Future of Small Group Benefit Brokers/Advisors

Nov 5, 2018

  1. somarco
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    somarco GA Medicare Expert

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    Doesn't the government (taxpayers actually) subsidize the cost of Rx? I believe that is why drugs are so much less expensive there.

    Plus they don't have to jump through FDA hoops for approval.
     
    somarco, Jan 4, 2019
    #31
  2. rcduggan
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    rcduggan Super Genius

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    PEO's are a mistake to any small group broker. Once the employer goes that route, all control is lost by the broker and also the employer. Should the employer decide to look elsewhere, the broker is long forgotten. Benefit designs may be enticing but the broker and employer are giving up everything.
     
  3. somarco
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    somarco GA Medicare Expert

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    I would agree up to a point. A PEO can be an all-in-one solution to many issues, not just health insurance. If the broker chooses to stay involved and is paid accordingly, then what is the problem?

    If he/she is merely shopping rates and not creating real value then they deserve to lose the account. Many years ago a commission check was mailed to me by accident. It was a group of 100 lives or so and the group health commission was $1800 on a monthly premium of $10,000. I don't know any broker that is worthy of an 18% commission on group health.
     
    somarco, Jan 9, 2019
    #33
  4. junkman
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    junkman Guru

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    The problem (as I see it) is that you have introduced competition into your group. You want them coming to you for answers and that becomes difficult when they deal with the PEO almost daily or weekly for things like payroll as they form relationships with the PEO that includes insurance.

    PEO medical plans are simply self-funded plans that you and the group don't control or have access to the critical data such as the PEO's loss ratio, stop loss, large claims etc. I've had PEOs promise to keep the broker involved bla, bla, bla. At the end of the day, things change and those promises go by the wayside. I've also had clients get mad at me when things go south even when I recommended against the plan that was cheap and has become painful.
     
    junkman, Jan 23, 2019
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  5. ABC
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    ABC Guru

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    I have brokered PEO to clients. Most PEO's are clueless on health & ancillary benefits, and to add this the plans are administered is a different state from the client. If the client states carrier is being used this can be a nightmare for service issues. With the high admin fees $1,250 PEPY, Payroll fee, then the PEO keeping the tax credits from section 125, this is seldom a good option. The groups that are a good fit, owners want nothing to do with administration, taxes, HR, payroll, & compliance. These type of groups are not using brokers in the first place. To promote a PEO on here is a sorry attempt of attracting sales.
     
    ABC, Jan 30, 2019
    #35
  6. Kiwi2020
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    Kiwi2020 New Member

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    To stay competitive group health brokers need to offer the entire package, support - compliance etc. Thoughts?!?!
     
  7. Kiwi2020
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    Kiwi2020 New Member

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    If a group is ready to detach from a PEO how difficult is it? They are a very motivated large group.


     
  8. rcduggan
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    rcduggan Super Genius

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    do you run group? if so, and you're in large group this shouldn't be an issue. get your ducks in a row so the transition is seamless for them.

    your previous comment about an "entire package" and thoughts? can you elaborate more on what you're asking?
     
  9. Kiwi2020
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    Kiwi2020 New Member

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    We have found partnering with a GA that has existing partnerships is best.... even when having to split commissions. The client has a very smooth transition.
     
  10. junkman
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    junkman Guru

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    Depends on how large. Employer will have census data. You may need claims data to be provided by the PEO and they may slow walk it. There may also be the issues of run out and reserves depending on how the current plan is set up.

    How many employees are there? Why do they want to move? Just shopping is one reason. pissed off is another.
     
    junkman, Feb 11, 2019
    #40
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