[Benefits Pro] 5 Tips for HR Pros

Originally posted on Benefits ProThe 2020 open enrollment season is upon us, and HR departments are in health insurance and workplace benefits mode.

Aside from deciding on insurance and benefit options, some employers are hunting for a new insurance broker. About 15% of employers change brokers each year. When you take into account the impact of the coronavirus pandemic on employers and employees, HR teams need now, more than ever, to ensure their insurance brokers are true partners in helping achieve HR objectives. This makes it that much more critical to find an insurance broker that’s aligned with your goals.Here are five tips for employers and HR professionals to help pick the right insurance broker for 2021 and beyond.

1. Shop around.

The shop-around advice is true for any insurance provider or product, not just corporate health insurance. To find the best insurance broker, it’s imperative to do your homework. This means conducting research online, asking professional colleagues for referrals, soliciting customer referrals from brokers, and comparing the pros and cons of each broker.

“People tend to refer people with whom they have had a positive experience. Ask what their experience was in dealing with the … broker,” the nonprofit United Policyholders group says.

It’s smart to obtain proposals from at least three brokers so that you can better compare their offerings and services.

“Amid a burgeoning marketplace of digital health offerings and innovations, employers should shop and negotiate for health care solutions with the same rigor they shop for their business needs,” Harvard Business Review advises. “They should challenge vendors to demonstrate the cost-effectiveness of their programs to produce better health and improve productivity, presenteeism and quality of life for their employees.”

Whatever you do, don’t simply stick with the status quo. If you’ve had the same broker the past few years, make sure it’s still the right broker for you.

2. Rely on technology.

When you’re searching for an insurance broker, keep an eye out for online platforms that do a lot of the heavy lifting for you. Some of these platforms use artificial intelligence and real-time data to rate brokers that offer corporate health insurance plans. Embracing this technology can simplify the process of hiring the broker that best meets your needs.

The AI-enabled, real-time data generated by one of these platforms can help you cut through what historically has been a lack of clarity and transparency regarding the quality of brokers.

According to the National Association of Insurance Commissioners, so-called “big data” holds the potential to benefit both insurers and insurance customers. Use of big data has resulted in 30% better access to insurance services, 40% to 70% in cost savings and 60% higher rates of fraud detection, statistics cited by the association show.

3. Ask about cost.

When you’re vetting an insurance broker, you want to be on the same page about pricing. A good broker should be able to explain all of the costs in an easy-to-understand way, including what you’ll get for what you’re paying.

The price will boil down to two components: the premiums you’re paying and the amount of money you’re paying the broker. Keep in mind that brokers typically charge a percentage-based commission, ranging from roughly 2% to 15% of the total premiums, along with fees. Ask whether a broker receives supplement commissions in addition to base commissions.

Today, the cost of health insurance weighs heavily on the minds of employers. Gallagher’s 2020 Benefits Strategy & Benchmarking Survey found that employers’ top concerns about health care costs were the high cost of medical services (67%) and specialty drugs (41%).

4. Check the credentials.

An insurance broker may offer a great deal. But is it a reputable company? Before you sign a contract with a broker, investigate who you’re dealing with.

Aside from checking references, be sure to check into a broker’s licensing and registration. Is the broker in good standing with licensing and registration agencies? Furthermore, dig into any complaints that businesses have lodged against the broker.

Also, make sure you look into whether the broker has faced any disciplinary action. Contact your state insurance regulator’s office for more information.

5. Inquire about the team.

Feeling comfortable about a broker is one thing. Feeling comfortable with the brokerage team you’d be working with is quite another. It’s critical to be aware of who’ll be handling your account. What experience do they have? What is their expertise? Are they a fit with your company’s culture? Perhaps most importantly, how well will they deliver customer service?

You need not go with the biggest broker to get the value you’re seeking. Rather, focus on the quality of the people working for the broker.

More broadly, what experience do they have with both your company’s size and industry? Each segment has unique characteristics. You wouldn’t want to be an orthopedic surgeon’s first case, for the same reason you don’t want to be the first client like you that your broker works with.

One more piece of advice: Seek two to three examples of when a broker has gone to the mat to fight for its employer’s clients. This is an easy way to see how much they will stand up for you if and when things go wrong.

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