How To Save On Group Insurance Costs
Costs are rising everywhere – including the cost of offering a group insurance plan. We've got five great tips to help you save on the cost of group insurance:
Reduce the overall cost of the group insurance plan.
Look at options for managing costs.
Consider alternatives to group insurance plans.
Shop around with different insurers.
Promote wellness
Reduce The Overall Cost of The Group Insurance Plan
Another way that you can save money on your group insurance plan is to reduce the amount of coverage provided by it. There are a variety of ways to do this, including:
Modify how the costs are shared between employees and the employer.
Reduce the reimbursement percentages offered.
Change the maximums payable.
Remove some coverage.
The drawback of this approach is that it can lead to reduced employee satisfaction, especially if you remove coverage previously offered. You may want to explore the option of providing flexibility within your group insurance plan, allowing employees to determine what coverage aspects they consider the most important.
Look At Options for Managing Costs
You can manage the costs associated with a group insurance plan in several different ways. These are some avenues you can explore:
Mandatory generic drug substitution.
Managed drug formulary. A managed formulary covers drugs based on a set of review criteria.
A capped pharmacist dispensing fee.
Encouraging employees to use a mail-order pharmacy.
Having prescriptions dispensed in a 90-day supply.
Increasing deductibles
If you make any of these changes to your group insurance plan, you must inform employees and explain why you created them.
Consider a Self-Insured Plan
Another way to save on group insurance plans is to offer an alternate option, such as a self-insured plan. With a self-insured plan, you only pay for submitted claims and associated taxes and administration fees.
There are pros and cons to this approach, which we can explain to you.
Shop Around with Different Insurers
One option to save on group insurance costs is to shop around with different insurers. This is a short-term strategy to save on costs, as you may save money at the outset by switching insurers, but there's no guarantee your rates won't rise when you renew.
These are some things to keep in mind when shopping around:
What kind of coverage does the insurer offer?
Is the new rate they're offering you guaranteed for a set amount of time?
Do they provide a set maximum rate increase?
What costs will be associated with the administration changes required due to changing insurers?
Promote Wellness
Promoting wellness among your employees can be an effective way to reduce group insurance costs. By offering wellness programs or incentives, you can encourage your employees to adopt healthy habits and behaviours that can lead to better health outcomes and lower insurance claims. Examples of wellness programs might include fitness challenges, smoking cessation programs, stress management courses, or healthy eating initiatives. These programs not only promote better health and well-being among your employees but can also result in lower insurance costs for your business. Investing in wellness programs can create a more productive and healthier workforce, reduce absenteeism and healthcare costs, and improve your bottom line.
Want to learn more?
If you're looking to save on group insurance costs and improve the health and well-being of your employees, it's time to act. Contact us today.
