A group discount assumes a group. If an employer negotiates a lower price for 50 members and 12 enroll, you're giving the discount without the volume. A minimum enrollment, or a price that changes with enrollment, keeps the deal fair for both sides.
Three ways to set it up
- A minimum bill. The employer pays for at least a set number of members, even if fewer enroll.
- Price bands. The rate depends on how many enroll, like $75 for under 20, $68 for 20 to 49, $62 for 50 or more.
- A review point. If enrollment is below a set number after 90 days, either side can reopen the price.
An example with bands
In a made-up example, an employer hoped for 50 members but 26 enrolled. Under the bands above, they pay $68 for 26 members, or $1,768 a month. Under a flat $62 rate with no minimum, they'd pay $1,612. The bands protect $156 a month that the discount was never meant to give away.
How to pick the number
Start with the enrollment the employer expects, then ask why. If they're guessing, set the minimum lower and use bands. If they're enrolling everyone by default, a minimum close to the eligible count is fair. Opt-in versus opt-out changes this a lot.
Word it clearly
Write down how enrollment is counted, on what date each month, and when the price changes if the count moves between bands. Have your attorney review the wording.
How to bill it
Show the count and the rate on every invoice. If a minimum applies, show it as its own line, like "Minimum enrollment adjustment, 4 members." Clear invoices prevent disputes. Here's what to put on the invoice.
What I'd do this week
- Check each current contract for a minimum or price bands.
- Compare actual enrollment against what each employer expected.
- Add a band table to your proposal template.
Common questions
Will employers accept a minimum?
Explain it as the price of the discount. You can offer bands instead of a minimum bill.
What if enrollment grows past the top band?
That's good news. Check capacity, and decide in advance whether a larger group gets a lower rate.
How do I count members who join mid-month?
Pick a count date, like the first of the month, and apply it every time. Write it into the contract.
Want every invoice to match the contract?
We reconcile every account every month and send your P&L and Balance Sheet by the 15th, so decisions like this start from real numbers. If that's what you need, apply to work with us.