Reducing Costs of Employee Benefits Through Web-Based Negotiations
From skyrocketing to stable: Negotiating your way to reasonably priced healthcare premiums
Have your insurance premiums been giving you a headache recently? It's not just your imagination - health insurance costs in the US are on a steady rise. Reports predict yet another 6% to 9% increase in employer-sponsored healthcare coverage in 2025, with many small businesses experiencing even higher premium hikes.
But is it possible to get your organization's healthcare premiums under control?
Taking the lead
When I was the finance exec for a large supply chain operation, we had a team of employee benefit experts to guide us through the collective bargaining process. They helped us understand our options, analyze economics, and propose plans that would best meet our needs.
As the owner of a small business, my first meeting with our employee benefits consultant was unexpected. Given the impending renewal, I felt it was too late to explore other options. That changed when I started looking for a new partner. After extensive research and careful consideration, I chose one that offered a flat premium agreement during our recent renewal.
Finding the right partner
Choosing the right employee benefits consultant is crucial. Take the time to research firms, assess their reputation, and understand their areas of expertise. You'll also want to feel comfortable with the team who will be supporting you, and trust that they genuinely want to help their clients.
Ideally, your benefits partner will become a trusted advisor, helping you navigate benefits issues and more. Be inquisitive, ask questions, and leverage their knowledge and expertise to make informed decisions. Be transparent, establish clear expectations, and establish an open dialogue to effectively resolve any issues.
Levelling the playing field
Knowing your benefits strategy is vital for successful negotiations. Consider the needs, wants, and expectations of your employees, as well as the impact on your business and HR objectives. Decide if you need highly competitive benefits to attract top talent, or if a more basic package will suffice.
Be proactive and engage your benefits partner well in advance of the renewal deadline. Coordinate the entire renewal process, from preparing requests for proposals to delivering employee communications, to ensure it runs smoothly. Get "out to market" early to assess the competitiveness of any special pricing offers and explore alternatives.
The power of negotiation
Here are some tactics to help you negotiate successful multi-year healthcare agreements with flat premiums:
Analyze your benefits strategy
- Understand employee needs and preferences, as well as the impact on your overall business and HR objectives.
Take control of the timeline
- Coordinate with your benefits partner to define the timeline for every aspect of the renewal process well in advance.
Explore and compare alternatives
- Encourage your benefits partner to obtain proposals from multiple carriers, including quotes for various plan designs, and perform due diligence on each proposal.
Evaluate proposal options
- Work with your benefits partner to review each proposal, compare and contrast them to your current plan, and make informed decisions.
Revisit plan designs
- Consider alternate plan structures that might be more cost-effective while still meeting employee needs.
Consider multi-year contracts
- Be open to multi-year agreements if they offer incentives to insurers.
By adopting these practices, you can work towards achieving mutual benefits that align insurer incentives with long-term cost predictability. Happy negotiating!
- As a proactive business owner, I sought a competent employee benefits consultant to assist in negotiating more reasonable premiums for my small company.
- Conducting thorough research and careful evaluation is crucial when choosing a benefits partner, ensuring their expertise and reputation meet your needs.
- Transparency is key in establishing a strong working relationship with your benefits partner, fostering trust and open dialog for addressing any concerns effectively.
- To level the playing field, understand your employee's preferences and needs, as well as the potential impact on your business and HR objectives when crafting a benefits strategy.
- Proactively communicating with your benefits partner and initiating the renewal process early enable you to assess the competitiveness of special pricing offers and explore alternative plan structures.
- In analyzing your benefits strategy, compare various plan designs from multiple carriers to make informed decisions that best suit your organization's objectives.
- By comparing and contrasting proposals from various carriers, you can evaluate and select the most cost-effective plan that still addresses your employees' needs.
- Considering alternate plan structures and being receptive to multi-year agreements may offer opportunities for incentives that align insurer interests with long-term cost predictability.
- Leveraging a competent employee benefits consultant, coupled with your insight and analysis, will genuinely help you navigate benefits issues and make educated decisions for your small business.
