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Edholm Uncovers "Dirty Little Secrets Your Benefits Broker Is Keeping From You" in Article From Employee Benefit News
| Source: Business Benefits Insurance
ANDOVER, MA--(Marketwire - July 2, 2008) - How can you make sure your benefits broker acts
in your best interest?
In his article, "The Dirty Little Secret Your Benefits Broker Doesn't Want
You to Know," in the June 15 issue of Employee Benefit News, broker Jim
Edholm reveals how bonus incentives can spur a broker to place his own
needs above his clients'.
Edholm warns that "brokers have another form of compensation that they
don't talk much about -- bonuses. Bonuses aren't like commissions.
Commissions benefit you because they reward the broker for giving you good
service, but bonuses primarily benefit the broker and insurance carrier."
Your broker might keep you with a certain carrier just to get a bonus he
can collect as a reward for renewing your business with it, even though
another carrier may offer a better deal, Edholm warns.
Businesses with fewer than ten employees need not worry, he writes, since
"most business is written through intermediaries and bonuses just aren't a
factor." Also, businesses with 100 or more employees can expose their
broker's intentions by analyzing the broker's compensation on the 5500
Form.
However, businesses with ten to 100 employees must be wary. "Ask your
broker what percentage of total income his practice gets from bonuses vs.
commissions... When you ask, watch his expression. Shock or surprise may
indicate that he's getting more than he'd like you to know."
He adds: "If you've been with the same carrier that whole time, you may
have been a victim of the 'bonus boogie.' But don't forget that larger
companies (more than 75-100 employees) should change carriers less
frequently. Carrier switching is considered a negative underwriting
characteristic, and it will raise your costs, so your broker may be acting
in your best interests... it's a balancing act."
The full article can be read at http://tinyurl.com/3sqb3l.
Edholm is president of Business Benefits Insurance (BBI), an employee
benefits planning firm in Andover, Mass. He has worked with employers for
more than 25 years and can be contacted at (978) 474-4730, via his website
www.Group-Insurance-Guide.com or via e-mail jedholm@bbibenefits.com.