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Most Common Concerns About Changing Employee Benefits Advisors

By February 22, 2021April 20th, 2021Employee Benefits/Group Health Insurance
Employee Benefits Advisor

How often do you get a call from an Employee Benefits Advisor asking to quote your next renewal?

If you’re like most businesses, you routinely receive these kinds of calls. And most likely, you’ve trained a gatekeeper to redirect the calls or politely convey that “you’re not interested.”

I mean, you’re busy and don’t have the time or energy to consider this kind of move. Things with your current plan are good enough. 

And, let’s be real, Employee Benefits advisors are all the same. Aren’t they?

And, your mind probably can think back to the last time you made a switch. Your employees complained, and your HR staff was overwhelmed. And, the switch didn’t result in any long-term solutions. 

Your new advisor wasn’t that different from the last. 

When you add past experiences to the amount of time and effort it takes to provide all the information you need to a new Employee Benefits Advisor, it’s no wonder so many employers are jaded!

When I reach out to employers about helping them out with their Employee Benefits program, I expect them to be hesitant. 

Moving to a new Employee Benefits Advisor stirs up a lot of doubts and fears.

And don’t let anyone tell you that you have nothing to worry about, that moving your group health program to a new advisor will be seamless and smooth. This is a big decision, and there are a lot of considerations!

At the same time, it’s often worth the short-term pain to move to an Employee Benefits Advisor who has the resources to help your business with a long-term employee benefits plan and the tools to help you control your group health costs.

That being said, in this article, I want to address the most common concerns I hear from businesses about switching to a new Employee Benefits Advisor. 

The top 7 concerns I hear time and time again are: 

  1. Do I have to fire my current advisor?
  2. I can’t afford to waste time. How long will the process take?
  3. How is an Employee Benefit Advisor paid?
  4. Don’t all Employee Benefits Advisors do the same thing?
  5. Am I getting a fair price for my group health insurance?
  6. Can you just give me a quote?
  7. Why should I work with Baily? 

At Baily Insurance Agency, we are committed to transparency. We believe that the cornerstone to having great agent/client relationships is honesty. I hope that the honest answers to these questions will start us on the road to that kind of relationship.

1. Do I have to fire my advisor?

For many business owners that I encounter, this is the biggest concern they have. Business owners have all kinds of reasons to want to stay with their current advisor. 

Maybe they’ve worked with them for a long time. Perhaps their advisor is a personal friend or even a family member. Maybe their advisor is super likable. Maybe their advisor has done excellent work for their company.

Whatever the reason, I want to assure you that to utilize our expertise, no, you do not have to leave your current advisor.

We’ve designed our process to come alongside you and help you evaluate your current employee benefits program without replacing your current advisor. 

Our agency never wants to disrupt good and effective advisor/client relationships. We believe if it isn’t broken, you don’t need to fix it.

In instances where staying with your current advisor is best for your company, we offer our six-step strategy to help you identify areas of weakness in your current Employee Benefits program. 

Without disrupting your current advisor/client relationship, Baily Insurance can act as a consultant as you build your employee benefits program.

Acting as a second pair of eyes, we can help you and your advisor evaluate your claims management processes, analyze the best funding options for your program, assess your current network, and determine the best options for your pharmacy options.

By looking at all of these factors before you go to market, you and your advisor will be better able to create a long-term plan for your insurance program that will lead to controlling your employee benefits costs.

2. I know Employee Benefits can be time-consuming. How long will the process take?

As a busy Employee Benefits Advisor, I definitely understand time limitations. Everyone has 24 hours in a day, and just about everyone I know has more to do than they can ever squeeze into those 24 hours. 

Unfortunately, many Employee Benefits Advisors aren’t that concerned about your time or the insurance company’s time.

Traditionally, Employee Benefits Advisors start by requesting loads of information from you and then applying to group health providers on your behalf. 

They may look at a few different carriers and help you pair down your benefits to create a product that gets close to what you’ve budgeted for your employee benefits.

And you know that gathering all of that information can take ridiculous amounts of time. The whole process is long and tedious!

Unfortunately, this process often ends with long-term dissatisfying results. This process rarely leads to controlling your company’s group health costs. Each year can be hit or miss!

At Baily Insurance, we begin with a different approach. During a 15-minute meeting, we start by interviewing you about your current employee benefits program.  

By getting a sense of your long-term goals and desires for your group health plan, we can evaluate what tools and resources would help you accomplish your goals. 

Without addressing your claims management plan, various funding options, compliance issues, and other related group health issues, you can not expect to have long-term success with your employee benefits program.

We want to determine if we have the tools and resources your business needs to establish an effective insurance program from the outset. Before getting bogged down in the quoting details, we want to know that we will truly be able to help your business.

Even if we cannot help you right now, we are committed to adding value to each business we meet with. We will share the best practices that companies similar to yours are using to control their employee benefits program.

3. How is an Employee Benefits Advisor paid?

This is an excellent question that businesses often have about working with their current advisor. Employee Benefits Advisors are paid in two ways: either a percentage of your premium costs or a flat consultant fee.

Percentage of Premium

Let’s face it, employee benefits, like many industries, is set up with a lot of conflicts of interest. I say this because often, Employee Benefits Advisors get paid a percentage of your premium.

That being said, the higher your premium costs, the more your advisor ends up getting paid.

This can lead to advisors doing a mediocre job. If your advisor takes proactive steps to help you on a long-term plan that leads to controlling your costs, it may also lead to reducing their paycheck!

To give you a clearer picture of what your Employee Benefits Advisor is getting paid, most advisors generally receive around 3% from your premiums.

For example, if your group health premium is $100,000. Your advisor is probably taking in about $3,000 by working with you. 

If next year, they help you reduce your premium to $90,000, they’ll only receive $2,700. 

If your agent does little more than present you with an annual renewal, they will probably not work very hard to help you control your group health costs.

And regardless of effort or expertise, advisors tend to be paid the same.

Consulting Fee

Other than being paid a percentage of premium, some Employee Benefits Advisors will charge a flat consulting fee. This often works out better for the client because they know upfront what services they can expect.

Knowing exactly what your Employee Benefits Advisor will do for you, allows you to evaluate better if they are meeting the expectations you have set.

Some of the services you can negotiate include:

  • Employee support
  • Employer support
  • Compliance reviews
  • Year-round claims analysis and reporting
  • Group health insurance renewal and negotiation of rates
  • Implementing employee benefits solutions like HRAs or HSAs
  • Employee education (including group health insurance program education)
  • Assistance with a BenAdmin system
  • Assistance with payroll

When you pay a flat consulting fee, you can outline an active role for your Employee Benefits Advisor to play throughout the year. This approach is more of a team approach. It can add the ongoing support you need for a successful employee benefits program.

At Baily, we are open and upfront with our clients about how we are paid. If you are not receiving value, we understand that it doesn’t make sense to work with us. 

If you choose to pay us a consulting fee, everyone agrees upon an amount at the outset of that process. The services you receive are well-laid out, so you know exactly what you will be paying for.

There are never hidden fees or surprise costs for our clients.

4. Don’t all Employee Benefits Advisors do the same thing?

Like I mentioned above, there is a wide variety in what insurance agents offer to their clients. And in all fairness, insurance is not a one-size-fits-all product.

The needs of your company can vary widely from that of other businesses. And in the Employee Benefits arena, much of what you need depends on the number of your employees.

For instance, the needs of a business with only two employees will vary vastly from a company with 500+ employees. The products available to you are impacted by how many employees you have on your payroll. 

And not all advisors have the resources available to meet the needs of every business. Not all advisors are well-versed in working with both small group and large group businesses. 

If you are a large business, you may be concerned that we won’t have the resources available that you need for your company’s needs as a mid-size agency. That is a common misconception.

As a Keystone Agency, Baily Insurance has resources available to all of our clients that typically are only available at large national agencies.

That is why we can service smaller mom-and-pop businesses or start-up companies and large entities with hundreds of employees.

And if we don’t have the resources you need, we don’t want to pretend we can pull off adequately servicing your account. If we are not the best fit for your company, we will honestly disclose that to you and help you find an advisor who can meet your business’s needs.

5. Am I getting good rates on my group health insurance?

This is a burning question that most businesses have about their group health insurance. They want to know that they are getting a fair price, that they are paying the same amount that their peers are paying for group health insurance.

So how can you know if you are getting a “fair deal?”

Unless you go out and poll your competitors and peers about their premiums, it can be pretty difficult to assess. 

At Baily Insurance, we want to answer this question for you with more than a “we think so.” We present our clients and prospects with credible data that shows them how their current group health program compares to their peers. 

In doing this, you will also gain valuable information about what you can do to control your annual premium rates and keep them at a reasonable level.

Most businesses find that their group health rates go up every year. And because of inflation, this is a reasonable expectation. 

What you should not have to settle for is a lot of volatility in your annual premiums. A great Employee Benefits Advisor should be implementing tools to keep your rates reasonable. You should not see wild increases! Instead, your rates should remain relatively steady. 

Also, by evaluating credible data about your program and your peers’ programs, you can hold your advisor accountable. This is an excellent tool for assessing your advisor! 

On a personal level, we use this marker to evaluate if we are doing an excellent job for our clients. When we tell our clients and prospects that we offer excellence in the way we do insurance, we want the data to back up those claims.

6. Can you just give me a group health insurance quote?

Ok, let me give you a quick answer to this. We sure can!

However (yes, there’s always a however)… merely providing you with a quote usually comes with a cost. Without addressing the most critical factors that impact your employee benefits costs, just quoting your group health insurance is usually a disservice to you.

Like I said earlier, quoting group health takes an enormous amount of time. Without addressing the underlying factors that affect your employee benefits, you can not get an accurate grasp on what you ought to be paying for your group health insurance.

You may be thinking, “Well, I only had a 5% increase on my premium this year.” But what if you should have saved 5%? 

And without a long-term plan in place for your employee benefits program, your group health insurance costs are a yearly gamble. You leave yourself entirely at the mercy of the group health insurance companies.

With group health insurance, quickly giving you a quote limits our agency from helping you with creative solutions for your business. It does not allow us to help you evaluate what you want from your employee benefits program. 

It will merely be a quick fix rather than a long-term employee benefits strategy.

At Baily Insurance, we meet with prospective clients over three short meetings to dig into the factors that impact their employee benefits program. We get a thorough picture of your program’s strengths and weaknesses before ever jumping into the quoting process. 

7. Why should I work with Baily Insurance? 

Most insurance agents approach employee benefits the traditional way – gather information and go to the group health insurance marketplace. 

The reality is that this model is broken. It encourages people to go to market before creating an effective strategy for their business.

If you only take away one thing from this article, let it be this: 

Quoting group health insurance is only the tip of the iceberg. If you don’t identify the root causes driving your employee benefits costs long-term, you will never control those costs.

Candidly, our agency is not for everybody. We tend to offer the most value for businesses spending at least $250,000 for group health. Though we certainly have the tools in place to help businesses of all sizes!

By engaging in our 15-minute introductory meeting, we can get a fairly good evaluation of whether we will be able to add value to your business and help you establish a robust employee benefits program.

And if you decide we are not a good fit for your business, you will still walk away with better insight into your current program that you can use with your current advisor as you design your insurance program.

Our agency has been able to help businesses time and time again take back control of their employee benefits program. 

I’m curious about your process. How can I learn more?

To get a good feel for the value we may be able to add to your business, we’d love to set up a 15-minute introductory meeting to hear about your company and what is most important to you. 

In those brief minutes, we will be able to identify what areas may need improvement in your current employee benefits program.

Remember, we focus on the premise that quoting is only the tip of the iceberg, so our initial meeting will touch on the factors within your control that impact your employee benefits costs.

Our conversation will focus on assessing these five factors:

  1. Funding methods (fully-funded or self-funded)
  2. Claims management
  3. Your group health plan design
  4. Employee wellness 
  5. Compliance regulations and issues

If you’ve always approached employee benefits the traditional way, you may not be familiar with these factors. And if you are familiar with them, you may not be implementing best practices in those areas. 

To be better prepared before our conversation, it may be helpful to read more about these factors and why they are essential to your employee benefits program. 

We are excited to walk with you through our blueprint process, explain what you can expect from us clearly, and help you find long-term solutions to your employee benefits needs.