Employee Benefits Landscape: Employee Benefits Broker vs. Consultant vs. Advisor
Crafting and offering an attractive employee benefits program can be tricky and daunting for employers. HR managers and business owners have to put in a great deal of work and consider a lot of factors to come up with the right benefits packages. Not to forget the challenges they have to overcome and numerous other aspects that fall outside their area of expertise. After all, you cannot expect a business owner to excel in human resources and employee benefits. Hence, most companies rely on an outside resource and professionals for assistance and constant guidance throughout, including employee benefits brokers, health insurance consultants, advisors, etc.
With the increasing complications in the employee benefits market, many small and medium-sized companies seek additional help to bridge the information gap. Some organizations procure benefits with the help of a payroll provider or broker while some prefer professional and licensed benefits experts. However, as employers turn to these outside resources to navigate potential advantages and pitfalls and find the best options, they face one major problem. Most business and HR leaders are confused about what is the difference between an employee benefits broker, consultant, and advisor. They always fret about whether they need a consultant, a broker, or an advisor. They are unclear about their respective roles, expertise, and responsibilities. Some often assume that these are just interchangeable names for the same job profile and they can’t be more wrong.
To begin with, brokers, consultants, and advisors are completely different from each other and play different roles throughout employee benefits programs. Their scope of services offered to employers and employees is different too. As you begin your journey of employee benefits and deploy employee benefits software in your organization, you must understand how each of these professionals helps you manage the plans and make the process smoother. Let’s get started:
Employee Benefits Broker
Employee benefits brokers are a primary source for companies to attain health insurance and other benefits packages for their employees. They work directly with one or more insurance vendors or providers. Employers need them at some point throughout the coverage process even when they work with an outside consultant or advisor as they build the right and suitable plan for their employees. These professionals reach out to companies ahead of plan renewal with new rates of carriers. They are most likely to visit offices to offer a presentation to staff members, sharing all the highlights and features of benefits plans and encouraging question and answer sessions.
Introduce a unified software with the help of professional IT services to connect brokers and employees so they can discuss all the pros and cons of different benefits packages. This will assist your workforce to select the best plan according to their eligibility and preferences. They are primarily focused on helping employers procure and choose benefits products and coverages. You can also seek additional services from them, such as assistance for open enrollment, but their services’ scope is limited and often insufficient for organizations.
Expertise: Their expertise lies in the benefits products they sell, the carriers that they represent, and the various ways in which they redistribute finances related to insurance plans. They analyze all the circumstances of an employer and offer options to resolve their needs.
Network: Brokers have networks consisting of buyers of healthcare plans, which include HR managers and business owners. They mainly focus on one type of buyer and dismiss others as irrelevant or unattainable.
Role: The focus is on the off-the-shelf products provided to employers, the price offered by the third party, and convince clients how their benefits plans are better than current ones. They aim at getting a commitment from buyers at the earliest and try that no one else intervenes in their efforts.
Differentiating Factor: These licensed professionals work directly with one or more insurance providers. Although their offerings are limited by their relationships with affiliated insurance providers, they have the most direct access to insurance providers.
Employee Benefits Consultants
Employee benefits consultants serve a complementary role to brokers and their designation is interchangeable with benefits advisors. However, there can be a difference between fee structure and the background analysis involved. These consultants take their relationships with employers up a notch by reaching out to them multiple times throughout the year while encouraging companies to connect with them for even the simplest queries.
Rather than referring to a plan document to answer employers’ and employees’ questions, they find the best and easy to understand language for clients to explain benefits packages, their features, advantages, limitations, etc. They also negotiate with insurance carriers and buy plans for employers, giving confidence to clients that they are moving forward cost-effectively with an impactful plan available for their workforce. Another important role that benefits consultants perform is helping employers make the right investment choices while selecting plans for employees so they earn maximum return and value out of the plan. As companies spend a huge amount every year on employee benefits, consultants assist employees to realize that their compensation is greater than their annual salary.
Expertise: They analyze how a business operates, the role of benefits and HR in the operations, and employee management and engagement. They understand all the circumstances of a given employer and offer options to address their client’s health insurance needs. They make connections with specialized brokers and examine choices according to the employer’s goals.
Network: They create a network with various people in an organization and work with decision-makers and influencers. Consultants also recognize their roles in the decision-making and implementation process to find what they can add to the conversations and benefits plans.
Role: To focus on the needs of their clients and how to offer the best solutions that benefit organizations, both operationally and financially. Their conversations include healthcare plan needs and HR and employees’ requirements. Based on these evaluations, they come up with the right solutions that meet these needs.
Differentiating Factor: The term employee benefits consultant can be used interchangeably with a benefits advisor. However, consultants imply a greater emphasis on the initial conditional analysis as contrary to an advisor that is more focused on advisement in regard to selecting the best among available insurance coverage and brokerage options.
Employee Benefits Advisor
Similar to benefits consultants, advisors also have a complementary role to brokers in the employer’s effort to achieve the best health insurance coverage for employees. They work for a fee and handle procurement and enrollment while being involved in how an organization’s benefits packages will drive human capital strategy and other strategic imperatives. It includes in-depth competitive benchmarking to analyze the importance of benefits in recruitment and retention. They also educate and recommend funding mechanisms against a company’s appetite for rewards and risks. Also, benefits advisors are involved in short and long-term financial modeling and forecasting.
They work with clients to find the ideal scope of coverage for them and assist in evaluating potential brokers to find the one who offers the best fits to meet clients’ needs.
Expertise: They analyze employers’ circumstances and consider their requirements and offer the best options to meet their health insurance needs. They handle benefits procurement, enrollment, and collective packages.
Network: It is their job responsibility to make connections with specialized brokers to examine choices based on the requirements of their clients.
Role: Apart from being involved in cost containment techniques and strategies, advisors also assist clients with daunting administrative tasks, such as onboarding, automation, enrollment, billing reconciliation, etc. They also help increase employee engagement by offering wellness,
marketing communication, and dedicated support.
Differentiating Factor: Employee benefits advisors take a broader approach to optimize benefits packages. They have more tools at their disposal than insurance coverage alone while helping employers put together a comprehensive and effective benefits plan that suits their unique needs.
Understanding the difference between employee benefits broker, consultant, and advisor is critical for employers and HR leaders. Having a clear knowledge of how these three are different from each other helps you implement the right benefits packages successfully across the organization. Also, you can control the costs and overall value of benefits by selecting a professional who delivers the most suitable solution.
Make sure to hire the right person with a clear vision who helps you in strategic planning steer clear of the ones who only show up once and deliver late results. Demand more from your benefits partner, be it a broker, consultant, or advisor. Find a forward-thinking and reliable partner and create powerful packages for your employees.
Author’s Bio: Alicia works with the editorial team of Accomplish EP, a leading company offering HR software solutions. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.