When you’ve finally determined to offer small business health insurance coverage to your employees, the time has come to seek out professional guidance.
Because there are a number of options and plans available, finding a knowledgeable and reliable resource is essential to making health coverage decisions. But how do you know if the firm or individual you’re looking to reach out to is both knowledgeable and reliable?
Understanding What a Small Business Health Insurance Broker Is
For anyone unfamiliar with the terminology of the insurance industry, some terms can be a bit confusing. For example, we often speak of both insurance brokers and insurance agents. Is there a difference? And, if so, what is it?
According to HealthCoverageGuide.org,
“When we say “broker,” we mean a professional who can direct you to products offered by a range of companies. This is in contrast to a health insurance agent, who works with only one company and promotes that company’s products. Technically, both of these types of professionals are licensed as insurance “agents,” but we distinguish between them based on common parlance. If you do not use a broker, you will likely work with an agent at each company you contact.”
So, the next logical question might be, “What will a broker do for me?”
A good broker will help you shop for the right plan for your business and provide you with a number of quotes for insurance premiums. In addition, he or she will discuss your alternatives for small business insurance so that you have a clear understanding of your plan choices.
Once you have made a decision on a plan, your broker should help you implement the plan you select as well as service your account. This would include helping to solve any problems with billing, employee eligibility and claims.
The advantages of working with an experienced broker are the time you will save by having your broker do most of the work for you, helping you get the most from your health coverage, and – during open enrollment season – help you with the renewal process.
Small Business Health Insurance Brokers and Fees
Now that you’ve made it past the essential understanding of what a broker is and does, the next question that usually comes up is, “What about fees?”
Most brokers make their living by earning basic commissions for their services and sometimes they may charge extra fees as well. Typically, the commissions are based on a percentage of your annual premium and are included in the premium that you pay. What this means in practice is that the broker’s basic commission is built into the health insurer’s rates, so all participants pay them whether they use a broker or not.
You’ll need to make sure you know what, if any, fees will be charged by your broker. These extra fees are generally paid directly to the broker.
Steps for Choosing a Broker
What we discourage any business owner from doing is simply choosing the first broker (or agent) they happen to come across. There are a number of ways you can build a short list of recommended and preferred small business health insurance brokers in your area:
- Reach out to professional associations that are involved with health insurance or small business and ask for recommendations. This could be the state or local association of health underwriters, or your local chamber of commerce, for example.
- Ask trusted advisors, such as your personal insurance agent or broker, your accountant, CPA or attorney.
- Use your network of other business owners and ask them about their experiences and for any referrals they may have.
Before deciding to use a particular insurance broker, you should ask some key questions:
- What is the dollar amount of any fees or commissions that you may be charged directly?
- In addition, what, if any, additional fees will be included to the premium by the broker?
- What are the services that you will receive?
- During the year, who will be responsible for servicing your plan?
Reliable and Knowledgeable California Small Business Experts
JC Lewis Insurance, based in beautiful Santa Rosa in Sonoma County, offers California health insurance plans only from leading health insurance carriers licensed to do business in California.
In addition to being expert brokers, we are licensed and certified by each insurance carrier to offer coverage to individuals, families, small group employers and to seniors with Medicare supplemental and prescription drug plans. We assist small business employers with the initial set-up, annual renewal, and on-going maintenance needed.
If you’re a small business owner who wants to provide insurance options for your employees, you likely have many questions and concerns. For all your questions about Small Group Insurance, the Small Business Health Options Program (SHOP), you can rest assured that JC Lewis Insurance Services is here to help you find the right solution.