Bud Bowlin has been advising business owners about health insurance and benefits for more than 35 years. For his 70th birthday, we gave him his own advice column. Got a burning benefits question for Bud? Send it to [email protected].
Dear Bud,
My small business has been with the same insurance broker for 5 years. Although he’s been good to us overall, recently we’ve had a harder time getting hold of him. Also, we had one big problem with our health insurance renewal this year. I don’t want to burn a bridge with our current broker, but I’m curious about new options and whether a different broker can get us better rates? How do I find a new broker, and what questions should I ask?
Thanks,
Change of Insurance Brokers Is Looming
Dear C.I.B.I.L.,
Baseball managing great, Casey Stengel, was once asked: “When is the best time to change pitchers?” Without hesitation, Stengel replied: ”The first time it crosses your mind.” As a broker for over 35 years, I feel it’s important that my clients take stock and evaluate their relationship with me every single year. If you have any doubts about your broker’s capability to do the job, then perhaps a change is in order. Changing brokers need not be scary if you know what to look for.
Is it time for a new insurance broker?
Ask yourself:
- Do I still have confidence that my broker is doing everything possible to protect my business interests?
- Does my broker anticipate areas of concern or changing needs?
- Does my broker have access to all the products/plans and carriers that satisfy my requirements?
- Is my broker knowledgeable in all products areas?
- Is my broker available when I need help?
- Does my broker rely heavily on carrier sales/service reps?
- Do my employees have a conduit to get all questions answered quickly, privately, and accurately?
- Am I pleased with the performance of past product recommendations?
- Am I confident my broker is protecting my company on all applicable compliance/regulatory issues?
- Does my broker relationship make my job easier, and save my employees time?
If the answer to any one of the questions causes you concern or doubt, then it’s probably time to take a deeper look. In today’s world, an established relationship is important, but it’s just not enough. Brokers need to have staff who can deliver expertise on a broad variety of topics (from ACA compliance to benefits administration) and stay on top of changing regulations and rates.
Can a different broker get you better rates?
The answer is: it depends. The better brokers will verify the accuracy of the census info before requesting quotes, and ensure provider networks are selected correctly so you don’t pay higher premiums for broader networks than suitable. For small groups, each state’s Department of Insurance approves the rates for each carrier—therefore a particular broker can not get better/cheaper rates for an identical census. For large group, brokers are able to influence rates with carriers based upon the size, MLR, and lapse ratio of their block of business and their commission level.
So, how do you actually choose a new broker?
Narrow your selection by asking friends and business associates who they use as a broker and how satisfied they are. Then, ask the prospective brokers to provide you with a list of at least 5-7 clients they’ve had for over 3-5 years. Make an effort to get some facetime with those clients. Ask them the questions you asked yourself about your own broker. Once satisfied with your selection, ask the broker to demo what services they provide. Ask for recommendations to your existing benefits, and ask for responses to a few sample employee support questions. Don’t be afraid to ask tons of questions. The right broker will show great patience—and isn’t that one of the characteristics you’re looking for?
Changing brokers can be scary because it’s never easy to fire someone. However, your purpose in making the change is to improve YOUR business. That’s what remains the utmost goal.
Got a question about benefits and insurance? Send it to [email protected].
The answers on Ask Bud serve as basic guidelines and are for informational purposes only. Bud is a treasure trove of knowledge, but is unable to provide legal, tax, or fact-specific human resources advice. Once a question is submitted, Bud and Zenefits reserve the right to accept, reject, edit, modify, or otherwise change it. All content on the Zenefits website, including questions received and answers provided by Ask Bud, are Zenefits property.
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