How Do Brokers Choose Insurance Plans?

Hi Bud,
How do brokers choose which health insurance plans my company should offer? There are so many variables!
Curious About Brokers

Hi C.A.B.,

Earning the title of Trusted Benefits Advisor begins with some detective work: I gather facts, study demographics, solicit responses from employees (about physicians and hospitals used), and analyze company characteristics. This is the process all brokers must go through before we can offer a single recommendation to a client.
Once I’ve gathered the appropriate data, I conduct a thorough question and answer session with the HR staff, business owners, and any other decision makers at the company. We explore topics such as budget, growth, and future plans. I must know what those leaders want to accomplish with their benefits in order to help guide them to the answers waiting to be implemented.
So, having set the framework, let’s take a look at some general parameters that are ever-present in most plan selection processes: choice or type, price differences, and networks and local carriers.
When considering the type of plan to recommend, I generally try to offer smaller businesses (those under 50 employees) both an HMO option (if available) and a PPO. If the insurance carrier permits, an HDHP coupled with an HSA plan is also appropriate—particularly as the size of the group increases. Local circumstances will often dictate which plans can be offered. Depending on the geographic dispersion of a group’s employees, a company may opt for a particular network offered versus another. Brokers must pay attention to NOT allowing personal biases into their research and recommendations. At Zenefits we have an established group Open Enrollment protocol that allows us to explore options in an unbiased and transparent method. Through the use of our sophisticated software rating tools we’re able to generate ACA compliant proposals, quickly and without bias, from a large number of carrier plans. We can then analyze our findings and make appropriate recommendations.
The chosen networks can create significant differences in premium rates. Many insurance carriers offer a very narrow network (smaller group of doctors and hospitals with deeper discounts) to keep premiums low. In certain parts of the country—Boston comes to mind—local carriers can provide a very practical local network solution at competitive rates. For instance, Tufts Health and Harvard Pilgrim Healthcare compete quite nicely against the industry giants in the greater Boston market, while being limited outside of Massachusetts.
With any benefit decision, pleasing the largest percentage of employees is always paramount.  As groups change in size, benefit plan offerings expand—but brokers must be careful not to add so many plans that the selection process becomes complicated for employees. Having choices that match employees’ locations, budgetary constraints and special needs can sometimes make the selection process arduous. However, that’s what experience and great broker-client communication are all about.
Another general recommendation I make to my clients is to offer a broad range of ancillary products—and to make them voluntary if the company can’t afford to contribute. This gives the employee an avenue to resolve personal choices of which the employer may not be aware. I know this sounds like a broken record, but great plan selection begins with the choice of an experienced broker who has broad-ranging experience and deep knowledge of your specific area. Can we help you decide what group plans your company should offer?

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