Probably at one time or another you have sought out insurance brokers or consultants. Whether it be from a referral, or a broker/consultant that has called on you, or from a proposal given to you, or a Requests For Proposals (RFP), you’ve probably asked a lot of questions. And while I’m sure many of them were appropriate, sometimes all of the right questions are not asked that should be asked, because you may not know what to ask. You Don’t Know What You Don’t Know.
Personally, I have responded to more RFPs than I care to admit. Most are usually written with lots of questions – some of which are relevant and some of which are not. I’ve also had plenty of interviews with the same questions, but in all situations not all the right questions are asked.
Here are 9 questions to ask your insurance broker or consultant – and from them you can find out where their preferences lie with regards to the best interests of insurance companies or yours.
Here they are:
- What percentage of your clients are with BUCA (Blue Cross, United, Cigna, Aetna)?
- What percentage of your clients are partially self-funded in an unbundled plan? Ask for references.
- What percentage of your revenue comes from BUCA?
- What percentage of your revenue comes from overrides?
- Identify where your overrides come from (health insurance companies, pharmacy benefit managers, reinsurers, TPAs, etc.)
- Describe how you get compensated on your health plan (commissions, fees, etc.)
- Will they be transparent and disclose 100% of all revenue from your account?
- Have you ever worked on getting compensated as a percentage of savings? If so, describe.
- Are you familiar with Reference Based Pricing (RBP), and if so what is your philosophy on RBP?
Responses of these questions will give you insight into how that broker or consultant operates. If they have a significant volume of clients with BUCA then don’t necessarily expect anything other than a BUCA alternative. And certainly don’t expect a competitive alternative because they get paid a lot of money by the insurance companies, including overrides.
Similarly, if the majority of the broker’s book of business is with BUCA as the Administrator, then they are being handsomely compensated as well, whether their groups are fully insured, level funded, or self funded.
Don’t avoid addressing overrides from various companies and vendors they work with. I can tell you from my prior experiences that the compensation received is huge, and will have a significant financial influence on which company or companies they recommend to you. By the way, these are never disclosed if never asked.
Lastly, there familiarity and philosophy towards RBP will also go a long ways in telling you what they want to sell. Unbundled RBP plans will reduce their compensation considerably so many brokers and consultants do not want that to happen, nor do they want to disclose it.
These questions will give you definitive indications of about which way a broker or consultant leans – working for the insurance companies are working for you! If you want to know many more questions to ask, shoot me an email at [email protected] or call me at 970-349-7707 and I will send you a copy of my book “You Don’t Know What You Don’t Know.” It will give you a “nose under the tent” about how the insurance world operates.
