A ‘broken’ relationship?
April 23, 2009 by Bill MeltzerPosted in: In this week's e-newsletter, Latest News & Views, Vendor management
Shopping for health plans through a broker is a fact of life for the vast majority of companies. But how well is your broker meeting your needs?
And how can you work together better to minimize costs while getting maximum bang for your organization’s benefits buck?
What’s New in Benefits & Compensation conducted an exclusive survey of 195 subscribers to find out how they view their company’s relationship with their brokers. Here’s what they said:
Half see room for improvement
The good news: Nearly half of your colleagues rate their relationship with their current broker as “excellent.” But that means the other half see some room for improvement.
Thirty-nine percent of respondents rated their broker relationship as satisfactory and said they were at least “reasonably happy.” The remaining 11% noted “unpleasant surprises” while 4% are actively considering a switch.
Tools for making buying decisions
Of course, the No. 1 reason any organization works through a broker is to find the best deals on health benefits. But many of your colleagues pointed to a few areas where their brokers could help make their lives a little easier.
First and foremost, your colleagues say they’d love for their brokers to provide user-friendly – but thorough – return on investment data they can use to benchmark different plans.
It’s worth discussing with your broker how much arm-twisting the broker can do with health plan carriers to get key data in your hands. Two specific areas of data benefits pros say they’d like help from brokers:
- obtaining and sharing claims cost data to compare to premiums, and
- benchmarking your typical plan costs against those of similar-sized firms in the region.
Unfortunately, claims cost data is often hard to pry loose from insurers, at least for smaller employers’ plans. Reason: Without this data, it’s tougher to judge if your premium rate adjustment at renewal time is fair. Fewer than half of respondents (46.3%) say they’ve ever discussed such information with their brokers.
Obtaining benchmarking data on similar-sized plans helps you see how comparably your costs and plan designs stack up in your area. Roughly 43% of respondents say they’re armed with at least some of this info when it comes time to decide whether to stay with the existing plan.
Earlier renewals
It’s worth talking with your broker about ways to push for the earliest possible renewals – and strategies for making sure your carrier doesn’t hit you with any unpleasant surprises.
One notorious game insurance companies play with employers’ plans is to wait until the last moment to reveal the new premiums at renewal. That way, there’s less time for negotiation – or to shop around with the insurer’s competitors.
About 28% of respondents report getting their renewals about 30 days before the rate kicks in. Different brokers use different benchmarks for securing renewals. A minority of respondents (19.5%) have seen them as early as 90 days ahead.
Taking work off HR/Benefits’ plate
The benefits brokerage marketplace is highly competitive. Some brokers try to set themselves apart by offering clients so-called value-added services.
Among your colleagues, the most popular services are those which relieve the company’s HR/ benefits manager of time-consuming tasks. Some examples:
- reviewing plan documents
- auditing (and, if needed, reconciling) carrier bills for errors
- monitoring plans for compliance (HIPAA, COBRA, etc.)
- offering tech support for a benefits intranet and/or employee self-service software, and/or
- assisting with employee education.
August 28th, 2008 at 6:24 pm
Thought you might like this bit of information
April 30th, 2009 at 4:42 pm
Very good insight on what to look for in benefit broker and insurance carrier.
May 1st, 2009 at 11:51 am
I just finished my renewal. Health insurance renewal is one of my most dejecting duties. The rates go up every year. The feeling of being ’screwed’ every year by insurance companies brings me down, as I’m sure all employers feel at this time. This year I considered an HRA type plan (moving closer to self-insurance. We are a small company (30 employees) but health insurance has been our largest line-item outside of production costs for years. Now that the economy has turned, it has become a huge blemish, but taking benefits away from our loyal employees was not an option.
I asked our broker for some information about how are we using the coverage? Where can we customize our plan to provide benefits where needed and stop paying for those that aren’t used? Our broker (who is very great – BTW) replied that insurance companies won’t provide that kind of information due to privacy laws. Even though did NOT ask nor do we want to know details or employee names; we cannot get usage information so that we can make anything better than a guess. It’s like getting a cellular phone bill without seeing the calls or minutes used. It’s very frustrating. Without knowing something about the actual health costs or types of usage, there’s no way we’d move to a self-insured plan, throwing our opportunity for savings out the window.
It’s hard enough for us right now, but just imagine what it would be like if all small companies were forced to provide health insurance they can’t afford. The Health insurance industry has grown into a huge monster, a ‘racket’ protected by the government. There’s no accountability to the group (employer who pays the bill). There’s no way to question the charges or premiums. Then the employer looks like the bad-guy when we have to downgrade the plan or worse yet, do-away with that benefit altogether.
Tangent: The government wants reform but they don’t consider the affect on small business. They brain-wash the average American worker into thinking it’s the employer who is denying them, not ever explaining that the insurance adds a siginifcant amount to employment costs.
The $5 sub-sandwich will then become an $8 sandwich. The additional cost isn’t going to the employee, it’s going to the insurance company. So really, how will that benefit the average worker? How many people are going to keep buying the $8 sub? Who benefits other than the insurance company?
Rant: Our politicians have lots of hands in their pockets; insurance, pharmacueticals, labor unions, any businesses with high campaign contributions. These organizations convince the average worker that they’re giving them something they didn’t have before. They convince them that they’re being denied something deserved. They convince them that the employer is the bad-guy; greedy, cold-hearted & disconnected from humanity. Do they realize that the employer is also human, has bills just as they do, has family to support just as they do, has emotional and loyal connection to their employees? What happens when that big bad employer can no longer afford to stay in business? Or has to cut staff to compensate for the additional employment costs?
Our politicians have become the beasts they have promised to save the people from.
May 1st, 2009 at 4:09 pm
Liily – well said!!! You should send your comments to the President and your state reps.
May 1st, 2009 at 7:02 pm
Don’t be convinced with everything your broker says. Proposals can me be received as early as 90 days from the effective date, and it’s in the best interest of the broker not to give you information you are requesting. After all, the more money the insurance company makes, the more money the broker makes in commissions, fees, and bonuses. Yes, bonuses.
Also, your broker can give you trend analysis, how many cases of with high blood pressure, how many with diabetes, how many doctor visits …everything must be on a plan level. No immediate participant information can be given. They can even tell you what medical group most of your plan goes to! We, as HR professionals, need to unmask the reality that not everyone you pay to do a service for you will look out for your best interest. We as HR professionals, must educate ourselves and not be afraid to ask questions. The better consumers we become, the quicker the insurance companies, brokers, politicians, etc. will wake up and see that we are not going to plead to them to let join there group, but they will need to come to us to acquire us. All because “We” said, “I’m not going to allow you to take advantage of me anymore!”