How health insurance brokers help employers save money and time

Running a small business or working in benefits administration for a small business often means you wear a lot of hats, and your expertise may not be in the world of health insurance. You want to ensure your employees have access to the healthcare coverage they need at a price that works for your business. This is where a health insurance broker can really come in handy. 

Health insurance brokers can be invaluable partners for small businesses seeking the right employee coverage. By offering expert advice, saving you time, and helping you navigate complex processes, brokers can ensure that your business gets the best possible health insurance plan—without the upfront costs. Read on to better understand what health insurance brokers for small businesses do and how they can save you time and money. 

What is a health insurance broker?

A health insurance broker can help your small business find and enroll in a health insurance plan that meets the unique needs of your workforce and budget. How health insurance brokers work varies. Some represent a handful of insurance companies, but others work for just one health insurance company. Either way—working with a health insurance broker won’t cost you anything. The broker typically receives payment in the form of a commission. 

If you decide to work with a health insurance broker, you can rest easy knowing that all states have strict licensing agreements. State law often requires the broker to act in the client's best interest. 

In some cases, working with a health insurance broker can lead to savings or earning a premium tax credit. It’s always worth asking a health insurance broker about how they can potentially help you save money on coverage. (Healthcare.gov)

Health insurance brokers vs. agents

Although the terms “broker” and “agent” are sometimes used interchangeably, there are key distinctions between the two:

• Representation:

  • Health insurance brokers

    typically work with multiple insurance carriers. Their goal is to present you with a variety of options and help you select the best plan for your unique needs.

  • Health insurance agents

    often represent one specific insurance carrier or a limited set of carriers. They may focus on marketing that carrier’s products, limiting the range of options you’ll see.

• Level of advocacy:

  • Brokers

    are usually required by state law to act in the best interests of their clients, offering a broader perspective on coverage types, pricing, and carrier reputations.

  • Agents

    can also provide valuable assistance, but they might be more constrained in terms of the plans and carriers they can recommend.

• Fee structure:

  • Brokers

    are generally paid through commissions built into the health insurance premiums. This means you usually won’t pay extra for their services—though some brokers offer expanded, fee-based advisory or enrollment support down the line.

  • Agents

    are compensated similarly to brokers (through commissions). However, if they work exclusively for one carrier, they may not be able to offer comparative pricing across multiple insurers.

In many cases, a broker can be a helpful option for small businesses because they can compare multiple plans from different carriers, looking for the best balance of cost and coverage. If you prefer to stick with a specific carrier or have already made up your mind about a plan, an agent may be sufficient. Ultimately, the choice depends on your business’s unique needs and preferences.

How to find a health insurance broker

If you decide you’d like to partner with a broker to streamline your search for an ideal health insurance plan, here are a few ways to locate one:

1. Use official directories: Websites like Healthcare.gov offer tools to help small businesses find brokers and agents registered with the federal exchange. These directories let you filter by location, specialty, and other criteria, making it easier to find a broker familiar with your local market.

2. Seek referrals: Talk to fellow small business owners or HR professionals in your network. They may have worked with a broker who provided exceptional service—personal recommendations can be invaluable for ensuring you find a reputable advisor.

3. Check credentials: Once you have a few candidates, verify their professional licenses. Each state maintains a database of licensed insurance brokers. Confirm that they’re in good standing and that no disciplinary actions have been taken against them.

4. Contact local business associations: Chambers of commerce and small business development centers often have partnerships with brokers who specialize in group health insurance. These organizations can connect you to local experts who understand the state-specific regulations and market nuances.

5. Interview your top picks: Schedule a quick call or meeting to discuss your business’s needs. Ask about their experience working with companies of your size, the variety of carriers they represent, and any ongoing support services they offer. This step will help you identify which broker aligns best with your goals and budget.

By taking these steps, you can find a knowledgeable health insurance broker who will help you identify the right plan, navigate any state-specific regulations, and possibly secure tax credits—all while saving you time and energy. If you already have a broker relationship, you can also combine those efforts with Thatch to explore Individual Coverage Health Reimbursement Arrangements (ICHRAs) and other innovative ways to manage your healthcare spending.

What do health insurance brokers do?

Individuals can work with health insurance brokers if they need to secure their own health insurance coverage outside of an employer, but many businesses also turn to these professionals to help find the perfect coverage fit for their employees. 

A good health insurance broker should be able to help you with the following tasks:

• Negotiate rates: Health insurance brokers negotiate rates by working with insurance companies and providers to find a balance between rising healthcare costs and fair service reimbursement. These negotiations often involve revisiting contracts to ensure providers are compensated enough to cover care costs while keeping premiums manageable for patients (The University of Kansas Health System)

• Remain compliant: Health insurance brokers may assist with compliance by staying updated on laws like the ACA, ERISA, and COBRA, helping employers design benefit plans that meet legal standards, and providing accurate documentation, notices, and training. They also monitor for regulatory changes, conduct audits, and guide employers in adapting to evolving compliance requirements 

• Provide expert recommendations: Brokers can analyze your small business’s unique needs, budget, and employee demographics to help you compare prices, coverage options, and benefit structures, ultimately guiding you to the most suitable health plan

• Assist with financial aid applications: Brokers are well-versed in cost-saving options like premium tax credits and subsidies. They are ready to help your business navigate the application process for financial assistance, ensuring they get the best possible deals on coverage

• Streamline enrollment: Once you choose the right plan, brokers can assist with the entire enrollment process, ensuring all forms are completed accurately and on time. They can also handle employee communication and answer questions, simplifying what can otherwise be a tedious and confusing process

• Offer ongoing support: Health insurance management doesn’t stop once the plan is in place. A good broker acts as a long-term resource for businesses, guiding on understanding plan details, adjusting coverage as needed, and addressing any issues that may arise throughout the year, such as claims or regulation changes. This ongoing support helps businesses avoid costly mistakes and ensures they continue to provide the best coverage for their employees (Experian)

How health insurance brokers can help employers

Working with a health insurance broker can help your business save time and money. Brokers can offer you expert support and bring institutional knowledge to the table that your small business may be lacking. Let’s take a closer look at some of the benefits of health insurance brokers for small businesses. (US Chamber of Commerce)

No upfront costs for your business

Your business can receive support without spending a penny because you don’t pay a fee to work with health insurance brokers. You can take work off your benefits administrator’s plate without adding to your budget. That being said, you may need to pay a fee down the road if you want ongoing advisory services or enrollment support. (US Chamber of Commerce)

Potential to earn tax credits

Brokers registered with the SHOP program can help businesses save money on health insurance. They can guide you in choosing the right plans and handle the paperwork for tax credits and deductions to lower costs. If you decide to work with a health insurance broker, make sure you inquire about whether or not you can qualify for the Small Business Health Care Tax Credit. (US Chamber of Commerce)

More variety of coverage options

Health insurance brokers can provide small businesses with a wider range of coverage options by connecting them to multiple insurance carriers. They can also recommend cost-saving strategies, such as using health savings accounts (HSAs), self-funded plans, or telemedicine services. (US Chamber of Commerce)

Increased access to technology

Some group health insurance brokers have access to helpful and expensive broker technology that makes navigating the enrollment and renewal process easier for your business. Many small businesses don’t have technology or support on this scale available to them unless they work with a broker. (US Chamber of Commerce)

Less administrative burden

Many small business owners and their HR staff have a lot of different roles and tasks to balance. Hiring a broker can help alleviate stress and lower your workload. Health insurance brokers simplify the health insurance process for small businesses by handling many of the administrative tasks. They can help identify suitable plans, guide employee enrollment, and provide clear information about plan details, reducing the time and effort required from employers to navigate and manage this process. (Experian)

For more healthcare options, sign up for a free demo of Thatch. Thatch can be your broker of record or can work with your current broker — all while helping you achieve your health insurance goals. Thatch can also help businesses save an average of $1,620 per employee annually while offering better, more flexible healthcare benefits.