When it comes to group health insurance, health insurance brokers and consultants can help employers provide the best health insurance possible for their employees while still managing to operate within their means. While it is possible for groups to manage their health plans alone, the broker provides insight and knowledge of the industry to reduce cost and improve benefits. Employers who choose to manage their health plans by themselves may save money by not using a consultant, but many times they are costing themselves much more money by not having the negotiating leverage that brokers possess. In addition, while employers may be knowledgeable about group insurance, good health insurance brokers bring years of experience and networking to help bring the best coverage at the lowest cost.
Knowledge of Health Insurance Business Practices
Consultants provide a great benefit simply by their knowledge of the business. They must be licensed by their state in order to function in this capacity. In Texas, this is the same license that health agents must hold. The license exam study material teaches just about everything a broker will need to know as they embark on their career. In addition, they must complete 30 hours of continuing education every two years. This helps them stay on top of the ever-changing world of healthcare insurance.
While employers and benefit managers may know much about the industry, they cannot always be focused solely on the health insurance market. A consultant does have that focus and a good broker will be very knowledgable on every subject.
Knowledge of the Insurance Marketplace
Health insurance brokers also know the insurance market very well. The networking that is done in the industry is vast. Agents love to meet with consultants and invite them to seminars and continuing education classes. This networking allows the broker to know which company would fit well with a given client. It also allows the broker to negotiate effectively with several agents at once when a client's employee benefit plan is out to bid.
Leverege in Request for Proposal Negotiations
Another aspect to keep in mind is that a particular employer only has one employee benefit plan that they negotiate for. An insurance consultant has an entire block of business that they negotiate for. This gives them high leverage with companies. Insurance agents do not like to make brokers angry. If a broker has a negative experience with an insurance company, that broker will be very leery about going back to that particular agent for more quotes. Because of this, insurance companies will "play ball" with brokers much more often than when they are negotiating with an individual employer.
Healthcare Consultants Free Up Time and Energy
Perhaps the most important reason to utilize a health insurance broker is that handing over the reigns to the health insurance plan frees the human resources department up for other duties. Most HR representative and benefit managers are overwhelmed by the work that must be done to make the department run effectively. A good broker will take the insurance aspect off your plate and you will never have to worry about it until decisions need to be made.
How to Spot a Good Health Insurance Broker
Health brokers work off of a commission. The commission depends on the type of plan and the integrity of the broker. Some brokers will receive a high commission without the client ever knowing about it. These are the people you want to avoid. A good broker will provide great service at a fair commission.
Some employers do not like to use medical insurance brokers because of this commission aspect. However, when you calculate the cost of this commission and compare it to the labor cost of an employer handling the benefit plans themselves, it is usually beneficial to utilize the brokerage firm, especially when you factor in the added knowledge and expertise you get with a health insurance broker.