Employee Benefits Marketing Checklist and Myth #1

10 Point Employee Benefits Marketing Checklist

In this blog series, we’re going to reveal each of the 10 points of an employee benefits marketing checklist in a brief discussion and debunk one related “Marketing Myth” that persists in the marketplace amongst brokers and employers.

What is an Employee Benefits Marketing?

The term “marketing” is used to describe a request to quote (RTQ) facilitated by a broker to one or more providers. This could include Life Insurance companies, Third Party Administrators, and Health and Dental Benefit Providers.  A marketing can be “closed”, which means providers must be invited to quote. Or it can be open “open”, which means all eligible providers are invited to quote. These quotes are often initiated by the policyholder (employer) and the marketing is carried out by an appointed broker. Data is collected from the employer and shared with providers for the purpose of generating a competitive quote. Once the quotes are in hand, the broker will compile a marketing report to evaluate the submitted proposals.

A high volume of brokers are still marketing employee benefit plans with casual high frequency, even annually. Plans should not be treated as commodities and traded between providers for every discount that produces the lowest cost. This mistake can negatively impact employees and their families. To address this, we have created the 10 Point Employee Benefits Marketing Checklist. This intuitive guide is designed to quickly and comprehensively evaluate the value in a proposal and the need to quote it. Our checklist is available from CloudAdvisor in the Solution Library, just search for “CloudAdvisors”. Alternatively, contact an employee benefit specialist who is powered by CloudAdvisors to share it with you.

Checklist #1 – Have a Stated Objective

It sounds simple, but a properly stated objective is the first step in a successful and well-timed marketing. The presumable reason would be to explore cost-savings. However the distinction between short term savings and long term savings provides a competitiveness to different quotes. By objectifying the problems with the current provider, or noting any sought after benefits, marketplace options can be explored.

Clearly stated objectives provides a simplicity for the criteria to be met. It makes the decision to move into a new provider more comfortable. Providers and Advisors benefit from ensuring the stated objectives are met in their proposal. Additionally, employers are awarded with the ability to change policies to attain their goals.

This change facilitation is particularly important. In Checklist Item #2, we will review it further with various responses from providers.  A provider may respond they are “uncompetitive” if they are not provided with a stated objective and only assume to compete on a rate comparison basis.

Some Stated Objective examples:

  • Poor plan administration or plan member service with the current Provider.
  • Seeking alternative plan design options or certain solutions not available from the current provider – such as underwriting guidelines, ASO thresholds, or flex benefit options.
  • Challenging a specific fee or structure that may be uncompetitive in the short term or may challenge long term costs – such as a LTD rate, pooling charge, or target loss ratio.

Note, if the marketing is generated by the dissatisfaction of a broker or advisory service, it may not be necessary to change providers, but to appoint new Advisors with a simple Agent of Record (AOR) letter.

Marketing Myth #1 – Organizations should go to market at least every 3 years

False.  Organizations should only go to market if there is a specific objective and an intention to move policies to obtain this objective from a new provider.  Marketings can be resource-intensive. They are currently being monitored by providers to identify organizations that use it as a means to annually evaluate their plan.

Organizations that “go to market” too often, especially without changing benefit plans, can be flagged as frequent shoppers. It may limit their ability to get future quotes. Marketing is a valuable tool available to broker advisors, but it is not the only tool. It should be used fittingly to maintain strong provider, advisor and employer relationships.

Of course, there is an alternative to just marketing benefits plans. An advisor can perform a full plan audit with competitive benchmarking reports to help reveal risks and show opportunities for value and cost changes. A plan audit can be an effective means of resolving simple issues with the current provider to prevent the associated interruptions of moving employee benefit plans with marketings.

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What is an employee benefits plan booklet?

It's a document provided by your employee benefits provider that details the coverage level, types of benefits, and cost of your plan. Ask your advisor or your provider to provide you with this document.

If you're still unsure, reach out to us at [email protected] and we can show you examples.


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