Benefits Broker: The Ultimate Guide

A competitive benefits package helps recruiting and retention within your organization. However, even the most polished HR department may not have the time, resources, and expertise to gather and dig into the details of particular benefits. Enter the benefits broker – a valuable addition to your business.

What is a benefits broker?

An employee benefits broker is someone who gets the best employee benefits possible for your business. They are licensed professionals with lots of experience and knowledge of benefits programs available to your organization. They listen to what you need from your benefits package and find the best programs at the best prices.

Benefits of benefits broker: healthcare efficiency

One advantage of a benefits broker is healthcare efficiency. Healthcare costs are continually rising, which could make employer healthcare benefits challenging. But with a benefits broker, your company can invest in long-term cost savings.

A benefits broker will help you find the ideal vendor, as well as streamlining healthcare benefits with approaches like cost sharing. At the same time, they can help you invest in your employees with benefits plans that promote responsibility and health management.

What types of benefits brokers exist?


Traditional paper-based broker
A traditional paper-based broker is usually experienced and knowledgeable about health insurance. They have been around for a long time, which gives them a wealth of knowledge. However, the traditional approach can often be slow, with manual processes.

This approach is time-consuming for employees and employers. There is often no dashboard for the team to see their benefits and no clear workflows to help employees know where to make changes. Traditional paper-based brokers may also have a hard time integrating benefits with payroll, with little software experience.
Software with a broker
With this setup, the software allows an in-house team to be your broker. As a client, you choose the software, but not the broker that goes along with it. This means you are potentially working with a less experienced broker and getting less customization.

Companies build their benefits software, so it scales up easily. That means that the software must suit brokers of all experience levels. In turn, this means fewer options for you as a client. You may also notice that lack of customization and relationship-building when you seek support, which usually comes from a 1-800 line.

When working with a broker in this arrangement, you should know that their goals are usually to grow client numbers rather than grow with clients. It’s easier for the software company and its brokers to work with small groups, avoiding large-scale plan rate negotiation.
Modern tech-enabled broker
Modern tech-enabled brokers combine the best of both worlds: The expertise of traditional brokers and the software know-how and partnerships needed to empower a modern employee benefits experience. Expertise and human touch plus modern software (you don’t have to choose just one)

Modern brokers provide recommendations on ancillary benefits that will integrate with their current systems, including 401k and HSAs. They have partnership discounts for small business software and dedicated contacts at these companies to help get you the support you need. Often, these brokers offer software for both payroll and benefits if you use their integrated providers, or you can use your existing payroll software.

What types of benefits brokers exist?


Each benefits broker brings unique experience, education, and skills. You will want to get to know your broker’s background, including references from former or existing clients the way they communicate, and their service model.

Experience with industry

If you work within a highly regulated or specialized industry, your broker should have experience and knowledge of the benefits landscape within the industry. Certain vendors and benefits packages are common within specific industries. Whether your business wants to match competitors or offer something novel, the broker needs to know how that fits with overall industry trends and requirements.

Employee services

Your preferred broker may or may not interact with your employees or provide services to them. You should be aware of the level of support you are looking for from the broker and ensure they offer it. Some benefits brokers are deeply involved with employee support, including claims and advice, while others are hands-off.

Health plan cost control

Healthcare benefits are among the most costly. It is critical to success that you develop a good understanding of how your broker manages that. 

How have they promoted wellness?

As part of health plan cost control, many benefits vendors are offering rewards and cost control measures centered around wellness. Employees, too, are often seeking wellness features as part of their benefits packages. From financial wellbeing to flexible healthcare spending, find out what your broker offers for your company and its staff.

Compliance experience

Any time your organization is dealing with benefits, it is dealing with protected information. Your benefits broker should have a full understanding of state and federal legislation and how to be in compliance with them. From HIPAA to COBRA, your broker needs to be on your side in keeping your business compliant. 

Software experience

HR software, including benefits software, can make everyone’s job much easier. Your benefits broker should have an acceptable handle on today’s HR software offerings.

Perhaps you are trying to build a new benefits dashboard or want your broker’s suggestions to integrate with your existing systems. No matter what you’re trying to do with your HR systems, any broker needs to demonstrate the particular skills and tools you require.

Where can we find a benefits broker in CA?

There are many ways to find an employee benefits broker in California, from insurance industry connections to your own network. Whatever path you take toward finding a benefits broker, be sure you have a good understanding of your needs first. Whether your company requires special services, integrations with certain software, or other must-haves, be clear on that before beginning your search.

Employee benefits brokers association

An employee benefits brokers association puts a wide variety of benefits brokers at your fingertips. There is usually a directory of benefits brokers available to browsers, who can get in touch with any brokers who seem like they could be a good fit. If you are unsure of where to start, connecting with a broker’s association is a good first step.

Check out the California Department of Insurance’s website on finding an agent or broker for more information.

Writing a benefits broker RFP

Many companies looking for an employee benefits broker start the process with a request for proposal, or RFP. An RFP tells benefits brokers that your company is willing to fund this process and invites them to submit a bid. A broker who sees your RFP will understand that your company is looking to hire, and they can submit their information and bid if interested.

You can think of an RFP almost like a job description, except you are writing it about a partnership you need rather than a permanent role. Your RFP for a benefits broker will explain what you need from them and provide the mechanism through which you will evaluate bids. A well-made RFP clearly explains your organization and its background, your needs and expectations, and the specifications of your ideal benefits broker.

Interested benefits brokers will submit their responses to your RFP, which you then need to review. If you get a lot of bids, this can be time-consuming.

Taking a different approach

Another approach is to build a suitable candidate pool first, using the criteria outlined earlier. Look at prospective brokers and their background, industry experience, skills and specialties, and other must-haves. Create a list of ideal brokers, which you will then narrow further.

For the candidates you have identified, who are presently taking on new clients, you can then introduce an RFP. Unlike the previously mentioned RFP process, which invites anyone and everyone to respond, you are communicating specifically with your shortlist of broker candidates. This should drastically reduce the amount of time it takes to get through submitted RFPs.

Your RFP should still explain who you are, why you want a benefits broker, and what you require from the broker. This should include the service model, services, health plan cost control, wellness, compliance, and other features listed above. Broker responses to the RFP will help you further narrow your shortlist into the finalists who you will interview.

With the information you have gathered from the interview process, and any of the materials submitted through the RFP, you can now make a decision. Your organization, your employees, and your HR department will be happy to know how much you value great benefits.

*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*



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