How Do You Tell If Your Benefits Broker Is Doing a Good Job?
A good broker shows its work. Your own files can tell you whether the renewal was shopped, whether the increase was explained, and how the broker is paid. Eight checks you can run this week, without telling anyone you are doing it.
Eight questions your own files can answer
None of these needs your broker’s permission. Most are answered by the last renewal and the last year of email.
Did the renewal arrive with time to act on it?
A renewal that reaches you days before the effective date leaves no room to market it. Look at when the carrier’s number reached you and when your broker passed it on. A broker who is managing the date has the renewal in hand early, with a written explanation of what drove it.
Was the renewal marketed, or only forwarded?
Ask which carriers were approached, what each returned, and why any declined. A single carrier’s number with no alternatives beside it is a quote, not a market test. Even when the incumbent is the right answer, you should be able to see what it was compared with.
Can your broker explain the increase in parts?
A useful explanation separates claims experience, trend, plan or network changes, fees and pooling charges, and any change in your enrolled population. “That is what the carrier offered” describes the number. It does not explain it.
Do you know how your broker is paid?
Under the Consolidated Appropriations Act, 2021, brokers and consultants to ERISA-covered group health plans who expect $1,000 or more in compensation must disclose it to the plan sponsor in writing, including compensation paid by carriers. If you have never received that disclosure, ask for it. Commissions are common and not a problem on their own. Not knowing what they are is.
What do you receive besides the renewal?
Claims and utilization reports, benchmarking against similar employers, a compliance calendar, employee communications and a named person for service questions are signs of a year-round advisor. If you hear from your broker only at renewal, you are buying quotes.
Who answers when something breaks?
An eligibility error, a denied claim, a carrier feed that did not run. Do you know who to call, who covers when that person is out, and how long answers usually take? A team assigned to your account holds up better than one person’s calendar.
Does someone own compliance?
ACA reporting, Form 5500, the summary plan description, required notices and COBRA each have a deadline and an owner. If you cannot say who files what and when, a missed deadline is only waiting for its date.
How would your plan look to a second pair of eyes?
A second opinion on a renewal costs nothing and does not change your broker. If a firm reviewing your documents finds nothing, that is useful. If it finds a gap, you learn about it while you can still act.
What the answers tell you
Count what you could answer from your own files.
Most of them
You have an advisor. Keep the relationship, and use what you found to ask for the one or two things that are missing.
Some of them
You have a broker who does the renewal well and little else. That can be enough if it is what you want to pay for. Ask what the broker would add, in writing, and set a date to revisit.
Few of them
You are probably buying quotes rather than advice. Get a second opinion before the next renewal arrives, not after, so a change is a choice rather than a scramble.
Three requests that are fair to any broker
Put the compensation in writing
Ask for the written disclosure and a plain statement of what you pay in total, whether fees, commissions or both.
Ask for the renewal workpaper
Request the carrier’s rate development, the census used, and the list of carriers marketed with what came back.
Set a service calendar
Agree on the dates for renewal, open enrollment, compliance filings and a mid-year review. A calendar turns “we are busy” into a date.
Questions employers ask about their broker.
How often should we review our broker?
Once a year, shortly after renewal, while the numbers and the service record are fresh. A fuller comparison every few years, or after any service failure, is reasonable.
Is it normal for the carrier to pay my broker?
Yes. Carrier commissions are a common arrangement, and so are flat fees paid by the employer. What matters is that you know which applies to you and what the total is. The written disclosure described above exists for that reason.
Does a lower broker fee mean a better deal?
Not by itself. Compare what each arrangement covers and what the plan costs after the broker’s advice. A small difference in fee can be outweighed by a renewal that was, or was not, shopped.
Can another firm review our renewal without us switching?
Yes. Sharing your own renewal documents for a review does not change your broker of record. A change happens only when you sign a broker of record letter, which is a separate step that you control.
What if our broker says the carrier will not release claims data?
Ask the carrier directly and in writing. What a carrier provides depends on your group size and funding arrangement, and larger or self-funded groups can generally expect more. If the data exists and you cannot get it, that is worth knowing.
We have worked with our broker for years. Should we look anyway?
A long relationship has real value, and checking it is not disloyal. The checks above take an afternoon and cost nothing. If the relationship is strong, they will confirm it.
Ready? Upload your renewal, or talk it through with someone first. No cost, no obligation.
General information, not legal advice. Plan-specific questions belong with ERISA counsel, and we will bring them in.
Where this comes from.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program: cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →