Helping clients with healthcare planning

As a tax and accounting professional, you are ideally suited to helping clients with their most important financial decisions, but one of the most overlooked areas of concern for clients is healthcare planning. It shouldn’t be. Health insurance is a major concern for people across all income groups, especially as the enrollment period is underway in October.

According to a Spectrem Group/CEG Insights report, two-thirds of affluent investors (65%) want their financial advisors to help them with health insurance, but only 4% say their advisor is providing that help. Further, among people who don’t have financial advisors, the top areas for which they would want guidance are retirement income planning, Social Security planning, and Medicare advice.

What is healthcare planning?

Christine Simone, CEO of Caribou Wealth, makes healthcare planning software for financial advisors. She told me on my podcast that healthcare planning is the “comprehensive overview and optimization” of your client’s present and future healthcare costs based on their individual needs and budget.

“Healthcare planning is about helping people find ways to reduce the cost of their healthcare at every stage of life; it can be as complex as analyzing different plan options and aligning those options with a person’s needs and budget,” she said, and added that it can be as simple as having a conversation “about the best ways” to use a client’s Health Savings Account (HSA) funds.

Simone shares more insights about how CPAs can help clients with healthcare planning in my new book “A Holistic Guide to Wealth Management for Accounting Professionals.”

The key to successful healthcare planning, said Simone, is not using the same industry benchmark for every single financial plan. It must be customized for every client’s health needs and financial goals.

Benefits of offering healthcare planning as a service

On the surface, customizing healthcare planning for every one of your clients seems like a lot of work. But as an accountant and financial advisor, the more unique, high-value services you can offer, the better your ability will be to attract and retain clients. Healthcare planning fulfills an important client expectation that shouldn’t be overlooked if you want your practice to remain competitive. After all, nearly half (47%) of clients report feeling “somewhat” or “very concerned” about issues relating to healthcare according to a recent Investments & Wealth Institute survey.

Those issues include the following:

• Personal or family health.
• Retiring comfortably.
• Retiring when they had planned.
• Caring for elderly parents or family members.

Why shouldn’t you be a trusted resource for them in this highly important area of their lives?

Healthcare costs are among the top expenses retirees face. They need to be discussed frequently as part of a comprehensive financial plan. Simone said many clients nearing Medicare eligibility age or are already eligible expect their advisors to provide at least some help with healthcare costs and health insurance planning. In addition, a Fidelity study found that one-third (34%) of younger investors (Gen Y and Gen Z) want “life advice” from their advisors, not just financial advice.

“Meeting this expectation is integral to creating a comprehensive financial plan and helps ensure that clients stick with their advisors for the long term,” said Simone.

Why don’t more advisors offer healthcare planning?

In my experience, not many advisors offer healthcare planning, despite the benefits–and this includes tax accountants. Healthcare is a very complex topic, so I find many advisors avoid it because they don’t feel they are knowledgeable enough to be helpful. That’s a huge, missed opportunity! Simone said that thanks to technology, you don’t need to be an expert in healthcare policy or health insurance to help clients optimize their coverage and costs. Clients just need to know they can turn to you for advice.

Another reason accountants have traditionally shied away from healthcare planning is that they don’t want to be perceived as sellers of health insurance, but that hurdle has been removed as well.

“True advice-based healthcare planning is non-commissioned, meaning no one is trying to sell any products to clients,” said Simone. “Instead, your client receives unbiased information and guidance to make a confident, knowledgeable decision about their healthcare coverage.”

There are also tax planning benefits to healthcare planning. For example, offering healthcare planning and tax planning could help your clients better understand whether an HSA makes sense for them. Knowing about your client’s healthcare costs can also help you determine whether they should take the standard deduction on their taxes or take an itemized deduction because they have qualifying medical costs.

For Medicare-eligible clients, understanding how their income affects the cost of their Medicare coverage is a huge benefit, too. These healthcare planning strategies enhance the tax planning services you already offer. It’s part of creating a less transactional and more holistic financial plan for your clients.

How to implement healthcare planning    

If you want to start including healthcare planning in your service model, start small and focus on areas where you can have the biggest impact. For example, clients who are eligible–or soon will be eligible–for Medicare are a great group to introduce to healthcare planning. This can deepen the advisor-client relationship, which can often result in better retention and more referrals.

Just what the doctor ordered

To be a truly comprehensive financial planner, you cannot afford to overlook healthcare planning and many other services. Advances in software and technology now make it easier and more efficient than ever. If you’re intrigued about expanding your practice to include higher margin services but aren’t sure how to get started, reach out to me anytime. I’m happy to help.