How to Choose a Health Insurance Carrier for Your Small to Midsize Business
Healthcare is perhaps the most important piece of the employee benefits puzzle. When it comes to providing support for your employees’ lives, both on and off the clock, this is basically square one.
Still, all medical insurance plans are not created equal. Having inadequate coverage could cause your employees to face difficulties choosing, using, and paying for care.
The key to locking in a great healthcare offering for your employees? Having a great broker. They’re the experts with an insider knowledge of the healthcare industry as well as your business’ unique goals and values. They should be ready to go to bat for you and your employees.
When you’re working with the right benefits broker, they’re more than a consultant — they’re a partner. A great broker will proactively work to offer your employer the level of healthcare coverage that meets your needs. They’ll recognize where there’s room for improvement, and take a creative approach to solve problems. And most importantly, they’ll keep your employees’ health needs top of mind.
Whether you’re planning to make a change to a new carrier, shop around to see what’s out there, or build your total rewards offering from scratch, here’s your three-step guide to working with your broker to find the right carrier.
Step one: Determine what you need.
Before you send your broker out to market, you need to know what you’re looking for. Start by assessing your company’s needs, goals, and values, then build your wish list around what you see. Think of this process as developing your “shopping list” — and your broker is your “personal shopper.”
Your current plan
If you already have a plan in place, take a hard look at what it’s accomplishing for your business and employees.
Start by asking these questions:
- Have your employees run into difficulties getting the care they need using their plans?
- How does this coverage impact our budget? Does this align with our financial goals over the next year or longer?
- Have your employees been asking for any features or coverage that are not currently included in these plans?
- How much of your plans’ costs are absorbed by the employees themselves? Could these costs be a significant strain on their financial wellness?
- What did your last renewal increase look like? How does it compare to years past?
- Does your healthcare plan ever come up in hiring conversations or exit interviews? If so, how?
One-size-fits-all benefits almost never work out. If you want to give your employees an offering that meets their needs, you’ll have to build it around their needs.
Data on employee demographics can be a valuable tool in shaping predictions on healthcare utilization. By considering their anticipated health needs, you’ll have a better sense of what their plans should cover.
The more diverse your employee population, the more plan options you’ll need. For example, a single 28-year-old employee will have different needs than the 50-year-old with three kids. A great healthcare offering will have options for both of them.
Business goals and budget
Take a look at your employer’s strategic plan over the coming years. How do your healthcare expenditures line up with the vision for your company’s future?
Remember that this may not boil down to price tag alone. If you’re planning on building out your headcount, for example, you’ll want a competitive total rewards package to sweeten the pot for job candidates.
Think about the other players in your industry. You’re not just competing on basket-weaving, or llama grooming, or whatever it is you do. You’re also competing on the level of support you provide to the folks who drive your business forward: your employees.
When done right, benefits give your employer the edge you need to hire and retain great employees. This is one area where you don’t want to be average.
Want a closer look into your competitive landscape? Check out Nava’s Benefits Search Engine to see which vendors your peers love.
Step two: Strategize with your benefits broker.
Take the “shopping list” you put together in step one and share it with your broker. Here are some conversation starters to kick off this dialogue:
- If our company had the ideal plan set in place, what would be the biggest impacts a year down the line? Five years down the line?
- If you could wave a magic wand and immediately fix three problems with our current plan or strategy, what would they be?
- What would shifting to a new funding strategy enable for our company? What would this process entail, and what support will you offer throughout this process?
Once you’re confident that they understand what you’re looking for, then we’re really off to the races. Sit back and let them go to market for you. Next stop, proposal town.
Step three: Review the proposals from your broker — and keep an eye out for red flags.
Proposals can be confusing. Sometimes this is by design. But you deserve to know what you’re getting into — and that may mean reading between the lines.
So we asked our expert team of seasoned brokers what to look for in these proposals: the good, the bad, and the ugly.
Green flags that your broker has found you a great plan
- The proposal clearly reflects your needs, goals, and budget. This shows that both the carrier and your broker understand what you want, and may take a creative approach to build an offering that can fit your needs.
- The document sounds like it was written by a human, not a health insurance robot.
- Your broker welcomes your questions. If you don’t understand something in the proposal, or simply want to talk through it with a real person, they’ll be there to help. The right partner will devote the time it takes to make sure you walk away feeling good about your decision.
- The HR community gives the carrier a thumbs up. The best proof is experience. And your best resource is your community. What are other HR leaders saying about this carrier?
- The carrier offers you the tools and technology to match your modern lifestyle. We can order pizza, chat with long distance friends, and even file our taxes online — so why not offer your employees the same convenience and modernity with their healthcare? If your employee population is tech savvy, give them a healthcare experience that compliments their 21st century outlook.
Red flags that you may want to keep looking (or find a new broker)
- The proposal reads like a one-size-fits-all template. If you don’t see your company reflected anywhere besides its name, your broker may not see you as anything more than a number.
- Your broker can’t explain how this proposal will help your employer achieve its goals. Plain and simple: this partnership shouldn’t be one-sided.
- Your broker can’t tell you for certain who your main point of contact will be. If a carrier or brokerage has a high rate of associate turnover, it’s probably for a reason.
- One proposal is drastically less expensive than the others. Look, we love a good deal. But in the healthcare benefits space, sometimes you get what you pay for. Before you choose the cheapest option based on price alone, do some research into what they’re really offering.
How often should my company consider changing our health insurance plan or carrier?
This will differ from company to company, and plan to plan. But a great broker will usually conduct a quarterly business review to ensure you’re on the right path.
As the benefits space continues to change and innovate at a breakneck pace, the shelf life of competitive plans is becoming shorter by the day. No one likes a stale plan.
To be sure you can offer your employees the support they need to fit their modern lives (not to mention keep up with industry competitors), it’s worth taking a look around when you can.