated market).
Perhaps the most herculean of my struggles involves one of the business segments that exists in MA… Massachusetts has three distinct employer groups that have emerged as a result of the Affordable Care Act:
Under 50 Full-Time Employees; 50-99 Full-Time Employees, and 100 or more Full-Time Employees. The 50-99 Full-Time Employee employer group is without a question the most challenging. This employer group represents the ONLY group where the Insurance Provider has an “unfair advantage”. For this employer group, they do NOT have to produce any claims experience and NONE of them release this data on these groups. Instead, the Insurance Provider can provide you with some hints, but no hard data.
Invariably, the Insurance Provider almost always indicate that employer groups in the 50-99 Full Time Employee category are not running well. This statement, which cannot be verified with hard claims data; allows the Insurance Provider an edge and justification to assign a significant renewal increase to these groups.
CBG has not sat idly by and it is on these groups that CBG implements is proprietary plan design and claim algorithm. The net result of this process produces more competitive rates, which are often used to force the incumbent Provider to re-evaluate their original renewal rates and then reduce them to maintain the business.
Custom Benefits Group (CBG) – what should we know? What do you guys do best? What sets you apart from the competition?
CBG was founded in 1998 and grew so swiftly that it was acquired by National Financial Partners (NYSE: NFP) in 2004. We soon discovered that by joining this large entity that we were expected to use “Preferred Providers”; we had “Selling Agreements” with specific Providers; and there were “Retention Minimums” that we needed to abide by. This experience made me realize that being part of a larger entity took my focus off my ultimate relationship: my client. I was not being an independent broker after the acquisition and decided after 24 months that I would re-purchase by firm back from NFP, which I did in 2006.
CBG quickly grew to “One of the Fastest Growing Employee Benefits Firms in New England” (2/16). I am most proud of the fact that CBG can truly be an employer’s “Total Benefits Solution”. We administer FSA, COBRA, FMLA, Section 125 Plans, mail Medicare Part D Notifications, and prepare Form 5500’s for all of our groups. In addition to our proprietary marketing algorithm, we also offer full State and Federal ERISA Compliance for all of our groups. We employee and In-house ERISA attorney as well as an Affordable Care Act Professional (ACAP) that abide by the Kaiser Family Foundation endorsed, Haye Group Compliance Model. In fact, we assume full ERISA fiduciary responsibility for ALL of our clients.
We are also quite proud of our overall retention rate of 96%. There are not many brokerage firms that can boast such a high level of client retention, but as our clients get more familiar with our services, they recognize that their existing broker never provided these comprehensive results. It is a very satisfying feeling to know that your “business partner” recognizes your value and recognizes the real value offered by CBG.
What moment in your career do you look back most fondly on?
My proudest moment was when I repurchased my firm from NFP. I made this move based on principle and because I needed to take a stand. During the acquisition process, I was never told about the many internal deals and existing relationships with “Preferred Providers”. I felt that these larger entities were serving their “Master” and not their clients as they should. This went entirely against my prevailing sentiment that has the client always as my Number One priority.
By purchasing my firm back from NFP, I unwound a very favorable financial relationship, but I simply could not longer do my job the way I wanted under the “Meg-Agency” mentality. I felt this decision, although quite difficult was the right decision and that I would be able to build up my business again.
Within the following two years after the re-purchase, CBG had grown their client base to a point where it was even larger than the pre- 2004 NFP acquisition level. Our overall book of business continues to grow by an average of 14% YOY growth since 2006.
Contact Info:
- Address: 300 Brickstone Square
Unit 201 - Website: www.custombenefits.net
- Phone: 978-662-5120
- Email: mike.cbg@gmail.com
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