One of the most repeated questions I get these days is how do we as brokers go about charging for our services? I have written several blogs about this topic but let me focus on one easy facet to get you started.

As a Zywave broker, you have access to the largest database of plan designs in the industry. The 2012 Zywave Health Plan Benchmark Report has been released and it represents nearly 50,000 employers and more than 73,000 health plans. It offers benchmarking information in six key areas: individual out-of-pocket maximum, individual deductible, emergency room copay, co-insurance, office visit copay and prescription drug deductible.

Information is power

Information is extremely valuable–with data like this, you can help clients ensure competitive benefit offerings in their industry, make sure their costs line up to the norm and make the tough plan design decisions. In addition it allows a broker to speak from a position of authority not only to customers and prospects, but to the local press as well. Some examples of interesting trends to pull from this report:

1. While PPO remains the most prevalent plan type consisting of 43 percent of all known plans, there was a 5% increase in HSA plan types (16 to 21%). This is no surprise as many employers shift to consumer-driven plans as a cost control strategy.
2. The highest individual deductible option ($2,500+) saw a significant increase over the past year, increasing 7%. This supports the growth in HSA plan types, since HSAs must be paired with a high-deductible health plan.
3. The most common range for out-of-pocket costs stayed the same from 2011 to 2012 at $2,500-$3,499 category, but there was an overall shift toward higher out-of-pocket maximums.
4. Companies are increasing their Rx deductible as another cost-cutting strategy. Though Rx deductibles under $50 are still the most common, Rx deductibles over $250 now represent 25% of all plans (up 5% from 2011).
5. According to this year’s data, employers with under 100 employees tend to favor a co-insurance rate of 100% while employers with 100 employees or more will likely favor a co-insurance rate in the range of 80%-89%.

Challenge incumbents with your capabilities

With access to this tool, Zywave brokers can simply enter in their customers name, basic plan design information, location, industry, plan type and group size, and the tool will instantly show how the group compares to the norms. Brokers can then create a custom report that compares the group to this vast database, thus allowing the broker to have an intelligent conversation on plan design.

A couple of quick questions to ask a prospect:

1. How did you determine to offer the plan design you now have?
2. How do you compare to others in the area? Your industry?
3. Has your current broker ever offered to do a comprehensive plan analysis?

You can then present a proposal (there is a sample in the Broker Briefcase) which not only lists the fees for this tool, but also all of your other services. Sample fees are illustrated but you can change whatever you feel is necessary. You can allow them to buy a la carte, or group the pricing as a deal and offer a discount if they commit to multiple years. Of course, your fee goes up every year during that time, but it is a discounted rate.

What are you worth?

Plug your own brokerage operation in as a sample group into this drill-down tool and see how powerful it is. How do you compare? Now do it for a favorite client and walk them through it. Ask them what would they pay for it?

As an industry, it is not a strength of ours to walk in and proudly say what we are worth. It’s about time we start.