Health Insurance Brokers

The Reader’s Question

How do the health insurance brokers function and help the small employers?

Mia Silva

Thank you for this question.

Insurance brokers play a strategic role in assisting the small employers look for very affordable health coverage for their employees and respective dependents. Such brokers give such important services to small companies like getting the coverage prices, detailing the benefits of the insurance coverage to employees and also solving problems for the employers. For some markets, the brokers also assist in teaching the employers as well as employees about the initiatives of the state policy to spread out the coverage.

Health insurance brokers are such a common feature of the health insurance market for the small groups. Majority of the small firms get their health benefits through agents or brokers. And most health plans see brokers as part of their marketing efforts. Yet most people wonder what the role really is of a health insurance broker in the industry. To better understand how these agents or brokers associate themselves with the employers, health plans may be able to help the makers of the insurance policy widen such effective policies so as to develop the insurance coverage for the small firm’s employees.

Small employers always take into account the cost of the coverage. It always seems to be the hindrance for them. Expenses like administrative ones including the commissions of the brokers, add up to the insurance’s high cost since the small firms consists only of a few people to spread out the fixed costs. Insurance policy makers proposed to regulate the commissions of the brokers in order to make the insurance more affordable to many people. This is understandable since the commissions of the brokers play a vital part of the administrative costs. It is not clear though if by removing or lessening the commission amount would decrease the premium because the health plans would maybe take over majority of the services as provided by the brokers. The cost will be passed along to the employers.

All these information negates the false notion that health insurance brokers make the insurance coverage more expensive and even shows that such brokers give out vital benefits to small employers, and as well as policy and plan makers.

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