Finding the right benefits consultant is as important a task as selecting your firm’s lawyer or accountant. These professionals play an integral role in the direction your company takes and help to ensure the long-term sustainability of your most precious resource: your people. Unfortunately, selecting a broker often becomes simply a decision to respond to offers of a better deal in the market.
One-dimensional efforts to secure an agent-of-record letter from you as a plan sponsor, purely based on the promise of finding you a better rate or price, may run counter to your needs to build a sustainable plan that helps you attract, reward and retain the best talent. While it may be possible to find rates better than your current renewal, should you always base your decision solely on price? Or is there something more at play?
When choosing a benefits consultant, an open conversation in which the candidate answers your questions and discusses your needs and goals is critical. And it should be matched with your own comfort level with the consultant’s personal experiences and credibility. Is the advisor asking thought-provoking questions, offering meaningful suggestions and engaging you in a two-way dialogue? Is the advisor offering more than just a low price?
As a plan sponsor, you need to ask yourself some questions, too, in order to guide the discussion. What is the nature of the social contract I have with my people? What can I afford to fund? What, if anything, can my team members afford to contribute? And what will that support in plan design?
Changes over time in plan costs, demographics and company fortunes will affect what your plan looks like. Solutions of service cuts or raised contribution levels belie the fact that there may be better ways of controlling plan costs without compromising plan members’ experiences.
Ask the potential new consultant (or your existing one, for that matter) hard questions such as the following:
- What changes can be made to my plan design that won’t require additional contributions or service changes?
- Can we implement new plan design elements such as special authorization processes, mandatory generic plans, custom drug formularies and drug utilization reviews? And, if so, what will these programs accomplish and offer by way of plan savings?
- What, if any, will the effects on plan members be in terms of out-of-pocket expense or experience?
Optimizing plan design and working with carriers that adjudicate to the letter of the plan design will do more to offer plan savings and will trump the lowest price. These considerations are also more tangible—as opposed to low rates that simply buy business today with nasty surprises to come at renewal time next year.
Your current advisor and/or advisor-to-be should have the answers to all these questions and should understand current market offerings from more than just a handful of most-favoured carriers. Ask how the advisor selected the carriers to be presented and how they are compensated. Finally, ask whether or not the advisor has any proof documents (preferably third-party) to back up his or her arguments or those offered by the carrier. Listen closely and trust your instincts to determine if you are getting the full story.
Honest questions form the basis of a solid relationship with your advisor. It’s your money, after all, and the future well-being of your staff and company’s bank account depends on this kind of trust and transparency.