How Shifting from Small Group to Mid-Market Classification Saved a Company 14% in Premiums

I often come across clients whose brokers have told them their current health insurance plan is the "best deal out there." While this may sound reassuring, it is crucial to dig deeper, especially if you are responsible for the health and well-being of your employees and your company's bottom line.

Take, for example, a recent case study involving a growing business in Texas. The company had expanded to 100 employees and entered the realm of what the state's health insurance regulations classify as "mid-market." Yet, their current health insurance plan still considered them a "small group." The result? They missed critical financial data, flexibility, and premium savings.

What Is The Difference Between Small Group and Mid-Market Classifications?

Here are some of the limitations the organization is facing with the small-group classification:

Access to Data: Limited or no access to claims data.

Rate Determination: Premiums are mainly determined by the demographic data of employees, like age and sex.

Flexibility: There needs to be more flexibility when creating a health insurance plan tailored for employees.

What Is The Benefit Of A Mid-Market Classification?

In contrast, here are some of the benefits this company will receive by moving up to the "mid-market" classification:

Access to Data: Full access to claims data, allowing them to understand their cost drivers.

Rate Determination: Premiums are set based on actual claims performance, potentially saving them money if their workforce is healthier than average.

Flexibility: Higher flexibility to tailor plans according to their needs.

Oh, and did I mention the huge premium savings?

When I started working with this particular company, I immediately noticed the misclassification. After re-evaluating them under the "mid-market" category, we were able to not only help them avoid a 7% premium increase but reduce their premiums by 7%. The net result? A 14% swing in premiums is significant for any business, but especially for one that is growing and mindful of costs.

What does this mean for you?

As your company grows, ensure your health insurance plan supports your growth. Making sure your plan has your company classified correctly can be the difference between overpaying or saving $100,000s.

As your next health insurance renewal nears, it is imperative you ensure that you are getting the best deal—not just in terms of premiums but also in flexibility and coverage. Remember, an appropriately tailored health insurance plan is not an expense but an investment in your company's most valuable asset: its people.

Do not settle the next time your broker tells you you are getting the best deal out there, do not settle. Challenge the status quo. Seek a second opinion. And if you need help navigating these complexities, consider seeking advice from a trusted health insurance advisor. Your employees and your bottom line will thank you.