How does a broker of record change work? You sign a short letter or form naming your new broker, and it’s sent to your insurance company. The carrier usually processes it within 2 to 5 business days. Your plan, coverage and employees’ ID cards stay exactly the same. Only the broker servicing your account changes.
The timing matters more than the paperwork. In general, make the change at least one month before your renewal date, so your new broker has time to review the renewal, compare plans and shop the market before decisions are due.
Below, we’ll cover the steps, the timing, what changes and what doesn’t, and what to do if you have coverage with more than one insurance company.
A real example
A small business recently received its renewal package. Like most renewals, it showed the new, higher premiums and maybe one or two alternative plans from the same insurance company.
That’s the point where a broker should get to work: quoting other plans with the same carrier and shopping the market with other insurance companies. This business got none of that. No other plan options, no quotes from other carriers. Just the renewal package and a higher bill.
Facing the increase on their own, the owner reached out to us. We completed a broker of record change, did the renewal work their previous broker hadn’t done, and moved the business to a different plan.
The switch itself was the easy part. Most owners are surprised by how simple it is.
What is a broker of record?
The broker of record is the broker your insurance company recognizes as the official representative on your policy. That broker can request your renewal, quote plan changes, help with enrollments and work with the carrier on your behalf.
A broker of record change, sometimes called a BOR change, simply tells the insurance company you’ve chosen a different broker to represent you. It’s your decision as the employer. Your current broker doesn’t need to approve it.
How a broker of record change works, step by step
- Choose your new broker. Talk with them about your renewal date, your current plans and what you’d like to improve.
- Sign the broker of record letter or form. Depending on the carrier, it’s either the carrier’s own form or a short letter on your company letterhead. It names the new broker and is signed by an authorized person at your company.
- Send it to the insurance company. Your new broker usually submits it for you.
- The carrier processes the change. This typically takes 2 to 5 business days.
- Your new broker takes over. Once the change is in effect, they can request your renewal information, quote other plans and start working on your account.
When should you change brokers relative to your renewal?
The right timing depends on your situation, but a good rule is to make the change at least one month before your renewal date.
That month covers two things:
- Processing time. The change usually takes 2 to 5 business days. Some insurance companies also make the change effective on the first of the month after they receive the letter. If you submit it on the 10th, for example, the new broker may not be recognized until the 1st of the following month.
- Renewal work. Your new broker needs time to review the renewal, compare plans with your current carrier, shop around with other insurance companies, and help you decide whether to change plans or keep what you have.
If you can make the change even earlier, there’s more room to compare options without a rush. And if your renewal is already close, it’s still worth reaching out. In the example above, the owner contacted us after the renewal package had already arrived.
You can also switch brokers mid-plan year. You don’t have to wait for renewal if you need help now.
What changes and what stays the same
A broker-of-record change affects who services your account. Everything else stays in place.
| After a Broker of Record Change | |
|---|---|
| Your plan and coverage | Stay the same |
| Your insurance company | Stays the same |
| Employee ID cards and doctors | Stay the same |
| Your premium | Generally stays the same |
| Who you call for help | Your new broker |
Your employees usually won’t notice a thing, other than having someone new to call when they need help. To learn more about how commissions are built into your premium, see How Do Benefit Brokers Get Paid?
What if you have coverage with more than one insurance company?
Many businesses have medical with one carrier and dental, vision, life, or disability with others. In that case, you’ll need a separate broker-of-record letter for each insurance company and each line of coverage.
It’s still a quick process. Your new broker can prepare each letter so you only need to review and sign them. If you want one broker to handle all of your benefits, it’s worth updating every line at the same time so nothing gets left with your old broker.
Frequently asked questions
Do I need my current broker’s permission to change? No. The decision is yours as the employer. The letter goes to the insurance company, and your current broker doesn’t need to sign off.
How long does a broker-of-record change take? Usually 2 to 5 business days to process. Some carriers make the change effective on the first of the following month.
Can I change brokers in the middle of the year? Yes. You don’t need to wait until renewal.
Does it cost anything to change brokers? No. There’s no cost to make the change, and your premium for the same plan generally stays the same.
Will my employees have to re-enroll? No. Their coverage continues without interruption. They’d only go through enrollment if you decide to change plans at renewal.
When is it time to change brokers? If your renewal arrives with no comparison, no options, and no conversation, that’s a strong sign. Here’s more on when to reevaluate your benefits broker.
Thinking about a change before your next renewal?
Spencer & Spencer is a third-generation, family-owned employee benefits firm based in Cedar Knolls, NJ, serving businesses in New Jersey, New York and Pennsylvania since 1947.
We quote multiple carriers each year for our group clients, assign one or more dedicated advisors to your account, and provide year-round service. If you decide to work with us, we’ll prepare the broker-of-record letters and handle the process with your insurance companies.
If your renewal is coming up, contact us for a free review of your current plan.