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Selling health insurance to SMBs: Tips for brokers

Defined Contribution Health Plans • May 13, 2022 at 8:37 AM • Written by: Elizabeth Walker

When you think about what keeps the U.S. economy moving forward, you might first think of the big corporations and their multibillion-dollar efforts in business. However, in reality, small and medium-sized businesses (SMBs) are the true driving force behind the U.S. economy.

Oberlo reports over 32.5 million SMBs exist in the U.S., which account for 99.9% of all U.S. businesses. Despite the enormous share of businesses they make up, SMBs have been a difficult market for insurance professionals to sell to, as many SMBs can’t afford traditional group health insurance.

However, new solutions such as health reimbursement arrangements (HRAs) are opening the SMB market back up to health insurance professionals and creating significant opportunities.

In the sections below, we’ll share seven tips on how insurance brokers can successfully market to and prospect SMBs to grow their clientele and business.

Download our broker scenario guide to see which HRA is right for your client

How do brokers get licensed to sell health insurance?

Insurance agents and brokers play a crucial role in educating SMBs about their health insurance coverage options. But the first step in becoming an effective broker for SMB clients is to get your license.

According to each state's guidelines, brokers must complete specific pre-licensing coursework and take a licensing exam to become licensed. Once a broker completes the required coursework, they are eligible to take the state’s agent or broker licensure exam.

Licensing exams vary by state, but they all test for knowledge of health insurance regulations at the federal government level and state insurance regulations.

Other aspects of the exams usually include:

  • Rules on selling health insurance
  • How insurance claims are handled
  • Health insurance terminology
  • Restrictions that could apply to selling health insurance

How do brokers sell health insurance to clients?

Once a broker is licensed, they’re ready to sell health insurance to SMBs. Health insurance brokers must be contracted through individual insurance companies to sell that company’s products.

Contracting requirements vary by insurer, but brokers are provided with all the necessary tools to guide an SMB through their health insurance options and questions.

Health insurance brokers and agents are experts in helping their clients select the right insurance products. SMB clients expect their broker to be a source of health insurance and consumer protection information and to keep them informed of any updates and changes to their coverage throughout the plan year.

Therefore, it’s essential to keep your client and their employees in mind when recommending and selling a particular policy.

Learn how much health insurance costs in your state with our comparison chart

Seven tips for selling health insurance to SMB clients

Most brokers spend many hours building their insurance book of business and practicing their sales pitch. Whether you’ve been selling insurance for years or recently started your insurance company, having an effective market strategy for SMB clients is crucial.

Below are seven methods to attract clients and generate SMB insurance leads.

1. Shift from salesperson to consultant

When talking with owners of small and midsize businesses, it’s important to remember that many of them are offering health benefits for the first time. Data from the Kaiser Family Foundation shows that the smaller the business, the less likely they are to provide health benefits.

Given how new SMBs are to health benefits, they’ll look to you as a valuable educational resource, not just as a salesperson. You should become their go-to person for changes in health reform, reporting, compliance, and other best practices.

By shifting from salesperson to consultant, you’ll become a trustworthy source to fill their gaps in knowledge, making them far more likely to trust you to find them the right health benefits solution when they’re ready to enroll.

2. Understand the SMB’s unique challenges

Next, it’s important to remember that SMBs come with unique pain points that larger organizations don’t have to worry about. The most obvious is their budget.

While larger organizations are starting to realize the cost of traditional group health insurance is becoming unsustainable, the annual rate hikes and increasing premium prices are even more of a concern for SMBs with smaller budgets to dedicate to their employees’ healthcare.

With fewer employees, SMBs also have a much harder time meeting a group health insurance plan’s minimum participation requirements. Whether they have a lot of employees still on their parents’ insurance, older employees who qualify for Medicare, or others who simply don’t want to participate in a group health plan, SMBs need a more flexible health benefits solution.

Rather than pushing a group health plan, reimbursement models like HRAs and health stipends serve as more cost-controlled and flexible health benefits that work for employees from various health situations and insurance statuses.

Check out our complete guide for health benefits designed with SMBs in mind

3. Guide the SMB through the buying process

With fewer tiers in the organization’s hierarchy and less people involved in the decision-making process, SMBs generally churn through the buying process much quicker than larger employers. It’s your job to make sure you’re facilitating this process, so they don’t get stuck in the funnel.

From the beginning, you should ensure you’re talking with the right people by asking the following questions:

  • Who will be involved in the decision? What are their steps to make a decision?
  • Who are the most influential decision-makers? At what stages should they be involved?
  • What does each decision-maker want? What are their problems/needs?
  • How does each decision-maker feel about health benefits and what priority do they place on finding a solution?

Once you have answers to these questions, you can match the steps of your sales process to where they’re at in the decision-making process.

4. Share solutions you’ve found for other SMBs


The majority of buyers today rely heavily on the opinions of their peers when making decisions. Survey data reported by Oberlo shows that 89% of consumers worldwide will read reviews before purchasing a product or service.

With that in mind, health insurance professionals should provide as much data and case studies as possible to help their prospects find relatable experiences.

Showcasing the solutions that worked for other SMBs helps your current prospect find a solution faster and establishes your credibility working with small and midsize businesses.

PeopleKeep has dozens of case studies of SMBs finding success with HRAs

5. Be open and honest about the SMBs options

One way SMBs are the same as your other clients is they value openness and honesty, especially from health insurance professionals. Because many SMBs are new to health benefits, they’ll need your honest opinion and insight on what’s right for them.

It’s also important to note that some SMBs may go into the buying process thinking they’ll find a traditional group health insurance plan—after all, it’s what most employees expect.

However, you may need to steer them to a health benefits solution that’s more realistic for their budget, but still meets their employees’ healthcare needs.

Watch our webinar to see how an HRA can work for your SMB prospects

6. Make multiple touches in a variety of ways

Unlike large employers with teams of people, oftentimes business owners of small and midsize businesses are doing the jobs of many, making it easy for them to get distracted with a dozen other tasks.

That’s why it’s important to follow up with new information to keep them engaged. Early on, you should make contact in various ways, including by phone, email, text message, and in-person meetings. You’ll soon get a sense of which form of communication your prospect responds to best, and you can tailor how you get in touch with them in the future.

7. Stay connected with old leads

Finally, don’t forget to reconnect with your old leads every so often to check in with them. A great time to do this is when new developments in health reform may change things for your previously closed prospects.

As new policies and rules emerge in the healthcare space, your prospect’s options for health benefits may open up. Additionally, you may see changes in your prospect’s budget. After all, it never hurts to reconnect and see how they’re feeling.


While many SMBs think they can’t afford health insurance, a good insurance broker knows which health benefits solutions to offer that will address every SMB’s pain points including cost, time management, and employee retention. By following the tips in this article, you’ll be ready to talk to SMBs about how they can make health benefits work for their employees.

This article was originally published on September 9, 2013. It was last updated on May 13, 2022.

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Elizabeth Walker

Elizabeth Walker is a content marketing specialist at PeopleKeep. She has worked for the company since April 2021. Elizabeth has been a writer for more than 20 years and has written several poems and short stories, in addition to publishing two children’s books in 2019 and 2021. Her background as a musician and love of the arts continues to inspire her writing and strengthens her ability to be creative.