Research shows that small businesses that use a broker or agent to purchase health insurance obtain better pricing, understand the coverage that they chose and are happier with their choice in the long term. Health- care reform is changing the look of the benefits that employees get, and health-insurance brokers play an important role in the coming year.

How can your small business go about getting a health insurance broker or agent? Here are some tips to help you make a decision.

• Check references, licenses and registrations of the broker or agent you’re thinking of hiring.
• Ask friends, relatives or peers for a referral.
• Ask insurance professionals to provide referrals from other companies like yours that they have worked with in the past.
• Ask questions, many questions, to find out what exactly they offer, their support services and the benefits and policies that they sell. This can vary from one agent to another.
• Call your state insurance commissioner’s hotline to find out the broker or agent’s disciplinary record.
• Understand that a broker and an agent are two different professionals and know these differences.
• Ask about renewals and how they are handled.
• Ask about their payment structure, such as how they are compensated for helping you. Is it by a commission from the insurance company or through a flat fee? How is the fee structured and who does it come from?
• Ask them what their area of expertise is in. Do they work mostly with small groups, individuals or large corporations? Do they offer defined-contribution health plans, and if so, which insurance companies do they represent?
• Do they understand all there is to know about health reform and what it can do to small businesses?

The Broker and the Agent

There are two types of insurance sellers out there that you should be aware of – brokers and agents. Understanding what each one is can provide you with enough information to know which one you should be working with.

Brokers

Brokers are independent workers who can sell for many different companies. They can work with you to evaluate insurance carriers on the different plans and costs of each. They get paid through commission from the insurance companies. However, there are times when a flat fee may be charged to the employer based on the number of employees and amount of months they are being covered by the chosen plan.

Agents

Agents usually only sell one type of insurance product. They can sell different types of coverage, but it will all be through the company that they work for. They have a close relationship with this company, which allows them to easily make changes to certain plans if needed. What they offer you for coverage might cost less than with a broker. Agents are compensated through the insurers, so your business will not be charged. Find out what different types of coverage and companies the agents work for before choosing just one to go with since you want the best offerings.

Agents usually only sell one type of insurance product. They can sell different types of coverage, but it will all be through the company that they work for. They have a close relationship with this company, which allows them to easily make changes to certain plans if needed. What they offer you for coverage might cost less than with a broker. Agents are compensated through the insurers, so your business will not be charged. Find out what different types of coverage and companies the agents work for before choosing just one to go with since you want the best offerings.