Business coalitions have been an effective vehicle for driving savings on health insurance and other employee benefits plans by using strength in numbers to negotiate preferred pricing with insurance carriers.

Well structured coalitions have successful track records for serving their constituents and delivering real savings and often multi-year rate guarantees. There are several major reasons for this:

• They deliver cost-savings to employers beyond what they would have paid had they stood alone.
• The coalitions and its employer members endorse vendors who deliver preferred pricing arrangements and actively support the marketing and sales process.
• They are led by Boards of Directors comprised of influential business leaders who know their constituents and have strong relationships with prospective coalition members.
• The employer members maintain a high degree of loyalty.

The common objectives of business coalitions are to:

• Provide a central resource to member businesses and organizations who share a common interest.
• Use strength in numbers to negotiate favorable pricing from insurance carriers for health insurance, other ancillary insurance products, and a variety of services.
• Inject competition into a segment of the market that has been dominated by a limited number of carriers to ultimately drive down costs for everyone.
• To create a vehicle that can help reduce the rate of inflation among employee benefit plans and make future prices predictable.
• Create an educational forum from which all member organizations can benefit.

Business coalitions, under the Benefits Network model, are different from classic “association-style” programs that pool experience and often fail to stand the test of time.