Look for a broker who compares every funding structure on your own employee data rather than shopping your renewal to a few carriers. At 50 employees, the ACA employer mandate can apply.1 Ask whether the broker will recommend a PEO when one fits, and whether they stay after the sale.

That’s the short version. The rest of this page covers what to compare, why 50 is a turning point, and what to ask in the first meeting.

What to look for in a benefits broker at 50 employees

A funding structure is how your plan pays for care. You can pay a carrier a fixed premium, share in the claims risk, join a PEO’s package, or give employees an allowance toward their own plans. A broker who shops your renewal to a few carriers is comparing versions of one structure. At 50, you probably qualify for several.

Three things separate brokers at this size:

  • Breadth. They price every path that fits your size and put the results side by side.
  • Your data. They cost each option on your actual team, using your census.
  • After the sale. They’re around through the year, for employee questions, compliance and plan reviews.

Our guide on how to choose a health insurance broker has the full checklist.

Why 50 employees is a turning point

The ACA employer mandate can apply. The IRS treats an employer that averaged 50 or more full-time employees, including full-time equivalents, in the prior year as an applicable large employer.1 A full-time equivalent adds up part-time hours, so a few part-timers can count as one full-time worker. Applicable large employers have to offer affordable coverage that meets minimum value to full-time employees, or they may owe a payment to the IRS.1 If you’re near the line, read whether the ACA employer mandate applies under 50 employees.

Level-funded plans are squarely in range. In a level-funded plan you pay a fixed monthly amount that covers expected claims, fees and stop-loss insurance (coverage that caps large claims). If claims come in low, the plan may return a portion of unused funds, depending on the carrier’s terms.2 The sweet spot is 25 to 500+ employees, and the larger the company, the better level funding tends to work.3 Compare that with a fully funded plan, where a healthy year returns nothing: $0.3 Level-funded health plans explained shows how the money moves.

A PEO is still an option. A PEO (professional employer organization) becomes a co-employer of your team and runs payroll, HR and benefits as one package. Its sweet spot is 10 to 100+ employees.3 What is a PEO? covers the legal side.

At 50, you sit inside both ranges. That’s why one quote leaves so much out.

Four ways to shop for benefits at 50 employees

Most growing companies end up in one of four places. Each shows you a different slice of the market.

If you use… It shows you Good fit Where it falls short
Your payroll platform’s benefits Its own plans, set up inside payroll A simple, single-state team that likes the plans on offer One product rather than a side-by-side of the other structures
A PEO One co-employment package 10 to 100+ employees who want HR and compliance support bundled3 Less flexibility as you grow
A traditional broker Your renewal, shopped to a few carriers A stable team with no plans to change structure Often one or two options out of seven3
An independent advisory broker Every structure costed on your census, plus a multi-year plan 10 to 500+ employees with a renewal, a funding round or a hiring push3 You need to supply an employee census

A census is a spreadsheet of your employees: each person’s age, ZIP code, and who they cover (just themselves, a spouse, children). Carriers use it to price plans for your real team. Most of it already lives in your payroll system, so pulling it takes an afternoon.

A traditional broker’s model works well when you plan to stay put. If you’re hiring fast or rethinking how you fund benefits, you’ll want the wider view. PEO vs. independent benefits broker goes deeper on that trade-off.

The seven paths a broker should price

There are seven realistic paths at renewal, and most businesses only hear about one or two.3 A broker doesn’t have to recommend all of them. They should tell you which fit and why the others don’t.

  1. Negotiate with your current carrier. Push back on the renewal number.
  2. Shop competing fully funded carriers. Get fixed-premium quotes from other carriers. This typically saves 5 to 15%, though results vary.3
  3. Level-funded plans. Share in the claims risk and reward, with stop-loss as a backstop.
  4. PEO partnership. Join a PEO’s plan and bundle HR and payroll with it.
  5. ICHRA. An individual coverage health reimbursement arrangement gives employees a tax-free allowance to buy their own plans. See ICHRA explained.
  6. Strategic plan design changes. Adjust deductibles, networks or your contribution, often paired with an HRA or HSA.
  7. Reference-based pricing. The plan pays claims against a benchmark, often set as a percentage of Medicare rates, rather than a carrier’s network discounts.

“Most businesses have never been shown all their options.” Jonathan Engle, Founder

Questions to ask a broker at 50 employees

Take these to the first meeting.

  1. “Which of the seven paths will you price for us?” Then ask why any are missing.
  2. “Will you cost each option on our census?” Averages for a company like yours won’t tell you what your team will pay.
  3. “Will you recommend a PEO if one fits us better?” Some brokers treat PEOs as rivals. We partner with PEOs instead of fighting them, and if a PEO fits you, we’ll say so.
  4. “How will you help us as we cross 50?” Ask about the ACA mandate and the reporting that comes with it. Our ACA reporting checklist shows what’s involved.
  5. “What do you do between renewals?” This is where a transactional broker and a year-round partner part ways.
  6. “What does our plan look like over the next few years?” A useful answer accounts for your hiring plan and your funding.
  7. “How are you paid?” It’s a fair question for any broker. Kingsfoil Health is paid by commission from carriers and partners, like every broker.

For a list focused on the renewal itself, see 5 questions to ask your broker before renewal.

When an independent advisory broker isn’t the right fit

Sometimes another route serves you better.

  • You’re in one state, growing slowly, and your team likes the payroll platform’s plans. That may be enough for now.
  • You want everything bundled. If you’d rather have payroll, HR and benefits from one company, a PEO may fit better. A good advisor will tell you so.
  • You can’t share employee data. A side-by-side needs a census. Without one, every quote is a rough guess.

The bottom line

A 50-person company has more options than most are shown. Pick a broker who prices every structure that fits, on your own team’s data, and who’s still around after the sale. We run this analysis for every client, free, with no obligation. If your renewal is coming up, start at least 90 days before your effective date.

Kingsfoil Health is licensed in 13 states, including Utah. If yours isn’t one of them, tell us.

Send us your renewal and we’ll price every path that fits your team. Get a renewal analysis.

Footnotes

  1. IRS, Employer shared responsibility provisions. Explains the 50 full-time employee threshold, full-time equivalents and the employer shared responsibility payment. ↩ ↩2 ↩3

  2. UnitedHealthcare, What is a level-funded health plan?. Describes a possible refund of unused claims funds, or a credit toward the next year, depending on the plan’s terms. ↩

  3. Kingsfoil Health, Rate Shock Survival Guide. States that there are seven realistic renewal paths and most businesses hear about one or two, that shopping competing fully funded carriers typically saves 5 to 15% though results vary, that a fully funded plan returns $0 in a healthy year, and that the sweet spots are 10 to 500+ employees for alternatives, 25 to 500+ for level-funded plans and 10 to 100+ for PEOs. ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7 ↩8