In tough economic times, sometimes annual reviews reveal a pressing need for benefit cuts. When companies are forced to scale back the benefits employees enjoy, ancillary products are always the first to be affected. It’s in dental or disability or life insurance that employers first look to make reductions. And in just about every case, there’s a deep concern that “taking anything away” from employees will be perceived as a harsh negative that can have widespread ramifications.
Our job as brokers is to help groups figure out where they save money—while still keeping employees satisfied.
Sometimes it’s as simple as doing a review and switching carriers to get a better rate. Sometimes, it’s changing contribution amounts to be able to keep the benefit. The reality is there are a number of things a broker can do to help a company not lose an ancillary benefit entirely even when facing severe budget restrictions.
A lot of it just comes down to strategy.
It comes down to having a good relationship with your broker where you can sit down and truly be honest about the situation. That can be a tough conversation for people to have—to admit it’s a tight time where they need to save money. But those are the conversations you need to be able to have with your broker. That’s because there’s not just one or two options a broker can give you. There are a whole slew of things that can be looked at to improve the situation without eliminating benefits. If the benefit can be saved, it will continue to be an employee retention tool.
A great example is with dental benefits. As a broker, we can run usage model analyses for groups. With the information we obtain, we can find alternatives that don’t disrupt employee benefits while still saving the employer money.
Perhaps a group has a $2,000 annual maximum on its dental plan, but nobody is using more than a thousand dollars. So, we reduce that down and there’s a cost savings. But that reduction has zero negative impact on employees because no one was using that second thousand anyway.
It’s rare to find a scenario without multiple solutions. The unfortunate truth is many brokers just don’t have the incentive to find those answers, while others haven’t adapted to the times and aren’t aware of them. It takes a lot of effort to really talk with a client, do a thorough review and research other carriers. Many brokers would rather keep things status quo rather than look out for a client’s best interests by being more aggressive and forthcoming.
The problem in the small group space is clients are not getting the attention from their broker that they should, in most cases. They’re just a file in the drawer. When renewal comes up, they get their token letter or e-mail, but there’s no outreach. There’s no push for something else—something better or more appropriate—because either the broker hasn’t stayed up with current trends or is only reactive (instead of proactive). Often it’s in the client’s best interest to make changes, but regrettably in the small group space often that client isn’t aware of what the options are.
No employer wants to go back to its employees and say, “We’re cutting benefits.” It’s hard to do. But when it’s essential to make cuts to important programs, your broker should be engaged and helpful in keeping benefits as rich as possible.