Insurance Broker

How Do I Choose a Benefits Broker?

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Published On: February 22, 2021

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

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 is customized to you. 

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

In this post, we discuss the responsibilities of a benefits broker, what to look for in a good one and how to tell if they will be a transparent partner.  

What Does a Benefits Broker Do?

Benefit brokers help your company get the benefits that are necessary for business insurance and total employee 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 advise on the selecting, purchasing and administering of employee benefits.

At a basic level, a benefits broker advises you on business insurance and employee benefits. A benefits broker will also advise your company on the types of benefits you can and should offer, as well as find plans and policies within your budget. Brokers then create a customized business insurance package to meet your company's unique needs.

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

Additionally, benefits brokers should be experts in areas like employee wellness and HR support. In most cases, benefits advisors and benefits consultants should act as an extension of your HR 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 additional consultant fees outside of the traditional commission structure.

What's more, nowadays many insurance and benefits brokers’ services have evolved to act more like consultants/advisors. Thus, the difference isn’t always straightforward. 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 provided 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, knowing what to look for in a broker is crucial.

First, you need to set goals, identify needs and establish criteria that will drive your search for insurance and benefits assistance. Then, it would be best if you found 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.

1. An expert in the benefits market.

Look for a broker familiar with several coverage types, including life insurance, health insurance, workers’ compensation and retirement plans. They should also 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.

2. 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 they affect your benefits plan and finds ways to mitigate them. 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.

3. Reveals value in your benefits program.

Good benefits brokers and consultants can help attract and retain talent through your benefits plan. You can look for a broker to 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.

4. Educates your team on benefits regulations.

Compliance is necessary for any benefits program and risking noncompliance can leave you vulnerable to fines and legal costs. Look for a benefits broker that proactively works to ensure legal compliance and educate you on regulations like FMLA, COBRA and HIPAA. Your employees deserve informed answers from a licensed professional for all kinds of questions, especially during open enrollment and renewal periods.

5. Knowledge surrounding online enrollment and other technology benefits.

Look for brokerages that offer a benefits portal or who can connect you to your HR systems that would allow employees to review and manage their benefits. Brokers can also use technology to track benefits usage and measure your plan's performance.

How Can I Tell if my Insurance Broker Is Being Transparent?

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.

  • Your broker should work with you 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 without a long-term strategy, your broker might not be best negotiating on your behalf.

  • A good broker has insight into necessary government and risk management regulations. If you question whether your broker has marketplace knowledge or if they are uncomfortable answering your questions, you might want to reconsider. 

You should feel comfortable asking questions to your benefits provider 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, then you might need a more experienced partner 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 keep your employees happy and healthy, they can add value to your business. If not don’t worry, there are plenty of quality brokers to choose from.

Match me with a broker.

Looking for more exclusive content? Check out what’s trending on the Mployer Advisor blog, or read more about what to expect from your insurance broker here.

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Weller Emmons

VP of Operations, Mployer Advisor


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