Executive Summary

Healthcare brokers are licensed professionals who help businesses select and manage their healthcare plans. Brokers work with several health plan carriers to provide a substantial list of coverage options to fit varying needs and budgets.
Small businesses often lack the expertise and manpower that it takes to secure the best healthcare. By hiring a broker, small businesses can focus on their typical work and rest easy, knowing that their broker will provide them with an ideal set of health plans.
When it comes to healthcare, small businesses must make informed decisions to provide their employees with proper health benefits. Having quality health plans can increase employee retention and productivity.

Understanding Small Business Health Insurance Brokers

Small businesses usually have limited resources and narrow knowledge of healthcare options, making finding a suitable health plan challenging. Hiring a licensed broker can make picking and managing your business’s healthcare exponentially easier. A small business health insurance broker can offer a high level of expertise as they walk you through selecting a health plan, upcoming policy changes, and important administrative tasks.

Most healthcare brokers work with several health plan carriers, giving you many options to choose from. Plus, they usually have access to helpful technology that can predict the best healthcare choice for your business. With the right broker on your team, you can make informed decisions about employee health benefits, saving your business money and achieving greater employee satisfaction.

What is a health insurance broker?

A health insurance broker is a licensed professional who assists businesses in securing an ideal health plan. A group health insurance broker functions as a link between health plan carriers and small- and medium-sized businesses (SMBs), facilitating a connection between the two. When there is a proper fit, the broker will help sign up an SMB for healthcare they are happy with.

Thanks to their training and catalog of various health plan carriers, brokers have extensive knowledge of the healthcare landscape. They often use top-of-the-line technology and customer relationship management (CRM) software to provide additional confidence that each proposed health plan is a good fit for the SMB they are working with.

Health Insurance Agent vs. Health Insurance Broker

To many people’s surprise, the roles of a health insurance agent and a health insurance broker are different. Knowing what separates a healthcare broker and an agent is crucial to determining which is the best fit for your company.

The Job of a Health Insurance Agent

A healthcare agent usually represents one specific carrier. An agent is a licensed professional who only sells health plans from the individual carrier they work for.

A healthcare agent can help SMBs by:

Providing information about the policies their singular carrier offers
Assisting new members with signing up for a health plan

A healthcare agent will likely have in-depth knowledge of their specific carrier’s services, but they usually won’t be able to share the various options outside of their carrier’s plans.

It may be a good idea to use a healthcare agent if your SMB is committed to using a specific carrier for healthcare coverage.

The Job of a Health Insurance Broker

A healthcare broker usually works independently and represents multiple carriers.

A broker is a licensed professional who assists businesses in selecting health plans from the list of different carriers they work with.

A healthcare broker can help by:

Providing less-biased guidance when selecting a health plan
Showing businesses a wider range of insurance products than an agent offers

Since a healthcare broker does not represent a specific carrier, their advice tends to be more impartial than a healthcare agent’s. They also have a more comprehensive selection of health plans to choose from.

It may be a good idea to use a healthcare broker if your business is looking to compare several insurance options to determine the best coverage for your employees.

What do Health Insurance Brokers Do?

A broker will usually take a slightly different approach for each business they work with, depending on its goals, demographics, and pre-existing healthcare data. Frequently, brokers will perform these tasks:

Assess business needs – Most brokers start by learning each SMB’s budget and the type of healthcare benefits and coverage they are most interested in.

Gauge employee demographics – Brokers will also conduct a general census of the SMB’s employees, taking into account their ages and their overall susceptibility to health complications that could increase claim costs.

Research health plans – After understanding the SMB’s healthcare goals and employees’ risk factors, brokers will likely research health plans from the various carriers they work with to find some that will fit the SMB’s needs.

Recommend ideal health plans – Following a thorough search, brokers usually compile a list of the most suitable health plans and present them to the SMB.

Serve as a mediator between businesses and carriers – Most brokers will also help the SMB set up their plan and continue facilitating communication between the business and the plan carrier to minimize confusion.

Relying on a broker can make the search and maintenance of your healthcare plan so much easier. Working with a broker can also be a smart financial decision, considering that most do not cost anything upfront.

How much do brokers cost?

The majority of services offered by healthcare brokers do not require an out-of-pocket payment from the business. Instead, brokers are usually paid commissions by the health plan carriers, likely based on a percentage of the plans’ premiums.

The cost of a broker is usually built into the pricing of the healthcare you choose. However, a broker will sometimes charge a business an extra fee if they sign up for additional services that go above and beyond the broker’s typical role. Still, the broker’s optional add-on services might be worth it if your business needs more consistent hands-on help with healthcare.

Can healthcare brokers help you save money?

Yes, a healthcare broker can save small businesses money by showing them the policy, cost, and comparison information they need to make the most informed, economical decisions about their healthcare.

By exploring self-funded plans, telemedicine options, and plans compatible with health savings accounts (HSAs), a group health insurance broker can help you identify several money-saving routes for your business’s healthcare.

Whether the broker is saving an SMB money, time, or resources, they are regularly regarded as useful. A survey from the Commonwealth Fund reported that 92% of small business owners label healthcare brokers as a helpful resource.

Pros and Cons of Using a Health Insurance Broker

Working through a healthcare broker is an excellent way for many businesses to commit to a health plan confidently. Nevertheless, using a healthcare broker may not be best for some businesses. Before securing a healthcare package, employers must consider the advantages and drawbacks of using a healthcare broker.

Pros

Using a healthcare broker can offer the following benefits:

Brokers can offer a high level of industry knowledge
Brokers can show you multiple health plan options at once
Brokers can save time and resources for SMBs
Brokers can tailor healthcare solutions to meet your business’s needs
Standard broker services are usually free

Cons

Meanwhile, some of the noteworthy drawbacks of using a healthcare broker are:

Potential delays in service due to the broker working with other SMBs
Larger commissions from certain carriers could cause a conflict of interest
Certain brokers may only work with a limited list of health plan carriers
Some brokers may give SMBs less control during the decision-making process

The expert-level assistance that a healthcare broker provides often outweighs the potential disadvantages. Still, each business is responsible for deciding if a healthcare broker will be a helpful addition to their team.

Should Small Businesses Use a Health Insurance Broker?

Many small businesses could benefit from leveraging the skills of a healthcare broker. Health plan policies tend to change each year, and it can help to have an expert walk you through those changes. Still, based on the company’s composition, some businesses have more to gain from using a healthcare broker than others.

Factors to Consider

Several determining factors suggest whether or not a healthcare broker can benefit your SMB. Consider the following factors to understand if you should work with a healthcare broker.

The size and structure of your business

If you have more employees, you will likely have more complex healthcare needs, making a healthcare broker more valuable. However, internally managing healthcare benefits might be easier if you only have a few employees with standard health-related needs.

The business’s financial budget

If your company has a strict budget for its health plans, a broker can help you stay within those restraints. However, hiring a healthcare broker might be unnecessary if your business has more financial freedom and is open to spending more on coverage to find a plan more quickly.

Employee expectations and desires

If your employees express specific wants and needs from their health plans, a healthcare broker can help you tailor your benefits packages to preserve employee satisfaction. However, if your employees don’t have specific requirements regarding what type of benefits and coverage they receive, you may not need the help of a healthcare broker to find a plan that meets their needs.

Getting opinions from your employees is always a great idea during the preliminary search for a healthcare plan. Sending out an anonymous poll is an excellent way to gauge your team’s interests and needs. With the results from an anonymous survey like this, it can be easier to figure out if you need help from a healthcare broker.

Why You Should Use a Broker as a Small Business

In general, a healthcare broker is great for doing the groundwork to set up your business’s healthcare. Since healthcare brokers serve many purposes, each employer may have a different reason for wanting to use a broker. For example, a series of surveys from Gusto showed that out of 508 small business owners:

63% of employers wanted their broker to find the right health plan within their budget
22% of employers wanted their broker to help them stay compliant with healthcare codes and regulations
15% of employers wanted their broker to help them with employee enrollment in health plans

If you need help with the health plan selection process or the backend administrative work that a plan requires, you could benefit from the support of a small business health insurance broker.

How to find the right broker for your business

If you opt to use a healthcare broker for your business, finding the right one that fits your needs can sometimes be tricky. The best ways to figure out if a potential healthcare broker will satisfy your company’s needs are to:

Seek referrals from other SMBs that have used healthcare brokers.
Interview several brokers to give yourself more options.
Confirm the credentials and licensing of potential brokers.
Thoroughly explain to brokers what you need help with.
Take note of each broker’s communication style and level of accessibility.
Review pricing and ensure you can afford the plans and services they offer.

Find SMB Healthcare Plans with Redirect Health

A small business healthcare broker can make tasks like choosing a health plan significantly smoother than searching on your own. Working with a broker will give you access to valuable technology and a knowledgeable resource to help you navigate the ever-changing healthcare market.

Redirect Health works with brokers, small and medium businesses, individuals, and families to help them find affordable health plans that suit their needs. Explore our diverse plans to get a better understanding of the value we can offer small businesses in search of healthcare.

At Redirect Health, we hold our broker partners in high esteem as they support SMBs, individuals, and families in finding health plans that best fit their needs and preferences. We also work hard to make our plans easy to understand and navigate so everyone can access affordable healthcare, with or without a broker.

If you have any questions in the process, our Care Team provides 24/7 support and industry expertise for all your healthcare needs, so contact us today!