Companies lose money when they allow their health insurance brokers to be the sole source of ideas for containing health care costs.
Since health care costs are often the second or third highest company’s expense after labor it’s important to know that…
1) A health insurance broker is a salesperson working on commission. What if you bought cars the same way you buy health insurance? Can you imagine anyone saying to a car salesperson, “What car do you think is right for me and what will the monthly payments be?”
That would be the commissioned salesperson’s dream come true.
CFOs and HR heads often buy insurance, paying 20% to 30% more than necessary, the equivalent of paying “full M.S.R.P.” without knowing all their alternatives. Every year, billions in premium are paid and overpaid to maintain the archaic and expensive health insurance complex.
2) Your goal of lower premium is not aligned with the broker’s goal of higher commissions.
Not only are retail brokers limited in their knowledge of what solutions might be better for you, they are not incentivized appropriately. As your premiums go up, their commission doesn’t go down, does it? What if brokers were rewarded financially for maintaining the quality of your plan while reducing its premiums?
3) The CEO and HR have different priorities. Think about it from the HR perspective. HR has to deal with the fall out from ill-advised Cost reductions so even if you get credit for cost cutting, they get stuck with all the complaints and the extra difficulty of filling positions while offering less-than-desirable benefits. Your top priority might be “saving money” but theirs is “keeping people with quality benefits.” Their second priority is to avoid HR stress overload.
4) Work with experts whose motivation aligns with yours. There are health care experts who are not commissioned brokers and who know how to give HR what they want while giving you the cost savings your company needs. These experts only make money when your costs go down. There are multiple ways to improve your quality of care and drive down employer costs, including solutions which pay no broker commission.
What Are My Options?
The following ways to contain health care costs are not necessary and often counterproductive:
- Asking employees to “sacrifice” plan quality
- Asking employees to carry higher portion of premiums.
- Asking the broker for a rebate on his fees.
Opening up new, better options start with new and better resources which maintain plan quality and reduce costs 10% to 30%. DCI can help you see and drive down the hidden cost drivers inside your healthcare costs. Contact us at (888) 395-0809.