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—Background—

 An insurance broker can serve as your advisor and advocate to guide a small employer through the complexities of providing employee health benefits. Brokers are licensed by the State of New Jersey and must take continuing education courses to maintain their license. A broker can help ensure that your individual or employer-sponsored health insurance plan offers the right coverage at the most affordable price.

—What Do Brokers Charge?—

Brokers receive commissions from insurance carriers. Generally, an individual or business doesn’t pay more for health insurance benefits purchased through a broker than if purchased directly from an insurance company (except, in some cases, with groups employing 51 or more workers). Insurance carriers set aside a small portion of the premium to pay brokers a commission, which covers not only the selling of the plan but much of the servicing required.

—What Are the Advantages of Using a Broker?—

You can get many services which include:

  • A person to help solve problems concerning claims payments, coverage eligibility, access to care and other
  • An explanation of several benefits packages and personalized advice to help you select the plan best suited to your
  • Assistance for your human resource department with services such as plan installation, plan enrollment and many

—Questions to Ask When Interviewing a Broker—

  • What percentage of your business is group health insurance? It should be at least 80
  • What percentage of your business is in the small employer health market? If you are a small business owner or representative, choose a broker with at least 75 percent of its business in the small employer health
  • As a broker, what services will you provide? The broker should be available to handle all service- related issues, billing problems, claim issues, addition or deletion of employees and dependents, and changing of primary care doctors, as well as follow-up on all these matters to ensure resolution.
  • Will you conduct an employee open enrollment meeting to explain our plan to employees and answer their questions? The broker should handle these
  • Will you help our employees with individual problems and answer their benefits questions? The broker should be available to answer employees’
  • What insurance companies do you represent and what will you do for us on renewal? The broker should have access to all insurance carriers in your geographic area and should review your group insurance program at least once a year on renewal to ensure that you always have the best plan and rates.

—For More Information—

 For more information, please call New Jersey Association of Health Underwriters (NJAHU) at 908-349-0789 or visit www.njahu.org. Brokers who belong to NJAHU are among the most knowledgeable and experienced insurance professionals in the state.

If you need additional information, please contact Chrissy Buteas at cbuteas@njbia.org or 609-858-9510.

Updated: November 7, 2016

 This information should not be construed as constituting specific legal advice. It is intended to provide general information about this subject and general compliance strategies. For specific legal advice, NJBIA strongly recommends members consult with their attorney.