What a Broker of Record Actually Does
Most employers have a broker and could not say precisely what that broker is responsible for. This is the standard scope, and the part about compensation that is rarely volunteered.
The standard scope
Group benefits placement and advisory
Selecting and placing coverage with an appropriate insurer, and advising on the structure of the plan.
The visible part of the role, and the smallest part of the work.
Life, health, disability and critical illness guidance
Advice across all lines, not only the ones with the largest premium.
Disability and life are where the advice gap is widest, because the premium is smallest and the consequences largest.
Plan design
Setting maximums, co-insurance, eligibility and benefit formulas against budget and workforce.
Where most of the durable value sits, and the part most often left untouched for years.
Carrier RFPs and marketing
Taking the plan to market and managing competing quotes.
Timing matters more than effort — insurers quote meaningfully sixty to one hundred and twenty days out.
Renewal negotiation
Challenging the insurer’s annual rate action against the plan’s own experience.
Only possible if someone has actually read the experience report. Many renewals are passed on unexamined.
Compliance and disclosure
Ensuring the plan and the advice meet regulatory requirements, including disclosure of how the broker is compensated.
You are entitled to ask how your broker is paid on your plan. A straight answer is the minimum standard.
Claims advocacy at policy level
Advocating on the interpretation and application of the contract when a claim is disputed.
Scope varies enormously between brokers. Worth establishing what yours actually does when a member’s claim is refused, before it happens.
Broker commission is a percentage of premium, built into the rate and sitting inside retention. It is richest on health and dental and thinner on life and disability. You pay it whether or not your broker does anything with your plan in a given year — which is the honest reason a plan sold once and never revisited is such a common thing to find.