Broker v. Consultant: Who Can Drive Down Insurance Costs?

Nov 6, 2015 | Insights

Behind payroll, group health insurance is the second largest line item for most companies in this country. The number one concern for CEOs in this country is attracting and retaining quality talent, and the cost of employee benefits plays a major role in that concern. HR professionals have overwhelmingly stated that managing health care costs is their greatest challenge when it comes to employee benefits. 

While health insurance costs continue to spiral out of control, most employee benefits brokers try to wow prospective clients with their expertise in service offerings such as benefits administration, ACA compliance and reporting, enrollment tools, HR administration, COBRA, FSA, payroll, etc.

Bottom line, it is impossible to be an expert at all of these services and still be an expert at helping your client bend their healthcare spend. Employers are asking for solutions to help drive down health insurance costs and their brokers are hitting them over the head with a smorgasbord of “value added” options but no viable spend management strategy. Thus, it should come as no surprise that the majority of employers say their benefits broker isn’t meeting their current expectations.

For years now insurance agencies have been positioning themselves as a one-stop shop for all services, yet…

  • They usually don’t hire trained professionals in these fields.
  • They are so busy trying to bring everything in-house and maximize revenue that they have forgotten about the things they actually might be doing well and now just do a bunch of “things.”
  • So many of these agencies now give “value-added” services to try to offset where they are falling short. If they really thought they were so valuable, would they truly be giving them away?

Enter the technology backed HR platforms dabbling in insurance. The broker community has created their own worst enemy. These organizations actually do have trained specialists and technology experts in-house to assist with many of the services insurance agencies have been screaming are so important. But, do they have trained spend management specialists armed with integrated cost containment solutions built to drive down your health care costs over the next three years?

I think not.

All of this begs the question, are you currently using a Benefits Broker or Benefits Consultant?

Do you have the right trusted Employee Benefits Consultant in place to manage this critical cost or have you left this in the hands of the typical insurance broker?

Your objective is to control costs, yet a reduction in your costs (premiums) lowers your broker’s commission income.

A consultant’s objective is to add value, to help you save money based on cost containment solutions. Commissions are an inherent conflict of interest. Working for the insurance carrier and not the client.

EMPLOYEE BENEFITS CONSULTANT:  A person who neither provides nor manages benefit products or services, rather they are a source of objective advice on the products and services that will best meet management’s needs.

-Fee for service




-Actuarial support


-Compliance oriented



-Compliance officers

-Problem solver


-Employee communication strategy

INSURANCE BROKER: Refers to their agency as the one-stop shop for all insurance needs, yet has no viable long-term strategy to drive down healthcare spend.

-Works on commission basis




-Tries to impress with their carrier status

-Selling you on price

-Renewal drive

-Works on commission basis

-Lack of transparency

-Fully insured offerings

-Pushing services rather than solutions

-Business as usual

Benefits administration, ACA compliance & reporting, enrollment tools, HR administration, COBRA, FSA, payroll are certainly essential functions that need to be delivered to small and large employers. A true employee benefits consultant uses their internal tools and resources to help drive down your health care spend while finding trusted strategic partners to perform the services listed above… Partners that actually specialize in these critical administrative functions.

Again, employers are desperate for cost containment solutions surrounding their health insurance offerings. Consumer-driven plans, wellness offerings, disease management, and level funding arrangements have merely provided a Band-Aid for increasing healthcare costs. Yet, these are the tools being used by most traditional employee benefits brokers.

An employee benefits consultant should be viewed as a spend management specialist. 

This means offering solutions to actually lower your healthcare cost per unit. There are really five core tenants surrounding a viable strategy to lower your healthcare spend and ultimately your health insurance costs:

  1. Drive treatment to a primary care home
  2. RX savings program
  3. Clinical programs
  4. Analysis of current insurance payment model
  5. Enhanced employee communication

A determined focus on these principles will be a huge step in the right direction for business owners.

To conclude, employers have spoken loud and clear that driving down health care costs is their number one concern regarding employee benefits. To make this happen an organization must find an employee benefits consultant willing to work on a fee-for-service basis who is maniacal about using the core tenants listed above as their spend management strategy.


Cobbs Allen is a national independent agency focused on risk management in niche practice groups. We deliver commercial insurance, employee benefits, personal insurance, and alternative risk financing services to our clients. Headquartered in Birmingham, AL, the firm is ranked in the top 100 of privately held brokerage firms and the top 100 of all U.S. brokerage firms.



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