8 Ways to Reduce Your Group Insurance Costs

8 Ways to Reduce Your Group Insurance Costs text overlaying image of a arrow pointing down over moneyWith the cost of healthcare continuously on the rise, many employers are faced with a dilemma. Do you want to provide solid health coverage for your employees and pay a high price? Or do you want to pay less and allow their health coverage to be lacking in some areas? Well the truth is, you don’t have to make that decision. It’s actually possible for you to offer employees a health plan with stellar benefits, without breaking the bank. Great employee group health coverage can help attract new talent, while also keeping current employees satisfied, but for many small to medium sized businesses, the associated costs have become a burden.


So how can you lower your group health cost without disrupting the lives of employees by removing valuable benefits? Well, we’re here to tell you. In this article we will be discussing some of the most effective ways for employers to reduce their insurance costs. So, that the money saved can be invested to further grow your company. If you utilize some of our tips, you will reduce your insurance related expenses, and still be able to keep employees happy. 

1.Participate in a Plan Audit

One of the first things you should do when looking to cut your insurance cost is to sit down with your insurance provider and participate in a comprehensive audit of your current coverage plan. When doing this, you’ll want to focus on reviewing things like claims history and administrative costs. Additionally, you’ll want to try to pinpoint any benefits that aren’t utilized, redundant coverages or any other plan inefficiencies. In these situations, it’ll pay off to be straightforward with your insurance agent. Tell them that you want to find ways to reduce your cost, without getting rid of the aspects of the plan that your employees value. By taking a step back and looking at the plan as a whole with an insurance expert, you should be able to identify some cost-saving tactics that can be applied. 

2.Add and Encourage Telehealth Services

If you don’t already know, telehealth or telemedicine refers to healthcare-related services that are distributed electronically. Giving patients remote access to care that formerly would require them to meet a doctor in-person. Within the past few years (during the COVID-19 pandemic), telehealth has become increasingly popular compared to traditional doctors visits. Not only are these services convenient for employees by letting them talk with their doctors from the comfort of their homes. But it can also reduce group healthcare rates by lowering the number of emergency room visits and other non-urgent visits. In addition to making sure your plan includes these services, it’s also a good idea to encourage your employees to actively use them. By promoting preventive care and early intervention through telemedicine, employees will have more flexibility, and your costs will go down. 

3.Offer a Wellness Program

Another way to lower your group insurance costs is by promoting a healthy culture among your employees. A great way to do this is by implementing an employee wellness program of some sort. By incentivizing employees to create healthy habits, they will be less likely to suffer from unwarranted injuries or illnesses. Which will ultimately lower the costs that you pay as an employer. While employees that are already low-risk can continue to maintain their exceptional health. Higher-risk employees will be able to improve their overall well-being. In addition to lowering plan costs, wellness programs have also proved to be effective in lowering employee absenteeism, disability and workers’ compensation claims. Here are a few example of what an employee wellness program could include:


  • Fitness Offerings – This could include benefits such as an employee gym or group fitness classes to help improve physical wellness. 
  • Counseling and Assistance – Helps employees navigate personal issues like substance abuse, nicotine cessation or mental health issues, by offering them resources and professionals. 
  • Healthy Food – Offering things like healthy snacks in vending machines or healthy foods in your employee cafeteria will help contribute to employees overall well-being.

4.Negotiate and Shop Around 

When it comes to securing better rates and terms for your group health insurance plan, you should never be afraid to negotiate with your current provider. A good tactic is to give your agent the price range that you would like to pay. If they turn you down immediately, you can let them know that you are going to explore other options. Even if you’re certain that you want to stay with the same company. The tactic will make your agent more willing to offer some discounts. With that said, it will be worth your time to actually explore other insurance providers to see what else the market is offering. How do you know that there isn’t something better available unless you look? Using comparative shopping sites like Group-Health-Quotes.com can help you view competitive quotes and plan benefits side-by-side, so you’ll be sure to get the best deal!

5.Consider Who and How You Hire

When it comes to hiring new employees, there are a couple ways to lower your overall group rate. The first way is to hire more employees. Are you aware that the more employees you employ, the lower your premiums will be? Yep, it’s true. And it all comes down to basic math. Insurance companies face a risk for each employee that is covered by a company plan. With that said, when a company has only a few employees, the probability that some of those employees will face major medical issues will go up. On the flip side, when a company has lots of employees, the insurance company will have less of a risk and in turn will be able to offer you a better deal. Though this tip is dependent on your company’s financial situation and necessity for new workers, it could be an effective way to cut costs. 


The second savings tip when it comes to hiring is to hire young employees. Overall, the younger an employee is the less likely they will be to face health issues like sickness or injury. Again, insurance companies will take this into account when deciding how much or how little to charge you. Additionally, since young adults are healthier on average than middle aged adults, they will consume less healthcare services.  Which will also lower your rates. While it is beneficial to have experienced, veteran workers, growing the group of younger employees in your company could benefit you monetarily. 

6.Offer Health Saving Account (HSA) Options 

Another way to lower your group costs is by offering employees health savings account (HSA) options. HSAs are saving accounts that employees can use to set aside money to later use for certain qualified medical expenses. These accounts allow employees and employers to contribute tax-exempt money to the fund. The way HSAs can help to reduce group health plan costs is simple. In order to be HSA eligible, employees must be enrolled in a high deductible health plan. With high deductible health plans in place, you and your employees will get to pay lower premiums since the employees are having to pay more money out of pocket. Additionally, by offering an HSA plan your payroll taxes will be lowered, and employee satisfaction will likely increase. 

7.Encourage the Use of Generic Drugs 

group generic medicationsOne of the top factors that drives the cost of a group health plan is the cost of pharmaceutical drugs.  While you can’t encourage employees to use less medications, what you can do is encourage them to use the generic versions of the pharmaceuticals that they need. Generic drugs are just as effective as name brand drugs, but cost far less money. Using generics is a win-win situation for you and your employees since they will be paying less for the medications and in turn your future plan cost will be reduced. 

8.Educate Your Employees

Another great way to save money for very little cost to you is by making sure that your employees are educated about their healthcare options. Oftentimes employees will pick a health plan that either provides too little, or too many benefits. When this happens, there will likely be excessive insurance claims and higher premiums, both of which you don’t want. To combat this potential problem, it will pay off to offer your employees some type of education about the insurance options that you offer. This could include resources such as: 


  • An information brochure or packet 
  • A company seminar where you bring in an insurance expert to speak.
  • A company Q&A
  • Open Enrollment training courses

There are plenty of ways to keep your employees informed when it comes to their insurance policies. And doing so will pay off in the long run.


As the head of a company it is your job to make sure that your group health insurance plan is not only affordable, but that it also pleases your employees. Finding a happy medium between these two necessities can be challenging but it’s not impossible. By offering your employees services such as a wellness program, telehealth services, and health savings accounts, you will effectively reduce your premiums and overall plan cost. Additionally, going the extra mile by encouraging the use of generic drugs, providing insurance education, and shopping around for competitive rates will also help to cut the price of your plan. You should also make sure to participate in an annual plan audit to pinpoint unnecessary plan features. If you adopt these strategies, you will reach the perfect balance between quality and cost-effectiveness when it comes to your company’s health policy. 


While all of these tips will help you to gain stellar employee health coverage for a good rate, the best way to lower your group costs is by comparing quotes on Group-Health-Quotes.com. At GHQ, we have a group of trusted insurance advisors who work around the clock to pair business owners like you with affordable health coverage that fits all their needs. We offer side-by-side plan comparisons and free quotes. So you’ll be sure to get paired up with the policy of your dreams. To get your free quote today or to learn more, fill out a form or give us a call at  888-571-0291

Picture of Sydney Berry
Sydney Berry

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