The real issue is how do you know if you are over paying for your medical plan? When we hear that companies are not using an actuary we ask another simply question: How do you know you are not overpaying? Where’s the analysis? We’ve yet to hear a convincing explanation. How can you or your broker possibly know, because they aren’t trained or qualified to interpret incurral factors, group specific trend and expected large claims versus actual as an actuary is, so they can’t know if there is an argument to be made.
We’ve worked on hundreds of renewals and only in a handful of cases were we unable to make an actuarial argument in favor of a lower renewal. If you are covering 250 employees and spending $2.1 million on premium look at the math. An extra 2% saved means $42,000! And in those occasions where we couldn’t justify a lower renewal, we were validating for the client that the carrier had put a fair offer on the table.
Good brokerage firms employ an actuary, hire an outside actuary firm, or the brokers themselves are actuaries. This gives the brokerage access to the same information utilized by the big carriers.
We encourage you to ask your broker questions! If you’re not getting good, timely answers to your questions, being charged a commission, or only have contact with your broker when it’s time to sign a contract… then you should just call Broad Reach Benefits.
For questions, or more information on actuarial analysis, contact one of our insurance professionals at 800-272-1144.