Health Insurance

What is a broker?

A broker is a person or business who can help you offer health insurance for your business. He or she is licensed by the state and completes continuing education to maintain that license and stay abreast of the ever-changing health insurance regulations.

Brokers can help your group select and enroll in:

  • Health insurance
  • Life insurance
  • Disability insurance
  • Dental/vision coverage
  • Other supplemental coverage, such as critical illness insurance

What does a broker do?

A broker can help you and your group navigate the whole process of rolling out and managing health insurance and related benefits: A broker will help you:

  • Select the right plan for your company and employees. There’s no one-size-fits-all when it comes to health insurance. Are you looking for the lowest monthly premiums? A broad network that will work for employees in varied locations? The option to allow each employee to select from among several different plans? A broker will work to understand your business and employee needs, and recommend the best option to fit those needs.
  • Enroll your business and helping your employees sign up for the plan. A broker works with the insurer or exchange to enroll your business, and works with your teams to help them sign up for the coverage.
  • Stay compliant. A broker will help you remain compliant with health insurance laws, including ERISA, COBRA, HIPAA, and the ACA.
  • Provide ongoing support for your employee’s needs. When your employees have questions about their benefits, claims, or eligibility, your broker can help.

How do brokers get paid?

Brokers are paid differently depending on the size of the group. (As a refresher, a “large group” means 51+ employees in most states, but 101+ employees in California, Colorado, New York, and Vermont.) .

For individual market and small group insurance:

  • Brokers are paid a non-negotiable commission by the insurance company. The commissions are approved by the state to ensure the commissions are reasonable.
  • You don’t pay extra to use a broker, and you don’t get lower premiums by avoiding a broker. Insurance  companies pay brokers directly, and the cost of your group’s health insurance is actually the same regardless of whether you use a broker..

For large group insurance:

  • Brokers are also paid a commission, but there’s more flexibility in terms of how it’s set and the commission amount can vary from one broker to another.

Should I use a broker?

That’s really up to you, as you’re not required to. There are a ton of benefits for using a broker for small group insurance. Since it doesn’t cost you more if you do it yourself, a broker can help you select, roll out, and manage your health insurance plan essentially at no additional cost to you.

For large group insurance, a broker can actually negotiate to help you get a better premium, as premiums are not set in stone during the rate review process like they are for the small group market.

This article provides general information and shouldn’t be construed as legal, benefits, or HR advice. Benefits and insurance regulations may change over time and may vary by location and employer size. So, please consult a licensed broker or appropriately certified expert for advice specific to your business’s benefits options.