Employee Benefits
HR & Compliance
Technology
Wellness
PEO Solutions
In the employee benefits industry, cost containment is one of the biggest challenges employers face. Rising healthcare premiums, compliance burdens, and administrative complexities make it difficult for businesses to offer competitive benefits without breaking the bank. Carrier credits—a lesser-known but highly valuable financial tool—can help employers offset costs and enhance their benefits offerings.
For brokers, understanding carrier credits and how to leverage them effectively can make a significant impact on cost savings, client satisfaction, and business growth. In this blog, we’ll explore:
- What carrier credits are
- How they work
- The different types of carrier credits
- How brokers can use them to benefit their clients
By mastering carrier credits, brokers can differentiate themselves in the market and provide added value to their clients.
1. What Are Carrier Credits?
Carrier credits are financial incentives, reimbursements, or discounts that insurance carriers provide to businesses that meet specific criteria. These credits can be used to reduce premium costs, cover administrative expenses, or enhance benefit offerings.
Insurance carriers offer these credits as a way to incentivize employers to:
✔ Choose a particular carrier for their benefits package
✔ Implement wellness programs or cost-saving measures
✔ Offset administrative costs related to HR technology platforms or third-party administration (TPA) services
✔ Maintain multi-year agreements with a carrier
Brokers who understand how to identify, negotiate, and apply these credits can significantly reduce overall benefits costs for their clients while ensuring employees receive high-quality coverage.
2. How Do Carrier Credits Work?
Carrier credits function differently depending on the type of credit and the specific insurance carrier. However, they generally fall into three categories:
A. Administrative Credits
Some insurance carriers offer credits to offset the cost of HR technology or third-party administration services. These credits may cover expenses related to:
- HR software & benefits administration platforms
- COBRA administration
- ACA compliance reporting tools
👉 Example: A health insurance carrier might provide a $10,000 annual credit to help an employer cover the cost of a benefits administration system like ADP, Zenefits, or Employee Navigator.
B. Wellness & Participation-Based Credits
Carriers often provide financial incentives to employers that implement wellness programs designed to improve employee health and reduce claims costs. These credits may be contingent upon:
- A minimum percentage of employee participation in a wellness program
- Offering preventive screenings or biometric testing
- Implementing smoking cessation, fitness, or mental health programs
👉 Example: A carrier might offer a 2% premium discount if 50% or more of an employer’s workforce participates in an annual biometric screening.
C. Multi-Year & Retention Credits
To encourage long-term client retention, some carriers offer multi-year credits or rate guarantees for businesses that sign a two- or three-year agreement instead of renewing annually.
👉 Example: A carrier might apply a 3% discount on second-year premiums if a company commits to a two-year benefits contract.
Brokers can proactively identify and negotiate these opportunities to drive cost savings for their clients while ensuring long-term rate stability.
3. The Key Benefits of Carrier Credits for Employers
Employers who take advantage of carrier credits can experience multiple benefits, including:
✅ Lower Premium Costs
Carrier credits help offset premium increases and make benefits packages more affordable for employers and employees.
✅ Cost Coverage for HR & Compliance Tools
Many companies struggle with the administrative burden of COBRA, ACA reporting, and benefits enrollment platforms. Carrier credits can fully or partially subsidize these services, saving thousands of dollars annually.
✅ Incentives for Employee Well-Being
Wellness program-based carrier credits can help companies create a healthier workforce, reduce absenteeism, and lower long-term healthcare costs.
✅ Rate Stability & Predictability
Multi-year credits allow companies to lock in predictable premium costs, which helps with budgeting and financial planning.
By working with a broker who understands carrier credits, employers can maximize cost savings while enhancing their benefits strategy.
4. How Brokers Can Use Carrier Credits to Help Their Clients
Brokers who leverage carrier credits deliver greater value to their clients while strengthening their relationships. Here’s how brokers can proactively identify, negotiate, and implement carrier credits for their clients:
A. Conduct a Carrier Credit Audit
The first step is to review existing policies and identify available carrier credits. Many employers are unaware that they may be eligible for administrative or wellness-based credits.
🔹 Brokers should:
✔ Review all carrier contracts for potential credits
✔ Check for HR software reimbursements (e.g., benefits administration tools)
✔ Identify available wellness incentives based on the employer’s industry and workforce size
B. Negotiate Additional Credits with Carriers
Not all carrier credits are advertised. Experienced brokers can negotiate additional incentives by leveraging their relationships with carriers.
🔹 Brokers should:
✔ Ask for rate reductions in exchange for multi-year contracts
✔ Inquire about custom wellness incentives tailored to the employer’s needs
✔ Request additional administrative reimbursements for technology platforms
💡 Pro Tip: If a company is switching carriers, brokers should use that opportunity to secure additional credits as part of the transition.
C. Educate Clients on Participation-Based Credits
For credits tied to employee participation in wellness programs, brokers should help clients develop strategies to increase engagement.
🔹 Brokers should:
✔ Work with HR teams to communicate wellness program benefits to employees
✔ Partner with carriers to offer incentives (gift cards, discounts, etc.)
✔ Track participation rates to ensure eligibility for ongoing credits
D. Help Clients Maximize Savings Year-Round
Carrier credits aren’t just a one-time perk—brokers should ensure their clients continue to qualify for credits year after year.
🔹 Brokers should:
✔ Set up quarterly or annual reviews to track carrier credit usage
✔ Monitor compliance with wellness program participation requirements
✔ Re-evaluate carrier contracts before renewal to renegotiate credits
Brokers who stay actively engaged in carrier credit management can help clients maximize long-term cost savings and benefits efficiency.
5. How Benely Helps Clients Optimize Carrier Credits
As a leading benefits broker, Benely specializes in identifying and leveraging carrier credits to help clients save money and enhance their benefits programs.
🔹 Benely’s Approach:
✔ Conducts in-depth carrier credit audits to find every available cost-saving opportunity
✔ Negotiates exclusive credits with top carriers to secure the best possible deals
✔ Works closely with HR teams to increase employee participation in wellness programs
✔ Provides ongoing plan management to ensure clients maximize savings year after year
By partnering with Benely, businesses can take full advantage of carrier credits while ensuring their benefits programs remain competitive and cost-effective.
Conclusion: Why Brokers Should Prioritize Carrier Credits
Carrier credits are an underutilized tool that can help businesses reduce costs, improve employee benefits, and streamline HR operations. Brokers who take the time to understand, negotiate, and optimize these credits can deliver exceptional value to their clients.
✔ Lower costs for employers without reducing benefits
✔ Offset expenses for HR technology & compliance tools
✔ Encourage wellness programs that improve employee health
✔ Provide long-term financial stability through multi-year rate incentives
For brokers looking to stand out in the competitive benefits market, mastering carrier credits is a game-changer. If you’re an employer looking for a broker who knows how to maximize your cost savings, reach out to Benely today!
