Most employers aren’t getting the guidance they need for their benefits programs. Here’s why this keeps happening, and what to watch out for when evaluating benefits advisors.
1. Limited Expertise in Modern Benefits Solutions
Many benefits advisors rely on outdated approaches because they haven’t invested in learning newer, more effective strategies. Their typical process involves simply gathering quotes from carriers and presenting a spreadsheet of options – essentially just comparing premiums without considering the deeper mechanics of plan design or alternative funding models.
This surface-level approach misses opportunities for cost control and program optimization. A properly designed benefits program requires understanding newer funding strategies, plan design innovations, and risk management techniques that many advisors haven’t mastered.
2. Unwillingness to Do the Necessary Work
Creating an effective benefits program requires significant effort and careful analysis. Too many advisors take shortcuts instead of:
- Understanding each employer’s specific business goals and challenges
- Analyzing claims data and population health metrics
- Developing custom solutions that align with company objectives
- Creating detailed implementation and communication plans
- Providing ongoing program optimization and support
Many advisors choose the path of least resistance – renewing existing plans with minimal changes – rather than putting in the work to design and implement more effective solutions.
3. Misaligned Financial Incentives
Here’s an uncomfortable truth: traditional broker compensation models often work against employer interests. When brokers earn commissions based on premium amounts, they actually make more money when your costs go up.
This creates a troubling scenario where your 5-10% premium increase translates directly into higher broker compensation. This misalignment means many advisors lack motivation to pursue aggressive cost-control strategies or alternative funding approaches that could reduce premiums.
What Employers Should Look For
To avoid these issues, seek advisors who:
- Can explain modern funding strategies beyond traditional fully-insured plans
- Demonstrate a thorough discovery process to understand your business needs
- Offer transparent, fee-based compensation not tied to premium amounts
- Show willingness to put their compensation at risk based on performance
- Provide detailed, year-round service plans beyond basic renewal shopping
The right benefits partner should bring both the expertise and commitment needed to design programs that truly serve your organization’s goals. They should be willing to prove their value through results, not just promises.