What Is an Employee Benefits Broker, and Does Your Small Business Need One?

Is an employee benefits broker right for your small business? Read this guide to learn what benefits brokers can and can’t do and what to do instead.

An increasing number of small business owners are realizing the importance of providing employee benefits to attract and retain talent

So much so, a 2023 Mercer report found that 53% of small employers plan to offer employees improved benefits packages to increase retention and recruitment. 

There are a variety of different benefits plans available on the market, but busy startup owners like you may not have enough time to go through each benefits package individually, nor would you have time to negotiate with different insurance providers.

That’s where employee benefits brokers come in.

Benefits brokers can help you get a better deal by leveraging their relationship with carriers, which is great because the cost of healthcare and health insurance has been on the rise. The cost of out-of-pocket spending increased by more than 10% in 2021, and the cost of health insurance went up by nearly 30% in 2022.

With the help of a benefits broker, you are more likely to get maximum cover options that you might not have heard about. Brokers can also simplify enrollment and help your business comply with legal requirements related to employee benefit programs.

In this article, you’ll learn what an employee benefits broker is, what they do, and if hiring one is right for your small business.

  • What Is an Employee Benefits Broker?
  • What Does an Employee Benefits Broker Do?
  • How To Choose an Employee Benefits Broker
  • A Modern Alternative To Traditional Benefits Brokers

Final Thoughts: What Is an Employee Benefits Broker, and Do You Need One?

What Is an Employee Benefits Broker?

An employee benefits broker is a licensed professional who advises businesses on matters related to employee benefits. Because they have the expertise, organizations hire brokers to help them choose from multiple insurance plans or customize a plan that fits employees’ needs.

What Does an Employee Benefits Broker Do?

Employee benefits brokers help businesses navigate the intricacies of signing up with an insurance carrier.

According to the U.S. Bureau of Labor Statistics, benefits for employees made up more than 30% of total employer compensation costs. It’s critical, therefore, for small businesses to optimize the value of their benefits plan relative to cost.

Brokers act as a go-between, bridging the gap between your organization and the healthcare industry. They find the right benefits plan for each company’s unique needs and negotiate deals for additional savings. 

The best employee benefits brokers can also help in the following ways:

  • Staying compliant with the Affordable Care Act (ACA) and other laws.
  • Giving information and guidance for different benefit options — from life insurance, health insurance, dental benefits, and more.
  • Providing advice on minimizing insurance costs and premiums.
  • Resolving conflicts between you and the carrier.
  • Educating employees about benefits and how to use them.
  • Advising employees on changing their benefits options during open enrollment season.
  • Answering employees’ questions on benefits, coverage, and claims.
  • Assisting employees in using the benefits. 
  • Analyzing existing benefits and designing a plan for the future.

How To Choose an Employee Benefits Broker

Choosing an employee benefits broker is no small feat. They’re responsible for helping your business select the best insurance policies and benefits for your employees. Choose the wrong broker, and you might end up overspending on a mediocre health plan.

When vetting a benefits broker, consider the following factors:

  • [Broker’s] experience. Can the broker support organizations of your size?
  • [Broker’s] specialized industry. What industries have they worked with?
  • [Broker’s] scope of service. What are the benefits included in the broker’s package? 
  • [Broker’s] willingness to understand your goals. Does the benefits package include voluntary benefits on top of basic health care?

Here are other things to keep in mind when selecting a broker:

  • Don’t be afraid to look around. It never hurts to speak to a few other brokers, even when someone recommends one. Maybe the broker your contact recommended isn't a good fit for you. Shopping around helps you pick the right person.
  • Don’t focus only on premiums. Paying a few extra dollars is worth it when your employee benefits broker is a professional committed to walking you through the entire claims process, educating employees, and creating strategies for changing your benefits offerings.
  • Research the broker’s area of focus. Some brokers have a large base of benefit options to choose from or specialize in one type of benefit. Some brokers may also work for certain insurance carriers and offer plans only for those carriers. The broker you choose must have all the insurance products you need. 
  • Notice their communication style. Odds are the benefits broker is the one who’ll be communicating with your employees about their healthcare options, so it’s important to choose one who’ll answer their questions promptly and in full. Otherwise, it could lead to dissatisfaction and low morale among your workers.
  • Check the additional resources and expertise the broker brings to the table. There are several fields involved when it comes to insurance, and most brokers can't do it all. Check whether your broker has a team. Look out for compliance experts, underwriters, risk analysts, and personnel with medical backgrounds among the broker’s staff.

The goal is finding someone that offers more than expertise — a partnership. But when it comes to partnership, there’s a better alternative. 

A Modern Alternative To Traditional Benefits Brokers

Choosing the right employee benefits broker can be a hassle, and there’s no guarantee you’ll find a reliable partner. If you find interviewing and vetting brokers time-consuming, consider an alternative service.

Pebble can offer a quicker, cheaper, and more efficient sign-up process, without unnecessary fees.

Pebble offers AI-optimized benefits strategies that allow small companies to be more generous with their benefits than off-the-shelf plans might allow. These, in turn, attract top-quality talent to your company.

Moreover, Pebble provides access to fertility and mental health benefits, which nobody else in the industry can offer. Pebble also handles the administrative work for you, including payroll deductions, paperwork, and even employee onboarding.

Plus, unlike a traditional broker, Pebble works more closely with your team, talking directly to each employee to answer questions and work through any issues.

Partnering with Pebble ensures a personalized experience for your business’s health insurance journey. By working closely alongside your business, Pebble will help find the best deals for your employees while also assisting you in creating a benefits package that fits your company’s budget.

Final Thoughts: What Is an Employee Benefits Broker, and Do You Need One?

Employee benefits brokers help organizations find the right benefits packages for their budgets and employees’ needs. However, the process of vetting a broker can be a hassle and doesn’t guarantee you’ll find a reliable partner.

Instead, consider an alternative option like Pebble.

Pebble uses AI to find the best benefits programs for your organization and takes care of all the administrative overhead involved.

Contact Pebble today to find the right benefits plan for your small business.