Have you ever thought about just going straight to the carriers and negotiating your benefits without a broker?

Some businesses might think that’s the best way to cut out the middleman, but it is rarely the smartest thing to do for your company.

It can be done, but you need to be an expert in the field and very dedicated to staying up on the latest changes in the marketplace.

I’m personally a CFO/CHRO for a company with 500 employees and I have a podcast and a community that works together on lowering healthcare costs. So I’m probably putting in 20-30 hours a week in this area and I do think I could hold my own with most brokers (even though I’m not one).

With that said, I still use a broker. It does take some work finding the true experts as there are many out there that aren’t worth the money they are getting paid. But there are some amazing brokers that I constantly blown away with the results they are getting.

The real secret, in my opinion, is finding those folks….and when you do they can make a huge difference.

With that said, I understand that sometimes hiring a broker it’s not an option.

If you find yourself in that situation, here are four things that I recommend:

1. You’re going to have to invest a lot of time/education into your own knowledge.

You need to join some groups, get connected with lots of other benefits professionals, and I think it would be good to start mingling as much as you can with some of the top advisors in the country just to hear what they are doing, by following them on Linkedin.

I also suggest becoming familiar with Health Rosetta. You can follow my group Trendbreakers as well. I host a podcast called Trendbreakers with a lot of advisors on it. Remember, you want a variety of sources for your information so don’t put your stock all into one group. You’ll need a lot of different groups to avoid the echo-chamber and ensure sure you’re seeing different ideas not only in your area but around the country.

2. You need to know your claims.

There is a big difference between negotiating a plan when you’re running at 60% loss ratio (ie claims to premium) vs when you’re running at 110%. A rule of thumb is if you’re running below 80%, you should be pushing for a rate pass or a decrease in premium.

If you don’t know the claims, you won’t know when to push.

Also, knowing the types of claims for example are they ongoing claims, or just something that happened one time.

The more that the underwriting team can get to know your plan the better. And the more willing they will be to give you a better rate.

I think this is an area that you’re going to struggle with giving the underwriter the confidence in what you’re giving them. So if they have to hand hold you through the process, or help explain things to you and dig for the info, you’re most likely going to be at the bottom of the stack of proposals they are looking at.

When you do talk with them if you’re not giving it to them in the format that they normally use, then they’ll struggle with having confidence in what you’re saying making them less likely to work with you to reduce your rates.

3. Think about the negotiation like you’re buying a used car.

The more information you have (Kelly blue book, consumer reviews, etc) the better you’ll be able to negotiate.

And a big lever is being able to get multiple quotes.

So if you currently have a Blue Cross plan and you’re only talking to Blue Cross and not talking to UHC, Aetna, Cigna, Humana, etc why would Blue Cross give you a better rate?

This means you are going to need to get to know the rep that you’re working with at Blue Cross AND you need to get to know the other reps from the other carriers and build confidence with them.

A downside is that they may or may not want to meet with you. While they all want to add some new business, you’re only going to bring them 1 client. You’ll be a small fish in a big pond, so they may or may not want to interact with you.

Whereas another broker that has multiple clients, or an employer with thousands of employees may get a different level of service. If you are going to attempt to get benefits without a broker who could bring a carrier multiple clients you’ll have to compensate for that.

4. The last thing, and what I think a lot of employers miss as well as brokers, is the way you can get the best value out of your plan is to change the way the plan is paid for.


Think about the differences between a HSA and PPO plan. They operate very differently in how they are paid for by the employees, but they are really the same Blue Cross or UHC network/plan.

The same thing happens for employers. You can prenegotiate the premium for the year and not get to keep any of the savings. Or you can build in shared savings components.

These options start when you get to about 100 employees, and really start becoming effective when you get over 200 employees.

I was able to save $500k/yr for my employer/employees by changing the funding while keeping the plan the same for the employees (ie same copays, same PPO/HSA options, etc).

I’m not trying to scare you, well maybe I am a little. I would compare it to trying to climb Mt. Everest. You can do it by yourself. But wouldn’t it be so much better to have a sherpa with you? Someone that has been up the mountain many times and can help you guide you up there? If you don’t have one, then you’re going to have to invest the time/energy into becoming your own climber and sherpa on the employee benefits mountain.

It can be done, but please don’t try and do it without investing the time/energy into properly preparing for it.

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