Updated: September 12, 2023 | Originally Published: May 21, 2019
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Get The Answers You Deserve Before Choosing a Broker For Your Company’s Group Health Insurance Needs
A California health insurance broker working with a small business on selecting and enrolling in a group health plan has one fundamental responsibility: to help the company and its workforce obtain the best coverage and benefits for their needs and budget.
When you and your small business start working with a health insurance broker, you are at opposite ends of the information spectrum. While you know all there is to know about your company, you probably don’t fully understand the complexities of group health insurance. In turn, your broker knows everything there is to know about health insurance but may not yet know much about your business.
That is why you need to ask the broker questions – and they need to ask you some – before you hire them. Knowing the right questions to ask a California health insurance broker can help you better understand how group health insurance works, your company’s needs, and the best option for your business.
What You’ll Learn in This Post:
- Before you hire a California health insurance broker to help your small business obtain employee health insurance, empower yourself with information by asking potential brokers insightful questions about their experience, compensation, and methodology.
- Ask whether you must offer coverage to your workforce and whether you should do so anyway, even if you don’t have to.
- Inquire how the broker goes about recommending a plan, why the broker does so, and how they will help you enroll in and renew your coverage.
Here are five questions to ask a California health insurance broker before you hire them:
“Do We Have To Provide Health Insurance To Our Employees?”
Not all California businesses are legally required to provide group health coverage for their employees. Under the Affordable Care Act (ACA), if your business has less than 50 full-time or full-time equivalent (FTE) employees are not obligated under the ACA or any other law to provide their workforce with health insurance.
What constitutes a full-time employee? Under the ACA a full-time employee is an individual who works 30 hours or more each week or alternately, 130 hours every calendar month, including paid leave and vacation time.
Additionally, if your business has fewer than 50 full-time employees, but 50 or more full-time equivalent employees, you may still fall under the realm of the ACA .What is a full-time-equivalent employee? The Internal Revenue Service provides guidance on determining whether an employee qualifies as a FTE employee.
If your business does meet the 50 or more full-time or FTE employees, you are an “applicable large employer” as defined in the ACA, and must offer an ACA-compliant plan to a minimum 95 percent of you full-time employees.
At a minimum, your California health insurance broker should understand the intricacies of the ACA requirement for small businesses.
“If My Company Doesn’t Have To Offer Our Employees Health Coverage, Should We Do So Anyway?”
If the broker tells you that the law doesn’t require your company to offer health insurance to your employees, don’t just thank the broker for their time and walk out the door. There are plenty of reasons to provide coverage even if you don’t have to, which is why plenty of California small businesses do so anyway. Offering your employees affordable group health insurance with robust benefits can help your company attract and retain top talent, reduce absenteeism and sick days, and increase employee productivity. All these upsides to offering health insurance coverage will save your business money in the long run.
“How Are You Compensated?”
A California health insurance broker’s job is to help you choose a group health insurance plan that is best for you, your budget, and your employees – not the best for them. That is why it is essential to ask and understand if they receive compensation, commissions, or incentives for enrolling their clients in a specific plan or with a particular carrier. This will help you know how these incentives could influence their recommendations and how long they suggest you stay with a carrier. (Retention bonuses, in particular, are often huge.)
An excellent way to phrase the question is, “Do you get half of your compensation from a single carrier?” If they say yes or refuse to answer the question, the broker likely won’t do the research they need to ensure you get the best health insurance plan, and you should speak with another California health insurance broker before choosing who to hire.
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“Why Are You Recommending This Plan?”
If the broker recommends a health insurance plan for your company, ask them why they chose that particular plan. Your potential health insurance broker should be able to explain the basis of their recommendation clearly. You can ask such questions as:
- Will my company and our employees be better served by a PPO rather than an HMO? If so, why?
- If you recommend that we consider a Health Savings Account (HSA) or Flexible Savings Account (FSA) as part of our coverage, how would this help my business and workforce?
- What potential tax benefits are associated with the group health insurance plan you’ve recommended?
If the California health insurance broker you are meeting with cannot defend their decision and give concrete reasons why the health plan is right for your company and employees, it’s time to move on.
“How Can You Help Me With Enrollment and Renewal?”
Small business owners or others at a company charged with researching and selecting employee health coverage already have plenty of responsibilities on their plate. You don’t have time to spend trying to prepare and submit the voluminous paperwork and understand the confusing process of group health insurance enrollment and renewal.
The best California health insurance broker should not only help you select a plan; they should help your company get your plan up and running. Ask them how they will streamline the process for you, which tools they will use, and how you get help or answers when you need them.
The same goes for renewals. Ask the broker when the renewal process starts. Inquire whether the broker will renegotiate your rate each year so you can get the best possible value and whether they will work with you to review and reevaluate your coverage needs to ensure that your plan continues to suit your company’s needs.
You Have Questions, Preferred Insurance California Has the Answers
Preferred Insurance of California is an independent group health insurance broker specializing in small business health insurance for companies throughout the state. Not only are our services free to our clients, but we also service what we sell, which means we are personally there to help your employees through enrollment and with all their health insurance needs.
To learn more about what we offer in California small business group health insurance, schedule your free consultation today.