Who really understands group health insurance? Your premiums go up every year and you can’t figure out why. The numbers you get when it’s time to renew your policy may not arrive on time or make sense, even for the supposed experts. And who has the time to grasp all those details when you have so many other responsibilities? You finally resolve to solve your health insurance problems and find an expert of your own. But where do you turn? Is it better to deal directly with the insurance company, a dedicated insurance agent or an independent health insurance broker? What do they do and how do they all fit into the equation?
Who’s Who and What They Do
According to Wall Street Journal Guides, here are the roles of each:
- The insurance company: They provide the actual health insurance itself, collect your premiums and pay your claims. Their ultimate goal is to maximize profits.
- The insurance agent: They represent the interests of the insurance company. While the best agents are sensitive to your organization’s needs, they have limited flexibility. They can offer only the plans the insurance company that they are tied to sells, with the goal of maximizing insurer sales (and profit, see above).
- The independent insurance broker: Has relationships with multiple insurers. And the authority to sell and negotiate adjustments in coverage on behalf of their clients. They represent the interests of the insured party – which is you. Brokers are independent, dealing with multiple insurers, and can provide more options with a broader view of the marketplace. They can sort through a variety of plans to find one that meets your needs and your budget. One World Cover is an independent insurance broker.
A Broker is Essential
Dealing directly with health insurance companies might be educational but gathering all the information from multiple providers and comparing them is extremely time consuming. Agents can be helpful to a point, but their ultimate loyalty lies with the insurance company, not with you.
Brokers can provide a wider range of options from multiple insurers. They’ll negotiate on your behalf when necessary. It’s their job to interpret and explain all the data and statistics from your plan’s performance. Perhaps that’s why the Society for Human Resource Management (SHRM – a professional human resources membership association) tells its members that a broker is an “essential hire” to solve health insurance problems.
Whether Starting from Scratch…
A health insurance broker’s wider range of experience means better ability to work with you on building a plan from scratch where optimizing benefits isn’t just about shopping for coverage from carriers. It’s a holistic approach to your overall company strategy, budget, employee benefits, workplace wellness and HR strategy, both short and long-term. A broker familiar with your industry can help you compare your coverage with what competitors in your industry offer so you don’t go overboard while still attracting quality employees.
…Or Renewing Your Policy
If you already have a group health insurance plan, renewal time is when a broker can be your best friend. They should give you their undivided attention during the renewal process and begin working with you on the strategy 4 to 5 months before the renewal date. Together, they can help you review your health insurance plan’s claims performance, table of benefits, usage patterns and explain how all that affects costs.
Through expertise and analysis of how your plan is used by your employees, they can identify opportunities for cost savings through plan adjustments that don’t require changing insurers. And by taking a close look at your plan’s claims loss ratio, a broker may discover that you’re overpaying – preventing a premium increase and, in some cases, triggering a refund. Imagine asking an insurance company, “Am I paying too much?” What do you think their answer would be?
Faster, More Efficient Claims Resolutions
Depending on the level of service you require, the right broker can be a valuable extension of your HR department. When employees have a question or a problem with a claim, they call HR. If HR has to follow-up with a large insurance company, imagine the bureaucracy they might encounter as merely a single client of a massive organization. But if HR reaches out to your broker who has a direct, long-standing relationship with the insurance underwriters through representing multiple clients, the solution is certainly much quicker to come.
At What Cost?
You already know there is no such thing as a free lunch but what exactly does working with a health insurance broker cost? Well, that depends…
- Insurance companies that don’t have an outside salesforce of dedicated agents will often include a broker’s fees in the premiums since they’re grateful for the clients they bring. In that case, you get all the benefits of working with a broker at no added cost.
- In other cases, a broker may cost a percentage of your premiums which might seem like an additional fee until you do the math. If you’re paying US$100,000/year for your plan and a broker charges you 10% commission but is able to bring your premiums down by 20%, you’re still saving US$10,000.
- Even if working with a broker costs you more in the short run, speedier claims resolution and added services provided to your HR Department saves you time and effort while increasing efficiency and employee satisfaction with less drain on your internal resources. So it’s worth it.
Where and When to Find a Broker
If you’re not currently working with a broker, choose one with experience in your industry. Experience with organizations structured like yours will allow them to deliver actionable and relevant insight and recommendations. Make sure to ask about their experience with the latest technology in data analysis as this is the future of insurance overall.
If you’re building your plan from scratch or going through a total revamp that involves switching insurers, get a broker involved in the assembly of benefits and insurer selection from the beginning for maximum benefit. Letting the broker make recommendations for you will save you time and likely a substantial amount of money.
No Time Like the Present
Whether starting anew or renewing an existing policy, the SHRM recommends starting your broker search as soon as possible. If you already have a broker that’s not providing the kind of service and expertise outlined here, it’s time to solve your health insurance problems with the right independent broker – one that can cure those headaches once and for all.
One World Cover can help. We have long-standing and strong relationships with all of the world’s leading health insurers including Aetna, Allianz, AXA, Bupa, Cigna, AXA, GBG, MSH and Now Health to name just a few. Click here to contact us. Get in touch: [email protected]