Lower Employee Insurance Costs

Lower Employee Insurance Costs

Every year the time will come when employers will be notified by their health insurance provider that insurance premiums are increasing.  What many employers in smaller to medium-sized companies don’t realize is that those new insurance rates are negotiable.  You could end up saving yourself, your employees, and your company hundreds or even thousands of dollars by negotiating lower insurance costs.  This can have a huge impact on employee satisfaction.  Here are a few tips to help you negotiate a lower insurance rate.

Be Familiar with Your Contract

Chances are you have signed some sort of contract or agreement with your insurance provider.  You can’t begin a negotiation without knowing what you may have previously agreed to.  Familiarize yourself with the duration of the contract, whether or not there is an agreed upon premium increase rate, and how much notice you need to give if you choose not to renew your contract.


Have the Right Information at Hand

When you begin negotiating, it will be helpful to be aware of any changes in your workplace that could affect these negotiations.  For example, have the number of claims placed by your staff increased or decreased over the last year?  Has the average age of your employees changed?  Is your company planning to hire more people, thus becoming more lucrative to insurance companies?  Have your employees had babies, suffered major injuries requiring surgery, had serious health problems, or any other ailment that might have affected insurance premiums?  The more information you can provide, the better your chances of negotiating a lower rate.


Get Ahead of the Game

Don’t wait for your insurance provider to reach out to you to discuss next year’s rates.  Rather, about 2-3 months prior to when your non-renewal notice is due, contact your provider and inquire about rates for next year.  If you wait until the non-renewal date has passed, you will lose much of your leverage.  However, reaching out in advance will give you a better chance of getting a lower rate.  If your insurance provider is unable to give you that information in advance, politely tell them that you are going to be shopping around for the best deal.  If they do provide you with the rate increase, compare it to the estimated U.S. average.  If these averages are lower, you have yet another argument on your side.


Know What You’re Willing to Take

Before you begin negotiating, you need to know what you would be willing to accept.  Are you going to take whatever you can get or are you willing to shop around and compare providers?  If you are interested in comparing, you should reach out to a few healthcare providers to get quotes. If you are unable to negotiate a lower rate, you can always consider asking the provider to lock in that same rate for next year so you won’t be hit with higher premiums again.