Let’s talk about something that should alarm every employer: the health insurance death spiral. And before you think this is just another industry buzzword, understand this: it’s happening right now, and your current broker might be the one pushing you into it.
17 Years of Rate Increases, Zero Solutions
Here’s a real story: An organization suffered through 17 consecutive years of rate increases. Seventeen years. Their broker did virtually nothing except show up at renewal with another double digit increase. And yet, they kept the business purely on relationship.
The HR person who’d been there the entire time had been trying for years to get basic healthcare literacy materials to employees. Basic materials. That’s something any competent broker should deliver in less than a week. Whether it’s steerage, patient navigation, or educational resources, this is foundational work. Not advanced strategy. The basics.
And for 17 years, this organization got nothing.
What Broker Laziness Actually Costs You
Your employees’ financial stress from healthcare costs directly impacts their productivity at work. Studies prove it. When employees are drowning in medical bills, confused about their coverage, and stressed about healthcare decisions, they’re less effective.
You’re doing your organization a disservice by not giving them these tools. Unfortunately, most brokers are lazy. They push the easy button: run a spreadsheet, shift costs to employees, maybe switch carriers. That’s it.
Healthcare is your second or third largest business expense. You’re managing employees with different demographics, different needs, different high-cost claimants. There’s no cookie-cutter solution. You need someone who understands:
- Your specific demographics
- Your high-cost drivers
- Medication management strategies
- Employee navigation solutions
- The dozens of moving pieces that make or break a plan
This requires high-touch service throughout the year. Not a single renewal conversation.
Once-a-Year Meetings Aren’t Enough
Most brokers talk to their clients once a year at renewal, but by then it’s too late.
Here’s what should be happening: Three to four meetings throughout the year. Quarterly check-ins on plan performance. If something isn’t working in Q1, you address it immediately. Not at renewal when your only option is to scramble for a new carrier, disrupt your employees with network changes, and start the cycle all over again.
When you wait until renewal to discover problems, you’ve already lost. The damage is done.
Questions to Ask Your Advisor
If you’re reading this and recognizing your situation, here are the questions you can ask your advisor right now:
- What are you earning in overrides and bonuses beyond the commission built into my premium? They’re legally obligated to disclose this. If they’re not disclosing it, they’re withholding it. And you’re not acting as a fiduciary for your benefits program. That’s a major liability.
- When was the last time you provided employee education materials? Not talked about it. Actually delivered them.
- How many times did we meet last year outside of renewal? If the answer is zero or one, you don’t have an advisor. You have an order-taker.
- What alternative funding strategies have you presented? If you’re getting low increases in the fully-insured world, you should probably be self-funding.
Your employees deserve great benefits. Your organization deserves a sustainable benefits package. And if your broker can’t deliver basic healthcare literacy materials after 17 years, they certainly can’t design a sustainable plan aligned with your objectives.
DM me for more information on how to break free from the death spiral.
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