As your organization grows, managing employee benefits often becomes more complex. Rising costs, a larger or more dispersed workforce, greater administrative demands and changing employee expectations may require more from your employee benefits broker than they once did. If you’re no longer receiving the strategy, service or health plan solutions that your company needs, it’s time to ask whether your benefits broker is still the right fit.
How Can You Tell When You’ve Outgrown Your Broker?
A broker relationship that worked well in previous years may no longer provide the same value today. It doesn’t necessarily mean the broker is doing something wrong. The employer may simply need a different level of expertise, service, technology or strategy support.
It’s a question of fit. If your broker no longer fits your needs, it’s time to move on.
What Should You Expect From a Benefits Broker Today?
If your health plan needs are simple and you’re satisfied with your coverage options, a broker who obtains quotes, helps you compare plans and facilitates annual enrollment may be sufficient. However, some brokers offer additional types of services and support, such as:
- Claims and utilization analysis
- Employee communication and education
- Compliance resources
- Benefits strategy and plan design
- Cost-management strategies
- Benefits technology
- Pharmacy benefit considerations
- Ongoing service throughout the plan year
You may not need all of these services. If you like your health plan and your costs are manageable, you may not want to spend more time or energy on benefits. But if you’re facing challenges that require new strategies, you may find value in a broker who does more. If your current broker isn’t equipped to provide the additional services you need, it may be time to consider a broker who is.
The Signs It May Be Time to Move On
It doesn’t make business sense to stay with a broker who no longer meets your needs. On the other hand, switching brokers without good cause can be unnecessarily disruptive. Your broker doesn’t control the wider market or health care cost trends, and they are not necessarily to blame for a challenging renewal.
So how do you know when it’s time to look for a new benefits broker? Here are five signs to watch for.
Sign #1: You Only Hear From Your Broker Around Renewal
A simple renewal may not take much time, but if you don’t hear from your broker until shortly before renewal, you may miss out on an opportunity to manage your benefits proactively.
Renewing is not always your best option. Your broker should be working with you well in advance of your renewal so you can carefully consider your best course of action. If you wait too long, you may be left without other choices or rushed into a bad decision.
A proactive, strategic relationship may include:
- Regular plan-performance reviews
- Claims and utilization discussions
- Updates on significant market developments
- Cost-management conversations
- Analysis of employee feedback
To be effective, many of these discussions need to happen weeks or even months before your renewal deadline. Renewal should be the culmination of benefits planning, not the beginning of it.
Sign #2: Your Broker Brings You Renewals, but Few Alternatives
Employers shouldn’t necessarily change carriers or plan designs every year, but they should understand their options.
If your broker encourages you to renew every year without comparing alternative health plan options, you may not be obtaining the guidance you need to make an informed decision. This is especially true if you have expressed any dissatisfaction with your current coverage or costs. Even if your broker believes your current plan is still the best fit, they should be able to explain why and provide the information you need to proceed with confidence.
Does your broker:
- Provide clear explanations to support renewal recommendations?
- Offer benchmarking and market context to show how your renewal fits into broader trends?
- Present alternative plan design options?
- Discuss contribution strategies?
- Explore alternative funding arrangements?
- Adjust recommendations and offer new strategies as your needs evolve?
If your broker is not providing these services, and if you believe these services would be useful, it may be time to move on.
Sign #3: You Don’t Have a Clear Picture of What’s Driving Your Benefits Costs
If your health premiums increase by 15%, is that an outrageous hike that should prompt you to switch plans or an acceptable increase in line with broader market conditions and your company’s claims history? If you’re only looking at the final renewal number, you have no way of knowing.
A broker can help by providing context. Depending on the plan size, funding arrangement and available data, a broker may be able to offer insights into:
- Year-over-year cost trends. How much have your costs gone up, both as a dollar amount and as a percentage, in the last year and in the last five years?
- Utilization trends. How are employees using their coverage, and how has this changed?
- Employee contribution levels. How much are employees contributing, how has this changed, and how does it compare to what employees might expect to pay with other employers?
- Plan-design effects. How are elements such as copays or deductibles affecting costs and coverage, and what effects would changes have?
- Major cost drivers. What high-cost claim patterns are emerging, and how does medical spending compare to pharmacy spending?
- What cost increases are similar employers seeing?
Data can help employers make informed decisions, but data alone isn’t strategy. In addition to providing reports, your broker should help you understand what the information means for your company.
Sign #4: Your Organization Has Become More Complex, but Your Benefits Strategy Hasn’t
If you had to look for a benefits broker for the first time today, would you choose your current broker, or would you go with someone else?
Your organization may be substantially different from the one that originally hired your broker years ago. At the time, the broker may have been a good fit, but that doesn’t mean the broker is still a good fit today.
Consider how your organization has changed:
- Significant workforce growth
- Expansion into additional states
- Remote or hybrid employees
- Acquisitions or new operations
- Changing employee demographics
- Greater competition for talent
- Greater HR administrative demands
Then consider whether these changes require a new benefits strategy.
If your company has become more complex and your benefits strategy isn’t keeping up, the problem may be that you’ve outgrown your broker. This is especially true if the broker continues to offer essentially the same solutions year after year despite substantial changes to your business.
Sign #5: You’re Doing Too Much of the Benefits Work Yourself
As your company grows, so do the demands on HR. More employees can mean more enrollment issues, benefits questions, qualifying life events, compliance responsibilities and administrative work throughout the year.
Your broker is not responsible for every HR or benefits function, but some brokers provide support in the form of technology, resources or additional services. Even more importantly, your broker should be adding value and supporting HR productivity and efficiency, not giving your HR department more work. If your HR team consistently feels like it is managing the broker rather than being supported by the broker, the relationship deserves a closer look.
Before You Change Brokers, Identify What You Need
Switching brokers without a strategic plan won’t necessarily yield any improvement. You don’t just want a different broker. You want a broker who better fits your needs. Before you change brokers, identify exactly where your current relationship falls short and what you want from your next broker.
Do you need:
- Stronger strategic guidance?
- Better service?
- Deeper analytics?
- Additional compliance resources?
- Better employee communication?
- More sophisticated cost-management strategies?
- Benefits technology support?
- A broker who’s experienced with organizations of your size or industry?
There’s one more question to ask: Has your current broker had an opportunity to address your concerns? If your current broker is able to adapt to your needs, remaining with your broker may be the best, least disruptive option.
What to Look for in Your Next Benefits Broker
Once you’ve decided to hire a new broker, you need to get serious about comparing your options. Ideally, your next broker will meet your needs for years to come, so you won’t have to go through the entire process again soon.
Meet with several brokers that serve companies similar to yours, and compare each broker based on all the criteria that matter to your company. Some important considerations include:
Strategic capabilities. Can they help develop a multi-year benefits strategy rather than simply managing annual renewals one year at a time?
Market expertise. Do they understand carriers, funding arrangements, pharmacy benefits, cost-management approaches and other available solutions relevant to your company?
Data and analytics. What information can they provide, and how will they turn it into actionable recommendations?
Service model. Who will actually manage the account after the sale? Will it be the broker or the broker’s support staff?
Employee support. What resources are available for enrollment, education, communication and ongoing benefits questions?
Technology. What tools or platforms can they provide or work with? For example, do they offer digital open enrollment tools?
Experience. Do they work with employers facing similar workforce, industry, geographic, or benefits challenges?
8 Questions to Ask a Prospective Benefits Broker
When you meet with a prospective broker, it’s helpful to be prepared with questions that cut to the heart of what matters.
- How will you evaluate our current benefits program?
- How do you help clients manage health care and pharmacy costs?
- What does your renewal process look like?
- How frequently will we meet throughout the year?
- What reporting and analytics will we receive?
- What employee communication and enrollment support do you provide?
- Who will be responsible for our account on a day-to-day basis?
- How will you measure whether our benefits strategy is working?
This meeting should be about your company and how the broker can help your company, not just about the broker. Instead of simply listing what services the broker offers, ask the broker to show you how those services would apply to your company.
Changing Brokers Doesn’t Necessarily Mean Changing Your Benefits
When you switch brokers, you may also want to switch plans. However, replacing a broker does not automatically mean you have to replace your insurance carrier or disrupt employee coverage. It’s possible that your current plan truly is the best option for your company, but you still need a new broker because you require additional services and support that your current broker doesn’t offer.
When you switch brokers, you will typically need to sign a broker-of-record (BOR) form. This form removes your former broker’s authority and gives authority to your new broker.
Broker-of-record changes and carrier or plan changes are separate decisions. However, the situation can become complex depending on the timing, contracts, carrier requirements and other specific circumstances. Before signing a broker-of-record form, determine exactly what would change and what would remain the same.
Your Benefits Broker Should Grow With Your Business
As your company changes, the expertise and support it needs from its benefits partners can change, too. A broker that was a good fit five years ago may still be a good fit today, but employers shouldn’t assume that automatically.
Your broker should be helping you make better benefits decisions today while preparing your company for what comes next.
If you’re not sure that’s happening, compare the service, strategy and resources you’re receiving now with what else is available. You may decide your current broker is still the right fit. Or you may discover that your company has outgrown the relationship.
Either way, you’ll have a clearer picture of what you need from your benefits partner.
Are you ready to find a broker with the strategy, resources and solutions to support your growing business? View our trusted broker partners.
