From a distance, the position and utility of health insurance brokers in the 21st century appears like that of travel agents: a service provider that used to be useful back in the days of rotary phones and leaded gasoline, but which is now a weak relic of an old system. After all, we have The Internet, don’t we? Why use a vestigial organ such as a broker?
As with many quick analogies, though, this one falls apart on closer examination. I don’t need a travel agent to schedule a flight to Miami on Tuesday and back on Friday. I don’t need professional expertise to choose an airline, or to examine the perks and features of the specific aircraft. And since my interaction with the airline will be over within four days, I won’t feel locked into a financial agreement which I may end up regretting. If I had a bad experience with that airline, I’ll avoid flying with them again, and maybe complain on Yelp.
Compare that to health insurance, especially from a small employer’s perspective. While an exception may exist somewhere, virtually NO small business owners started their company because they want to deal with employee benefits. Figuring out the benefits that can benefit your specific pool of employees and attract valued applicants, which can provide the best overall benefits while fitting within your operating budget… And then answering employee questions on what doctors they can see, how are their stepchildren covered, how maternity coverage works, whether their dental insurance covers injuries, how deductibles work… Wouldn’t it be great if there were someone who would answer those employee questions for you?
“But there’s got to be a tradeoff. What does using a broker cost me?”
Nothing. And in the fine print…
Seriously, nothing.
Here’s why. If the insurance carriers didn’t work through brokers, they’d have to hire their own people to answer customer service questions. And even then, they could never make a recommendation on this insurance carrier vs. that one, as they’ve got an obvious financial interest. If you’re working with a broker, though, the insurance carrier knows that (a) someone other than them will be the frontline for employee questions, and (b) they aren’t guilty of a conflict of interest in recommending specific health plans. Because the broker’s allegiance and responsibility is to you, the client.
The insurance carrier is even willing to pay the broker a commission to work with you. This does not increase your premiums; your invoice would be exactly the same amount whether you work with a broker or not. So your choices, for the same amount of money, are either to muddle through benefits offerings, claims questions, enrollments, etc. instead of doing what you actually got into business to do… or working with a broker whose actual business is understanding those things.
If you want to see what our brokerage can do for your company, talk to us.
