Health insurance premiums never seem to stop going up. The 2015 Employer Health Benefits Survey conducted by the Kaiser Family Foundation found that annual premiums for employer-sponsored family health insurance increased by 4% over the last year, reaching $17,545. On an average, workers paid $4,955 each towards the cost of the premium. A simple method that small businesses can use to reduce the cost of health insurance is to utilize the services of a broker or agent. While brokers work for several insurers simultaneously, agents represent a single company. Agents are paid directly by the insurance firm but you may be required to pay a broker for the services provided to you.
Selecting the right broker or agent is critical to finding the most appropriate and economical insurance cover for your employees.
Is the broker registered? - They are required to undergo a specified number of hours of training on health insurance and related topics. Subsequently, they have to pass an exam conducted under the supervision of the state insurance board.
The broker you engage should have the required credentials. It may also be a good idea to call the state insurance commissioner's office to check whether there are any complaints pending against the person that you plan to appoint.
Reference checks - Before giving a broker or an agent the mandate to help find the best insurance coverage for your employees, it is advisable to conduct a reference check.
Ask to speak to some clients. Is their employee strength similar to yours? If the person that you plan to appoint usually works for large corporations and you are the first small-business client, it may not be a good fit. Try and find someone who has expertise in handling the requirements of organizations similar in size to yours.
Which services will be provided? - It is best to seek clarifications on various issues before you select a broker. Is the person you are considering familiar with the Affordable Care Act? The health insurance sector is very complex with a large number of regulations that change periodically. Unless you find someone who is familiar with these, you may not get an adequate level of service. Will your existing policy be handled even if it was arranged by someone else? What is the support that will be provided to you for billing and claim issues?
How will renewals be handled? - Will you be simply given a printout of the various health plan options and asked you select the most appropriate one? You definitely do not want someone who will provide services of this nature.
The renewal process should begin 90 to 120 days before payment is due. This will give you enough time to understand the changes that have taken place in the last one year.
During this time, the number of your employees may have increased. Their age profile and health insurance requirements may also not be the same as in the previous year. All these factors could lead to the need to make alterations in your health plans with a subsequent change in insurance premiums.
A competent broker should be in a position to guide you through this entire process.
An agent or a broker can prove to be of great help in arranging health insurance for your employees. But a lot depends on the care with which you make your selection. Try and find someone with several years of experience in the field and a number of satisfied clients.