[Infographic] The Importance of Hiring an Employee Benefits Broker
When it comes to hiring an employee benefits broker, companies traditionally have hired people they’re already familiar with. There’s logic to this—because of the complexity of the benefits marketplace and the need to trust your broker, it makes sense to hire someone you already have a relationship with.
But just because you’re related to or friendly with someone doesn’t mean they’re the right broker for your business. This is a very significant expense for every business—only salary is a bigger line item—and smart business leaders will look for someone that can provide the most value to their business.
But how do you determine that? Most employee benefits Employee bs have the same sales patter, and their offering looks the same. Discerning between your choices can be difficult. In the infographic below, we spell out some of the differences between benefits brokers, and how to begin to make an informed choice when selecting a broker.
First, some definitions
In the benefits consulting world, there were traditionally three types of companies you could call to manage your company’s benefits:
- benefits brokers
- benefits consultants
- benefits advisors
In today’s market, the distinctions between these three have blurred, and the differences are barely distinguishable. Today, most benefits professionals work for either fees or commissions, have access to all carriers and should work with your best interest in mind. When looking for a broker, it’s best to ignore what they call themselves and just focus on what each individual vendor offers.
And don’t let inertia set in; just because you’ve had the same broker for ten years doesn’t mean they should be your broker next year—look for a partner that makes the most sense for your business. The wrong partner could mean inadequate coverage for employees, excessive costs for the business, compliance risk, and/or a perception your business is not competitive.
For this reason, companies should periodically reevaluate their employee benefits broker and their offerings to make sure they’re getting all the advice and value they deserve. Companies change, and so do their benefits needs.
Here’s what you should keep in mind when selecting a broker.
Benefits are your company’s second largest expense
Unsurprisingly, the biggest expense for companies is employee salaries. What may be surprising is that the costs of employee benefits come in second.
For an employee with a salary of $50,000, their total compensation comes to $71,839 including all of their benefits. These benefits include insurance, legally required programs (like Medicare, Social Security, etc.), paid leave, retirement and supplemental pay.
When you hire an employee benefits broker, you’re essentially hiring someone to manage your second largest business expense. Treat the process of picking a benefits broker as you would treat the process of hiring a new employee—it only makes sense to want the best person for the job.
Brokers provide more than just health insurance
Benefits brokers don’t just provide health insurance—they provide the services that make benefits possible.
A good benefits broker helps employees manage their healthcare spend, assists with compliance and reporting, helps with open enrollment, adds new services to help employers control costs and assists with benefits communication materials.
When you’re picking a health insurance broker, choose someone who offers the services you and your employees need today, and may need in the future.
Brokers provide expertise in picking health plans
Most employers would struggle to pick the right plan for their business. Understandably so—it’s not their area of expertise. In fact, nine in 10 employers aren’t familiar with objective quality metrics for health plans.
Having the right broker for your business means that your employees can get quality health insurance and benefits that won’t break the bank.
Providing your employees with the benefits they want
The wants of employees are important, but not always easy for employers to keep track of.
As part of their job, benefits brokers try to be in-the-know with the latest trends in benefits. Based on experience from other clients and their knowledge of the system, they’ll be able to make recommendations for benefits to keep employees happy.
Benefits like FSAs, student loan reimbursement, sign-on bonuses, financial advisors, recognition programs and even standing desks, all help attract and retain employees.
A solution for comparing benefits brokers
Comparing health insurance brokers can be difficult, but tools like brokerSpotlight make it easy to compare multiple brokers all in one place. brokerSpotlight and similar platforms allow users to find benefits brokers that specialize in the size, industry and culture of your business. You can then narrow down your search to find the employee benefits broker that’s right for your company.