4 techniques for negotiating employee benefits

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Before starting a discussion about benefits, know what low value “gifts” are and be prepared to trade in a “donation” for an employer’s high-value priority. (Photo: Shutterstock)

Strategies for negotiating with a carrier will vary depending on the identification of the employer, the industry and their working relationship with the carrier. Insurance brokers have several negotiating tactics. Similar to a game of chess, it is imperative that brokers understand the lay of the land and think about various approaches before taking their first step.

Brian freeman
Brian freeman is the founder and CEO of Mployer Advisor, the nation’s leading digital marketplace for advisor ratings and reviews, which is redefining the way employers find, review and select insurance advisors.

To guide you, here are four techniques to consider when negotiating benefits.

1. Listen to employers’ priorities

The most important piece in chess is the queen. The most important information for the broker is to know what is important and what is not important to the employer client. Fortunately for brokers, this valuable information is something carriers are not aware of. To successfully execute this approach, it is important for brokers to take the time to actively listen to their employer clients and identify ways to meet their business needs and priorities.

Employers generally fall into one of four categories and / or personalities:

  • It is important to offer generous medical and professional services, whatever the cost.
  • Cost is the primary determinant of a benefit plan decision
  • Providing quality services at a profitable price is a priority
  • Benefits are a recruiting tool, including work-life balance

Before contacting an operator, check that you have correctly identified the personage who best corresponds to your employer client.

2. Recognize the gift

Often in chess, a player will sacrifice a pawn or other critical piece to set up a bigger move later. In the insurance industry, the pawn may be referred to as “the gift” or the non-essential elements of the employee benefit plan of the employer client. Before starting a discussion about benefits, know what low value “gifts” are and be prepared to trade in a “donation” for an employer’s high-value priority. For example, if a wellness plan isn’t important to an employer but price is, then negotiate removing a wellness plan from a benefit package in exchange for price drop.

3. Know your BATNA

Just like in chess, it is important to anticipate your opponent’s next moves and to plan your counter moves in advance. As stated in Herb Cohen’s 1982 bestseller “You Can Negotiate Anything: The World’s Best Negotiator Tells You How To Get What You Want,” have a BATNA – or the best alternative to a negotiated deal – ready. . Before any negotiation, enter into the discussion with your prepared countermovements. This could mean accepting a different carrier or working with a different plan design. To avoid a dissatisfied employer client or potential trust issues later, set expectations early. Remember to proactively discuss your BATNA with the employer client in advance to avoid any unpleasant surprises later.

4. Negotiate in good faith

Your reputation is essential, both for your employer customers and for the carriers. Don’t misrepresent or overdo it just to make a deal now and risk losing your employer client’s trust later. Trust and respect are two non-negotiable elements when negotiating a deal. The insurance space is a small world, and your character and reputation are paramount. Maintaining a level of trust and respect in the industry will allow your voice (and your opinion) to gain more weight and influence in future negotiations.

For a seasoned insurance broker, negotiating deals with insurance companies can be a fun challenge. As in chess, with experience and practice, the strategies, tips and techniques described above will instinctively harden. Even so, insurance brokers must continually work to hone and refine their negotiating skills. After all, insurance brokers have much more of an effect on the cost and quality of an employer’s benefit plan than insurance companies.

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