Employee benefits have a direct impact on the quality of the workforce of a business; therefore, creating a well-rounded offering and managing it properly is essential. Businesses that understand the value of a good benefits program often enlist the help of experts to ensure their program is effective. When outsourcing the development and management of employee benefits, there are two main types of professionals that companies may encounter: employee benefits brokers and employee benefits consultants. Find out what sets these two types of experts apart?
Employee Benefits Broker vs. Consultant
In the past, an employee benefits broker generally worked on a commission basis, while an employee benefits consultant worked for a fee. However, the way these professionals are compensated has changed over the years, and many brokers now work for fees while consultants may work for commissions.
Employee benefits Broker
Businesses that are concerned about the way their employee benefits specialist is compensated can ask the professionals they are considering working with for those specific details. These days, it is largely the relationship between these professionals and the companies they work with, rather than the compensation model, that sets them apart.
An employment benefits broker focuses on helping companies to procure the right benefits and coverage to meet their needs. Some also offer services such as open enrollment assistance, but their work is generally confined to procurement. Another way of looking at a broker is to think of them as buying or selling something on behalf of others, which, in this case, is a benefits plan.
In some cases, a broker will be aiming to earn a good commission from an insurance company, and this may influence which plans they recommend to a business. Insurance companies may also offer additional incentives to brokers for renewing plans, which means they may have a financial incentive to keep rates higher when negotiating on behalf of a client.
This could mean they are less motivated to research cost containment initiatives and alternative funding arrangements. However, their close relationship with insurance companies may enable them to provide a business with access to a lower rate than they could have obtained on their own.
Employee Benefits Consultant
Employee benefits consultants have a broader role, and their work is geared more toward the company that hires them. In addition to assisting with procurement and enrollment, they help develop the company’s benefits package in a way that will help them achieve their goals.
This may involve carrying out in-depth competitive benchmarking to determine the role of specific benefits in recruiting and retaining employees. They may also help companies find the right balance between risk and reward when it comes to offering an attractive benefits package.
In addition, they may offer services such as financial modeling across the short and long term, large claims management and forecasting. A benefits consultant works as the contact person for a business throughout the year for everything related to their benefits.
A good consultant will also encourage the company’s employees to contact them directly with any questions or issues they have related to their benefits at any time during the year rather than only reaching out when it is time for renewal.
A benefits consultant will also take the time needed to negotiate a good rate with the business’s existing carrier and get prices from alternative carriers, if possible, to find the most cost-effective plan.
Another important part of what benefits consultants do is outreach, helping employees understand all of the components of their compensation.
What to Look for in an Employee Benefits Consultant
Finding the right benefits consultant is worth the effort considering the prominent role that a company’s benefits serve in employee satisfaction. Outlined below are four qualities to look for when seeking a benefits consultant.
Transparency is an important quality for a benefits consultant to possess. They need to be honest and open about the services they provide to the business as well as the cost of their services. If they are not upfront about their own fees, how can a business be sure that they will be transparent about the costs involved in the benefits they recommend?
Because employers, employees and carriers each have their own expectations surrounding a benefits policy, a good employee benefits consultant should be able to manage everyone’s expectations and ensure they are satisfied.
One of the reasons businesses seek an employee benefits consultant over a broker is because consultants tend to have a more hands-on relationship with their clients throughout the year.
Therefore, it is important to ensure that the consultant being considered has a collaborative nature and is willing to cooperate with the business to ensure that everyone’s needs are met.
The field of employee benefits is extremely complex. There are many different options available, technical terms to understand and nuances that set seemingly similar plans apart from one another.
In particular, businesses should look for an employee benefits consultant who is very knowledgeable about compliance with the many laws and regulations governing employee benefits, as well as the health marketplace and risk and disease management. A failure to understand these important components of benefits plans could result in costly penalties and fees for a business.
Although hiring a knowledgeable employee benefits consultant is essential, it is also important for a consultant to be able to communicate well with others and teach employees about their benefits.
This may involve explaining difficult concepts to staff in terms that they can understand so they can get the most out of their benefits and companies can ensure their chosen benefits are having the desired effect. A big part of this is providing an open and clear channel of communication to employees so they fully understand what is available and remain engaged and satisfied with the plan.
Contact the Employee Benefits Consultants at Business Benefits Group
Businesses that wish to attract and retain top talent need to offer a well-rounded benefits plan that meets their employee’s needs while working within the company’s budgets. To speak to an experienced business benefits consultant about your goals, contact the professional team at Business Benefits Group (BBG).