Do All Health Insurance Brokers Really Have the Same Price?
Searching for a health insurance broker in Houston, Texas? The complexities of employer-based health insurance require the assistance of a professional, but did you know that no two brokers offer the same service?
Brokers vary in the services they offer, the experience they have, and the negotiation power they can wield. Reducing costs and keeping employees satisfied with benefits packages is a tough balance to strike. The right broker, however, does this and so much more.
But should pricing differ that much? What is it you really get with the plan your broker is offering?
Understanding Health Insurance Broker Compensation
Health insurance brokers are trained to understand the health insurance market and how to negotiate with carriers to get the best possible rates for their clients. Clients may be experienced employers with hundreds of employees or individuals who simply want a better rate and coverage for their needs.
The Patient Protection and Affordable Care Act (PPACA) has had a dramatic impact on the health insurance landscape. Brokers are now a critical part of helping individuals and businesses navigate this complex world. Broker compensation, however, has largely remained the same.
Most broker compensation is based on several factors including:
- Services offered
- Market Knowledge
- Strategic Plan Design
- Market Power
- Negotiating Ability
The more adept the broker is at these abilities or services, the greater their value to the person using them. Just as with any other position, compensation should be based on value and skill. Unfortunately, many consumers find it difficult to distinguish between brokers. While some may claim to offer the lowest rates, what does that really mean for you?
First, brokers are not paid by the client. They are paid by commission based on the plans they secure for the folks that use them. For example, if a company with a group size of 50 employees comes to a broker looking for guidance, the broker will not receive compensation from that group if he secures a plan for them. Instead, the broker receives compensation from the insurer.
Broker’s compensation fees are built into every plan, so consumers pay for them whether or not they use a broker. However, by using brokers, employers and individuals can benefit from a wide range of services they may not know they needed. What are not included are broker’s fees.
Broker’s fees are another area to consider. While broker compensation is typically in the commission or in the core price paid for your coverage many brokers attempt to incur fees via added services. These services might include:
- COBRA Assistance
- Online Enrollment
- HR Support
- Claims Support
- Employee Handbooks
Fees are most often billed separately, but this where most brokers differ. Some opt to charge their clients high fees for the services they need, while others choose to include those in the premium costs. So while you may be paying the same rate, what you aren’t getting is the same level of service.
Clients often realize this when their broker doesn’t seem overly concerned with negotiating their rates. This can also come out when a client needs assistance with claims or could use the added help of a qualified lawyer. Many brokers only provide those services for an additional fee even though they are already getting a percentage of the total premium.
A health insurance broker who is only concerned with broker compensation won’t focus on making your rates more affordable or your coverage better.
Brokers Role in Health Insurance Coverage
Brokers are responsible for representing buyers. Their job is to seek out agreements that are in your best interest. They do this by first gathering information about you or your company, what requirements you may have, and your budget. A broker can always find a better plan than standard offers because of their ability to understand the market place. The right broker will not only understand the market place but also consider your personal needs. What they charge, however, can vary greatly.
Many brokers charge up to 8% or 9% for the services they provide. Commissions based services come with a down side—they incentivize the broker to offer higher priced plans. The higher the premium you pay, the more they earn in commission.
The trouble is, many of these brokers aren’t providing the valuable services needed to justify the ROI. For example, your broker should aggressively negotiate better rates on your company’s behalf or shop the market to find a competitive rate. They should also handle adds or terms and hold enrollment meetings for employers. All of that is factored into the ongoing commission they make on each plan they negotiate.
Another area to be aware of is partially self-funded, level-funded, self-insured plans. These plan rates are often set by brokers. Brokers negotiate on behalf of the buyer with the TPA or reinsurance carrier. In many cases, the fee schedule (the rate paid to doctors or providers) is far from transparent. Unfortunately, some brokers take advantage of this and add in the aggregate or specific premium they want to increase their commission. The result? A higher premium for the buyer.
To get the most out of your insurance coverage, you need a broker in your corner who is always transparent. You need a team that is on the lookout for the best rate possible without sacrificing on the quality of the coverage you deserve.
Healthcare Consultants Inc. Brokers You Can Trust
At Healthcare Consultants Inc., our first priority is actively negotiating better rates for our clients. At the end of the day, we are only as valuable as the services we offer and the premiums we can negotiate. That’s why with every commission we earn we offer assistance with COBRA, HR, Compliance, Claims assistance, Enrollment Meetings, and even provide Employee handbooks at no extra fee. We also provide a transparent rate structure so you know exactly what you’re paying for.
Our goal is to make our percentage rating as low as possible and offer the greatest level of service. Our 20 plus years of industry experience, market knowledge, and negotiating ability has earned us countless loyal long-term clients.
We fully appreciate that your company or family deserves the best in health insurance coverage. That’s why we deliver the best possible broker services at the best possible rates. We take a hands-on approach to the negotiation process, and as a small business ourselves, we try to find the best coverage options. While other brokers are charging 8% because they can, we believe you should get a significant ROI, which is why we always offer the services mentioned above in our broker’s fees.
If you’re looking for a health insurance broker in Houston, Texas, or the surrounding areas, we’d love to help. For fast, friendly, and efficient service please reach out to us today.