How the role of the broker has evolved

Benefits broker: A professional who provides benefits advice, services and products to employers and employees.

While the definition of the role has remained consistent over the years, the nature of that advice — and the form those products and services take — is continually evolving in response to economic trends, a diversifying workforce and changing consumer needs and expectations.

More than ever before, today’s brokers are viewed as strategic consultants, advising employers not just on how to tweak plan offerings and choose carriers, but how to contain health care costs, meet employee demands and remain competitive in a tight job market. Brokers are constantly crafting competitive benefits packages with what employers can afford. Brokers support employees year-round by developing communications strategies to help employees make informed health care decisions, and by meeting the growing demand for voluntary benefits so employees can enhance their financial and overall wellbeing.

Combatting rising health care costs

In its 2023 Broker Report, The 2023 Benefits Broker: Rising Health care Costs and Increasing Competition Set the Tone,  81% of responding brokers say their clients rely on them to control health care costs — up from 66% just five years ago.

Health care costs have consistently risen faster than the rate of inflation — a trend that shows no signs of slowing as employers cope with new and more costly medications coming to market, consumers skipping routine preventive services and postponing needed care, and skyrocketing use of behavioral health care. Employees are seeing their premiums, copays, and out-of-pocket costs rising, and few understand how their actions affect those costs or what programs their employer offers to help them plan for and mitigate these costs. Faced with a looming recession, many employees want more benefits to ensure their financial security. Employers risk losing talent to competitors if they fail to provide them with and effectively communicate benefits options that make employees feel medically and financially protected.

Employers are balancing what employees want and need, what they must offer to compete for top talent, and what they can afford. Optavise found that 83% of brokers reported that clients rely on them to contain health care costs. While 77% of brokers reported high to moderate demand for health care transparency support in the past year, Optavise discovered that only 70% of brokers currently provide some health care transparency and clinical advocacy services to help clients manage their health care costs. Once health care plans and programs are set in place with the help of a broker, employers should educate employees on how to choose and use their plans, so both the employee and employer save costs on health care.

For self-insured employers, costs are often driven by premiums, stop-loss coverage, coinsurance, and out-of-network care. In short, as plan sponsors, employers pay when employees overspend on the coverage they don’t really need. Likewise, employees aren’t always comfortable having conversations about their health care needs with their employers. Because few employers have the resources for personal conversations with every employee as they select their plans or look for care, brokers can take the reins and fully shine by providing this guidance.

Communicating with employees

Today’s employees are increasingly turning to their employers for help understanding not only how their plans work but how they, too, can control their health care costs. This demand — coupled with a shift to a hybrid workforce over the past few years — has driven increasing requests from employers for communications support.

In fact, since the pandemic, over 90% of brokers have reported high to moderate demand for benefits communications support. While demand declined slightly this year (likely due in part to a partial return to onsite, rather than remote work, making it slightly easier to reach employees), 66% agree that offering communication services brings a lot of value to their business. Where once brokers focused on group meetings at open enrollment, today’s brokers provide materials, virtual presentations, in-person support and year-round communications campaigns.

And while content once centered on descriptions of benefit plans and that year’s changes, today’s brokers are crafting messaging that helps educate employees and their families about basic health care terminology and concepts, how to choose and use a plan and how to shop for health care services. This ongoing education also sets the stage for employers to distribute timely tools and resources in the health care landscape.

Helping their clients meet their compliance and reporting obligations has always been part of many brokers’ responsibilities, but its importance appears to be declining. As recently as two years ago, 73% of brokers reported that their clients relied on them for help with compliance, while this year’s report from Optavise saw that percentage drop to 62%. This may reflect a decline in new regulations as the hype around transparency reporting and as surprise billing notices start to fade in the wake of implementation. Instead, the focus has shifted to explaining the impact of these requirements on employees and their families and what it means for them.

It has always been essential to convey benefits information using multiple channels to ensure employees get the information they need when they need it and in the way that makes the most sense to them. With many workforces now remote or hybrid, the traditional means of engaging employees, like onsite meetings and packets of information, are only effective for some. To engage workers in this new era, brokers are collaborating with employers to incorporate digital tools such as virtual benefits fairs, dedicated benefit sites, one-on-one virtual meetings or calls with benefits educators, and texts, emails, and social media posts into their mix of resources. Opportunities to speak one-on-one with benefits experts remain important for many employees as these conversations may prompt employees to rethink their benefits selections to ensure plans meet their dependents’ needs.

Introducing voluntary benefits

Today’s employees want the flexibility to create a package that meets their needs, and since employee retention also heavily depends on an employer’s ability to provide the right benefits packages for the diverse members of their workforce — without breaking the bank — voluntary benefits have become increasingly popular.

Sixty-four percent of brokers saw an increase in clients adding voluntary benefits last year, which is up from 58% in 2021, according to Optavise. The top three “most added” benefits include accident insurance (71%), critical illness (68%), and hospital indemnity (39%). Additionally, enrollment in disability and life insurance nearly doubled and tripled, respectively, from last year, highlighting the increasing focus on financial security and wellness. Employees want to know that their employers care about their wellbeing, not just their productivity. Because these programs often permit mid-year/off-cycle enrollments, they are less likely to add to employee stress during open enrollment.

Now, as the generational mix of the workforce continues to shift, brokers will also have to stay up to date on the latest market trends. By 2025, Generation Z is expected to make up 27% of the global workforce. With this generation even more likely to change employers every few years, this will require brokers to understand what will attract — and retain — these employees in the years ahead.

Related: The ‘broker of the future’

As the saying goes, the only constant is change. With market forces ever-changing, the role of brokers has been even more important as they help employers design benefits strategies that curb costs and attract and retain top talent. From keeping employees — and, by extension, their employers — up to date on the cost of coverage and care, to educating employees on their benefits, to meet the demand from both employers and employees on voluntary benefits, brokers must continue to leverage their expertise and resources to respond to their clients’ needs.

Kim Buckey, vice president of Client Services at Optavise.