5 Questions to Ask Your
Health Benefits Broker
The Phoenix-based nonprofit loved their health benefits broker. He was friendly, charismatic, and always had new ideas about how the human services organization could manage their benefits costs.
The only problem was … his ideas didn’t work. Each year, the nonprofit’s costs went up and the value that their employees received went down.
The nonprofit realized it was time to break up with their broker. They needed more than just a nice middleman between buyers and sellers. In AHRIC and its administrative partner, CBIZ, they found a long-term strategic partner that produced the results they wanted.
Think you may be in a similar situation? Ask your broker these five questions to see if he or she really has your best interests at heart:
Is your role to broker an insurance agreement with a vendor? Or do you have a team of experts that will consult on our behalf and help us manage our benefits?
There’s a big difference between brokers and consultants. By definition, brokers are middlemen (or middlewomen) who collect a fee for matching buyers with sellers. The bigger the sale, the bigger their commission. If they do provide some consulting services, these are outsourced to other firms — in the U.S. and abroad — and often without your knowledge.
As your consultant, CBIZ would operate differently. They have in-house (and often local) experts that specialize in the tasks that are required for you to self-fund your insurance. They would help:
Monitor weekly financials
Oversee plan use that drives expenses
Identify & address rising costs/risks
Perform actuarial duties to ensure proper funding & reserves
Educate employees about benefits program services
And much more when it comes to financial management, compliance, and employee care
Having all these experts in-house means you would have a responsive team that knows you and has your back. And unlike a broker, the fees CBIZ charges are fixed and clearly documented in your service agreement.
Will we have a service agreement that outlines your fees and service commitments?
Most organizations don’t. What they have is a vague Broker/Agent of Record letter that authorizes the broker to work with insurance companies on your behalf — and collect hidden commissions, bonus payments, and overrides.
Unfortunately, what these letters do not include is a clear explanation of how the broker is paid, what services he/she is obligated to provide you, what level of service you can expect, and your legal rights should the broker fail to perform.
As an AHRIC partner-owner, you would have a service agreement with CBIZ, our administrative partner, that clearly outlines expectations and fees, as well as your legal rights. This would allow you greater transparency and control over how your benefits dollars are spent.
The document also holds CBIZ accountable for providing objective benefits advice about all vendors and for ensuring that any arrangements are in your best interest.
Will you prepare a documented and personalized strategic plan for our employee health benefits?
Health benefits spending is likely your second - or third -
largest cost center. But it’s hard to actively
manage this cost — and ensure the best value for
your employees — without a clear plan that
documents where you are now, where you want to
go, and the best strategies to get there.
Most brokers don’t know how to help you create this
kind of plan. And they have no incentive to do so — the
more you pay, the more they earn in commissions.
As an AHRIC partner-owner, you would have a
documented, 3-year strategic plan for managing your
benefits created by the experts at CBIZ. Our combined
analyze the current state of your benefits;
help you compare that to nonprofit employer
devise a plan that fits your organization’s unique
Plus, your CBIZ consultant would check in with you quarterly to help you stay focused on creating more affordable and valuable benefits for your employees.
Will our employees have one number to call for all benefits-related questions — with experts who can actually resolve issues vs. a call center?
Every minute your employees sit on the phone trying to figure out their benefits is another minute that could have advanced your mission. Benefits companies that give you a confusing sheet of numbers to call and then keep referring you to other departments and vendors don’t understand that.
As an AHRIC partner-owner, each or your employees would be assigned a personalized concierge who coordinates their benefits and helps them solve any issues. This person can help with things like:
resolving a bill from a provider
finding a quality specialist that accepts your insurance
arranging transportation to a medical appointment
coordinating prescriptions between the doctor and pharmacy
maximizing your benefits use to improve health
With the concierge service, your HR professionals would no longer need to be the go-between employees and benefits vendors. Nor would you need to hire additional staff to administrate your benefits.
Because of its size and resources, AHRIC is able to offer our members a holistic and personalized experience while removing the administrative burden from your HR team.
Brokers get paid to be nice to your nonprofit. And it’s natural to want to reciprocate by keeping your benefits business with them each year. In fact, they’re counting on it!
Just be aware that nice may not be enough for your nonprofit, especially when it comes to being kind to your employees and the communities you serve.
Will your health solution return excess underwriting margin to us or is it kept by the insurance company at the end of the year?
Insurance companies reported record profits in underwriting margins in 2020. The fear of contracting COVID-19 kept many people out of the doctor’s office, so they filed fewer health care claims. Yet, insurance companies still increased their annual rates — with most employers like you paying 4-10% more in 2021.
AHRIC took the opposite approach. When our partner-owners experienced a record year of underwriting margin in 2020 amounting to $7 million, they opted to return that margin to their nonprofit organizations and did not increase their rates.
Want to find out if AHRIC is right for you? Contact Dave Madden at David.Madden@cbiz.com or call 602-308-6649.