The New Benefits Blueprint

The Definition of Insanity

As we near the fourth quarter, many of you are entering the period when your health insurance renews. 

That means calls and emails from health insurance brokers requesting an updated census, benefit summaries, and a copy of the most recent renewal to go “work their magic” and quote your benefits. 

While sending multiple brokers to the various health insurance carriers to quote is commonplace, it takes leverage away from employers and puts the emphasis on the process of pricing a commodity rather than looking into what is truly driving higher premiums for employers and their employees. 

When an insurance company receives the same request for proposal for your company from multiple brokers, it signals to them that there is no benefit strategy in place because you have yet to select your benefits strategist. Many times, these RFPs are being received within a month of the renewal date, which leaves time for only one consideration: price.

Has your company ever changed insurance carriers or brokers based on the price only to face a steep renewal the following cycle? 

That’s because the way in which you’re conducting the buying process puts an undue emphasis on price and not on developing a sustainable and repeatable strategy to control health-care costs and reduce your premiums.

Here’s the dirty little secret about quoting health insurance: If your current broker, three other brokers and your HR manager all go to market with the same data, they will all receive the same quotes.  

The broker community has spent enormous amounts of time conditioning you as the employer that your time is best spent conducting an exercise that ends with brokers presenting the exact proposals. That leaves you listening to the same speech you’ve heard 100 times about how their firm has been in business since 1804, they have amazing carrier relationships and that their customer service is next to none.

Instead of conducting the auction each year, it is in your best interest as an employer to proactively interview brokers well outside of your health insurance renewal.

This type of buying style shifts the conversation away from the one area that makes all brokers the same (the price of the commodity) and squarely to strategy. You’ll also reduce the pressure and regain the leverage you lose making the decision up against a renewal deadline. 

These interviews with potential brokers should center around what causes health insurance premiums to increase, how to attack inefficiencies within benefit plans to lower costs, and speaking to other employers who have worked with the broker to execute these strategies. 

Even if you’re not evaluating multiple brokers, the questions above are applicable to your current broker as well. 

If your current broker can’t explain why your costs are increasing, they can’t possibly fix the problem for you and your employees. 

Many of these interviews will be awkward since you’re changing the rules of engagement and setting a course forward that is in the best interest of you and your employees. If you’d like the answers to the above questions now, download our e-book, “The Definitive Guide to Health and Benefit Plans.”

The New Benefits Blueprint is sponsored editorial content produced by DCW Group Inc.

Copyright 2019 The Business Journal, Youngstown, Ohio.