Choosing an Insurance Broker

The amount of times I have this conversation with prospective clients never ceases to amaze me. Our industry seems to have failed to properly educate buyers on how our process works best. Quoting is often likened to bidding in construction, but insurance does not work this way. Asking several brokers to quote the same deal is actually killing your ability to have a successful outcome. We’ve all heard the warning ‘Don’t put the cart before the horse.’ Asking for quotes before selecting a broker is doing things in reverse. Chances are, you actually end up paying more too. Here are three problems with quoting your insurance with different brokers: 1. Brokers may not know your story or have a relationship with your organization. 2. Brokers have different carrier relationships. Just because two brokers can approach the same market DOES NOT mean they will get the same result. 3. Once a broker has approached a market, it is blocked. Instead of quoting your business insurance, interview different brokers first. Assess their relationships, resources, teams, and find the best long-term partner for your organization. Then, once you’ve selected the right broker, develop a game plan before approaching the markets. Your broker's ability to communicate your business to the underwriter is crucial. If you’ve been buying insurance via bids, give this approach a try. I guarantee that doing the legwork up front will lead to better outcomes. Have conversations with multiple brokers before ever approaching the market. #quotingkills #brokerselection

Using the low-bid process select your insurance agent, and carrier is a broken approach. It's broken for a lot of reasons, but primarily it makes premium the be all end all without accounting for performance. I know you have to be low bid to win your work, so it's only fair your vendors do too, but stay with me for a minute. Do you remember Alan Shepard? He was the first American to enter space. May 15, 1961, he was about to be launched into space on the red stone rocket. Right before take-off a reporter asked, "What's on your mind?" Alan's response was classic, he said, "It's a very sobering feeling to be up in space and realize that one's safety factor was determined by the lowest bidder on a government contract" What Alan realized, is that price, while important in the moment, isn't the most important thing. The most important thing is performance at time when it's needed. I think if you asked yourself, and were being honest, what's the most important thing about your insurance program, you'd say that it covers you how you want and need to be covered. Rather than approaching multiple agents, having them go to the market, and then hiring the one with the lowest bid - try this instead, Interview several agents and hire one. The one who you trust will provide you with the product you need, at the fairest price the market offers, while serving and advising you the most effectively throughout the year. This might seem crazy to you, but using ONE agent to negotiate on your behalf will not only increase your odds at securing the best coverage, but also the best price. I've seen this work consistently for over 10 years now. Ultimately, it gives you the most control.

Next time you interview your insurance broker, try asking “What does your process look like for analyzing my risk management needs?” The vast majority of insurance agents sell based on price. It’s the easiest concept for them to understand, so it’s the easiest to explain. This question is designed to steer the conversation away from price and see how they respond. Because what you pay for insurance is not just a function of the price of your policies. It’s the uncovered or retained losses. It’s the money that you pay for your team to manage claims, and risk management. It’s the money for outside vendors. A broker with expertise in your field will know the areas of your operations that typically need to be solidified, and how to bring you resources. This question will bring a light to their eye and they will be so happy to explain how they can help. The unqualified broker will start to look sad and lost. #insurancebroker #brokerinterview #insurance

Many self funded employers have suddenly awakened and are paying attention to their new fiduciary duties and are particularly interested in costly abuses that they and their beneficiaries have had to pay for. Today’s topic is cross-plan offsetting; the practice of (quoting this alert) “a TPA seeks to recover an overpayment to a healthcare provider under one health plan that it administers by underpaying or “offsetting” an amount owed to the same provider under a different health plan it administers. Essentially, the TPA uses the assets of one health plan to pay or reimburse benefits provided under another health plan in violation of ERISA’s exclusive benefit rule.” Needless to say, employer fiduciaries who “allow” this practice are not acting in the best interests of their plan beneficiaries. This topic is nicely covered this week by Julie Selesnick in Stacey Richter”s podcast Relentless Health Value Podcast https://lnkd.in/e-Qu_JsF . Here’s an example of the practice and why, for fiduciaries, it’s likely an easy practice/abuse to discover. Many BUCAs make the practice an automatically opted in practice. Employers and their brokers simply need to ask about whether they’re opted into the practice. Here’s UHC’s policy: https://lnkd.in/euR6AAbF “Example: Company X maintains a self-insured health plan that contracts with Insurer Z as the TPA. Company Y maintains a fully insured health plan through Insurer Z. Due to a coding error, Insurer Z overpays a hospital $1,000 for a claim incurred by Company Y’s employee. Subsequently, a Company X employee incurs a $3,000 claim at the same hospital. Instead of paying the hospital $3,000 for the Company X claim, Insurer Z pays the hospital $2,000 and refunds Company Y’s plan $1,000. If there is a dispute or it takes time to work out the claims, the hospital may balance bill Company X’s employee $1,000.” Simply stated, if your plan has automatically allowed your payer/tpa to do this; they’re keeping your beneficiaries dollars that are rightfully theirs. To me, this looks like low hanging fruit for fiduciaries. #fiduciaryduty #compliance #healthplans #employers #employeebenefits #healthcare #healthcareleadership #DOL Christine Arnold Steve Schutzer, MD John Rodis, MD, MBA, FACHE, CPHQ Lisa Trumble Chris Deacon Jamie Greenleaf AIF, CBFA, C(k)P Patrick Long Peter Hayes Wyatt Bosworth Brian Klepper Josh M. Berlin Josh Spivak Raju Kattumenu Christopher Gormley Les Wilkinson Darren Fogarty Ann M. Richardson, MBA

This is a mistake I see #HR, #CFOs, and businesses make all the time: Choosing your #broker and #healthplans at the same time. 𝗛𝗲𝗮𝗿 𝗺𝗲 𝗼𝘂𝘁. How many times have you been so overwhelmed by the renewal process that the thought of reviewing another broker or proposal felt impossible? It’s always last-minute and high-pressure, and the idea of changing brokers adds even more stress resulting in short term decision making. But what if that broker could actually solve your problem? Not by just increasing deductibles or adding an HDHP, but by addressing the root cause and impacting the real cost of care? Unfortunately, because of the chaos that surrounds renewals, you might never realize what your benefits program could be because you are partnered with a reactive partner. While it may seem like choosing your broker and benefits program may appear alike, they are not one and the same. That’s why I believe this so strongly: 𝗖𝗵𝗼𝗼𝘀𝗲 𝘆𝗼𝘂𝗿 𝗯𝗿𝗼𝗸𝗲𝗿 𝗼𝗿 𝗮𝗱𝘃𝗶𝘀𝗼𝗿 𝗙𝗜𝗥𝗦𝗧. • Do their values align with the goals of your healthcare program? • Do they have the expertise to deliver a long-term, customized strategy? • Are they compensated in a way that benefits you, or do they profit more when you spend more? • What conflicts of interest exist in their recommendations? Once you’ve found the right strategic partner, let them go to work crafting a health plan strategy that will surpass anything you’ve experienced before. You do not need to change plans to change brokers! In other words, choose your plans SECOND. These are not the same decision, and they shouldn’t be. Ethos Benefits #healthinsurance #plansponsor #employeebenefits

Do you choose your broker/advisor based on who brings you the best quote? Do you reach out to multiple brokers/advisors just asking for quotes? When companies do this, it relegates brokers/advisors to mere sales agents.....and it creates a "race to the bottom". It incentivizes brokers to simply find the cheapest option. Problem is, the cheapest option in insurance is typically the worst value proposition to the very people companies are trying to protect.....employees. Instead of choosing a broker/advisor based on who brings you the lowest quote, raise your standards. Ask them how they can lower your costs without compromising your benefits. Ask them how they can truly help you retain key employees. Ask them how they can help you manage risk, solve problems, and provide great customer service. Ask them about their strategies and concepts. A good broker/advisor's value proposition isn't in their ability to find you cheap insurance. You don't even need a broker in order to do that..... #butlerbenefits #HPHP #amarillo #healthrosetta

𝐓𝐡𝐞 𝐦𝐨𝐧𝐞𝐲 𝐲𝐨𝐮 𝐝𝐢𝐝𝐧'𝐭 𝐤𝐧𝐨𝐰 𝐰𝐚𝐬 𝐢𝐦𝐩𝐚𝐜𝐭𝐢𝐧𝐠 𝐲𝐨𝐮𝐫 𝐡𝐞𝐚𝐥𝐭𝐡 𝐢𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐩𝐥𝐚𝐧   I've worked at both independent and non-independent brokerage firms and how those brokerage firms were paid was similar (for the most part).   Employers are paying compensation through a % of premium, a per employee per month fee or a flat level fee each month. That’s what I call base compensation.   Then you have carrier overrides, also called supplemental compensation. This is where carriers provide a bonus to a brokerage firm for how much business they write and retain with that carrier. Not every carrier pays these bonuses, but most major medical carriers, stop loss carriers and ancillary carriers (dental, vision, life and disability, etc.) do.   Similar so far, but here’s where it gets different.   In my experience at non-independent firms, I’ve seen “special deals” negotiated with carriers on top of supplemental compensation. These amounts were never disclosed to the client unless they specifically asked and were not small amounts of money.   These monies are an additional cost for the carrier and those flow through to the employer and eventually the employee…which is very problematic from a fiduciary perspective. That’s one of the major issues. The other issue is these “special deals” stifle innovation (more on that in another post).   So here is my advice. Make sure you are requiring your broker to provide a compensation disclosure. Then review it and ask questions if it’s unclear. Always ask if the vendors are paying them anything on top of what they disclosed. #ceo #cfo #hr #humanresources #employeebenefits #healthinsurance #brokercompensation