Tips for health insurance brokers on prospecting SMBs

Written by: Gabrielle Smith
July 30, 2021 at 8:40 AM

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.

Small Business Trends reports that there are over 30.7 million SMBs in the U.S., which account for a vast majority of the businesses in the country (99.9%).

Despite their enormous impact, SMBs have been a difficult market for insurance professionals, as many SMBs are unable to 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 opportunity.

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

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 offer 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 making the shift 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 their own 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 is even more of a concern for SMBs with less funds to dedicate to their employees’ healthcare.

What’s more, with fewer employees, SMBs have a much harder time meeting the minimum participation requirements that come with group health insurance plans. 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 plan, SMBs need a more flexible health benefits solution.

Rather than pushing a group health insurance plan, reimbursement models like HRAs serve as a more cost-controlled and flexible health benefit that works for employees from a variety of different health situations and insurance statuses.

Check out our full guide for health benefits specifically 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 they can to help their prospects find relatable experiences with your other clients. Showcasing the solutions that worked for other SMBs not only helps your current prospect find a solution faster, but it also 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 that SMBs are the same as any of your other clients is that they value openness and honesty, especially from health insurance professionals. Because many SMBs are new to the world of 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 are familiar with. 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 who have 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 consistently follow up with new information to keep them engaged. Early on you should make contact in a variety of 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 there have been new developments in health reform that 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. In addition, over time you may also see changes in your prospect’s budget and overall opinions. So it never hurts to reconnect and see how they’re feeling.


While many SMBs think they can’t afford health insurance, the smart insurance broker knows the right health benefits solutions to offer that will meet every SMBs pain points from cost, time management, and employee retention. By following the tips in the 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 July 30, 2021.

Topics: Defined Contribution Health Plans, Small Business

Additional Resources

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