Many employers assume that changing benefits brokers means changing insurance carriers, plans, or rates. In reality, your broker and your insurance carriers are separate relationships. Understanding this distinction can help businesses evaluate whether they are receiving the guidance and support they need from their current broker.
CAN YOU CHANGE BENEFITS BROKERS WITHOUT CHANGING INSURANCE PLANS?
Brokers and insurance carriers are not tied together. Employers can change brokers at any time and for any reason. A broker change does not impact your insurance carriers, benefit plans, employee coverage, or premium rates. The primary change is who the insurance carrier recognizes as the broker of record.
In short, changing brokers changes who supports your organization, not the insurance products themselves.
WHAT HAPPENS WHEN YOU CHANGE BROKERS?
When you change the broker of record on your insurance plan, the new broker gains the ability to communicate with the insurance carrier on your behalf. Your existing premiums already have commissions or service fees built in; therefore, with a change of broker, carrier-paid commissions simply shift from the former broker to the new broker. That said, a broker transition is largely administrative and does not create additional costs for the employer.
ALL BROKERS HAVE ACCESS TO THE SAME INSURANCE MARKETS
The question comes up whether one broker can get better rates than another broker. The simple answer is no. Brokers generally access the same carriers, plans, and rates. The rates a business receives from an insurance carrier are based on the group, not the broker: Identical census and company information produce identical quotes. The real differentiator is not the product, but the expertise and support that comes with the broker relationship.
STRATEGY, SUPPORT, AND SERVICE: THE THREE COMPONENTS OF AN EFFECTIVE BENEFITS PARTNERSHIP
If the plans and pricing are often the same, what should employers look for when evaluating a broker relationship?
Strategy: Helping Employers Make Informed Decisions
A benefits broker can help a business make informed decisions by providing the following:
- Annual strategic planning meetings
- Market reviews and carrier negotiations: Even when an employer wants to keep the same carrier, competitive market reviews can strengthen negotiating leverage and potentially reduce renewal increases.
- Renewal analysis
- Plan design recommendations
- Employer contribution strategy analysis
- ACA affordability analysis
- Budget forecasting and cost modeling
- Long-term benefits planning
- Industry benchmarking
Support: Taking Work Off Your Team's Plate
A broker can act as an extension of your HR and administrative team and do much of the benefits-related work, so your team doesn’t have to handle the following tasks:
- Open enrollment project management
- Employee education meetings
- One-on-one enrollment support
- Enrollment tracking and follow-up
- Carrier coordination
- Preparation and submission of employer paperwork
- Form preparation when possible
- Payroll deduction reporting
- Payroll integration coordination
- Benefits administration platform implementation and support
- Annual ACA reporting
Service: Ongoing Support Throughout the Year
Brokers can continue to provide value after enrollment season ends by helping with the following items:
- Employee benefits questions
- Life event and eligibility guidance
- Claims advocacy and issue resolution with carriers and service providers
- Benefits administration support
- COBRA and compliance guidance
- Assistance with reporting requirements
- Troubleshooting unexpected problems
- Access to responsive, knowledgeable support
HOW TO EVALUATE WHETHER YOU'RE GETTING ENOUGH VALUE FROM YOUR BROKER
Below are some questions to ask to help evaluate the value you’re getting from your broker:
- Does your broker bring proactive recommendations?
- Do they review your benefits strategy annually?
- Are they helping manage administrative workload?
- Do employees know where to turn for benefits questions?
- Do you feel supported year-round, not just at renewal?
A benefits broker's value extends far beyond securing insurance coverage. While carriers, plans, and pricing may look similar from broker to broker, the level of strategy, support, and service can vary significantly. Employers should periodically evaluate whether their current broker is helping them make informed decisions, reduce administrative burden, and support employees effectively throughout the year.
HAVE QUESTIONS?
If you’d like to discuss your benefits plan, please contact our team:
