Stephen McCarthy nearly left the real estate industry over benefits.
The Boston-area Compass agent recently told Inman that when he was just starting out in the industry nearly two decades ago, he had several young kids and no employer-provided healthcare. After exploring their options, McCarthy and his wife ended up paying $2,500 a month for Blue Cross Blue Shield, “but it was always a struggle.”
“It was just crazy expensive,” McCarthy, who started his career at RE/MAX, recalled. “We got through it, but there were times where I thought maybe I shouldn’t be a real estate agent, maybe I should just go get a full time job somewhere with benefits.”
Today, McCarthy’s kids are grown up and his wife has a full-time job that provides the empty nest couple with healthcare. He said that the current arrangement “works out well for us,” but added that “my heart goes out to anyone with young kids who doesn’t have health insurance.”
The comment, and McCarthy’s own past experience, highlight the extremely challenging environment real estate professionals face when searching for benefits such as healthcare. Though salaried workers in the U.S. tend to get standard benefits through their employers, agents are typically classified as independent contractors and consequently have no such luxury. And while the rights of some contract workers have inched closer to those of salaried employees, real estate professionals are usually still on their own.
To get a better sense of how real estate professionals handle benefits, Inman recently asked in a survey if agents receive healthcare from their company, and if health insurance is important. Nearly 700 people from every U.S. state and a handful of foreign countries ultimately took the survey, meaning the results offer unique insights into industry culture.
The results of the survey ultimately show that insurance is, in fact, quite important to agents — even though most are on their own when it comes to actually getting it.
Insurance matters to agents
The biggest takeaway from Inman’s survey was that nearly 55 percent of respondents said that health insurance was very important to them. That’s both a majority, and far surpassed any other responses in the survey.
By contrast, only 20 percent of respondents said health insurance was not important.
Significantly, however, nearly 68 percent of the survey respondents also reported that their company does not offer health insurance. Barely more than a quarter, or 26 percent, said that they do get healthcare through work.
Those results offer a curious juxtaposition in which healthcare is important to real estate professionals, even as they have to scramble to find potentially atypical means of securing it.
Research from the National Association of Realtors, which was published last year, further showed that ultimately 84 percent of Realtors have health insurance. Among the minority who lacked insurance, the overwhelming reason people cited was the cost.
So if insurance is important and most agents have it, where are they actually getting their plans?
Dozens of respondents to Inman’s survey also provided written answers, and many of them indicated that they get their healthcare through a spouse’s work plan. This appears to be such a popular approach that several of Inman’s survey respondents wrote that they didn’t even know what exactly their own company offers.
McCarthy is among them. Though his current brokerage, Compass, has a discounted benefits program for its agents, McCarthy said that he hasn’t “even looked at it” because he simply uses his wife’s plan.
Ben Olsen, a team leader at Vanguard Properties in California’s Bay Area, told Inman that he too gets his benefits through his wife’s job — and the same is true for his team.
“In a team of 10,” Olsen said, “most of them have working spouses who provide benefits.”
NAR’s research — which is based on 2,296 responses to a survey it conducted in July 2019 — further shows that a vast plurality of agents get their insurance from a spouse.
Other popular options for obtaining insurance, based on NAR’s research, include medicare, other non-real estate jobs, and government exchanges.
These findings align with the responses to Inman’s survey, where a number of people reported getting insurance from medicare and various other sources. A small handful of respondents also reported simply not having insurance.
Benefits do impact happiness
Research suggests that benefits can have a significant impact not only on health and physical well-being, but on life satisfaction as well.
A late 2018 study from the IZA Institute of Labor Economics — a German research firm — looked, for example, at reforms to Massachusetts’ healthcare system that were designed to provide coverage to more people (and which later served as a template for the Affordable Care Act). The researchers ultimately concluded that those reforms “significantly improved Massachusetts residents’ overall life-satisfaction.”
That study also found that Massachusetts’ healthcare reforms improved residents’ mental health.
Similarly, a 2017 study from researchers at California State University, Sacramento, found that “individuals without health insurance coverage were less likely to be ‘very satisfied’ or ‘satisfied’ with life.”
None of this research was looking specifically at real estate, but NAR’s survey suggests a degree of ambivalence among agents about the current state of healthcare in the U.S. For example, when NAR asked Realtors if their benefits plan covers everything they want, 83 percent of respondents said either “yes, most definitely” or “yes, to a degree.”
Most agents, in other words, seem to be getting the things they want out of their healthcare. Which is great.
But when NAR asked how agents actually feel about their premiums, a total of 49 percent replied that to some degree it was too expensive.
Respondents provided similar feedback about their deductibles and co-pays.
An overwhelming percentage of NAR’s respondents also said that the current healthcare system in the U.S. is not meeting the needs of most Americans.
Realtors who participated in NAR’s survey did identify things they like about the U.S. insurance system — a majority said it works well with regard to doctor access — but overall the responses hint at least at an apparently widespread yearning for something better.
Brokerages have been beefing up benefits options
It is perhaps no surprise, then, that benefits such as healthcare are a perennial source of news in the real estate industry. The National Association of Realtors, for example, has consistently advocated for various healthcare reforms and listed the issue among its 2019 advocacy successes.
A number of brokerages have also moved to offer their agents various forms of benefits. Recently for example, Realogy announced a new program called Spark that includes among other things a healthcare marketplace for its agents. Participants in the program are still independent contractors and pay for insurance themselves. However, the program lets agents access both Affordable Care Act (ACA) plans and non-ACA compliant plans, and provides access to a consultant who helps participants navigate the process.
The company rolled the program out to all of its agents in November.
This week, a Realogy spokesperson told Inman that in the months since Spark launched, more than 10,000 of the company’s agents have accessed program consultants to “help guide them in the insurance marketplace.” Realogy has also had more than “20,000 affiliated agents accessing health insurance either through Spark or MJA,” a third-party provided that the firm works with.
“We’re seeing Spark membership grow week to week as we continue to drive enrollment and further educate affiliated agents and franchise owners on how to take full advantage of the slate of benefits that Spark offers,” the spokesperson added.
Realogy isn’t the only company focused on beefing up its offerings. Texas-based JP & Associates, for example, also announced in 2019 that it would offer healthcare and retirement plans. An in 2018, both Compass and HomeSmart also began offering healthcare plans.
Agents are coping
Inman spoke to more than a dozen agents for this series of stories on its recent survey. All of them had insurance, and while they generally agreed that the current system isn’t ideal, more often than not they also said the pros of the job outweigh the cons.
For example, Dan Hamilton, an agent in the Palm Springs area of Southern California, said that while some real estate firms “allegedly provide benefits, they’re not real benefits.”
Hamilton argued that most company-provided benefits for agents are no better or cheaper than what those agents can find on their own. Still, getting his own plans isn’t a problem in his case.
“I was in the corporate world for 40 years,” he explained, “but I like figuring out what the best solutions are for me.”
Diana Morgan, a Keller Williams agent in New Jersey, had a similar take. She described having to “scramble every year to find” the right plan. It’s a situation that is particularly hard on agents who are just starting out, she said, though in her case she feels like in the end “the trade off is worth it.”
“We pay a lot of money for health insurance, which seems pretty awful,” Morgan said. “But at the same time, I’d rather pay for my own health insurance than go work at Sears and have a benefit thing.”
Still, benefits do hang over many people in the industry. Jeff Seman — a broker and owner of Ironwood Fine Properties in Arizona — has done well over the course of his career but told Inman that he is turning 53 this month and benefits are now “becoming a bigger and bigger deal with me.”
“I have $10,000-catastrophic insurance,” he explained. “Anything under 10,000 I pay for.”
So far that has worked for Seman, and he pointed out that because agents are contractors there isn’t a clear solution for how to get everyone better insurance. But, he added, he’d love it if some improvements were hammered out.
“If this industry could figure that out,” Seman concluded, “that would be fantastic.”
Correction: This post originally characterized Realogy’s Spark offering as a medical benefits program. In fact, it merely includes a healthcare marketplace among its various benefits offerings.
Next Friday: Agents and leadership
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