Lowering the cost of your group health benefits is not as daunting as you might think. You just need to know where to look and what questions to ask.
If you are trying to avoid having your team complete medical applications, you are making, as Julia Roberts put it, a BIG mistake. Your greatest opportunity for savings is to test your renewal increase against the market. Quotes based on your census yield the least savings. Digital tools to safely collect and warehouse underwriting data will allow one application to be used for multiple carriers, year after year.
- Get A Second Opinion
Worst kept secret alert. Your current broker gets a raise when you get a big rate hike. If you accept a 12% rate increase without a fight, your broker gets a 12% raise. Your incentives and your current broker’s incentives are misaligned. Invite another broker to shop the group. Make your current broker do it too. Spreadsheet rates and census quotes are for the lazy. Complete medical applications. See #1.
- Show Me the Money
Having amazing benefits will certainly help you win the war for talent. Your employees need to understand how much the company pays for their coverage. Ironically, most employees don’t find out how expensive their health insurance is until they are gone and get their COBRA offer, which equals 100%of the cost of the coverage without the employer’s help. Consider preparing annual TOTAL COMPENSATION STATEMENTS which show the true value of benefits (medical, dental, life, workers’ comp, unemployment, Medicare, FICA, etc.).
- Demand Rate Relief
Most top brokers can petition the insurance carrier for rate relief, meaning they can get a reduction in the renewal just by asking. Brokers represent dozens of clients with hundreds of employees. Carriers will often make rate concessions for top brokers. Side bar: Avoid brokers who are nearing retirement, as these brokers lack the leverage to get things done.
- Beware of the “Tiger Team”
Many Big Box providers of benefits often send in a talented team to “sell” you on the benefits and all the “amazing” things they will do for you. Once the deal is closed, you are relegated to working with an unlicensed underling or, worse yet, an out-of-state call center. Work with a broker who is a business owner, like you.
- Avoid Payroll Companies
See #5 above. Payroll companies fall into the classic trap of jack of all trades, master of none (except perhaps payroll). Aggressive, silver-toungued payroll sales people get their foot in the door, and then other non-local, non-experts cross sell benefits, 401k, and HR services which are not remotely in their wheel house. Focus on local subject matter experts.
- Consider Level Funding
Level funding is a recent innovation that allows employers to enjoy the economies of self funding without the downside financial risk. Companies with a 5-100 employees are eligible for level funding and would enjoy a “level” monthly premium. Best part, if your actual claims are lower than expected, you get a refund. (If they are higher, you pay nothing extra, until your renewal.)
- Visit spiralightgroup.com
Better benefits for less is within reach. Get local help from a benefits expert by contacting us.