Worrying about covering your employees as a small business with a limited budget? Fear not, that’s what corporate medical insurance brokers are for. Corporate health insurance brokers are can help your business in many ways. But, what do they do?
A health insurance broker is the person most people buying health insurance go through to get their insurance plan regardless of whether it’s for an individual or for a small group (company). They will work with you to keep you informed about your options and to help you decide which insurance plan will suit your needs best.
Beyond meeting you, the broker also has to fulfill administrative duties like processing claims, cutting checks and delivering payment. They are also responsible for keeping you updated of changes or trends even after you’ve signed up with them, to ensure that you are fully aware of what is going on with your insurance plan.
There are two main groups of people selling health insurance- brokers and captive agents. Brokers are not tied to any company, and can provide you a wider range of options, from across the entire market while captive agents typically sell only one product or company (the one they are tied to).
For small businesses that may need a range of plans for different employees, brokers might be more suitable, but big insurance companies are also trying to increase market share by catering to businesses as well. They are starting to expand into providing an employee-elect arrangement where employees can pick and choose what they need, cutting unnecessary cost.
Now that we know what these brokers are about, here are some common misconceptions about them and the services they offer.
They are also responsible for keeping you updated of changes or trends even after you’ve signed up with them, to ensure that you are fully aware of what is going on with your insurance plan.
- Small businesses do not usually offer their employees benefits.
Owners of small businesses are beginning to realise that the cost of high employee turnover and the resulting loss of productivity far outweighs the cost of a comprehensive benefits plan. Hence, in an attempt to try and retain their workers, most small businesses provide comprehensive benefits such as insurance, paid leave and dental or medical plans.
Although providing benefits make employees more expensive and eat into a company’s profits in the short term, it is better in the long run. As business owners realize this, more of them are starting to look into offering their employees benefits. Of course, they have to take into consideration the cost and how much more expensive it makes each worker. But with the right plans and strategies to tackling this, providing employee benefits can be low-cost and yet highly effective. That is where brokers come in to help advise and choose the right plan that will allow for a win-win situation on all sides.
- It’s better to cut out the middleman to save cost.
You might feel that you have sufficient knowledge on your own to handle the deals the brokers get hired for. But it is their job to know the markets and the products or plans available well, and it is a lot better to just hire a broker and have a person focus on doing all the required research and negotiating for you.
On top of that, brokers would have been working in the industry for a long time and would be able to better negotiate a deal or have connections that could help you secure better deals. And this would be their full-time job, meaning that they would be more skillful and better equipped to handle these deals rather than a person trying to navigate their way using some basic knowledge.
- Employee benefits for small businesses are too expensive.
Of course, the benefits plan also need to be well thought out and negotiated to ensure that companies do not overspend on employee benefits. Initial premiums for benefits plans depend on a few factors such as selected benefits, coverage percentage, number of employees, family to single ratio of the employees and their respective ages. Companies should consider which employee benefits do their workers really want or need and adjust coverages accordingly.
Consultants will allow employers to provide comprehensive plans that are competitive within their industry that is not too expensive. Many companies are also beginning to adopt a co-payment policy when it comes to employee benefits as well. This way, those who don’t need the benefits will drop the plan, which ensures that the benefits are only provided to those that need it, further reducing the cost of providing employee benefits.
- Having multiple insurers are better than one.
Insurance policies from two or more companies may overlap each other. This may be useful while making claims as one will be able to pick up from where the other one stops coverage, but most of the time, having multiple insurance plans is more trouble than it’s worth. To begin with, having multiple insurers means you have to pay multiple premiums and probably for duplicated benefits.
On top of that, the administrative process when making claims can get very messy and complicated and you may not get to choose which insurance company pays for your fees. Also, when getting multiple insurance plans, one has to inform the other insurance companies he is already covered by, otherwise it could be considered a breach of contract and this could be considered as mis-representation. Hence, having multiple insurance policies isn’t really worth the trouble and it would be better to just stick to having one.
- The cost of insurance exceeds its benefits.
Health insurance might not be as important in countries with universal healthcare, the sad truth is that healthcare in Singapore, while heavily subsidised, is not free. Private clinics continue to charge high prices, and government health services with their heavily subsidized fees are only for citizens and permanent residents. All Singaporeans are covered by the mandatory MediShield Life, but almost 60% of Singaporeans are already paying the premiums for an integrated shield plan, which provides even more coverage.Choosing the right insurance plan is important, to ensure that your insurance plan is really worth it, and that you’re not paying more while being under-insured. Obviously, if the insurance plan is a shady one with minimal benefits the costs will outweigh the benefits. Insurance is supposed to lighten the load of medical bills, be it the usual visit at a clinic or hospitalisation. And we all know that it’s better to be prepared, and that no one goes through their life not needing a doctor. When things do happen, the coverage provided by insurance, even with the premiums paid deducted, make insurance worth getting.
- All brokers charge a broker fee.
Most brokers earn by commissions paid by the insurance company, which could be reflected in the premiums. However, there are brokers who instead charge a consulting fee from the employer they advise, which will then vary depending on say, the number of employees covered or the duration of the insurance. Hence, the money you pay for your broker will depend on how your broker usually earns. However, it is still worth hiring one as the advice they give should be insightful and valuable. Quite a few health insurance brokers switch into the industry after working in the medical industry, etc and will have a little more background knowledge on what are the needs of people when it comes to handling medical bills.
For a useful opinion and genuine help as to which plan to get to cover your employees, find a credible and reputable broker and sit down to have a nice discussion about the available options for small businesses. It will help you make a better decision as to what to get, and will relieve you of the burdens of having to settle the paperwork involved as well.