Tips For Selecting Your Next Benefits Broker

Managing Benefits is a complex process. It involves understanding products, services, plans, analytics, reporting, communications to name just a few. This blog will help identify the top 10 critical decision points in selecting a benefits consultant as selecting the wrong broker may be your most costly mistake.

What is consulting?

Benefits consulting, in its purest form, seeks to create and maintain your benefits package. The goal being to keep benefit levels as high as you wish, cost as low as possible, while at the same time making sure that all plans are compliant with minimal work for your internal human resource department. Benefits are a part of the employee compensation package and should be communicated to your staff so they can appreciate what is being offered.

Obviously selecting your benefits consultant should not be based on relationship or friendship, but quality. Quality is the tough one. How do you gauge quality in someone who advises you? You need trust. Someone who looks out for your interest and not theirs. They need to bring solutions to the table and then manage the solutions, not just drop them off at your doorstep. They need to be do-ers, not just find reasons for why you can’t get what you want. You often hear “we are the biggest” and “we have boots on the ground at all of your locations”. Guess what, those locations usually don’t communicate effectively with one another. Besides, how does being big help you? You need to visibly see passion from your consultant, they should exude it. Passion creates people who want to solve problems, your problems. They are the ones who will go to the ends of the earth to get what you need.

Questions to ask prospective brokers

  1. Question and discuss. Your benefits consultant needs to know more about your benefits than you do so they can recommend the best products for your company. Make sure your benefits consultant does their due diligence by considering and discussing the following with you before any recommendations are made:
  2. Are you paying more per member in cost for your benefits than your competition?
  3. What has your own company’s 5-year inflationary increases been and what is the cause?
  4. Are your employees and families happy with their benefits?
  5. How do the member contributions compare to other companies?
  6. Do your benefits attract and retain employees?
  7. Are you using the right vehicles to fund your medical and dental plans?
  8. Are the medical and dental rates underwritten correctly?
  9. Are high risk reinsurance provisions removed from the reinsurance agreement?
  10. Are negative provisions removed from the administration agreement?
  11. What are the merits or disadvantages of the following benefits designs?
    1. One plan vs multiple plans
    2. Exchanges
    3. High vs low deductibles attributes
    4. Appropriate out-of-pocket costs
    5. Appropriate Rx co-pays
    6. Health savings accounts options
  12. Are incentives designed to foster engagement and participation?
  13. How do we make sure the best industry healthcare management tools and solutions are selected?
  14. How can we implement a high level of healthcare literacy, engagement and outreach education platforms to employees and their families?

Do your due diligence

  • Make sure your benefits consultant’s philosophy aligns with yours and they are placing your interests above their own.
  • Talk, talk, talk. Talk to other employers who have worked with your consultant and can provide a reference. Talk with insurance carriers they have worked with, also. Ask about not only the consultant, but also what is the reputation of the agency and how is the service the entire team provides?
  • Find out how much are you are being charged for the consulting service. Keep in mind that if you have under 50 employees on the medical plan, the fee is already set. However, if you have over 50 on the medical plan, you get to choose how much your plan carrier will pay in commission. You can also demand no commissions paid and then you are able to negotiate an annual consulting fee directly with your consultant.  Find out if you consultant is profiting by any of the following:
  • Do they build commission fees into the products they sell you? If that’s the case, are they selling you a product for the right reason?
  • Do they charge you an annual consulting fee and if so, will they allow you to negotiate that fee, and will it cover all products and services?
  • Do they accept bonuses and overrides from the carriers and vendors? These are dollars paid to agencies from carriers/vendors as a reward for placing business with them. Since this can go against the philosophy of finding someone who places your interests above their own, you might want to demand that no bonuses or overrides are accepted on behalf of your business.

The bottom line is you can decide how much you pay your consulting group in annual compensation, commission and overrides!

Other things to consider

  • Will the consultant that you have been working with during the sales process be the lead consultant involved on your group? Often, agencies will send their best troops to the front lines during the bidding wars, but you will need to find out which team will be with you for the long run.
  • What is the knowledge level and experience of the consultant’s team? Because you will have a day-to-day team that will support your group, you will want to ensure that they are also well educated in compliance laws, self-insurance and knowledgeable about all your benefit plans.
  • Make sure your consultant is a leader not a follower. You want someone who will be uncovering new innovative programs, rather than simply bidding out the programs you already have.
  • Are daily useable management reports offered? You want reporting that will drive decisions and not merely look complicated while giving useless information. The reports should tell you:
  • How do costs compare to the original expectations?
  • Why are costs running higher than projected?
  • What options exist to rectify?
  • Do they have a compliance department that can work with you to make sure all your programs are compliant; including HIPAA, Cobra, ERISA, state and public entity laws and more?
  • Do they take the annual budget you are willing to spend on medical and dental plans, life, disability, health savings accounts, etc., analyze them all independently, and then bring it all together in an affordable benefits package?

So….?

Remember, the purpose and function of the benefits consultant is to provide ideas and solutions to keep costs lower than industry norms, and to advise on benefits that will attract and retain employees and increase their workplace satisfaction. Consulting agencies offer lots of bells and whistles that are not always necessary. You should always select your consultant on what solutions they offer to solve the issues your company faces. Your job is to remain open to new ideas, not becoming complacent and allowing the consulting firm to limit your options.

As a leader in your organization, the more you continue to question the benefits process, the better opportunity you will have to achieve better outcomes. Your company’s interests should always be in the forefront when advice is solicited. In addition to your vendors, you should always demand that your own management team make business decisions rather than personal decisions. This will help negate the number of decisions made from a relationship basis and help keep an eye on corporate interests.

Communicating Benefits to Remote Workers

According to a recent survey by the International Foundation of Employee Benefits Plans:

  • Only 19% of employers report that their employees have a “high level” of understanding of their benefits
  • 80% of employers state that their employees don’t even read the benefits collateral
  • Approximately 50% of employees don’t understand the employee benefit materials

With continued increases to the cost of healthcare, employers changing insurance carriers, changes in benefits, and implementation of consumer driven health plans, communication is critical.  In fact, 65% of employers say employee education is a high priority and 40% of employers now have a budget focused solely on employee benefits.  There is simply too much at risk for employees not to understand their benefits. Accompanied with the fact that 4.7 million workers are now working remotely, strategically communicating with employees regarding their benefits needs to be even more of a “creative” process and can seem like wrangling cats.

It is so important to effectively communicate benefits to remote employees because of the positive correlation that exists between effective communication and the perceived value of benefits from employees. Here are the top 10 strategies.

Top 10 Benefit Strategies

  1. Benefits need to be communicated year-round, not just during open enrollment, to keep benefits forefront for the employee 
  2. Leverage word of mouth using trusted managers, champions and/or peers on-site that are trained on how to effectively communicate benefits. When choosing champions or peers, remember employees who are “early adopters” are your best picks.
  3. Implement “word of mouth” strategies and foster a culture of trust and open dialogue where employees explain and share their own benefits experience and how it might help their colleagues, i.e. “I used telehealth for pink eye which saved me time, money and stress!”
  4. Use short videos or live/recorded webinars to employees to explain benefits (link one of our videos)
  5. Since the average individual spends an average of 4.7 hours a day on their smartphone, there is an opportunity for employers to capture employees’ attention through social media, such as Facebook, Blogs and YouTube, to help with communications
  6. Develop surveys and focus groups to get feedback from employees on the best way to reach both them and their spouses/dependents
  7. Create your communications while considering
    • Language barriers
    • Life stage
    • Multiple generations
    • Shift workers
  8. Create educational assessments, i.e. “How well do you understand your benefits?” and reward completion with incentives such as prize drawings, PTO or health savings accounts contributions
  9. Engage spouses/dependents with communications especially as it pertains to employee assistance programs, expert medical opinion services and carrier programs
  10. Communicate using simplified language (not insurance jargon) and multiple communication channels to reach different demographics, ideas include:
    • Snail mail
    • Email
    • Print distributed on-site
    • Internal websites
    • External websites
    • Social media (e.g., Facebook, Twitter, Instagram, etc.)
    • Games
    • Videos
    • Texts

Distance Learning

Though effective benefits communications is essential to all firms, distance challenges creates an even greater need. Communications are essential to not only benefit satisfaction, but also for knowing how to access all benefits and what for.

When considering a “distance” situation, where a group of employees are not in working in the same location, a company needs to rely heavily on digital forms of communication (look at #5 in particular). Futhermore, it pays to have a “work from home” policy in place. This can help to set a standard for when and how your team is communicating. This will to understand the best method of benefit communications (i.e. hosting a group meeting on Microsoft “teams”).

Creating a Successful Remote Work Policy

COVID-19 is already having a major impact on American society and industry. Both the State and Federal government is implementing guidelines for reducing or limiting the transmission of this disease, which has created challenges for how businesses operate. Many companies in the hospitality and travel industries are closing or suspending their operations altogether, other industries are directing employees whenever possible to work remotely for the near term. If your organization had a work from home (WFH) policy in place before, you may just be expanding the number of employees that utilize it and this may be a good time to update your policy. If your company isn’t currently set up to allow employees to work remotely, there are several things to consider and implement in order to create a successful WFH policy.   

Focus on Communication          

Similar to what we recommend for benefit communications, a rollout strategy is needed for any new initiative such as working from home. One of the greatest challenges for a remote work force is improving communications. In a shared space, there are countless conversations, and interactions that take place in person every day that can be a challenge to replicate, but there are things that you can do:

  • Use a messaging software that allows team members to interact in real time on projects
  • Update phone directories with personal phone numbers and make it accessible to all employees
  • Establish clear expectations for work schedules time and availability as working from home can quickly blur the lines between work hours and personal time
  • Utilize and consistently update shared calendars to make it easy for teams to find time to have video/conference calls
  • Create social media groups through Facebook, LinkedIn, Instagram, etc, to allow employees the ability to connect to help maintain and develop internal relationships
  • Set consistent team virtual meetings
  • Use video messages whenever possible, if there is an update from leadership, team managers or HR, a video message can be helpful to bridge the gap between in person and email communications
  • Educate employees on any new tools or software that is implemented to ensure they can stay connected
  • Ask employees about the challenges they experience when transitioning to a remote workforce, what do they need to be successful?

Staying Engaged

A fear some organizations have about a remote working is that there will be a decrease in productivity. Providing clear expectation for each employee and updating or setting their success measurements is vital. Additionally, clearly communicate the consequences for employees that are not following the rules and expectations for working remotely. Employers should also make a conscious decision to trust employees to do their work instead of leaning into the feeling that they need to increase their levels of micromanaging.  

Learn from Others

What have other organizations done that are like yours in terms of demographics, location and available technology that have been successful or unsuccessful in implementing a remote working strategy? Asking peer groups, member associations, and other industry leaders what they have done that has worked for them can save you time and stress in avoiding their pitfalls.

Legal Considerations

Check with an attorney to determine any legal ramifications of implementing a remote work policy in your state.

Treating Expensive Healthcare

Healthcare costs have risen approximately 2x faster than inflation & wage increases. Employee deductibles are rising, the cost of receiving care is more expensive, and the average employee is financially squeezed more than ever.

Without getting into the causes of heatlhcare cost inflation, it’s important to look at what you can do to mitigate your own personal costs, as employers and business owners.

Tactics That Fail

Managing healthcare costs in the 2010’s consists of one primary action: switching to a high deductible plan. The theory being that if the consumer has to pay more, they will be more cognizant of their expenses. This is great in theory, but it has one massive problem: it encourages people to forego the doctor and illnesses/sicknesses aren’t caught early. This is bad for the individual, for the employer, and for the insurer.

Another tactic that has been popular is inserting cost containment programs (i.e. disease management, telehealth) to create efficiencies. The problem being that they don’t get used and ROI isn’t easy to track. Sometimes an employer will open their own clinics, but only 4%-8% of claims are really impacted.

The last tactic that firms lean on is to bid the health plan out to each relevant carrier, each year. This encourages the carriers to bid on the business to win it for the (presumably) long-haul. The insurer is planning on you being there for a good few years, so they may give you a preferential rate for the first year. The problem with this is that you’ll have ot pay for it during the subsequent years.

Tactics That Succeed

So if these tactics don’t work, then what should a company do? Firstly, these tactics can work, if done correctly, and as a part of an overall strategy. Consider the following:

High Deductibles Can Work: Your HDHP can motivate employees to be better consumers, you just have to make sure that they know how to use their health plan, and that they have enough support to make decisions (like when to go to the doctor). A HDHP should ideally be paired with an HSA. This allows the individual to hedge their bets on the fact that they wont be sick every year, and can use that premium savings to actually save for the futre. This way, if they have a HDHP, they can afford the out of pocket maximum when they do hit their deductible.

Cost Containment Can Work: Most companies have at least a few vendors in their benefits package. This might be a telehealth service, or maybe an enrollment company. If you engage an active management strategy, these can really work to your advantage. You just have to maintain a system of checks and balances to ensure that the vendor is meeting their targets each month (i.e. how many people have they worked with? Do they have accurate contact information?)

Education, Education, Education: What’s included in your enrollment strategy? You probably have some sort of informational seminar or packet that goes out. This simply isn’t enough. Firstly, you should be educating your benefits year-round. Over 50% of employees can’t name all of their benefits. They simply can’t remember them, much less accurately select the correct ones during open enrollment. There’s more to this strategy, but simply being aware of a year-round education strategy is a good start.

Check out our blog on using social media to engage your employee benefits

Driving Employee HSA Utilization for Employers and TPAs

Can you name all of the advantages of an HSA account? Here’s just a few:

  1. Lower your monthly health insurance premiums with a higher deductible. These HDHPs can be paired with an HSA
  2. You Can provide a savings buffer for unexpected or high medical bills
  3. Use the HSA to pay for current medical expenses, including your deductible and expenses that your insurance may not cover, or you can save your funds for future medical expenses
  4. You can withdraw money from your HSA at any time and for any reason
  5. They offer a triple-tax-advantage – tax-free contributions, tax-free withdrawals, tax-free interest on investment
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Do People Want To Become Healthcare “Consumers”?

A group of shoppers conversing

I was talking to a family member recently, and she revealed that she had no idea how to go about doing price shopping and quality comparisons when it came to her medical care.  I asked her if she even cared?  “Of course,” she said.  “I feel totally taken advantage of”.   This surprised me.  Being in the industry, we see pushback from people saying that their employees won’t take the time to become empowered consumers. Are they right? Do people even want to help themselves and deal with skyrocketing costs or do they see it as a no-win situation? 

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Help Your Boss Understand the Importance of Healthcare Literacy

Your boss is asking you to help control the cost of your health plan, which is most likely your second biggest expense after payroll. Healthcare literacy is the key to improving your employees’ healthcare outcomes, ensuring quality of care and controlling costs. Now, if only your boss understood that.  We will help you make the case for convincing your employer that healthcare literacy is the way of the future and a necessary component to your benefit package. Healthcare literacy will do the following 10 things for your employees:

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