It’s great that you thought about your employees’ health and are planning to buy health insurance for them. Today, health insurance is a critical factor in retaining employees, especially your old employees who are working for years with your organization. Also, a good retention percentage is one of the major parameters to determine the status of the company in the industry. But, the process of buying a health insurance plan is not a cakewalk. It involves many stages so it’s recommended to work with a health insurance broker in Austin.
If you are worried about the cost and think that the service charge of the broker will be an additional cost to you are completely wrong. For the service of a health insurance broker in Austin, you don’t have to pay a single penny. It’s because the insurer pays commission to the broker for the plan he delivers and the service he offers to you.
How is a health insurance broker paid?
The insurer is paid by the insurer from the monthly premium you pay for health insurance. The premium received by the insurer by you is strategically divided. A major portion is spent on health care costs and another portion is spent on administrative costs, marketing costs, and other expenses like broker commissions.
In some cases, the insurer pays a set percentage of the premium paid to the broker. Or, you will find the insurer paying a flat percentage to the broker per policyholder. No matter what the payment is, it will not impact the cost of a health insurance plan and its buying process.
Why is retention important for brokers?
Just like employee retention is for your organization, customer retention is important for a health insurance broker. The only difference is you don’t get monetary benefits like the broker.
A health insurance broker is paid monthly based on the number of people enrolled in a given plan. There is no lump sum payment done to the broker any time in the year. Even if you change, the broker will receive the commission from the insurer. But, if you change the health insurance broker along with the plan, the previous broker will not get the commission. The amount will go into the account of the new broker from whom you took the new health insurance plan. Chances are that the previous broker might not receive the commission for the plan that he sold you before switching.
This is why brokers make lots of effort in retaining their customers. You can help a broker by staying with him even when switching your plan.
Will the commission paid to the broker affect my monthly premium?
No, the commission amount will not affect the premium that you pay for the health insurance. It’s because the cost of the health insurance premiums is regulated by the state and a broker cannot increase the cost of the premium for the sake of earning a higher commission. Though a broker receives incentives for every new enrollment and renewal, he will not be biased towards one plan because it will not change his incentive amount. So, you shouldn’t worry about the higher or lower rate of commission paid to the broker. You should apply the policy that you think is the best for your employees and organization.
A health insurance broker in Austin will help you obtain information about different health insurance plans without adding a line item to your budget. Also, the broker will help you go through all the stages of the buying process. So, you should work with him without worrying about the extra cost.