How does a Broker of Record (BOR) letter really impact your organization’s employee benefits program?
How does a Broker of Record (BOR) letter really impact your organization’s employee benefits program?
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Before you sign off on that Broker of Record (BOR) letter, do you understand what that really means to your organization’s operations?
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Today I want to clarify what a Broker of Record (BOR) really means, in hopes it may be a beacon of truth to your organization now or in the future. Unfortunately, through my many years as a benefits broker, I’ve seen (and even fallen victim to) some questionable tactics used by other brokers who are just trying to “win” a BOR rather than “earn” a partnership. ?
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A Broker of Record (BOR) letter confirms to the insurance carriers and administrators that your organization is confidently partnering with this new broker and brokerage to manage your employee benefits program. Prior to a BOR change, expectations should be clearly defined by both your organization and the broker. The broker’s references should be checked. No empty promises should be on the line. The BOR is an essential piece to your benefits program. Protect it and treat it as such.
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What a BOR letter means:
1.????You are appointing a specific broker and brokerage to manage your employee benefits program with a particular carrier or carriers as listed in the letter.
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2.????You will cease working with your existing broker/brokerage upon the effective date of the letter. Any service questions, support issues, etc. will immediately begin going through your newly appointed BOR’s team. Be sure all your ducks (including your technology) are in a row. Your new BOR should guide you through this.
3.????You are essentially firing your current broker. Has your current broker provided a subpar performance, leaving unmet expectations in their wake? If yes, then it sounds like a BOR change is warranted. Consider a courtesy call to your current BOR letting them know you are making the change… or if you choose not to, they will be notified by the insurance carriers upon the letter’s processing.
4.????Your newly appointed BOR will begin receiving a commission from your current insurance carrier(s) on the 1st day of the month following the letter’s date. Since your new BOR will begin receiving compensation almost immediately, they should be ready to service your account immediately as well. Do they have all your policy information, plan numbers, benefit summaries, account manager contacts with your existing carriers and TPA’s, names of your compliance partners, COBRA administrator, etc.?
5.????Your newly appointed BOR should have already done a decent amount of legwork for your organization, prior to earning your BOR letter, to prove their expertise, enthusiasm, and determination in serving your benefits program. Do not make a BOR change hastily. While a BOR letter can be rescinded, a rescission can cause confusion and mistakes to your benefits program.
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Your Broker of Record (BOR) should be exceeding your expectations when it comes to your benefits plan design/strategies, year-round support, claims analysis/management, compliance resources and technology solutions. They should also be readily available to jump in whenever and wherever needed. This is the type of brokerage we strive to be here at Lone Star Benefits. Please reach out anytime we can be of assistance!
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I deliver peace of mind to benefit brokers, consultants, their teams, and clients by leveraging my expertise to elevate all aspects of ancillary benefits.
1 年It is really sad how often the approach from the incoming consultant is just sign and we will figure the rest out later. I just recently had a CEO ready to move his business to me and I told him to wait so I could make sure it would not have a negative impact on his company or HR team and that more conversations needed to take place.
I help employers structure a benefits program that fits their budget and that their employees appreciate.
1 年Great "Benefits Beef" this week! So many important things for an employer to know when they sign over that BOR letter.