Wall Street loves benefits brokerage firms because they make more money when your rates go up — not down.
This is because brokers work for insurance companies — not you.
When I ask employers why they use brokers, they say “to get us the best rates”.
Does that mean they’re supposed to negotiate with carriers on your behalf?
“Absolutely”
Interesting…how do brokers get paid?
“Commissions from carriers”
Does that mean they make more when your rates go up or down?
“Up”
How else do they get paid?
“Bonuses from carriers”
How are those bonuses calculated?
“Not sure…probably by premium volume?”
Exactly. Does that mean they’re rewarded with for placing business with one carrier over another?
“I guess so, yes”
Does that mean broker recommendations can be biased?
“Probably”
Do you have a contract with your broker that discloses all of this as required by the Consolidated Appropriations Act effective 1/1/22?
“No”
Why do you think your broker has you out of compliance with federal law…do you think maybe they’re embarrassed by how misaligned they are with your organization?
“Perhaps”
What’s the most important thing they do for you?
“Get us the lowest rates by negotiating with the carriers”
Do brokers benefit from negotiating hard on your behalf?
“No”
If there was a different kind of professional services company that worked for you — instead of the carriers — and actually negotiated on your behalf, would that be something you’d want to know about?
“Absolutely”
I founded the first non-commission-based benefits consulting firm to do exactly that in 2018.
As a result of our financial alignment with employers, we saved them millions and millions of dollars over the past few years.
Just as importantly, their employees are living happier, healthier lives as result of the financial stability our services produce.
If there was a for you to save your organization about $1,500 dollars per employee, per year, while improving coverage for your team — is that something you’d want to know about?
“Absolutely”
Great. Since your lines of coverage operate independently from your benefits firm, you can change firms anytime throughout the year.
In fact, it’s often better to change firms outside of your renewal period so we have more time to understand your goals, perceptions of risk, and educate your about various healthcare financing and procurement models.
It doesn’t cost you anything to change firms.
Let’s get started.