How to Keep Your Health Insurance Costs Down

Assuming you can't change the health condition of your employees, the industry in which you work or your geographic location, the only real power you have to lower cost is to "shop around".  Shop around and make providers regularly compete for your business.

You can do this yourself or hire an agent or broker. You could even hire more than one. A broker is a person that works for you and "goes out into the marketplace" to find the best insurance for you. Assuming your broker is a good one, this can be worth quite a bit.

What will this service cost? As with any major purchase, a good broker should be more than able to pay for himself. But health insurance is unique in that the carriers have a built-in fee for the agent and broker. If you don't use one, the carrier will simply keep the fee. In other words, you don't get a better deal if you go direct. In fact, it is illegal in most states for any carrier to give direct buyers a better deal than they provide through reps.

An agent represents an insurance carrier or multiple carriers. Contact a few agents to obtain multiple quotes. Sure, you could do all the legwork yourself and you might be able to find similar benefits, but be sure to consider the cost of your time from your business, family and leisure. Why do the legwork yourself when the carrier will pay the broker or agent fee?

The nature of insurance is that rates fluctuate from year to year, and the price you are charged by your carrier typically rises each year. Fail to shop every few years and you will soon be paying too much. In fact, most good agents today know this and will re-bid your coverage to multiple carriers each year. They do this to keep your business.

Take caution, however, when you want competitive bids. A good health insurance agent can be a real asset. When you have a good one, take care to maintain a healthy relationship by communicating your cost sensitivity and interest in periodic competitive bids. Don't hire competing brokers or agents without first discussing it with them. The good ones won't have a real problem with it, but they want to know what to expect and that you are upfront and honest with them. Like any important relationship, manage it well and it will pay dividends.

The following health insurance experts generously contributed their expertise to this article series:

• Dale Bresee and Diane Stallcup of Henderson Benefits Group, Mr. Bresee can be reached at dale.bresee@GoHenderson.com
• Stuart K. Hawley, president of The Hawley Group, Inc. Mr. Hawley can be reached at Stuart@thehawleygroup.com