As an employee benefits professional, you have many options. You can focus on different market segments: Small Group Medical, Large Group Medical, Small Group Ancillary (Dental, Vision, Life, etc.), Large Group Ancillary, Voluntary Benefits, Supplemental Benefits (like Short- and Long-Term Disability, Critical Illness, administrative services – like Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), etc. – or any combination you choose.
Pros and cons of selling Large Group Health Insurance.
Employer Mandate for Coverage: While the Affordable Care Act does not require employers to provide health insurance coverage for employees, it does impose penalties on employers that do not offer health insurance to full-time employees and their dependents.
The ACA’s “shared responsibility provisions” mandate that Applicable Large Employers (those with an average of at least 50 full-time employees, including full-time equivalent employees), must either offer minimum essential coverage that is “affordable” and that provides “minimum value” to those employees. If the employers do not offer such coverage, they are subject to one of two ACA penalties. (Visit the IRS website for information on how these penalties are calculated.)
Your clients may want to offer health insurance to employees to avoid ACA penalties. That could make your pitch that much easier.
Employer Tax Advantages: Beyond avoiding an ACA penalty, your clients may choose to offer health insurance to employees for other reasons. Benefits make it easier for employers to attract and retain employees – especially in a competitive talent marketplace. Benefits are also tax deductible for most employers. In general, a business can deduct 100% of the contributions to premiums paid for health insurance benefits for employees and/or their dependents. That’s true for both federal and state income taxes.
Good Compensation: Brokers can make a good living by selling Large Group benefits. Commissions vary by product, but typically start at 5% for most Medical plans. Dental commissions begin at 3.75% and go up to 8% or 10%, depending on the plan and underwriting company. Vision products typically offer 10% commission. Disability and Life products sometimes offer tiered commissions. A few carriers and administrators offer negotiable commissions. To learn more about commissions offered by Word & Brown’s carrier and administrator partners, click on your state-specific summary below:
California Products & Broker Commissions
Nevada Products & Broker Commissions
Carrier and Plan Variety: The Large Group market is very competitive. In California, there are more than a dozen administrators and carriers writing Major Medical coverage. In Nevada, coverage is available from nearly a dozen carriers and administrators. Working with the right General Agent can give you access to a range of options to address your clients’ needs.
It’s Easy to Get Started with us as your Partner: Word & Brown is committed to providing you with everything you need to quote, enroll, close, service, and renew groups of 51+ in Nevada or 101+ in California. Find out how in the “Our Large Group Difference” section below.
Limited Audience: CalChamber (the California Chamber of Commerce) said in 2022 that businesses with fewer than 100 employees represent 97% of all firms in the Golden State. Statistically, according to the U.S. Census Bureau, firms with fewer than 100 employees account for more than 98% of businesses nationwide. Your sales opportunities in this market are limited, because most employers have fewer than 100 employees in California and 50 or fewer employees in Nevada.
Earnings Could Vary: If you lack the drive and commitment to prospect and service your block of business (Large Group, Small Group, or a combination), you risk losing sales to other brokers. The result is that you could see dramatic swings in your income, whether your income is base and commission, commission only, or commission and bonuses.
A lot of Group Health business is written in the fourth quarter and early new year because many employers have calendar year benefits. It’s essential that you be able to attract and retain business, month after month, to ensure a steady income.
Our Large Group Difference
Word & Brown delivers everything you need to quote, enroll, close, service, and renew Large Group business in California and Nevada.
We treat you – and each of your Requests for Proposal (RFPs) – with TLC. We have the tools and resources, backed by market professionals, to make your job easier.
Differentiators: No-cost extras for you and your clients, access to in-house compliance specialists, and a team of marketing, enrollment, and sales experts ready to assist you.
Value-adds for brokers: We “scrub and clean” your quotes before submission to the carrier – speeding up turnaround times. We also track and follow-up on quotes to ensure proposals (or declines) within the requested due date. We’ll generate a strategic market analysis and provide benchmarking. The bottom line is cleaner, complete submissions.
Downloadable documents: Link here to download valuable RFP and quoting documents, including the Provider Search Request, Quote Request Checklist, Proposal Request + Census, Large Group Quotes FAQs, and Quoting Guide. The FAQs guide offers useful answers to what’s needed to start a quote, timelines for Medical and Ancillary quoting, guidance on scheduling a presentation, and much more.
Clearly, the “pros” of writing Large Group business outweigh the “cons.” If you’re already working with Word & Brown, talk with your rep about how we can help you write more – and earn more – by selling Large Group. If you’re not yet doing business with us, it’s easy to register using our online form