By: Mike Kroupa, Director of Data Analytics, Connor & Gallagher One Source
For many employers, managing healthcare costs has started to feel like an annual exercise in choosing the least painful option.
Renewal arrives, costs go up, plans get adjusted, employees absorb some of the increase, and then everyone moves on until the following year. As I discussed at the MRA conference, that isn’t really a strategy. It’s a cycle.
Breaking that cycle starts with asking better questions. And if I were an employer evaluating my benefits strategy today, there are two questions I would start with.
1. How is my broker being paid and by whom?
Most employers know their broker is compensated, but surprisingly few understand the full picture.
Ask your broker to walk you through all sources of compensation connected to your health plan, not just what appears on an invoice. Are there commissions from insurance carriers? Overrides, bonuses or other incentives? Are vendors paying fees or commissions when they are recommended or implemented?
None of those arrangements automatically mean something is wrong. But employers should understand them.
Why? Because incentives matter.
Your broker should be able to explain, clearly and comfortably, how they are compensated and whether any financial relationships could influence the recommendations being made. Transparency creates accountability, and accountability creates better alignment between the employer and its advisor.
2. What strategic ideas are you bringing me before my next renewal?
This may be the more important question.
A good broker provides service. A great broker also brings strategy.
Employers should expect proactive recommendations, data-driven planning and a multi-year roadmap…not simply a spreadsheet comparing carrier renewals once a year. If you attended MRA’s Benefits Conference, you heard me say it: Renewal is an event, but a broker partnership is a year-round process.
Ask your broker: What are the two or three biggest opportunities you see in our health plan right now? What does our data tell us? What should we be working on over the next 12, 24 and 36 months?
Those conversations might lead to evaluating how healthcare is purchased, identifying significant price or quality variation among providers, reviewing pharmacy strategy, improving employee education, or redesigning incentives to steer employees toward higher-value care.
The specific solution will be different for every employer. The important part is having a plan.
Healthcare is complicated, and employers cannot control every factor driving costs. But they can take more control over how their plan operates. That requires good data, a deliberate strategy, aligned partners and employees who understand how to use the benefits being provided.
Your broker should be helping you build that, not simply helping you survive another renewal.
