What employers look for when selecting an employee benefits brokerArticle added by Philip Eide on February 6, 2013
Shaker Heights, OH
Joined: December 12, 2010
Ranked: #56 (925 pts)
As organizations begin this part of the decision-making process, it is very important to select brokers with whom the CFO, HR department, department managers, and employees can work comfortably.
Owners, CFOs and HR departments must sit down and make the important and often expensive decisions about employee benefits. Before deciding on the design, plans, programs and services, many organizations consider changing their broker or working with a broker for the first time. Many organizations utilize several brokers/agents to gain more specifically focused expertise. These areas of expertise may include:
I would suggest the following when making these important selections:
- Selecting and pricing traditional core benefits
- Selecting and implementing voluntary worksite plans
- Selecting and implementing retirement plans
Voluntary/worksite benefit plan brokers should have the following:
- Qualities should include: flexibility, creativity, broad-based knowledge, experience
- References from people in your industry and of organizations with a similar size and employee mix
- Carriers and a broad-based knowledge of them
- Licensing and a willingness to become licensed with the carriers, state-by-state, that can best meet the needs of the organization and the employees
- Design strategies and a full knowledge about the advantages and disadvantages of traditional, fully-insured health plans, HMOs, PPOs, HRAs, HSAs, self-funding, stop-loss coverage, TPAs, captives, defined contribution (DC) and other options
- Plan choices, including: medical/health, limited health plans, life insurance plans, dental, vision, long-term disability (LTD), long-term care (LTCI), AD&D, RX plans, wellness plans
- Openness and a willingness to integrate his/her plans with a voluntary benefit broker
- Regulations and being capable of assisting with them, both state and federal
- Focus and a willingness to spend the time to understand the specific needs of your organization and the employees, including job descriptions, income levels, geographic distribution, languages spoken and other demographics
- Participation and a willingness to participate in the employee education, communication, enrollment, and data management processes
- Sharing the cost of the overall education, communication and enrollment processes
- Availability and capacity to assist with new hires and interim enrollments
- Financial savvy to work within the organization's and employee's price points
- Administration to assist in claim management
- Future awareness and knowledge about the impact of PPACA between 2012 and 2114 and beyond
While I do not have significant experience in selecting a retirement plan broker, a SHRM Report of 6/7/2011 titled "Benefits Broker: What should my company consider when selecting a benefits broker?" offered the following:
- Qualities: flexibility, creativity, availability, broad-based knowledge, experience, empathy for the time constraints on management and employees
- References: Provide references from employers in similar industries and organization sizes
- Openness: A willingness to integrate his/her plans, programs and services with the traditional core benefit brokers
- Plan design: A thorough understanding of cafeteria plans, flex plans and defined contribution (DC) strategies
- Insurance-based voluntary/worksite plan choices: A broad-based knowledge of the various carriers and their plans, programs and services. No one carrier has the best of all plans, including: short-term disability (STD), long-term disability (LTD), critical illness (CI), hospital income (HI), cancer, life insurance, dental, vision, pet insurance, auto and home
- Organizational buy-in: The capacity to generate interest and participation within the employer's executives, managers, department heads, and unions, as applicable
- Licensing: A willingness to become licensed with the carriers, state-by-state, that can best meet the needs of the organization and the employees
- Tax-advantaged plans, reporting and regulations: These include Section 125 reimbursement accounts, medical/health, dependent care and transportation
- Experience with qualified TPAs for flex plans: For implementation of the above tax-advantaged plans (8)
- Non-insurance-based benefit plans and services: Including vision, dental, legal, pet coverage, consumer discount cards, RX cards
- Financial savvy: Must thoroughly understand the financial capacities and price points of the organization and the employees
- Focused on needs: Must be willing to spend the time to understand the specific needs of your organization and the employees, including job descriptions and income levels
- Enrollment: Be capable of delivering a well-orchestrated employee benefits, education, communication, enrollment, and data management process that is inclusive of all carriers, plans, programs and services. The broker(s) should be knowledgeable of the various communication and enrollment choices: group meetings, one-on-one, Internet-based, paper-based, call center-based, or a an integration of the systems.
- Cost-sharing: Be capable of working with all of the carriers and providers of plans, programs and services to share in the cost of the education, communication and enrollment process
- Employees' and their families' financial capacities: Have a sensitivity to the the employees' and their families' combined income capacity to afford additional plans, programs and services. A willingness to monitor the enrollment process.
- Troubleshooting: A willingness to meet with managers and department heads during the enrollment process and hold "pulse meetings" to isolate and resolve problem and concerns
- Presence: The ability to be onsite to assist in resolving problems before, during and directly following the enrollment, including the fist date when the payroll is issued following the first payroll deductions
- Working with new hires, change in status and new eligibility: Assist in explaining and enrolling the plans, programs and services offered.
- Future awareness: Be as knowledgeable as possible about the impact of PPACA between 2012 and 2114 and beyond
As organizations conduct this part of the decision-making process, it is very important to select brokers with whom the CFO, HR department, department managers, and employees can work comfortably. The selection of the brokers, plans, programs and services, as well as the education, communication, enrollment and data management processes, protect the well-being of the employees for the near and long-term.
- Services: What services and knowledge does the broker provide?
- Cost and plan design: Will they evaluate the costs and plan designs of several major insurance carriers in your region?
- Compliance issues: Are they able to provide compliance advice regarding relevant federal and state laws? How familiar are they with the Patient Protection and Affordable Care Act (PPACA) requirements? Can they explain what changes current plans should make to ensure compliance?
- Evaluating risk: Will they assist with evaluating health-related risks and offer suggestions on how to reduce the company’s exposure?
- Enrollment: Will they assist with open enrollment communications?
- Problems: Will they assist with claim resolution and/or problems?
- Licenses: What licenses has the broker obtained, and are they current?
- Cost of services: What are the costs of the broker’s services? Are they paid commissions by the insurance companies, or do they operate on a flat-fee structure?
- Industry knowledge: Are they familiar with the company’s industry?
- References: Are they willing to provide references from existing and former clients?
- Disciplinary record: Are there disciplinary actions that might be on file with the state insurance commissioner?
- Needs-based understanding: Does the broker have a good understanding of your company needs? Do they ask you relevant questions about benefits preferences and likes/dislikes about current benefits plans? Do they ask about the company culture? Do they address company needs and/or summarize the overall needs or wants appropriately?
- Recommendations: How will they determine what benefits recommendations will be made to the company?
- Communications: What is the broker’s communication method (mostly by phone or email), frequency (weekly, monthly, bi-monthly) and response time?
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