Whether you’re seeking individual health insurance or are looking to offer your employee group coverage, brokers simplify the process. But what is their role?
Brokers can help you navigate the federal and state marketplace exchanges and recommend Affordable Care Act-compliant off-exchange plans. They also can help you apply for financial assistance like premium tax credits.
Identifying Your Needs
Health insurance brokers are knowledgeable about the many different types of policies available. They can help you sort through the various plan options, search doctor networks and explain pricing terms like coinsurance, deductibles, and premiums.
You can also apply for financial aid, such as premium tax credits if you purchase through the marketplace. They can even help you enroll in an approved health plan. They can even offer guidance on Affordable Care Act-compliant off-exchange plans, a popular option for small businesses seeking employee coverage.
Professional Colorado health insurance brokers must always consider their client’s best interests. And while no regulations require insurance agents or brokers to disclose their payments from insurers, it is important to note that they receive compensation for their services. This is a fact that is often overlooked or ignored by consumers.
Identifying the Right Coverage
The health insurance market can be confusing and complex, but brokers are trained to sift through the many policy options available to find one that suits each individual’s needs. Their services are free for customers, as they are compensated through commissions from insurance carriers.
They also help explain insurance plan types, terms, and pricing and provide a perspective on the industry that can make it easier for clients to understand what they are paying for.
However, it’s not always easy for them to do that; the health insurance market is constantly changing as carriers enter and exit the exchanges, rewrite their plans, issue executive orders, and debate the fate of Obamacare. This makes it a full-time job to keep up with the market. That’s why some brokers take a more hands-off approach by charging flat fees paid directly by employers, which removes the conflict of interest. These brokers are still available to consult with employees and assist with the purchase process.
Choosing the Right Plan
Whether you are self-employed or offer a small business with employees, health insurance brokers are a great resource. They can assist you in navigating the complex rules of ACA and other federal and state laws such as ERISA. They also know how to address claims issues and are often a good resource in preventing fines from government agencies.
A broker’s value is magnified in a market with high “search frictions” or difficulty matching customers to products. A broker can reduce this friction and act as a check against exploitative plans.
Choosing the Right Broker
Brokers help to educate customers about the insurance market, explaining common questions like plan types and the meaning of industry-specific terms. They also stay current on relevant insurance laws and regulations, which vary by state and are frequently updated.
Choosing the right broker is crucial, particularly for small- to medium-sized companies. Look for brokers that generally service businesses of the same size or larger, as they will have established processes to manage these accounts efficiently and effectively.
In addition, look for brokers who do not churn their products. Some unscrupulous brokers earn massive year-one commissions by pushing employers to jump among multiple insurers for supplemental coverage, which generates additional revenue each time they do. Thankfully, most brokers do not engage in this practice, but it should be something that you consider when hiring a health insurance broker.