Can You Negotiate Insurance Rates?

Discover the key to attracting and retaining top talent while optimizing your company’s financial health. Learn how to negotiate better insurance rates and provide a competitive benefits package for your employees. Explore our comprehensive guide to making the most of your employee benefits

Nov 03, 2023 6.5 minute read
Reviewing employee benefits packages on a laptop computer.

Employee benefits are very important to American workers. According to a Forbes Advisor study, 40% of survey participants said they believe workers leave their jobs for other jobs that offer better benefits, and one in ten said they would take a pay cut to have better employee benefits. Understanding how vital good benefits are to employees might make you question, “Can you negotiate insurance rates?” With help, it might be possible to negotiate better insurance rates for your employees that maximize savings without sacrificing benefits. Better rates for employees can offer better all-around benefits for the workforce and allow a company to present itself as a competitive option for workers.

Can You Ask Insurance Companies To Negotiate Lower Prices with Providers?

Private insurance companies can sometimes negotiate their prices to be more competitive. Public insurance like Medicare and Medicaid do not negotiate and use fixed fee schedules. However, this is not the case with private insurers and these items can often times be negotiated with the help of experienced brokers.

How Do You Negotiate an Insurance Offer?

Now that you know the answer to the question of whether or not the provider fees can be negotiated depending on whether or not you elect a public health plan or a private insurer, you can now focus on how to negotiate better insurance rates and copays for your employees. Here are a few steps employers can consider looking into  to negotiate  better rates for their companies with insurance carriers and TPA’s.

Review Your Current Contracts

The process begins by reviewing a company’s existing insurance and healthcare provider contracts. Look at the benefits employees are currently receiving. Drill down on the specifics, including:

  • Out-of-Pocket costs associates with using  in-network providers
  • Out-of-Pocket costs associates with using out-of-network providers
  • Service fee schedules
  • Reimbursement rates
  • Maximum coverage provided per employee and plan
  • Insurance contract rate for each service
  • Average payment per visit
  • Costs associated with other more specific services

Employers should also check when their contracts are due to renew. In some cases, a company may want to avoid auto-renewal to make it easier to change contracts or switch insurance carriers as the renewal date approaches.

Compare Your Price To the Market Price

Once employers have a good idea about what they are currently paying and receiving in return, the next step is to compare this to what other carriers and/or TPA’s can offer so that the team responsible for your insurance contracts can negotiate with the company’s existing carrier or switch to one that offers better rates, without compromising on the employees’ benefits. Publicly available tools like Fair Health Consumer can let administrative personnel see what insurance companies pay to in-network providers for specified medical services. This research offers businesses looking to negotiate their employee group rates more insight and negotiating power.

Analyze Cost Drivers

To get the best rates, companies may find it helpful to dig further into their insured group’s insurance data to determine what the biggest expenses are. What types of services are the company’s employees paying the most for? What are the most frequently requested services? Are there ways to reduce costs related to those particular services, such as implementing a company-wide wellness plan or prevention efforts? 

Shop the Market

Next, an employee benefits coordinator can take all of the data the team has accumulated and shop the market for better plan structures and rates. Consider the overall effects of the plan. Meaning if the plan offers lower rates on some services but higher rates on others, what will the net effect be on the plan, the costs, and the overall benefits to employees? You want to try to find the best plan that optimizes costs and services.

Identify Your Options

Companies may have a wide array of options available to them. Commonly available choices include providing multiple plans from which employees can select their preferred plans, using preferred provider networks, and using a value-based services structure rather than a fee-for-services arrangement. Other options may also be available, depending on your company’s needs, that may allow you to decrease the total cost of the employee benefit plan while still enriching the benefits.

Get Help from Licensed Insurance Brokers

For teams that do not regularly negotiate insurance contracts, it can be easy to find the various regulations, compliance factors, and insurance language confusing and nuanced. Small and mid-sized companies may struggle with having the capacity or expertise to efficiently analyze all of the options or to negotiate better rates with insurance companies and healthcare providers. Benefit coordinators and other administrative personnel do not have to handle these complex negotiations on their own. Companies can turn to an employee benefits brokerage such as Wisterm to assist with the process.

How Do You Negotiate With Healthcare Providers?

Ultimately, the task of negotiating better prices with healthcare providers will be up to the insurance company or TPA, but experienced employee benefits consultants can provide practical and logistical assistance. These firms’ services focus on providing companies and their employees with health and wellness services and managing rising healthcare costs. The goal is to develop a long-term approach so that your employees are not subject to annual premium increases, and will be shielded from market volatility. This strategy facilitates the creation of more affordable, multi-year employee benefits packages that are attractive to both current employees and future recruits.

Contact Wisterm for Assistance Negotiating Insurance Rates

Rising healthcare costs can be difficult to combat, but successfully managing these costs can help you recruit and retain a talented workforce. Wisterm assists American companies in structuring employee benefits plans and negotiating insurance rates to provide a more competitive benefits package for employers. Our team can answer your questions regarding negotiating your insurance rates and enhancing your plans and all of the necessary steps to achieve that for you. If you would like help negotiating your employee benefits, contact Wisterm at [email protected]

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