Many employers make benefits decisions based on outdated assumptions about what insurance brokers do, how they’re compensated, and whose interests they truly serve, and those misconceptions can quietly undermine both budgets and talent strategies. While brokers are often viewed as advocates for employers, most are actually paid by insurance carriers through commissions built into premiums, which can influence recommendations toward higher-cost plans or familiar structures rather than more innovative, lower-cost alternatives. The idea that brokers are “free” further masks this reality, since their compensation is typically funded indirectly by the premiums employers pay, meaning higher spend often benefits both the insurer and the broker. Although many brokers have access to the same major carriers, not all bring the same level of strategic thinking, creativity, or willingness to explore options like level-funded plans, partial self-insurance, or customized solutions with third-party administrators. Employers also tend to overestimate the difficulty of switching brokers, when in most cases a simple broker-of-record change can happen without disrupting carriers or employees. Smaller companies, in particular, may underestimate their leverage, even though thoughtful benefits design can be just as critical for retention and compliance. Finally, many brokers focus only on annual renewals rather than proactively monitoring claims, trends, and cost drivers year-round, leaving employers reactive rather than informed and in control.
source: https://thebenefitdoctor.com/6-myths-business-owners-believe-about-health-insurance-brokers/
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