How to pick the right benefits broker, adviser
This is the third article in a 10-part series on successful open enrollment. The first two pieces can be found here.
The demands on HR and benefits professionals have never been more complex. Most need a broker or adviser who can help design benefit plans, navigate product selection and boost enrollment. But how does an employer go about picking the right one?
For starters, consider corporate needs. Every business has to control — at least to some degree — certain things related to their employees:
- The cost of a benefit/insurance program
- The time demands of service issues associated with the program
- The goals for the HR/benefit/insurance efforts
- The ROI of its benefit/insurance program
- The ability to attract/retain the best talent
- The workforce’s morale and engagement
Historically, insurance brokers have only focused on the first two items related to the cost and service of benefits. But as the needs of employers change, so should the services provided by insurance consultants.
Employee benefits consultants/advisers know many aspects of a business intimately, including:
· Who a client’s employees and their families are and the needs they have as a group
· The finances of a client’s benefits program
· The choices a client makes in creating a plan design that fits the needs of employees, the values of the organization and its financial considerations
· How a client compares to others in a market
Because of all this knowledge, advisers should be the first to offer ideas and advice on how to help employers take better control over benefits programs. And some do, but not all. What we’re seeing is insurance brokers falling into two very clear categories:
Brokers — or middlemen — are those who focus simply on the first two items: The product and the reactive service they can sell to a business that needs group benefits. You may recognize some of the sales pitches:
“We have great relationships with the carriers; let us give you a free insurance quote and see if we can beat your price.”
“Nobody provides better service than we do; we’ll be like an extension of your HR department.”
“Look at all of the ‘free stuff’ we’ll give you if you become a client.”
Consultants or advisers are those who recognize there is a much broader application and need for their knowledge and skills. They serve to help employers craft strategies for better alignment between HR and company goals. They are committed to ensuring their clients have the right insurance solutions at the right price, but they also understand that insurance is just one part of the answer they must bring to their clients.
Having access to all of the resources (insurance, communication, compliance, technology, wellbeing, etc.) is simply the ante into today’s game. Yet, they never show up with pre-determined answers around any of these items. They show up with a level of insatiable curiosity focused on uncovering what may be holding an organization back from reaching new heights.
What’s in a name?
The broker and consultant labels used here are purely for explanation purposes because middlemen sellers will sometimes call themselves consultants, and people who truly consult and advise and help craft strategy may call themselves brokers and agents. Don’t be misled by the labels. Make an assessment based on what’s presented to you.
If it’s all about product, carriers and price, and the final presentation and decision is dependent on a spreadsheet, they’re likely running their business as a distributor for the carrier products.
If it’s all about you — your HR and company goals, your employees, your strategy, their process to help you with those things — and they make a clear distinction between the insurance carrier and their own advising services, then they’re likely running their business as a true consultant or adviser and working on your behalf.
But follow the process all the way through and make sure it’s not just conversation. Advisers must identify employers’ most important needs, in priority order, and have a plan to meet those needs. If not, then the “consultation” may well just be empty promises.
Think about your current adviser firm. Which category does it fall in? Do you find that maybe it’s time to take a look at some other practice? If so, review their websites and LinkedIn profiles in detail. What are they saying? Are they talking about things that are important to you?
Select a couple of consultants for interviews during off-renewal times. Learn about their processes, and select someone who breaks down the complexity of HR/benefits and builds a plan of action to make your results predictable and manageable. Not only do you likely need that, but you deserve it as well.
Developing plan designs and negotiating with carriers will likely be something everyone you talk to is exceptionally good at (if not, they probably wouldn’t be in business), but developing a strategy to help you drive better overall business results should be the decision point. Ask yourself: Have they demonstrated an ability to deliver a better overall business plan or simply provided various plan options?
Keneipp is a partner at Q4intelligence, a consulting firm that works with insurance and benefit agencies on business improvement.
Tomorrow: Reviewing eligibility and compliance issues.