Le Lézard
Classified in: Health, Business
Subject: PDT

Five Questions to Ask Your Insurance Broker By Steve Idoux, President of Lockton Dunning

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.

SOURCE Lockton Dunning

These press releases may also interest you

at 19:15
According to Minnesota Compass, 44.2% of Minnesota's American Indian population resides in the Twin Cities. Yet until now, there was no tribal college in the Twin Cities that provided culturally based higher education to Native students. Red Lake...

at 19:00
Purpose Investments Inc. announced today the final May 2024 distribution rates for Purpose High Interest Savings Fund, Purpose US Cash Fund, Purpose Cash Management Fund, and Purpose USD Cash Management Fund ("Cash and Money Market ETFs"), updated...

at 19:00
Questor Technology Inc. ("Questor" or the "Company") announces the departure of Vice President Operations and Customer Experience, Ryan Pilsner, effective today. On behalf of the employees and Board of Directors, the Company thanks Ryan for his...

at 18:40
Leading accounting and advisory firm, Brown Plus, is pleased to announce that it has recently been named a winner of the 2024 We AAM to Serve Marketing Achievement Award by the Association for Accounting Marketing (AAM). "I am so proud to lead our...

at 18:00
The Honourable Terry Beech, Minister of Citizens' Services, on behalf of the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, and the Honourable Mark Holland, Minister of Health, will announce an investment to...

at 17:58
Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC, a nationally recognized law firm, notifies investors that a class action lawsuit has been filed against Direct Digital Holdings Inc. ("Direct Digital" or "the Company") and certain of its...

News published on and distributed by: