As a broker, it's never easy to negotiate with the employer to obtain a new voluntary/worksite benefit
account. You have competition from other brokers, agents representing specific insurance companies, consultants, enrollment companies and even some payroll companies. You must clear hurdles with the CEO, CFO, HR department and sometimes unions.
It is even more difficult to walk away if you are unable to negotiate the good working conditions essential for optimizing penetration and persistence. After years of experience working with brokers and negotiating with employers, I have found 15 reasons that should trigger your walking away. Any one of these could cause a disaster. A combination of these factors almost guarantees a bad experience for all involved: the broker(s), employer, employees, insurance companies, enrollment company, TPA, etc. Here they are:
- Respect — The employer shows no respect for the employees.
- Hidden agenda — The employer has a hidden agenda for utilizing your services, like free enrollment of core benefits, free Section 125, free medical reimbursement accounts, free dependent care reimbursement accounts, etc.
- Core benefits — The employer does not offer or contribute to at least a basic health insurance plan.
- Menu of benefits — The employer will not offer a menu of benefit choices that meet the needs and price points of the employees.
- Integration — The employer is unwilling to integrate core and voluntary/worksite plans to avoid duplication and waste of employees dollars.
- Unearned commission broker splits — The employer authorizes or forces you to split commissions with a broker/agent who is not contributing to the effort.
- Payroll deduction — The employer will not allow for payroll deduction of the plans, programs and/or services to be offered.
- Pre-taxing qualified plans — The employer is unwilling to pre-tax qualified plans (Section 125 of the IRSC) to reduce benefit costs for the employees.
- Buy-in — The employer will not assist in getting the management and department heads to understand and participate in working with their employees by having managers meetings.
- Time and a system — The employer will not provide adequate time and a system for the education, communication, enrollment and data management processes.
- Preliminary group meetings — The employer will not make time and space for providing information to the employees (and preferably their family members) prior to the enrollment period.
- Working hours — The employer will not provide the employees time during working hours to make their decisions.
- Pulse meetings — The employer will not permit periodic meetings during the enrollment period to iron out problems being reported by managers and employees.
- Data systems and payroll — The employer will not allow the time for a payroll "dry run" to check plans and employee deductions.
- Deduction follow-up — The employer will not have someone available at the time the first paychecks come out following the enrollment and first deduction.
Voluntary/worksite employee benefit accounts
are only as good for all parties involved in the plan strategy as the negotiated working conditions. Employers, managers and most traditional core benefit brokers do not understand what it takes to have good participation (penetration) and to meet the needs of the employees so they remain on the plans, programs and/or services offered (persistence).
If you, the originating broker, compromise on the above, you will be compromising the success of the benefit strategy and design. Please share your experiences by commenting below.