FAQs
Selecting a Plan
What is a High Deductible Health Plan?
FAQs: Health Savings Account
FAQs: Health Reimbursement Account
FAQs: Flexible Spending Account
Selecting a Benefits Advisor
FAQ’s About Changing Your Employee Benefits Advisor
Q. Can we keep the same benefit plan provider if we change our consultant or broker?
A. Yes, you may keep the same benefit plan provider if you change your consultant or broker. Your current insurance and service providers do not have to change just because you change your benefits advisor. If you are retaining a new broker, you should confirm they either are, or will be, appointed with your existing insurers.
Q. When is the best time to change to a different benefits advisor?
A. The best time to change your benefits advisor is at least six months before your next renewal date. Six months is recommended to allow ample time for your new benefits advisor to build their files, learn about your needs, address urgent plan or provider issues, and lead you through an organized assessment of insurance, benefit and communication options.
Q. Are any steps required in changing a benefits advisor?
A. Yes, five steps are required in changing your benefits advisor.
- Step 1: Review any contract between your company and your existing benefits advisor to identify any terms that address the termination of the agreement. Usually benefit brokers are retained via a simple Broker of Record letter, and termination provisions are not addressed.
- Step 2: Notify your existing benefits advisor(s) of your decision with respect to their services. While this is not mandatory, it is the professional thing to do.
- Step 3: Execute a Broker of Record letter for your new benefits advisor. In the letter, address the effective date of the change and identity the actions your new benefits advisor is authorized to take on your behalf. Click here for AFG Broker of Record letter.
- Step 4: Your new benefits advisor should take responsibility for filing the Broker of Record letter with your insurance carriers and service providers. This often requires that you provide the advisor with a comprehensive list of the contracts you have in force.
- Step 5: Your new benefits advisor should be able to obtain copies of contracts and other required data from your plan providers. In certain situations, it may be quicker for you to provide this information.
Q. How are broker commissions affected by a change in broker?
A. Most group insurance contracts require employers to pay premium on a monthly basis. The insurance company or service provider then pays the Broker of Record according to the terms of a commission agreement. In most cases, the insurer will commence payment to a newly appointed broker beginning on the date of a change in the Broker of Record. In certain instances, commissions are vested with a broker who originally placed the insurance or investment contract. This vesting period can be as short as the remainder of the policy period, to as long as the balance of the life of the insurance contract. If you are compensating a new broker via commissions, it is important to understand how the commissions are affected by a change in Broker of Record.
