What your broker’s sticker price doesn’t tell you about your savings potential

When business owners start searching for benefits brokers, many are (rightfully) focused on cost. They see their health care costs rising every year with no improvement in the quality of their benefits, and, desperate to save money, they decide to work with a broker who charges less for their services than competing advisors. This decision may seem financially wise in the short-term, but over time, this choice can result in missed opportunities to save money.

If you want to achieve significant savings on your benefits plan, here’s why you should look beyond your advisor’s sticker price:

More for your money

Benefits brokers are traditionally viewed as a necessity rather than an opportunity. Most business owners’ interactions with brokers are limited, meeting with them only when it’s time to renew their plan and signing yet another expensive contract.

Your advisor can offer you so much more than traditional brokers would have you believe. Rather than acting as a bare-bones middleman between you and your insurance company, a great advisor can work with you to provide:

• Employee education – Your advisor can help teach your employees how to use their benefits plant to maximize their quality of care while minimizing costs to them and you.
• Supply chain management – By analyzing the health care supply chain at every level, your advisor can find every available opportunity to create savings for you.
• Year-round support – Your interactions with a benefits advisor don’t stop once your contract is renewed. Instead, they work with you throughout the year to adjust your plan based on the changes in your business.

A great benefits advisor may charge more than traditional brokers, but those costs will likely reflect the valuable services they offer.

Price vs. cost

Imagine that you find and decide to work with an advisor whose sticker price is four times as high as their competitors’. You elect to work with the more “expensive” advisor, while another company in your industry selects the “less expensive” broker. Your advisor gets to know your business inside and out, strategizing with your C-suite to identify your company’s needs and examining the areas in which you may be overpaying for health care goods and services. They help you create direct savings, which are then funneled back into the company to help purchase new equipment and increase employee wages. Your production increases, and your employees (who are now paid more, receive better care, and feel valued by their employer) are happier at work, decreasing your turnover rates.

Your competitor, on the other hand, finds that their savings don’t go beyond what they’re paying their broker. They and their employees continue to pay more for their benefits plan year after year. They retain surface-level interactions with their broker, who continues to provide surface-level services. Funds that could have been spent on their employees or other areas of their business are instead spent on over-inflated health care prices, and their frustrated workers start searching for other employers who could offer them better compensation for their expertise.

By looking beyond the sticker price of your advisor you can create a chain of positive impacts that radiate throughout your business for years to come.

Service that pays for itself

As you meet with brokers and advisors to discuss prices and services, consider not only the services they offer, but also if the amount they save you could be even greater than what they charge. Your advisor should be working with your best interests in mind, and they should assure you of their intentions with a performance guarantee. If your savings potential aligns with their earning potential, you can remain sure that they’ll be doing everything possible to search for opportunities to save you money.

The savings you acquire from a great advisor can go beyond justifying their cost—they can essentially pay for the advisor’s services on their own. The initial price tag can encompass a variety of tools and expertise that can create savings that other brokers wouldn’t even bother to look for.

A cost that creates savings

Like your plan itself, your benefits advisor shouldn’t be treated as a one-off expense. Your advisor is an investment for your business, and spending a bit more to choose the right one can lead to better service, better savings, and a better overall business. Don’t let high advisor charges steer you toward lower-quality broker services—your company deserves the very best.

Read more: 

• Out on a limb: Predictions for the benefits industry in 2019
• Communications breakdown: How can brokers and employers get on the same page with technology?
• Brokers’ roles are changing. Are they prepared to keep up?

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Jim Blachek is co-founder of The Benefits Group.