This story is brought to you by Gary Taffet via the USA Herald Platform
If you’re offering your employees group coverage, you’re more than likely overpaying for it. It’s just a sad, but true fact.
Most companies – or the HR person they’ve employed – simply don’t have the tools they need to get the best possible price on insurance. And that’s no fault of theirs. The insurance industry is a secretive one, and most insurers don’t want to be too forthright about their products or, especially, their pricing,
In my experience, this means most organizations end up overpaying for their policies. They accept this secretive, vague pricing or product bundling, and they move forward without so much as a question.
In reality though, they could have:
- Negotiated – It sounds surprising, but you really can negotiate with insurance companies – particularly if you’re a big company with a lot of potential policies to leverage. But even if you’re on the smaller side, there’s still some wiggle room in pricing. Make a counter-offer, and have some reasons to back it up; maybe the average age of your employees is pretty low or your company’s biggest claimants have recently left the payroll. Basically, you just want to show them that you are a lower risk than they assumed you were initially.
- Shopped around – You don’t have to use the same insurance provider year after year. In fact, you shouldn’t. You’ll likely be able to get a deal by shopping around and comparing prices a bit. At the very least, you’ll confirm that you do, in fact, already have the lowest rate on the market. And that can give your higher-ups some peace of mind.
- Had a broker negotiate on their behalf – Negotiating with insurance companies can be a little intimidating, especially when they start to push back. But there’s no reason you have to go it alone. It’s an insurance broker’s job to get you the best policies and the best rates possible, so always engage one when at all feasible. In the end, it means better results for both your company and your employees.
- Converted to individual plans – For smaller organizations, group coverage isn’t always the best option. If everyone on the team is a different age, with different health concerns and conditions, then a blanket policy just doesn’t make sense for them or for your company’s pocketbook. Moving toward a self-insured program, which allows employees to pick out their own insurance plans, may be a better option in these situations. You’ll want to discuss it with an independent broker first, so they can run the numbers and confirm that before you make any moves.
- Changed up the benefits – In most cases, your staff doesn’t need a plan with all the trimmings. While you don’t want to offer bad policies to your employees, you can likely make an educated guess as to what sorts of coverage your employees need and, at a minimum, at least ensure those benefits are a part of their plan. You can also opt for a high-deductible plan and add in a health savings account. Again, talk to a broker first to make sure this is a good fit for your group.
Overpaying on insurance is an all-too-common occurrence in today’s ever-changing marketplace, but it doesn’t have to be that way. Insurance prices and products are never set in a stone, and with the right preparation, tools and resources, any organization can lower its insurance costs while still providing its employees with the quality coverage they need.
Gary Taffet is the founder & co-owner of Reliance Insurance Group, LLC. He is an expert in disability, property and group insurance and previously served as the Chief of Staff to Gov. James E. McGreevey of New Jersey.