Seven Advantages and Disadvantages to Using an Employee Benefits Broker

Hiring an employee benefits broker can help take the guesswork out of choosing the best benefits package.

Employee benefits brokers can help business owners in a number of ways as they try to determine which benefits packages are best for them and their employees. Due to the number of advantages that employers can gain with the help of employee benefits brokers, many businesses use them. However, as with all things, there are also disadvantages associated with employee benefits brokers too.

Convenience

Employee benefits brokers provide employers with a lot of convenience as they do the majority of the work finding the best plans.

Money Savings

Employee benefits brokers have access to many large benefit providers and, since they do business for many clients, can often get the best deals for employers who use them.

Time Savings

Due to the fact that employee benefits brokers know where to look for the best benefit packages, and then handle most of the work, employers have more time available to concentrate on other areas of their businesses.

Detailed Information

Since employee benefits brokers have access to many benefit providers, you will have more options available than if you were trying to find benefit packages on your own. Benefits brokers have the knowledge to offer detailed explanations about every package and answer all your questions, ensuring that you know exactly what you're getting with each one.

Employee Access and Paperwork

Employees enjoy having online access to their accounts so they can review their benefits at a glance. This is something that some benefits brokers are able to do for you, saving you and your HR department time. Employee benefits brokers will also take care of filing all of the necessary paperwork for the chosen benefits package for employers.

References

Some employee benefits brokers have given employers bad past experiences, but hide it well. Therefore, ask for references -- and call them -- before signing a contract.

Bias

One of the ways employee benefits brokers are paid is through commissions. Some commissions are higher than others, based on the amount of the premium paid. Therefore, some brokers may not be honest about which package is best for you. In addition to commissions, employee benefits brokers can earn bonuses from various companies when they reach “x” amount of packages sold. This can motivate some brokers to only recommend packages offered by companies who pay the highest bonuses. Therefore, ask what the broker’s techniques are for matching your criteria to various carriers.

References

• Checkpoint HR: Benefits Brokers - Outsourcing for Employee Benefits
• Checkpoint HR: Employee Benefits Brokers
• Employee Benefits UK: Using a Broker Will Aid Procurement

Resources

• The Secret that Benefits Brokers Do Not Want Employees to Know