What to Ask a Business Insurance Broker: An Insider’s Guide
Published On: May 9, 2021
If you are shopping around for health insurance, chances are you have heard the term ‘insurance broker’ thrown around a few times. While both insurance agents and insurance brokers act as intermediaries between insurance sellers and buyers, they have different job functions.
Where an insurance agent represents one or more insurance companies, an insurance broker works directly for the client. On the other hand, brokers work for you and only you and will use their experience to provide the best insurance package for your specific needs.
When shopping around for a business insurance broker, there are a few things you should ask to ensure they are the best fit for what you are looking for. Here’s an insider’s guide of what an employer should ask an insurance broker before hiring them.
Can you tell me about your business?
You’ll want to know more about your broker’s business to get a sense of their experience. A business insurance brokerage that has been around for a while is a great sign that they are well-versed with a lot of different business types and the issues you may face. It’s also a good idea to ask for references and to ask about what some of their success stories are. Doing this will help you see their track record, and if their previous experience aligns well with your goals.
There’s no such thing as a good answer or a bad answer to this question, but make sure to follow your gut. Your insurance broker’s job is to represent you, but if something seems off, make sure to act on it.
Who will I be working with?
Insurance brokerages can be quite large, and you want to make sure that you are more than just a number to them. It is important to ask about who you will be working with, as this gives you an idea of how this firm operates. They should provide you with a dedicated account manager that serves as your only point of contact, but if they don’t, proceed with caution. An account manager makes sure that all your needs are met, and that you are treated as an individual. You will need to evaluate if a large firm or small firm is best. Who are you working with and how long have they been in the business.
Can you help me review my current coverage?
You may already have some type of insurance coverage, and an experienced broker can take a look at what is working well for you and what isn’t. Based on their findings, they can create a customized plan for your needs, and fill in any coverage gaps you may be experiencing. Make sure to sit down with the broker to analyze your specific plan before you start discussing other options, as you want to make sure your concerns are heard before you enroll in a new plan.
What are the different types of plans you offer?
Not all plans are created equally, so you will want to hear out all the different types of options available to you before you decide. There is no such thing as a one-size-fits-all type of insurance plan, so take your time listening to the plans they offer, and ask as many questions as possible.
Additionally, you’ll want to find out about the different types of health plans. Indemnity plans are a type of health plan that require you to pay a certain percentage of healthcare costs when the healthcare company pays the rest. There are also managed care systems, health maintenance organizations (HMOs), and preferred provider organizations (PPOs), that can add versatility to your health insurance plans. At the very least, you should expect your broker to provide a comprehensive list of health insurance terms, rates, and benefits for multiple options for your review.
Please explain the fees you charge.
Some insurance brokerages have salaried workers, whereas others rely only on commission-based sales. The health insurance company will pay the broker out of their end of the sale, so it doesn’t cost you anything to use a broker’s service. But sometimes, they add on an extra brokerage fee on top of your plan.
Asking upfront about any extra charges ensures you’re not surprised down the line.
How do you handle the enrollment process?
Each brokerage handles the open enrollment process in a different way. Some may take care of enrolling for you when others require the clients to do it themselves. It is important to ask your insurance broker how they will streamline the entire process to make everything easy for you. They may even offer some tools that can make the process a bit easier for you, but again, this may take some time to learn. You want to be as prepared as possible going into open enrollment, and asking all these questions ahead of time will set you up for success.
Does your brokerage have a specific renewal process I should be aware of?
You will need to renew your plan every single year, and some insurance brokerages have certain automatic renewal processes set up as a way to streamline the entire process. Generally speaking, a systematic renewal process will go into place about 45 to 60 days leading up to the renewal date. But it is important to be aware of your insurance brokerage’s renewal process because it is best practice to ask your broker to negotiate a better rate for you every year, and you don’t want to get enrolled in the same plan if you wanted to make a change.
What are your capabilities in the following areas?
It is best to know your business insurance broker’s capabilities in the following three areas:
Claim advocacy. Does the brokerage have specific claim specialists at your disposal for difficult situations?
Claim reviews. How do they close and review claims? Do they have a standardized process for doing so?
Loss control. Can your brokerage complete a lost trend analysis, if need be?
Benchmarking is very critical to ensuring competitive benefit structure.
The answers to these questions will shed light on how the brokerage works, and if its operations align with what you are seeking.
Finding the right business insurance broker for your business doesn’t have to be a daunting task. With these questions to help guide the conversation, you’ll be confident in knowing that you’ll be making the right decision for your business needs and goals. Looking for more exclusive content? Check out what’s trending on the Mployer Advisor blog.
Vice President of Operations, Mployer Advisor