Epidemic Flu in the U.S. Crippling Businesses – Health Insurance

RateCraft Consumer Advocates for Business Insurance

I’ve taken the temperature of many businesses in the past few years and have found that many are suffering from a very high fever. The high cost of health insurance, is making them ill. Ironically, it seems to be the CEO and CFO that are the most effected and of course the employees that end up losing their jobs, or with increased deductibles and higher out of pocket costs.  The benefits department is concerned about raising deductibles, changing doctors, the administrative workload of change to the current staff and having to deal with the fall out, and certainly that is understandable. However, isn’t it a bit short sided to be too concerned about the employees that still have a job, most have no plan to leave their job without a replacement job and there are plenty of individuals ready to fill any empty positions? Keeping a business healthy financially should be the number one decision of every employee and employer, as it provides a long term employment opportunity that can weather difficult times and ultimately improved the well-being of all employed. Without financial solvency and profit most businesses will not and cannot survive. Health insurance outside of human capital is in the top five spends on a general ledger, it has got to be addressed and it should be address by the CEO or CFO, it is a financial issue.

The remedy is not fast, it is a long term solution and it is based in transparency. You do not have to receive a rate increase; contrary to what you have been experiencing the past several years, the only thing missing is the right tools. 

Yes, even tools your current benefits department and human resources have not discovered. Most human resource managers have no idea what we do or how we do it, as hard as they try to guess. 

Why is the human resource department unaware of how to keep these costs down? 

They are experts in human resources they are not experts in the function and purchasing of insurance or the negotiation of insurance contracts. Just as I would fail, or even the CEO would possibly fail at the administration of payroll, procedures, COBRA laws administration, etc. A human resource department may not know how to negotiate the best deal on health insurance. It is not their fault, it isn’t anyone’s fault, it is just the way it is and has been this way for years. The insurance system is not transparent.  The compensation model is flawed on commission, it is based on premium, so if your premium goes up your trusted advisor, the agent, receives a raise. Wait a minute!! Did you forget that fact?

You can’t reduce cost if you don’t know what you should be shooting for, in another words you need a target. Agents often will provide “bench-marking” but their bench-marking is the comparison of their client to averages. Do you want to be with the averages? Or do you want your pricing to be the “best”?

If you want to win a marathon, you need to know the times that others are winning the race, you need to know how much to train, you need to know about nutrition for sustaining yourself, and you need to know ways to improve your speed. You do not just show up on the day of the race at the starting line and run when the gun goes off; you will not win this way.

You need a good agent for your health insurance, (by the way, that’s not us, we are insurance negotiators not your agent) but that is not enough and furthermore most businesses judge their insurance agent by the fact that they answer their calls, or are nice to the employees or to them, or they receive a rate increase and the agent brought it down by 3%, or they provide their COBRA administration (they do that don’t they? If you answered no, you already have a poor agent). Do you have any idea where your premiums should be? If not, why not? What is a good rate? How do you obtain a good rate? What are others paying? If my agent isn’t offering a good rate, how do I obtain one?  What services should our agent provide for us? Are they offering us all the options available?  

Eighty-percent of all our clients that we save the huge bucks believe they have a good agent, the opinion only changes when they see it in black and white that they did not receive as much as they thought, and paid much more than others. The best thing about health insurance negotiations is the secret sauce we provide to our clients lasts years. It is the same example of teaching a man to fish, it will feed him for years, but if we give you a fish to eat it only lasts a day. We teach clients tools they can continue to use for years to come and many of our clients reduce their health insurance premiums between 10%-35% the first year. Pretty significant savings especially considering many are only seeing rate increases.  Here are three tips to start getting healthy now:

1) If your agent sounds like a broken record, chances are they are bringing nothing new to the table. If your agent never negotiates your initial renewal downward, you have the wrong agent. Try a new agent and see if anything new develops.

2) Demand transparency. Did you know that there are signing bonus with some carriers? Higher commissions with others? Know what your paying your agent and decide if it is a fair compensation for the service they deliver. Structure a fee for service versus a commission based fee with a performance contract.

3) A sick population will only leave you with higher premiums. Bio-metric screenings are the best wellness investment to identify individuals that will become a health risk emergency costing thousands, when preventive action could by pass the emergency. Negotiate a wellness budget with your carrier at renewal and add incentives for your agent to increase participation.

These tips are just a very small idea of ways to improve your overall health of the business. It’s time to get well and healthy so your business can thrive!

Leave a Reply

Your email address will not be published. Required fields are marked *