We are in Open Enrollment season for over half the companies in America.
Business owners and HR managers are evaluating their health insurance and employee benefit programs.
It’s also a time when they evaluate their current broker relationship.
In today’s world, the best health insurance brokers do more than just sell insurance.
The best brokers stand out as Advisors, Problem-Solvers, Strategists.
But how do you know you have a good broker? How can you trust you are getting the best care and value your company needs?
I have been in the industry for nearly 30 years, and I believe there are professional qualities that make top brokers stand out from the rest.
Top Qualities To Look For in Your Health Insurance Broker
1. Common Sense Approach
What’s the one thing we lack today?
You got it – It’s Common Sense.
The dictionary defines Common Sense as:
“Sound judgment in practical matters; making a prudent judgment based on a simple perception of the situation or facts.”
Health insurance is complicated as it is. You need a broker who can be straightforward with the facts. Of course, they need to consider all the different angles, but they should not let it hand-tie them from simply doing the best thing for your company.
2. Proactive with a Sense of Urgency
There is a difference between knowing what to do – and doing it.
You want a broker who is proactive; One who brings you solutions to potential problems before they become an issue. Someone who can keep you up to date with changes in the marketplace and make suggestions as things evolve.
One way you can tell if your broker is proactive is how they approach open enrollment. They should present your renewal and their recommendations in enough time for your employees to have 30 days before the renewal date to review and decide which options are best for them.
When meeting a new potential broker, ask them how their renewal process works. If they say they will “shop the market” but not mention that they will first evaluate your employee population – there is a problem. A thorough analysis is recommended each year.
3. Available & Communicates
There is nothing worse than having a question or needing help with a claim and the broker is simply not available. Or worse, they refer you and your employees to the 1-800 number at the insurance carrier.
Having prompt follow-through is a good practice in a broker because they act as advisors on a variety of issues. They also need to be available for employees if they have questions about a claim.
In addition to open enrollment season, throughout the year the broker may send flyers to your employees to educate them on different health conditions. They can also remind employees of benefits they should take advantage of.
4. Problem Solver & Strategist
A good insurance broker is persistent in finding answers for you.
They are a bridge-builder to get you on the other side of a problem.
We recently worked with a new client who had previously worked with a large brokerage firm. Their renewal was excessively high – even after a high renewal the previous year. Their medical conditions were driving their costs.
When the previous broker ‘shopped’ at other health insurance carriers, the rates were higher than the renewal. So, they asked him to try again. The broker would bring a new spreadsheet with a lower premium – but then there were less benefits.
What did we do? We raised the deductible to bring the health insurance premium down. Then we purchased a GAP plan that would pay the remainder of the deductible once a person had paid $2,500 in a calendar year. The cost of the GAP insurance combined with the lower premium from the high deductible was within $2.00 of the current, pre-renewal price.
The difference here was an account manager at a large brokerage company who had been taught to ‘shop’ the market, put the results on a spreadsheet and expect the client to ‘pick one.’ But the answer was to first listen, assess the problem, and then find a viable solution.
5. Creative Thinker
Thinking outside the box is both innovative and liberating.
We find solutions we did not know were possible.
Too often in this business we rely on the spreadsheet.
Brokers normally provide a spreadsheet to evaluate your current policy. They are comparing it with other policies within your existing carrier in addition to other carriers to consider. In an attempt to keep costs down, we think we have to settle for reducing the benefits. But there are other creative options to manage your costs.
An experienced broker will lift their gaze from the spreadsheet, find viable options, and give creative solutions.
How Insurance Brokers are Paid
These qualities are simply good business practices.
The level of service you receive might come down to the person you are dealing with. It might also be the size of the brokerage firm and how they are paid as to the service they can provide you.
Brokers earn a basic commission for their services, and sometimes charge extra fees.
Their rates might be dependent on the number of employees.
For example, companies under 5 employees – The broker might be paid as little as $5 per employee per month. You should not expect much service for $25 a month. In fact, most small agencies could not afford to work with this size company.
For companies with 5-50 employees – The broker is usually paid around $40 per employee per month.
However, brokers that work for the large insurance companies share the commission with their employer. The broker may be paid 40% for the first year that you are a client, and then 25% for every year after that. This type of sliding scale in the percentage the broker is paid is another difference between a fully engaged smaller brokerage firm vs. the mega agencies.
My company provides service to businesses in the state of Georgia with anywhere from 10 to 300 employees. I enjoy having a smaller firm so that I can give quality care and attention to my clients.
An Advisor You Can Trust
Having an insurance advisor who you can rely upon is essential in today’s world.
Take the time to speak with your insurance broker on a regular basis. Ask questions and brainstorm ways you can bolster your employee benefits package.
Make sure your broker is proactive, available, and gives creative solutions. This will go a long way in giving your company the best value for your time and money.