Choosing a New Employee Benefits Broker? Here's What to Look For.

When it comes to employee benefits brokers, there is no one-size-fits-all solution. Finding a broker is easy, but finding the right broker for your needs is tricky.

Each employer has unique wants and needs for their benefits offerings, and finding the ideal partner to meet those needs isn’t always simple. On top of that, the scope and quality of brokers’ services can vary widely depending on who you’re working with — and while some brokers do great work, others may leave your team feeling unsupported. So if you’re in the market for a new broker, you need to know what to look for.

Keep reading for a few simple steps to take and tips to use when choosing a new employee benefits broker. This short guide will cover essential features your new broker should have, as well as how you can save time searching for the right option.

What services should an employee benefits broker provide?

Above all, your broker should make managing benefits easy for your HR team. While everyone’s needs are different, there are a couple of essential services that every broker should offer to all their clients.

(But here’s an unfortunate reality check: Not every broker offers all these services. Yeah, it’s a bummer – but it makes it that much easier to sniff out the brokers who are worth your business.)

Here are six essential services every broker should offer:

1. Renewal Support

When healthcare renewal season rolls around, the right broker will give you all the time, support, and information you need to feel confident in your benefits strategy for the year ahead. At a baseline, brokers should help HR teams review their current coverage, make sense of prior utilization and employee population data, and make plan recommendations based on your needs. There’s no need to rush renewals – a great broker should give you enough time to build a great benefits strategy before any carrier deadlines.

2. Open Enrollment Support

Your open enrollment can be a breeze or a nightmare – and that largely depends on how well your employees understand their benefits options. This is why you’ll want to work with a broker that offers support in employee education. This way, your employees will understand their options and will feel confident choosing the right plan that meets their needs.

3. Year-Round Compliance Support

Most employee benefits brokers offer compliance support to their clients. This often includes providing HR leaders with compliance updates, such as information on new laws and important dates. For example, as a business secures more employees, a good broker will highlight notice requirements for COBRA, MHPAEA, and similar federal requirements.

4. Year-Round Employee Advocacy

Employee education shouldn’t begin and end with open enrollment. Your employees will likely still have benefits questions throughout the year and your broker should make it easy for employees to get answers to those questions. Ideally they should have easy access to a support team whenever questions arise, seven days a week. This helps ensure that your employees are getting the most value out of their coverage.

5. Transparency

Let’s be clear – there are a lot of great brokers who are committed to doing great work for their clients. But unfortunately, far too many not-so-great brokers fly under the radar. If your broker isn’t upfront and honest about their pay structure, financial incentives, and proposed services, it may be time to think twice about the partnership.

6. Financial Alignment

Some providers offer commissions to brokers who promote their plans. Keep this in mind, because you’ll want to make sure your broker is recommending plans that are the best fit for your employees and not their own bottom line. (Tip: The Consolidated Appropriations Act (CAA) requires brokers to disclose pay sources, including commissions. So all you have to do is ask.)

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What are the signs that a broker will be a good partner?

On top of those non-negotiable services above, your broker should approach your partnership with thoughtfulness, proactivity, and a support model to fit your needs.

In other words, your broker should be easy to work with. Remember that they’re a partner – and partnership is a lot more effective when you enjoy working together.

Here are some signs that a broker is a good partner::

• They have a dedicated customer service team: A broker is only as good as their client support team. Ideally, you want to be assigned to a CS team with strong professional backgrounds. Pay attention to their CS team’s average tenure – high turnover rates often don’t bode well for consistent support.

• They’re responsive and easy to reach: You shouldn’t have to chase your broker down. Brokers should ideally respond to your inquiries or return your calls within 24 hours.

• They’re committed to providing proactive support throughout the year: Benefits management is a year-round commitment – so you should feel comfortable relying on your broker throughout the benefits lifecycle. And it’s even better if they’re the ones to reach out first.

• You’ve heard good things about them: The HR community is nothing if not strong – and when HR pros find a reliable partner, they’ll want to share the good news. When you’re considering a new broker, ask around in your network and check out their reviews on third-party websites. (Pro tip: Digital HR networks — like Nava’s HR Slack Community — can be a great source for this info.)

• They have a strong library of client quotes and case studies: Sure, any broker can talk about their service and value – but can they back it up with case studies or data? Consider it a benefit if a potential broker can offer you case studies and in-depth reports that showcase the impact they’ve already made on existing clients.

• They offer tech-driven tools and resources: If you want to build and manage an effective benefits strategy for the 21st century, you can’t rely on outdated tools. Your broker’s offering should come complete with easy-to-use, modern tech to streamline your benefits support.

• They’re committed to understanding your employer’s unique values: Your employer deserves benefits strategies and support that are bespoke to your needs – because one-size-fits-all won’t do you any favors here. The first step? Your broker needs to take a distinct interest in learning about your employer.

What red flags should I watch out for?

There are plenty of “green flags” to look for when you’re choosing a new broker, but keep an eye out for these concerning behaviors as well. If you notice one or more of the following red flags, it may be time to look for a different broker.

• They refuse to disclose their compensation: Whether the broker gives you vague answers or none at all, failing to disclose compensation is not only a red flag, it violates a recent law called the CAA. Under the CAA, brokers are legally required to share info that's been previously kept under wraps. This includes their compensation (both their salary as well as any carrier commissions, kickbacks, and "perks" like fancy trips or dinners) as well as the services they provide.

• They’re making big promises: A good broker can help you choose the best benefits options for your company, but they can’t perform miracles. If their claims sound too good to be true, or if they don’t have a clear roadmap to take you from point A to B, stay skeptical.

• They claim they can get you better prices for the same plan: All brokers have access to the exact same plans and prices. So if your broker suggests that they can negotiate a lower rate for the same plan, it’s simply not true.

• Their recommendations aren’t data-driven: Brokers should be able to provide market data or benchmarks to support their recommendations. If they can’t offer that data – or if the data they do provide is incomplete – it’s better to continue your search elsewhere.

• Their answers are unclear or vague: If a broker can’t answer your questions about their experience in your industry or with companies of similar sizes, you have reason to be concerned.

• They don’t volunteer a client reference: A great broker has superfans in their corner, ready and willing to share what they’ve accomplished together. If the broker hesitates to connect you with their existing clients, it may be a bad sign.

The broker you choose can make or break your employee benefits strategy, budget, HR bandwidth, and employee satisfaction. It’s an important decision, so choose wisely.

Get the most out of your benefits offering with Nava Benefits. By melding innovative tech and industry expertise, we make great benefits easy for midsize businesses. Get started here.