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Posted by Alexandre Timothy, Group Insurance and Group Annuity Plans Advisor, December 3 2015
Plan Implementation
Group insurance: do you need a broker or an advisor?

Broker Group Insurance

A broker is defined as someone who functions as an intermediary in business or other transactions, who does not deal on behalf of its clients but simply connects them with their co-contractor. Thus, the traditional role of the broker is to shop around for insurers. However, with skyrocketing health care costs, employers need more than a traditional broker to maintain attractive group benefit plans at an affordable cost. Discover more!

Advising rather than selling

So, what exactly is the broker’s role today? The answer is simple: to advise rather than sell. The broker must expand its expertise and consider not only the financial aspects of insurance, but also the HR dimension. We must remember that, for employers, the basic objective of benefits is to improve employee retention and attraction (advantages of group insurance). In other words, you and your employees must get their money’s worth. But where do we start?

A 5-step process for sound advice

1. Determine the plan’s structure

The advisor surveys the employees to identify their needs and measure the employer and employee budgets. If all employees appear to have similar concerns, a single plan where all employees benefit from the same coverage will be enough. If not, a health management account or a modular plan (modular plan) will be selected. Thus, the money is invested in the right place.

2. Select the right insurer to benefit from long-term savings

The advisor will compare all financial aspects, not just rates by asking a few questions:

  • What are the administration fees, the inflation factors, the reserve factors?
  • What portion is invested by the insurer?
  • Will the insurer recover this amount upon the next renewal?

A 40-month projection provides further validation of the insurer selection. Obviously, the right financial arrangement must also be chosen: fully insured, self-insured (self-insurance) or a retention plan (discussed in a future article).

3. Support for better guidance

Stand by the employer during the transition and make sure everything goes smoothly for both the administrator and the employees. A plan administered by a third party provides many advantages in this respect (AGA +Plus).

4. Implement the best cost management practices

Gone are the days when we went shopping around every 2 or 3 years hoping to make long-term savings. The quality of your benefits depends on the smart use of the plan by your employees. To prevent waste, several adjustments can be made to your plan (cost management). This comes with employee information sessions to explain the basic group insurance concepts and promote proper use of the plan. We inform your employees about ways to lower their prescription drug bills, including shopping around for their pharmacy and asking for 90-day prescription filling. These two elements can generate savings up to 35% on the cost of a prescription drug, with a direct positive long-term impact on your plan.

5. Provide a first class service

Once the plan is set up, i.e. answer client queries in a timely manner, regularly track the plan experience, make adjustments as needed and, of course, ensure the rates proposed by the insurer upon renewal are justified. If not, the advisor must negotiate the rates with the insurer. The advisor will also assess when the time is right to issue a call for tenders. A call for tenders can generate substantial savings when made at the right time – and not too often. 

Finally, keep in mind that the role of the broker has changed tremendously in recent years. An occasional call for tenders and an annual meeting with the client at the time of renewal no longer suffice to serve businesses well. The brokers have become advisors and know how to surround themselves with a skilled team including analysts, service representatives and client service specialists. This is how brokers ensure businesses will continue to provide quality benefits to their employees. 

Group Insurance and Group Annuity Plans Advisor | With a Bachelor in finance, Alexandre Timothy understands the challenges and realities of his clients, both from a financial point of view as well as a level of human resources and benefits. With his new outlook in a traditional industry, Alexandre offers innovative solutions to ensure the sustainability of social benefits while meeting the needs of participants and employers. During his ten years of experience, Alexandre has stood out for his creativity and integrity, becoming a highly valued adviser by many of his customers.
Alexandre Timothy, Group Insurance and Group Annuity Plans Advisor