Our firm specializes in the small to mid-market consisting of employer groups of 20 up to 1000 employees. Why this market? It’s underserved and missing out on the small, rapidly growing Captive market. Due to brokerage consolidation, many of the employers in this segment are serviced now by the big box brokerage firms who are driven by their bottom line, not yours. Whether public or private, every area of their business is run as a revenue generator, so management scrutiny over revenue trumps what is best for the client. And the fully-insured market with its’ annual renewal increases is the best way to ensure a constant flow of automatic revenue increases on the brokerage’s existing book. These conglomerate firms may find solutions that fit your budget, an increase over last year’s of course, but not what is best for your organization. Why is it acceptable to receive and feel good about a “reduced” increase?
As a fee-for-service broker, you pay us only for services you need and want. Our compensation is not tied to the premium nor are we beholden to the carrier. We are about ideas and delivering the best solutions to you – whether through a Captive or the Fully-Insured market, and that is how we earn and keep your business. Wouldn’t you rather pay your broker for actually reducing your costs, rather than reducing your annual increase?
The “Status Quo”
It’s another renewal, and another increase. If you are fortunate, the carrier offers you the “trend” increase. What is Trend? Simply put, it’s an easy way for the carrier to give you a “pooled” renewal increase when there is no transparency of data to counter it. As a result, your broker has delivered choices that are “surprisingly” similar to last year’s renewal, and your prior renewals.
1. Stay put and absorb the increase
2. Pass on some of the increase to your employees via higher contributions and/or reduced benefits, or
3. Change carriers. It’s been two to three years since your last carrier disruption so why not.
None are beneficial options, nor do they solve the problem. There’s a reason why most employees are not looking forward to the Open Enrollment meeting – generally more of the same old bad news. If your employee benefit plan costs continue to increase, and you’re frustrated with the same routines year after year, why are you expecting a different result? It’s time for a change. Your bottom-line depends on it.
The Captive Solution
Healthcare is a top three expense for employers, for many, it’s their second highest cost behind payroll. On top of that, healthcare is the fastest rising cost for most, and the one they feel they have the least control over. The traditional “fully-insured” market is a failed approach for many employers. And those hurt the most are the small to mid-sized businesses and their employees. Both continue to struggle with hefty premium increases, added government regulation and higher deductibles and copays.