As a health insurance agent, one of your most valuable skills is sniffing out when a small business is ready to buy health insurance for the first time or switch their current plan. This readiness assessment separates top-performing agents from the rest—it helps you identify which prospects to invest time in and which to give breathing room.
Some readiness signs can be found simply by taking a peek into their front window. Are they new in town? Are they adding on a residential storefront where that empty room used to be? Are they extending their hours? Might be time for their local health insurance agent to stop by to pedal their wares. But it might not be that easy.
We can help you position yourself beyond just another vendor, and ultimately close more sales by focusing on the businesses most ready to take the plunge.
Before diving into readiness assessments, both you and your clients should understand the legal obligations around group health insurance.
If your client has fewer than 50 full-time equivalent employees, they are not legally required to offer health insurance. This gives small businesses flexibility in deciding whether to provide coverage. But, it also means they're competing for talent without a pivotal benefit if they opt out.
For context, businesses with 50 or more full-time employees face significant ACA tax penalties if they don't provide health insurance to at least 95% of full-time workers and their dependents.
Some situations may require offering health insurance regardless of company size, including:
Familiarize yourself a bit with the industry before you walk in the door. This way you can be armed and ready to scout out any opportunities and look like a trusted expert.
Definitely a question heard by every parent, teacher, coach, and health insurance agent on Earth. The answer, of course, is the same for all—its good for you. Even when not legally required, benefits like health insurance remain a powerful tool for business growth.
Research shows that health insurance is the second most valued employee benefit after salary. According to recent employee surveys, almost all employees value health insurance benefits, making it a top decision factor for those choosing where to spend their weekdays.
Over 70% of all private US companies offer health insurance. In today's competitive labor market, prospective employees compare benefits packages across multiple opportunities. So while companies might be saving a buck or two on premiums if they go without coverage, your clients are at a significant disadvantage when recruiting top talent.
It’s always cheaper to retain than to replace, and retention impacts are striking, too. Studies indicate 56% of adults with employer-sponsored health benefits see coverage quality as a major factor in staying at their job, while 46% say health insurance significantly influenced their choice of employer. Companies with generous health coverage experience lower turnover rates than those with minimal or no health plans.
When employees have access to health coverage, they're more likely to pursue preventative care and address health issues early. This leads to reduced absenteeism, increased productivity, and lower long-term costs as preventative care reduces expensive emergency treatments.
For employers, the financial benefits extend beyond healthier employees. Employer contributions to group health insurance are tax-deductible, and businesses pay less in payroll taxes. Small employers with fewer than 25 employees may also qualify for the Small Business Health Care Tax Credit.
Now that you have the whys set up, you can start thinking about your readiness assessment.
As an agent prospecting new small business clients, your role is to quickly evaluate whether a prospect is ready to implement health insurance for the first time or switch from their current plan to something new. Talk can be cheap for them, but could cost a great deal of your time. This checklist helps you identify the most promising opportunities across four dimensions.
The most successful health insurance implementations happen when leadership, and therefore, the rest of the company, is ready to shake things up. Look for these positive indicators:
Of course, the company can be as ready as Freddy, but if they don’t have the money, they can’t get the coverage. Try to ascertain if:
The business can offer these benefits all day long, but if they are not not a good fit, or if the employees aren’t sure how to use them, then they don’t do anybody any good.
Once its all said and done, you as the agent can give the situation everything you’ve got, research the richest plans, get the best rate, the widest network, and it still might not matter if the group’s expectation’s aren’t managed properly.
This checklist isn’t exclusive to groups new to insurance, either. With a few tweaks, you can use this list for more seasoned groups who already have coverage. Instead of asking if the whole package is sustainable and working for them, ask where these areas can be improved upon to better meet the needs of the group. Likely, cost is a big factor for all parties, but if the configuration isn’t working, then the benefits are just going to waste.
Maybe the business is projected to grow this year, and decision makers are worried their benefits aren’t stacking up to their competitor. Or maybe the bet they took with the previous agent didn’t pan out, and now they need slimmer benefits—and fast.
You are the sole person who can make all the ends meet for everyone, whether that means choosing a plan with a wider network because employees are all over the state, or keeping costs low due to razor thin margins. If the client is ready to dive in, you are the one getting out the boogie board—or snorkel.
At this point, it’s going to become real for the decision makers. They can now fully understand how Lynn in accounting can get her allergy shots, or know they did right by their employees if a tragedy happens. But on the flip side, the cost becomes real, too. Your skills in presenting can make or break the sale.
Focus your presentation on the metrics that matter most to decision-makers: total annual healthcare spend, per-employee-per-year costs, employer vs. employee contribution splits, and the tax advantages that offset direct costs. Make it easy for your clients to play with the numbers. Show them how different styles of cost contributions can help manage costs. CoverageForCompanies is the easiest way to set that up for yourself, and for your clients to manage enrollment.
And don’t forget to think of isolved if they are in need of compliance solutions or HR admin supports, like COBRA management or Consumer Driven Health plans administration.
This also might be when your group worries about dumping lots of money into a brand new employee. They worry that even if they adhere to their probationary period to the letter, they might still waste resources. Meanwhile, they have workers interested in taking benefits right away. So you step in with voluntary benefits.
Accident insurance, critical illness coverage, dental, vision, and supplemental life insurance can be offered immediately to new employees without costing the employer anything. Employees pay the full premium through payroll deduction, but they benefit from group rates that are typically better than what they could get individually. It’s a happy medium between no benefits at all, and forcing your clients to take a gamble they aren’t comfortable with.
Of course, the questions you ask are just as important as the answers you give.
For prospects not ready for major medical, position voluntary benefits as an immediate win that establishes the relationship. Many agents find starting with voluntary benefits creates natural opportunities to expand into major medical coverage as the business grows or circumstances change.
Be consultative about timing and fit. If a prospect needs a few months to strengthen their position financially, maintaining that relationship positions you as the trusted advisor when they're ready. If you’re lucky, a referral or two could be in your future.
Mastering readiness assessment gives you a significant competitive advantage. While greener agents might chase every lead equally, you can quickly identify the prospects most likely to convert and focus your energy where it matters most.
Using our checklist qualifies prospects efficiently. You’ll position yourself as a strategic advisor who understands their business challenges and is willing to work within them, not just someone selling policies. This approach leads to faster sales cycles, higher close rates, and referrals.
Businesses most ready for your services have engaged leadership, feel competitive pressure for talent, face cost pressures that motivate a change, or are experiencing growth that demands stronger benefits. These are your highest-value prospects—identify them quickly and invest your time accordingly.