Renewing your group benefits plan can come as a bit of a shock. After all your hard work understanding the industry, designing your plan, and working with your advisor, how can it already be time to do it all again? Although often looked at as a chore, renewing your group benefits plan can be an excellent opportunity to re-engage employees and ensure you’re getting the best service. It’s easy to avoid surprises if you follow these tips.
Understand the why
So, why go through this process in the first place? For the insurer, renewing group benefits plan rates is an opportunity to ensure that the plan is properly funded. Your insurer will evaluate industry trends, inflation, group demographics and your claims experience to decide what level of contributions will keep the plan sustainable, protecting your employees for the long term.
You can take the renewal as an opportunity to check in with your employees and ensure their needs are still being met. You can adjust your plan based on your experience over the past year and requests you have received for new benefits.
Don’t buy on price alone
Maybe you’ve already been through a renewal and discovered this truth: choosing the lowest cost now can hurt at renewal time. Many insurers offer deep discounts to groups in their first year in order to make the sale. This can result in steep increases when your plan comes up for renewal. Choosing a carrier who has a history of fair pricing can benefit you in the long run.
You should also value the relationship you build with your group benefits provider. Remaining with a provider with great service can save you both the time and energy required to undergo a switch and educate your employees about the change.
Be an informed consumer
Instead of letting renewal time sneak up on you, be prepared by following industry news and keeping an eye on your claims experience. If you are on top of these trends, you will have an idea whether to expect increases due to factors such as climbing drug costs or decreases due to positive claims experience at renewal time. This added knowledge will also help you redesign your plan if necessary to continue meeting your employees’ needs while staying on budget.
While you are watching your claims experience, be aware of measures you can take to contain costs immediately, or at renewal. Educating your employees to recognize, avoid and report benefits fraud and abuse, for example, is one way to protect your plan from ineligible costs.
Consider a flexible plan
Flexible plans offer the advantage of transparency and control. Employees with flex plans can see that you are maintaining your contribution or benefits in the face of upward pressure on costs. As an employer, you benefit from setting a budget that fits your business, letting employees take advantage of flexibility to choose the benefits that are right for them.
Group benefits plan renewals don’t have to be confusing. Give yourself a clear goal for your plan, stay on top of trends and have open and honest conversations with your advisor to ensure you avoid any surprises.