Almost every benefits firm now calls itself a consultant. The title tells you nothing. Here are the questions that separate a firm that places coverage from one that manages your healthcare spend — and how to ask them.
The practical difference between an employee benefits broker and an employee benefits consultant is scope of work, not job title. A broker places and renews coverage. A consultant manages the cost and design of the plan year-round. Most firms now use the word consultant, so the only reliable way to tell them apart is to ask what they do between renewals.
I say this as someone who has been on the receiving end of that question. It is a fair one, and the employers who ask it get better outcomes.
What is the actual difference?
Historically the split was compensation: brokers earned commission built into premium, consultants charged a fee. That distinction has largely collapsed, because both models now appear on both sides. What remains is scope. Broker versus consultant is best read as a description of the work, not the license.
A useful test: ask what happens in your plan in March. If the answer is essentially nothing until renewal season, you have a placement relationship. If the answer involves claims review, vendor management, and mid-year decisions, you have an advisory one.
Why does compensation matter so much?
Because commission tied to premium creates an incentive that runs against you: when your premium goes up, so does the commission. That is not an accusation against any individual, it is simply how the arithmetic works, and it is worth understanding in a relationship this consequential.
You are entitled to know the answer. Under the Consolidated Appropriations Act, 2021, which amended ERISA section 408(b)(2), firms providing brokerage or consulting services to ERISA group health plans must disclose to plan fiduciaries the compensation they expect to receive — including indirect compensation from third parties. Those requirements applied beginning December 27, 2021, per the U.S. Department of Labor (2021).
If you have never seen that disclosure, ask for it. It exists specifically so plan fiduciaries can see conflicts of interest before renewing an arrangement.
What should a mid-size employer expect?
At roughly 50 to 500 employees you are large enough that your own claims experience drives your cost, which means generic advice stops being useful. This is also the size range where funding structure becomes a live question rather than a theoretical one.
The KFF 2025 Employer Health Benefits Survey found that 67 percent of covered workers are in self-funded plans, including 27 percent at firms with 10 to 199 workers and 80 percent at larger firms. The same survey found 37 percent of covered workers at firms with 10 to 199 workers are in a level-funded plan.
In other words, the mid-market is where the funding decision is actively being made. An advisor who never raises it is making the decision for you by default.
What questions separate the two?
| Ask this | What a weak answer sounds like |
|---|---|
| How are you compensated on our plan, including indirect compensation? | A general reassurance instead of a number |
| What did you change in our plan last year that was not a rate? | Nothing, or a carrier switch |
| What are our top three cost drivers, by claims? | An answer that does not reference our data |
| When did you last audit our claims or pharmacy spend? | Never, or the carrier handles that |
| What is our multi-year plan? | We will see what the market does |
The third question is the one I would not skip. If a firm cannot tell you what is driving your spend, it cannot meaningfully reduce it. A claims audit is often the fastest way to find out whether anyone has actually looked.
What does year-round management actually involve?
It involves a calendar. The single clearest difference between a placement relationship and an advisory one is whether anything is scheduled between renewals. A consultant working properly has a cadence, and you should be able to see it without asking.
In practice that means quarterly claims and utilization review, so large claimants and emerging cost drivers surface while there is still time to act. It means pharmacy reviewed on its own terms rather than bundled into the medical conversation, since that is where cost growth tends to concentrate fastest. It means stop-loss marketed on a real schedule rather than automatically renewed, and a compliance calendar covering filings and notices.
It also means telling you things you did not ask about. If your advisor has never brought you an idea you had not requested, you are receiving service, not advice.
What does this mean for you as a plan fiduciary?
If you sponsor an ERISA group health plan, selecting and monitoring the firm that advises it is itself a fiduciary act. That reframes the choice: you are not simply picking a vendor you like, you are making a decision you may need to be able to explain and document.
The practical implication is process. Review compensation disclosures when they arrive rather than filing them. Benchmark what you are paying, both to the advisor and to providers. Independent price data makes that possible in a way it was not a decade ago — RAND's Hospital Price Transparency Study, Round 5 (2024) found employers and private insurers paid an average of 254 percent of Medicare prices for hospital services in 2022, with wide variation between facilities and states.
That variation is the actionable part. It means the question is not only whether your advisor negotiated a discount, but whether the resulting price is defensible. Where the specifics of your obligations matter, that is a conversation for benefits counsel rather than an article.
Does the answer change for a Utah employer?
Somewhat. Utah's provider market is concentrated among a small number of large health systems, which means carrier network leverage and local relationships carry real weight. An advisor without genuine familiarity with those systems will struggle to model what a network or funding change actually does to your employees.
At the same time, do not mistake locality for capability. A firm being nearby is not a strategy. Employers in Salt Lake City and across the Wasatch Front should apply the same questions above regardless of where the firm keeps its office.
What if you already like your current broker?
Then keep them, and raise your expectations. Switching firms is disruptive and often unnecessary. A great many advisory relationships improve simply because the employer started asking better questions and made clear what it wanted, which most firms are capable of delivering when asked directly.
The relationships worth ending are the ones where you ask the questions above and get defensiveness rather than answers. An advisor who treats a compensation question as an insult has told you something useful. One who says the claims data is not available should be asked who has it, because in a self-funded plan that data belongs to the plan.
What to do next
You do not need to fire anyone to get value from this. Send your current advisor the five questions in the table and read the answers carefully. If they come back specific, data-referenced, and forward-looking, you are in good hands. If they come back vague, you now know something you did not know last week.
For more on what actually drives the increases, see why employer healthcare costs keep rising. And if you want a second read on your current plan and what your data says, reach out — the first conversation costs nothing and is worth having before your next renewal.
One concrete test of an advisor: ask where your stop-loss attachment points sit against the rest of the market. Utah publishes that distribution every year, and we have put the current numbers in one place.
Tyson has specialized in employee benefits since 2010, helping C-suite executives and HR leaders build custom health plans that reduce costs and improve employee access to quality care.
Skyler partners with Utah employers to design strategic, data-driven employee benefits programs that align financial outcomes with workforce wellbeing — bringing the same boardroom-level thinking featured in Healthcare's C-Suite Solution to every engagement.