Curbing The Rising Cost of Group Health Insurance and Benefits

Friday, March 1, 2024 16:28 Posted by Admin

It’shard to overstate the importance of businesses offering benefits to their employees.

These additional perks are one of the main ways that employers can entice quality team members to join their staff, but they can come with a hefty price tag—and it’s only getting heavier. Healthcare coverage and benefits packages, in general, have seen steadily rising premiums in recent years, and it doesn’t look like that’s about to change.

Projections indicate that employers can expect a hike in premiums falling somewhere in the range of 4% – 6% for 2020, and although this number might not sound significant, the total can be staggering with enough employees, and also for employers that aren’t massive corporations.

As any good accountant will relay, even a rise in the single digits can translate to a significantly impacted bottom line, as these things simply add up faster than seems possible to most. The problem is, there’s not much that employers can do to stop it, and there are only a few options for recourse in the face of these rising costs.

So,why exactly are premiums rising in this way, is it really worth the headache, and what can businesses do about it? Unfortunately, not all of these are simple answers, but they’re still questions that are worth exploring for employers frustrated over their rise in premiums.

The Rising Cost of Healthcare and Benefits

The fact that healthcare is expensive comes as nothing new; it’s one of the main reasons that employers offer to defray the cost of insurance for employees—it’s a hugely enticing benefit because many people simply won’t be able to afford coverage otherwise.

As most business owners have already come to know, these costs have been steadily on the rise over the course of the last decade. Unfortunately, there are plenty of agencies on the market willing to further capitalize by gouging their customers with little regard for the impact it has on businesses. For those companies who don’t have the resources to try and negotiate premiums, it can sometimes feel like there’s no option but to simply roll over and pay the higher prices.

However predictable the rise in premiums may be, it’s still bound to put a knot in the stomachs of employers when it comes time to assess the rise in cost year over year. The simple fact is that there’s not one clear reason for rising premiums, it’s merely a trend that falls in line with one that began many years ago.

Think of the cost of healthcare as having set out on a trajectory years ago, like an airplane. Unless some outside force interferes (like running out of gas, or encountering a difficult weather pattern), that airplane will continue on its current path indefinitely; no such outside force has yet presented itself, and so the cost of healthcare has continued to rise. In fact, no such outside force has yet appeared on the horizon, so it’s safe to assume that costs will continue to rise from here on out as well.

What’s more, there’s no good way for a business to avoid these costs. Though especially big companies often pay more due to the fact that they simply have more employees, small and mid-sized companies generally end up paying more proportionally. This is because larger companies have the resources to dedicate to bargaining, whereas smaller businesses are often spread thin as it is.

Basically, it’s difficult to get around the rising premiums when so many insurance providers know that companies have no choice but to pay them. The only real options are to try to negotiate rates, find an agency that’s more personable and willing to tailor the experience or to cut benefits significantly, which is obviously a slippery slope.

The Difference That The Right Agency Can Make

As costs continue to rise (along with the stress that inevitably accompanies higher premiums), many businesses might be tempted to ask themselves whether it’s really that important that they offer employees robust healthcare coverage.

The answer is a resounding yes. All things being equal, a prospective employee will always choose to work for a company that seems to value you them more, over one that seems to value them less. How can you communicate to employees that you value them? Benefits, of course!

Think of it this way: a highly qualified employee has just entered the job market. They interview at a handful of different companies, and receive several offers. The pay is likely similar, but benefits packages can vary significantly. Now, imagine this employee has a family, needs to plan for retirement, and wants to bulk up their savings. It only stands to reason that the company offering the most robust benefits package would be the one that this employee chooses.

Of course, there are many, many different kinds of benefits, so it’s hard to compare them all as equals. It’s worth noting, though, that in a time where many people struggle to afford health coverage for their entire families, that is one of the most important types of benefits an employer can offer. It’s worth noting that premiums are increasing across the board for all types of benefits packages, so there’s no way around these rising costs regardless of which type of package is chosen.

It might seem simpler to skimp on benefits packages, but no good can come from that method. Eventually, employees will read a business’ reluctance to pay higher premiums as a lack of support and appreciation, which always translates to less committed employees and a generally lower quality of work.

What’s more, employees who feel they can’t afford to go to the doctor are more likely to miss more work due to sickness, or even worse yet, come to work sick and spread that illness throughout the business. These are the sorts of eventualities that are all but certain when a passive approach is taken to benefits.

All of this leads to one final question: what can be done about the rising costs of premiums? To this question, there’s an equally succinct answer: find the right agency through which to purchase benefits for employees.

The Difference That The Right Agency Can Make

The agency through whom a business purchases group health insurance and employee benefits packages make a bigger difference than many people realize. Sure, rising premiums are the industry standard, but that doesn’t mean that the human factor can be discounted completely.

Working with an agency that truly values their customers can completely change the narrative. Although costs are unavoidable, there are a number of ways that the right agency can transform the experience, and even find ways to cut costs. Most importantly, they will work with business owners to find the plans that most closely suit their needs.

What’s more, agencies like Taylor Benefits Insurance see the value of customization. That’s why we give businesses flexibility and choice when they are selecting their benefits and group coverage, allowing for a more personal approach. Not only does this mean that our clients can reduce their premiums in many cases, but it also means that the packages they offer are the ones they feel are best suited to their employees.

Additionally, we offer policy review each year during the renewal period, along with a host of other benefits included with working with us. Our decades of experience in the industry mean that not only do we understand the ins and outs of this space, but we also understand the importance of treating people fairly when it comes to providing benefits and coverage.

We know that wading through the waters of healthcare coverage and benefits can feel murky, but we’re here to shine a light on the entire process. We believe that providing a helping hand and taking a transparent approach is the only responsible way to handle this business.

At Taylor Benefits Insurance Agency, we understand how frustrating it can be to contend with rising premiums. If you’re an employer who has recently seen a price hike, contact us to discuss how we might be able to offset that cost without compromising on the packages you offer employees.

Written by Todd Taylor

Todd Taylor

Todd Taylor oversees most of the marketing and client administration for the agency with help of an incredible team. Todd is a seasoned benefits insurance broker with over 35 years of industry experience. As the Founder and CEO of Taylor Benefits Insurance Agency, Inc., he provides strategic consultations and high-quality support to ensure his clients’ competitive position in the market.

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