How Do I Choose a Benefits Broker?

How Do I Choose a Benefits Broker?

Health insurance and benefits are complex for many businesses, and they can certainly get expensive. Most companies benefit from choosing a benefits broker who is as invested in your company as you are.

How do you find the best benefits broker to meet your unique needs?

To choose a benefits broker, you should look for a professional with expertise in the benefits marketplace, a track record of customer service, and a comprehensive strategy that fits your specific needs.

After all, your choice will have far-reaching effects on your human resources team, talent acquisition and all your employees.

In this post, we talk about the responsibilities of a benefits broker, what to look for in a good one, and how to tell if they are being honest.

What does a benefits broker do?

Benefit brokers help your company get the benefits that are necessary for business insurance and employee total compensation.

These advisors have in-depth knowledge of group insurance and employee benefits, such as health insurance, liability insurance and retirement plans. Brokers sometimes focus on a particular benefit type, but they all provide advice on selecting, purchasing and administering benefits.

At a basic level, a benefits broker advises you on business insurance and employee benefits.

A benefits broker will advise your company on the types of benefits you can and should offer, and will find plans and policies within your budget. Then they create a business insurance package that meets your needs.

Beyond finding coverage and supporting the transaction process, brokers also typically assist you with managing benefits, assist with compliance, and manage relationships with benefits providers all year long. This may include guidance through enrollment and education for employees to get the most out of their benefits.

Benefits brokers, have expertise in areas like compliance, health benefits, wellness and HR support. In fact, many benefits advisors and benefits consultants will act as an extension of your human resources team.

Benefits consultant vs. benefits broker

Many benefits brokers take on the roles of advisors and consultants, by offering ongoing assistance to employers with human resources needs. This could include ad-hoc, project-based or on-site HR consulting services across a wide range of insurance and benefits issues.

For example, a benefits consultant could find cost-saving strategies using health and wellness plans or advise you through an HR problem like workplace discrimination and harassment.

These additional services, such as strategic planning or administering the plan’s compliance documentation, sometimes come with consultant fees that are different from the traditional commission structure.

Many modern insurance and benefits brokers’ services have evolved to act more like consultants/advisors. Thus, the difference isn’t always straight forward. Always make sure to define the relationship and expectations of the services expected.

In addition, some states do not recognize brokers, and in those states, some agents have evolved and provide services like brokers for their clients.

Read more about the differences between an insurance broker and an insurance consultant here.

What do I look for in a good broker?

Given their effect on your business and bottom line, it is crucial to know what to look for in a broker.

First, you need to set goals, identify needs and establish criteria that will drive your search for insurance and benefits assistance. Then, you need to find a broker that is willing to offer customized solutions tailored to your specific business needs.

Look for a benefits broker or consulting firm with proven experience with the benefits and insurance your company needs. Some brokers may operate on a partnership basis with other firms to provide best in class services.

Here is what to look for in a good broker:

  1. Expert in the benefits market.

Look for a broker that is familiar with several coverage types, including life insurance, health insurance, workers’ compensation and retirement plans. They should also know the differences between benefits providers and keep track of marketplace trends and legislative changes that affect benefits. Using this knowledge, a good broker fits into your overall company strategy, through benefit plan design, HR assistance and budgeting.

  1. An active approach to risk management.

Coverage procurement is just one part of optimizing your company’s benefits. Look for a broker who analyzes potential risks, determines how it could affect your benefits plan, and find ways to mitigate it. The right broker will keep you consistently informed on your insurance programs, business trends, risk factors and legislation, so you can spend more time running your business.

  1. Proves value from your benefits program.

Good benefits brokers and consultants can help attract and retain talent through your benefits plan. You can look for a broker that will build and maintain efficient and high-quality HR processes, such as showing employees how to use their benefits. They can help employees fully engage with your benefits plan, which increases its utility and improves employee satisfaction – while managing the benefits budget.

  1. Educates your team on benefits regulations.

Compliance is necessary for any benefits program, and not being compliant can leave you vulnerable to fines and legal costs. Look for benefits brokers that proactively work to ensure legal compliance and educate you on regulations such as FMLA, COBRA and HIPAA. Your employees should get informed answers from a licensed professional for all kinds of questions, especially during enrollment and renewal periods.

  1. Online enrollment and other technology benefits.

Good benefits brokers and advisors will offer or partner with HR softwares or benefits enrollment companies to streamline enrollment and administer compliance information for your company. Look for brokerages that offer a benefits portal or connect to your HR systems, allowing employees to review and manage their benefits at will. Brokers can also use technology to track the usage of benefits and measure your plan's performance.

How can I tell if my insurance broker is being honest?

Finding and managing employee benefits has become a complex process, regardless of your company size. But you should always make sure your insurance broker is being honest and acting in your best interest.

Here are ways to tell if your insurance broker is being honest:

  • Your broker should work with you personally to ensure employees have the coverage and support they need. They might be dishonest if you are unclear on the value you get from the commission or fees you pay, or if you find it difficult to determine the ROI from your benefits package.

  • Your broker or consultant should have relationships with many insurance carriers and benefits providers. If they do not present a wide range of plan options, they may not have enough relationships with benefits providers. Likewise, if you go several years without reexamining your benefits, or keep renewing the same policies with little long-term strategy, your broker might not be best negotiating on your behalf.

  • A good broker has insight into important government and risk management regulations. If you question whether your broker has marketplace knowledge, or if they are uncomfortable answering your questions or willingness to assist in finding you the answers, you might want to consider. 

You should feel comfortable asking questions to your benefits provider, whether about enrollment, health coverage, retirement plans or regulatory compliance. If they do not seem to have adequate personnel to assist you, or you receive less guidance than you expected, you might need a more experienced brokerage on your side. When you look at potential brokers, ask what they can do for your business as a whole. If they have a customized plan to help your budget and to keep your employees happy and healthy, they can add value to your business. If not, don’t worry – there are quality brokers to choose from.

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