Legacy health insurance brokers are worthless. They’re bad for your financial health. They’re lazy, dumb and often great golfers.
But legacy health insurance brokers are an integral part of the health insurance distribution system. Brokers have relationships. They went to high school with you. They married your sister. Their father is best friends with your father. They have pictures. They buy lunch, dinner and umbrella drinks. They are great story tellers and a valuable source of gossip. They hate fellow health insurance brokers but they try hard to hide it. Their smile muscles out perform opposition muscles.
Their idea of risk management is in the power of the spreadsheet. They are spreadsheet artists crafting their skills in partnership with those who pay them. They claim to represent their client but that’s not true. They represent those who pay them and no one else.
Those that pay these bottom feeders have them by the short hair. Agent/carrier contracts are Contracts of Adhesion favoring the carriers at the expense of the broker. Brokers can be terminated at will, with or without cause, with 30-60 day notice. Poof, gone are all commissions built up over time. And it happens.
“Are you sure you want to move our case to (Name a BUCA)? Says the BUCA rep. “We’ll terminate your contract if you do!”
Plan sponsors are parties to the scheme. They unwittingly contribute to a broken system. They don’t like change, They fear their own employees. They are lazy, dumb and often great golfers. And their broker may have pictures.
There is a solution to all of this. It’s multi-faceted. It starts with firing your legacy broker and hiring an experienced free-lance fee-based risk manager whose duty of loyalty is to you and no one else. Then a miracle begins to happen……………..
