What Does Your Benefits Consultant or Broker Really Do For You?

In these changing times in healthcare and employee benefits, with a slow economy and high unemployment, it is more important that ever to reassess your operations.  One of those is the area of health consultants, or benefit consultants.  As with travel agents, who used to get discounts and plan your trips for you, consultants and brokers are losing in the new changes in healthcare.  Airlines stopped giving discounts to travel agents and paying for free travel.  They could not give you a better a deal than Travleocity, Priceline, Expedia, or a host of other sites.  That is why very few travel agents survived.

In the new employee benefits arena, increasingly brokers are challenged to provide savings you could not get in your own market.  Some try to complicate matters or keep their clients in the dark about what they do.  Brokers can get anywhere from 1% to 20% or more depending on the size of the contract, the type of employee benefit, and the incentives they have to place business with certain insurers.  “Free brokers” still get paid, but they get paid by the insurers.  That being the case, do you really think they are working for you?  Or for those who pay them?  As the market consolidates and National Healthcare Reform is implemented, many brokers and consultants will go away, unless they have some new value added.

That is why I am so impressed with the new model of purchasing cooperatives.  They work exclusively for their members, not the insurers.  They are able to negotiate huge group discounts with insurance carriers, and hire their own consultants that work for them and are not allowed to take any compensation or incentives from carriers.  The Valley Schools Management Group (VSMG) is one such purchasing group, and perhaps one of the best in the country, saving their members million in premiums and overhead costs per year.

The VSMG does not hide its practices behind a veil of secrecy like the Wizard in The Wizard of Oz.  On the contrary, they hold quarterly benefits meetings, board meetings, do presentations at each member site, hold an annual information conference, report regularly and openly on their audited financials, investments and expenditures, and even have an annual study session to explain to each member organization exactly what they are doing.  Here is a Power Point from one such recent meeting.  Does your broker or consultant do this for you?  In this case VSMG, run by Tom Boone, hires Aon/Hewitt as their consultant for the trust, Aon/Hewitt being the largest benefits consultant in the world.

QEB 03272012 revised

How would you like this type of in depth reporting a dozen or more times every year?  If so, contact Sheri Gilbert at 623-594-4370.

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