Unlock Hidden Savings: The Cost-Saving Power of Carrier Credits in Employee Health Plans

Over the past couple years, employee healthcare costs have continued to rise, and unfortunately, there’s no sign of it slowing down anytime soon. Employers and HR teams are having to find ways to get creative with cost-saving initiatives to balance out these increases. As your benefits broker, we’re always looking for new ways to help you cut costs and get the most value out of your employee health plans. That’s why we’re highlighting one of the best-kept secrets in cost-saving strategies: carrier credits.

Throughout the plan year, insurance carriers provide opportunities for employers to earn credits that can be put toward invoices or additional employee benefits. We’re pulling back the curtain on carrier credits to help you understand exactly what they are, how they work, and how your benefits broker can help you access them.

What are carrier credits?

Carrier credits are reimbursements provided by insurance carriers that are designed to offset employee benefits costs. These credits can appear as reductions on your monthly invoice or as funds allocated toward wellness initiatives for your employees.

Carrier credits can come in different shapes and sizes, depending on your group size, plan selections, or renewal agreements. It’s smart to check in on potential credits during a few key moments throughout your plan year. It’s also important to communicate with your benefits broker on the best plan of action to ensure you’re informed about any available credits.

What types of carrier credits are available?

Available carrier credits can depend on the type of funding you have, if you’re adding new lines of coverage to your plan, and more. Here’s some of the most common types of carrier credits.

Premium/admin credits

When adding new lines of coverage with an insurance carrier, you can work with your broker to negotiate premium or admin credits. Since you're expanding your coverage and giving them more business, it's a great opportunity to ask for extra concessions or benefits from them.

End-of-plan-year unused claims funds credits

If you’re using an alternative funding type for your employee benefits (like a level-funded plan), some providers or insurance carriers will return any unused claims funds to you at the end of each plan year. It’s crucial to work with your broker on designing the right benefits plan for your needs and negotiating carrier contracts. They can help you secure a higher percentage of claims credits and maximize your cost savings.

Wellness credits

Wellness credits are allocated funds that can be put toward wellness initiatives for your employees. Data shows that preventive wellness measures lead to lower healthcare costs, so it’s in the carrier’s best interest to support these initiatives. Large group or alternatively funded plans are typically able to negotiate wellness credits, allowing you to spend more money on your employee wellness benefits. Wellness credits typically range from $20,000 to $25,000. Here are a few examples of how these credits can be used:

• Gym stipends
• Nutrition services
• Wellness gift baskets
• Wellness app subscriptions

When should I check for carrier credits?

There are a few key moments during your plan year that are best to check for potential carrier credits, but the short answer is: your benefits broker should already be proactively negotiating carrier credits on your behalf.  Here are some of the most important times throughout your plan year to check in on carrier credits.

Pre-renewal

While negotiating for renewals, you’re in one of the best positions to ask for carrier credits. This is especially true if you’re switching insurance carriers. You hold the purchasing power, and the insurance carriers want your business. For example, we were recently able to negotiate a $7,500 signing credit while moving a client from one insurance carrier to another.

Mid-plan year

A mid-year check-in is crucial if you’re counting on wellness credits for your employees. Many carriers have lengthy approval processes, so it's vital to submit your plans for those funds well in advance to ensure everything is processed on time.

End-of-plan year

The end of your plan year is also a critical time to check on your wellness credits because they have to be used before the end of the year or you’ll lose them. If you get to the end of your plan year and you haven’t used your credits yet, check in with your broker for ideas on how to quickly make the most of them.

How to ask your broker about carrier credits

If your broker hasn’t brought up carrier credits as part of your renewal conversations or other cost-saving strategies, we recommend taking action now so they know you’re interested.

Here’s an example of how you can start the conversation with your broker:

Hi [broker name],

As we continue to look for ways to maximize the value of our employee benefits program, I wanted to see if we can look into potential carrier credits. Specifically, I’m most interested in:

1. Credits available as we approach renewal season and [resign/renew] with [carrier name].
2. Potential credits for unused claims funds we’ve already paid.
3. Wellness credits for employee wellness initiatives.

Your insights and connections are extremely valuable to us, and I trust your expertise in guiding us to find the best solution.

Best,

[your name]