Top 5 Ways to Reduce Health Insurance Costs Before the New Year

Sound Insurance Brokerage Group is a Maryland-based benefits partner dedicated to helping small and mid-sized employers offer strong, sustainable health coverage without losing control of their budgets. Rather than dropping a renewal packet on your desk once a year and hoping you sign, we take a consultative, year-round approach. We look closely at how your current plan is structured, what your employees actually use, and where there may be hidden inefficiencies or missed opportunities.

Our mission is simple: help Maryland businesses manage rising health insurance costs without sacrificing coverage quality or employee satisfaction. That means cutting through the jargon, explaining options in plain language, and bringing creative strategies from carriers like CareFirst, Aetna, and UnitedHealthcare. For employers who feel like health insurance is something that just happens to them, Sound Insurance is there to put you back in control.

As health insurance renewals approach, many small business owners brace for the same pattern: the renewal arrives, the rates are higher, and you’re forced into a quick decision. Do you absorb the increase, shift more of the cost to employees, or cut back on coverage? None of those choices feel ideal.

The good news is you don’t have to wait for your renewal to take action. With the right strategy and a bit of lead time, you can reduce health insurance costs before the new year—without gutting your benefits or frustrating your employees.

Below are five proven strategies Sound Insurance Brokerage Group uses to help Maryland employers lower health insurance costs while keeping coverage strong.

Why Health Insurance Costs Feel Out of Control

Before we dive into solutions, it helps to understand why so many employers feel stuck.

For many small businesses, the biggest pain point is the unpredictability of year-over-year premium increases. You might see a double-digit jump with little explanation, making it tough to build a reliable budget. Health insurance often becomes your second-largest expense after payroll, yet it’s one of the least predictable.

There’s also the pressure of feeling boxed into bad options. When costs rise, it can feel like your only choices are to strain the business by absorbing the increase or risk employee dissatisfaction by passing more of the cost onto them. Neither path feels like a win when you’re trying to stay competitive and take care of your team.

On top of that, the language of health insurance can be confusing. Terms like “level-funded,” “self-funded,” “HSA,” “HRA,” and “narrow network” get thrown around, but it’s not always clear what they actually mean for your business. You may suspect there are smarter ways to structure your plan, but without a guide, it’s hard to know which options are truly a fit.

Time is another real constraint. Running a business doesn’t leave much room to shop the market, compare carriers, or model different contribution strategies. As a result, many employers simply renew what they already have because they don’t have the bandwidth to explore alternatives.

And finally, there’s a very human concern: you don’t want to upset your employees. Benefits are a big part of how people evaluate their job and overall compensation. Any change—higher deductibles, different networks, or new plan structures—can be perceived as a downgrade, even if it’s part of a smarter long-term strategy.

These are real challenges, but they’re not permanent. With the right support and a proactive approach, you can start to regain control.

Explore Level-Funded and Alternative Funding Options

One of the most effective ways to lower health insurance costs for many small and mid-sized employers is to look beyond traditional fully insured plans.

Level-funded plans blend the predictability of a fully insured plan with the potential savings of self-funding. You pay a fixed monthly amount, so your cash flow is steady. Behind the scenes, your group is partially self-funded and protected by stop-loss insurance.

If your employees are generally healthy and claims are lower than expected, you may receive a year-end refund. If claims are higher, the stop-loss coverage helps shield you from unexpectedly large expenses.

For Maryland employers, Sound Insurance frequently evaluates level-funded options from carriers like CareFirst, Aetna, and UnitedHealthcare to see whether they’re a good fit. When they are, employers can benefit from:

• Lower overall premium spend
• More transparency into how claims are driving costs
• The potential to share in savings when claims are favorable

If you’ve only ever renewed a traditional fully insured plan, exploring level-funded or alternate funding options can be a meaningful first step toward cost control.

Reevaluate Your Employer Contribution Strategy

How you split premium costs between the business and your employees has a major impact on both your budget and your long-term exposure to rate increases.

Many employers set their contribution strategy years ago and haven’t revisited it since. A fresh review can uncover opportunities to save without surprising your team.

One approach is to offer a strong “base” plan where the employer covers most or all of the cost. Employees who want richer coverage—such as lower deductibles or broader networks—can choose to “buy up” and pay the difference. This keeps your core costs controlled while still giving employees meaningful choice.

Another strategy is to shift from percentage-based contributions to flat dollar amounts. When you commit to covering a percentage of the premium, your costs automatically increase every time the premium does. A fixed dollar contribution per employee gives you more predictability and allows you to better manage future increases.

Sound Insurance Brokerage Group works with employers to model different contribution setups and find a structure that balances affordability, predictability, and employee satisfaction.

Use Voluntary Benefits to Strengthen Your Package

Reducing health insurance costs doesn’t always mean cutting benefits. In many cases, you can keep your core medical plan lean and still offer a strong overall package by layering in voluntary or supplemental benefits.

These might include dental, vision, accident, hospital indemnity, or critical illness coverage. Employees who want these extra protections can elect them and pay via payroll deduction, so they’re choosing what fits their needs and budget.

From the employer’s perspective, voluntary benefits:

• Add perceived value without increasing your premium spend
• Give employees more ways to customize their coverage
• Help your benefits package stand out in a competitive labor market

Over time, a more complete and flexible benefits offering can also support retention, which reduces the indirect costs of turnover and rehiring.

Invest in Wellness and Preventive Care

Healthier employees tend to file fewer claims, and fewer claims can help stabilize your rates over time. You don’t need a large, complex wellness program to make progress—small, consistent efforts can add up.

Encouraging preventive care is a simple place to start. Promoting annual physicals, preventive screenings, and routine checkups helps employees catch issues earlier, when they’re easier and less expensive to treat. Reimbursing for flu shots or offering small incentives for basic wellness activities can also support healthier habits.

Mental health is another important area. Providing access to employee assistance programs (EAPs), telehealth counseling, or stress management resources can improve well-being and productivity while helping to prevent more serious issues down the line.

Many carriers offer wellness tools, engagement platforms, or even premium credits for groups that meet certain participation thresholds. Sound Insurance helps employers understand what’s available through their current or potential carriers and how to put those programs to work.

The result is a healthier workforce, better morale, and a more sustainable long-term cost trend.

Fine-Tune Your Plan Design and Networks

Sometimes, the most effective savings come from carefully adjusting what you already have rather than making sweeping changes.

One lever is your provider network. Broad PPO networks are convenient, but they can be more expensive. Narrow or performance-based networks focus on providers with stronger cost and quality metrics, which can lead to lower premiums without sacrificing care.

Another lever is your plan design. Modestly increasing deductibles or copays can reduce premiums, and you can help offset the impact by pairing the plan with a Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) that you partially fund. Employees still receive meaningful support, but you gain more control over how and when dollars are used.

It’s also worth reviewing your plan for underused features. Many plans include extras that sound attractive but see little real-world use. Removing or simplifying those features can trim costs without affecting most employees.

Sound Insurance Brokerage Group regularly conducts plan reviews for Maryland employers to identify these “quiet wins”—small, strategic adjustments that add up to real savings over time.

Take Action Before Renewal Season

Most employers wait until their renewal arrives to start thinking about changes. By that point, time is short and options are limited. Decisions are made under pressure, and it’s easy to default to “what we’ve always done.”

You don’t have to follow that pattern.

By starting the conversation before the new year, you give yourself room to explore level-funded options, revisit your contribution strategy, consider voluntary benefits, implement simple wellness initiatives, and fine-tune your plan design and networks. The goal isn’t to slash benefits—it’s to spend smarter and build a sustainable benefits strategy that supports both your business and your employees.

Sound Insurance Brokerage Group partners with Maryland businesses to do exactly that. Through no-cost benefits reviews, clear explanations, and tailored strategies, they help employers lower health insurance costs without cutting corners.

If you’re ready to take control of your next renewal and position your business for lower 2026 premiums, now is the time to start planning. With the right guidance and a proactive approach, you can enter the new year with a benefits strategy you feel confident about—not just another rate increase to absorb. Contact Sound Insurance today for a no -cost benefits review.
We’ll show you how to reduce costs without cutting corners — and help you enter the new year with confidence.