The strategic role of brokers and consultants in healthcare benefits

Healthcare costs are a top concern across the United States, with 2025 anticipated to be the most expensive year for employer-sponsored insurance yet. Employers are expected to face an 8 to 9% increase in health plan costs, according to SHRM: a plan that previously cost employers $10,000 per member would now cost $10,800. For employees, that means paying over $100 more in premiums, based on KFF’s data showing the average individual employee contribution was $1,368 in 2024.

Think of it this way: nearly five weeks of an average employee’s annual salary is now going toward medical coverage, and that’s before a single doctor’s visit or prescription. Despite these soaring costs, many employers and employees don’t see a corresponding improvement in the quality of care. Nearly 40% of employers are considering changing their health insurance carriers within the next two years, according to a survey by the Business Group on Health.

While the BUCA model is easy for employers to administer and execute, the costs keep rising without the data transparency to explain why. Brokers and consultants are crucial in bringing employers the best of both worlds: ease and efficiency in execution, along with price controls and cost containment. 

Andrew Fondow, SVP at AON sees it as brokers and consultants’ role to put a mirror in front of employers. “From the outside, we can see that there’s a big problem and we can’t sustain consistent increases of 9 to 9.5%,” he says.

“My role [as a consultant] is to get them to look at where they are: maybe they were at $700 per employee five years ago, but they’re at $1200 now. That’s not sustainable over time.” 

It’s his view that a valuable consultant will be able to get ahead of unsustainable cost increases with proactive, tailored strategies and small, manageable changes before a company is forced into a major, disruptive change. 

“We look at what we call the buyer’s risk-adjusted ROI,” he continues. “Most buyers that we see are deflating the actual positive impact [of implementing a new benefits strategy] to the organization and inflating their workload and risk. Thus, that ROI goes way down. If they introduce something new, in their mind they’re going to be on the hook for all the risk regardless of the savings that they are promising. If they miss that, they think they’ll have egg on their face. And they have all the logistical and operational things that go along with setting up new benefits.”

Where he finds success is helping benefits teams determine what they’re willing to put on the line to create real, sustainable change. When he can take a long view with them and show that it’s highly unlikely that their budget can sustain a 50%-plus cost increase over a 5-7 year period, he sees more of an appetite for strategic change.

“Good brokers and consultants are actively saying to their clients, ‘I can help you find alternatives to what has been going on for the last five to 10 years.’” says Nick Soman, CEO at Decent Health. “Mainstream adoption of new approaches to health benefits is starting to happen faster than I expected.” 

Nick sees brokers and consultants increasingly playing a critical role as the solution to the fact that many small businesses accidentally end up running a healthcare company when all they meant to run was their own company. “Not many people want to become a true expert in that,” he says. “So good brokers and consultants will embed with employers to understand their business and their people in order to find a better option. I’m a huge advocate for the brokers who are really trying to take care of people.”

From Nick’s data, brokers drive or influence about 75% of small group health plan sales. “The good ones work hard and are valuable,” he continues. ”You need a sherpa to get up a mountain, an expert who’s motivated to help.”

Considering that healthcare benefits are the second largest budget item behind payroll for most companies, a nearly 10% increase per year is a substantial amount of money. While CFOs can get into nuances that impact 0.1% of their payroll expenditures, historically, it’s impossible to do that for their healthcare costs — the data is held in a black box by insurance companies.

“The government has made it very clear that medical claims data belong to the health plan not to the insurance company,” says Barbora Podzimkova-Howell, CEO at TrueClaim. “That creates a lot of opportunity [for brokers and consultants] to work with TPAs and leverage the data to start creating transparency around healthcare expenditures. With transparency comes power and the ability for benefits to be designed and costs to be managed by understanding specific population needs and addressing them in the most cost effective way.” 

Barbora sees immense value in brokers and consultants working with TPAs on behalf of their clients to bring together a variety of different solutions.

Starting with the network, they can introduce programs such as direct primary care to take some of the claims out of the system and provide better care at a lower total cost, and show the comparison in terms of access to a variety of benefits.

“We’re seeing more brokers customizing programs by putting together unbundled solutions and bundling them back up to where the TPA will execute the moving parts,” says Josh Butler, President at Butler Benefits. “More brokers are transitioning business over to independent TPAs to gain that level of flexibility and transparency.”

There are hundreds of point solutions in the market, and thousands of ways they can be configured to provide value within the context of a plan design. Smart brokers and consultants are developing ways to understand what best fits together to provide the most value for an individual employer. “It’s like building Mr. Potato Head,” says Josh. “We start with a blank canvas and put on the arms, legs, eyes, nose, mustache, and glasses. Brokers need to put something together that makes sense for their client in their specific marketplace. A TPA partner that can help bring that all together and consolidate it into a high performing plan.”

“Everything that we do without an employer who’s willing to implement these types of plans and strategies or to custom build a plan is for naught,” Josh continues. “Employers have to go out there on a limb to try to fix what’s very, very broken in our industry. But they don’t want more work. They’re not in business to try to solve healthcare so they want a holistic solution. Forward-thinking brokers and consultants are working with savvy TPA partners to execute a holistic plan with cost containment solutions that really work, but also make it just as easy to execute as the BUCA plans.”

‍