Are you looking to hire an employee benefits broker and don’t know where to start? Or have you had the same broker for a while and are now wondering whether you could do better? Picking the right benefits broker is challenging, especially because the right partner can have an enormous impact on your employees and your bottom-line.
You want to work with a company that is not just your benefits broker, but your trusted benefits advisor. Especially at growing companies, having expert third-party help is essential to keeping your costs low and your value-add for employees high. The right benefits broker will not just sell you on a benefits package and then leave you to figure out the rest. They will be an HR and Benefits specialist who can help you navigate the entire benefits process and keep your benefit offerings up-to-date and competitive.
But the stakes are high, and there’s so much to consider – how do you even get started? Well, luckily this guide is here to help you. We will examine why it’s important to pick the right broker, and when to hire a new broker before diving into what you should be looking for in a broker, including that they provide:
- Modern benefits that appeal to your workforce
- Cutting-edge benefits technology
- Cost savings
- Comprehensive employee education
Looking for a Better Benefits Broker: Why and When to Start
Before we dive into what you should be looking for in a benefits broker, let’s examine the reasons why it is important to choose the right broker and when to start looking for a better partner.
Why You Should be Picky About Your Benefits Broker
Your benefits broker’s performance will have an enormous impact on your benefits package’s ability to draw top talent to your company, encourage your existing employees to deliver their best work, and keep employees around for the long-haul. These are just some of the reasons why it’s important to pick the right benefits broker, but let’s look at some specifics.
On a purely numbers level, benefits are a big deal. Benefits spend is a large part of your overall budget, making up 25-40% of most companies’ payroll. The right partner will help you minimize those expenses while maximizing the return-on-investment.
But benefits are never all about numbers; they are ultimately about people. Your benefits package is one of the most important parts of your employees’ total compensation package and is meant to help your employees live a higher quality of life. Your benefits broker should help you craft a package that meets those needs for the well-being of your employees and your company. Benefits that are tailored to take care of your employees will strengthen your company culture and can mean the difference between attracting and retaining top talent that drives your company’s growth or watching your best people leave for better offers. Your employees are responsible for your company’s success, so it’s important to make sure that they are properly taken care of.
So, when building or updating your benefits package, you need a benefits broker who will help you balance your budget and your employee’s needs. Which is why it is important to be choosy when hiring a benefits broker, and not just stay with the same broker because that’s what you’ve done in the past. But when is the right time to make a change?
When to Shop for a New Employee Benefits Broker
Many companies overlook the importance of taking a proactive approach to benefits, frequently staying with the same benefits broker for years out of habit. That means that employers fall out of touch with the newest benefits trends, losing the ability to properly evaluate whether or not their current broker is providing them with the best possible service. That’s why it’s a good idea to keep yourself apprised of what’s what in the benefits world so that you can tell when your benefits broker may be underserving your business.
The decision of what kind of benefits broker you are looking for, and whether your current broker meets that description, should be based on a comprehensive review of your company’s mission/vision, culture, short and long-term goals, and business strategy. You want a benefits broker that will support each of those elements and help you achieve sustainable growth.
So, the reasons why you may want to look for a new benefits broker will depend on your unique business needs. That being said, there are some clear signs that it’s time for a new broker that any business can look out for, including:
- Continuing to pay the same fees while retaining more or less the same benefits package year-over-year
- Receiving limited guidance and/or a poor service level from the broker
- Going several years without reexamining the broker relationship
- Difficulty finding ROI to justify investment in your current broker
Your business and its needs are constantly changing and so is the benefits marketplace. If you haven’t updated your benefits offering in quite some time, chances are that you can do better for your employees and your bottom line by looking for a new benefits partner.
How to Pick the Right Employee Benefits Broker
Now you know why you should take a proactive approach to your relationship with your benefits broker and what to look out for when deciding whether or not to look for a new broker. But how do you know which benefits broker is right for you, once you’ve decided that your current one isn’t meeting your needs?
Modern Benefits
The last thing you want is a broker who doesn’t stick with the times and strive to deliver cutting-edge, high-impact benefits options. Looking for a broker who can craft modern benefits packages will not only help you compete in today’s market, and offer benefits that even appeal to Millennial talent, it will also help you find a broker that you can trust long-term. If a broker is keeping up with the latest and greatest now, odds are that they will continue to do so. On the other hand, ff they’re already behind the times, chances are they’ll just continue to fall behind.
What kind of benefits should the ideal broker help you navigate? Some hot-topic benefits to ask about are telemedicine, financial wellness, remote work, and other flexible work benefits that will help you compete in the digital age. Again, even if these benefits aren’t the right fit for your company now, they might be in the future and a broker who has expertise in building diverse benefits packages will likely offer other cutting-edge solutions that you can use.
Another increasingly popular option that the ideal benefits broker will be able to offer is wellness benefits. These benefits help prevent lifestyle-related healthcare costs while increasing employee engagement and quality-of-life. Think of subsidized gym memberships, weight-loss or smoking-cessation challenges, access to a nutritionist, financial planning, employee assistance programs, and more. There are so many wellness benefits that it’s easy to get overwhelmed. The right broker will help you find the benefits that address your employees’ specific challenges.
Benefits Technology
Technology is an all-too-often overlooked aspect of what sets a great benefits brokers apart. Software is what makes the world run nowadays, and benefits are no different.
Benefits technology makes navigating your benefits package easier for your HR team and your employees. The ideal broker will offer a benefits portal that makes reviewing and managing your benefits package in one central location a breeze. This makes it easier for you to plan your benefits strategy and for your employees to take full advantage of your offerings. It’s perhaps even more important that your benefits broker provides you with enrollment software to ease the annual headache that is open-enrollment. Getting employees enrolled in benefits is one of the hardest parts of the job as an HR professional, and a streamlined software solution can make open enrollment as painless as possible for both your HR team and then rest of your employees.
Cost Savings
Of course, one of the main reasons to hire a benefits broker is to minimize your benefits costs while maximizing your package’s impact on your employees. That’s why it’s a good idea to hire a benefits broker who will also serve as your benefits consultant or employee benefits advisor, helping you craft a strategy that meets your goals and needs.
One of the main ways that brokers can help you develop your benefits strategy is through data collection. They can provide third-party health risk assessments (HRAs) and employee surveys to establish demonstrated employee needs. That information enables you to craft a strategic benefits plan that keeps costs low while increasing the benefits that matter most to your employees.
Another cost-saving offering to look out for is a tiered health plan structure. These health insurance packages allow employees to manage their health expenses, keeping your costs low while making sure that employees get the coverage they need. Young and healthy employees to take on low-premium, high-deductible plans paired with HSAs to keep their upfront costs low, while employees with families or health risks can opt-in to more comprehensive plans.
Health savings don’t stop at the plan level, either. The right benefits broker will help you reduce your prescription drug spend while making sure that your employees get the medications they need. Drug formularies can guide employees towards lower-cost, preapproved medications and away from expensive alternatives. When necessary, benefits brokers can also help you impose limited restrictions such as requiring employees to try generic drugs before covering name-brand equivalents. And some brokers will help you cut costs across the board by offering a prescription savings card as an added benefit for your employees. These cards can help employees save up to 80% on most medications.
Education
Your financial investment into your benefits strategy isn’t worth a whole lot if your employees don’t understand the benefits offered to them.
Your benefits broker can help you provide your employees with the tools they need to decrease their medical expenses and increase their wellness to minimize days off and maximize productivity. But if your broker doesn’t also help you educate your employees about those options then your employees won’t take advantage of them. As a result, you won’t see those savings that the broker promised when you when you hired them.
Even by itself, education has a huge impact on your bottom line and employee welfare. According to a McKinsey survey, engaged healthcare consumers spend one-third as much as passive consumers. That means that having a benefits broker who helps you educate and engage your employees can lead to massive savings for your employees and your company. Plus, helping your employees become educated, intelligent benefits consumers will allow them to better understand their own needs.
At the same time, you’re investing a huge amount of money into employee benefits to reward and engage your employees so that they are productive, loyal, long-term members of your team. You want to make sure that they understand all of the benefits that you are offering them and all of the perks that make your benefits package stand out.
Choosing the Right Employee Benefits Broker: Key Takeaways
We’ve covered a lot in this guide, so let’s take a moment to go over the key points that you should keep in mind when hiring a benefits broker:
- Benefits are a major expense and a significant investment in your human capital, so it’s important to work with the right broker for your organization
- Don’t simply stay with the same benefits broker for years without reexamining the relationship, and be on the lookout for signs that your broker isn’t keeping up with the latest benefits trends
- Look for a broker who offers and has expertise in modern benefits such as telemedicine and wellness benefits
- Ensure your broker offers software solutions for benefits management and enrollment
- See what the benefits broker can do to help you build a benefits strategy and proactively manage your benefits costs
- Work with brokers who will help you educate your employees so that they can take advantage of their benefits, fully appreciate the package you offer, and become smarter healthcare consumers