COST REDUCTION STRATEGIES
ACTIONABLE STEPS TO TAKE TO REDUCE GROUP COST
At the end of this short guide, we will provide our proprietary tool that will help you save hundreds and thousands of dollars every year on group insurance rates, first you need to understand a few concepts to get the most out of the tool. Even during less volatile times, group rates can still spike based on claims submissions, the carrier can offset their cost by extending rate increases back to the employer. These helpful tips can alleviate those recurring issues. Read on.........
AGE RATED VS COMPOSITE RATING
We always recommend employers structure their group plan as "AGE RATED" vs "COMPOSITE RATED". Here's why! Composite rates uses highly complex systems to compute, are aggregated compilation of all employees rounded up to equal one rate for all of your employees, this gives an unfair advantage to older (Baby Boomer) employees and disadvantage to younger (millennial) employees. (EXAMPLE) For a single 25 year old employee the rate will be $465 per month, and for another 55 year old employee would pay the same rate of $465.
By doing AGE RATING, younger employees pay less, instead of $465, their cost would be $198 huge difference. In the next section will discuss structuring your group plan by age classification as a cost reduction strategy.
Optional, but highly
*Benefit brokers rarely discuss with their clients ways to structure their plans to maximize benefits, and control cost. The strategy laid out in this guide, allows the employer to take control of cost rather than relying on the broker of record to dictate what is affordable and what is not. The employer will understand how plans are designed and what to do to work within the frame of that design to curtail cost.
This means you can know with confidence that you have the final say on what your plan should look like, how offering of the plan will increase participation, without the additional cost, when structure properly