DALLAS, April 16,
2024 /PRNewswire/ -- Change in the employee benefits
space is a given. Companies that work with insurance brokers and
consultants always have questions. So, it's important to know which
questions to ask and how to frame them to find the right
broker/consultant to navigate you to an effective Total Rewards
strategy. There is no template for asking the perfect questions,
but determining your goals for the conversations will help you make
the best decisions for your company. Knowledge is power. So here
are five questions to ask potential broker/consultant partners to
build the right Total Rewards strategy for your employees.
How are broker/consultants compensated?
To get the
straight answers you need, it's important to know the potential
broker/consultant's compensation model – what fees they collect and
if they disclose them. It's also critical to know if they have any
preferred partnership arrangements that generate referral or
revenue sharing fees. Often, commissions are built into different
products, and an employer may never know about them, but they can
be sizeable. It's common in the broker/consultant industry to take
advantage of cost reductions due to scale, so some firms have built
their own pharmacy benefit coalitions and private exchanges. That
should serve as an alert. Why? When firms have their own coalition
or exchange, recommending (or firing) itself becomes a
conflict.
What's included/excluded in your scope of
work?
Knowing what services and products your potential
broker/consultant can make available to your company and their
costs, is important in helping you to make the right decision for
your employees' benefits. Understanding what's included and
excluded in their scope of work is key. Ask your potential
broker/consultant if they bill by the hour, how they track it and
if they limit hours. It's also good to know if billing for travel,
data and actuarial work is included. Having access to medical
experts, ERISA attorneys, communications specialists, a data
platform as well as people who can analyze the information is also
important to know upfront in a proposal as it provides insight into
whether a firm possesses those important capabilities in-house or
services you will be billed for individually.
How do you derive your recommendations?
As a Human
Resources executive or manager, your broker/consultant is a partner
you should be able to depend on to guide you to the best decisions
for your employees. For instance, to pay or not to pay for costly
weight loss medications is the issue du jour for many
companies now. So, having a broker/consultant help you with
considerations, if not solid recommendations, requires knowing what
resources they use to arrive at their decisions. That requires
transparency and visibility on their part. Without it, there is no
accountability. So, ask your broker/consultant what tools, people,
resources, and experience they have that can help build a
decision-conducive environment to improve your employees' health
and wellbeing while also meeting your business objectives.
What is your end game?
Learning more about your
broker/consultant's own goals and loyalties, and their company's
growth aspirations can be important in understanding whether
serving you or their company is their first responsibility. Many
employee benefits broker/consulting firms are publicly traded, so
by default, their obligation is to their shareholders, not to their
clients. Some are owned by private equity, which has the same
priorities. While there is nothing sinister or disqualifying in
being publicly traded or funded by private equity, we're in the
services business — like law and accounting firms — and we should
prioritize an ethos that puts relationships above profits.
How does data help inform your
recommendations?
Determining the sophistication and
availability of the data in a broker/consultant partner is critical
to managing your healthcare and employee benefits efficiently. In a
world where artificial intelligence (AI) is becoming increasingly
important, knowing what data and how much a broker/consultant has
access to (or if they have their own data platform) and how you
will be charged to access it, should be a key consideration in
deciding if that broker will be your partner of choice. Why is this
important? In today's rapidly changing employee benefits
environment, data is key to providing you with nuanced insights
that inform critical decision-making. Integrating deep data
analytics with strategic foresight, helps you to deploy the right
strategies for your business and people. Underestimating data
capabilities in evaluating a potential broker/consultant partner,
can be an expensive oversight as you may not have the ability to
identify an early trend or cost control to manage complex claims
and accurately cost benefits. Remember, the strategic use of data
not only allows businesses to accurately appraise cost
considerations but also enhances health opportunities for their
employees.
Lastly, in considering bringing a new broker/consultant to the
table or strengthening the relationship with an existing partner to
manage your employee benefits, honest questions deserve honest
answers as transparency engenders trust. Anything less, is reason
to continue looking for the right partner, or ending the
marriage.
Idoux is President, Lockton Dunning.
About Lockton
What makes Lockton stand apart is also what makes us
better: independence. Lockton's private ownership empowers its
10,750 Associates doing business in more than 140 countries to
focus solely on clients' risk and insurance needs. With expertise
that reaches around the globe, Lockton delivers the deep
understanding needed to accomplish remarkable results.
For 14 consecutive years, Business Insurance magazine has
recognized Lockton as a "Best Place to Work in Insurance."
Lockton was named among the 2022 Best Managed Companies by Deloitte
and The Wall Street Journal, a program that recognizes excellence
and honors private companies for their strategy, execution, culture
and financials.
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SOURCE Lockton Dunning