Was Your Health Insurance Renewal Successful This Year?
Your health insurance renewal shouldn’t be the worst part of your employee benefits year. It could be the time when your employees are reminded of the commitment made on their behalf including both your time and the company’s money. Unfortunately, most small businesses do not have a positive renewal experience from year to year. Don’t let it happen to you again! Make sure you are working with a team that is as committed to your renewal as you are.
Provided By: Marcus Newman, RHU, CBC Vice President, Small Business Benefits Consulting
What is a successful renewal?
- You felt in control of the timeline and never felt rushed to make a decision.
- Any changes – or the decision to stay the same – were thoughtful and strategic.
- You feel that your employees are offered acceptable programs based on cost and quality.
- You are confident that you have the best possible plan(s) at the best possible price relative to your unique circumstances.
- You conducted meaningful open enrollment meetings and accounted for all of the new ACA communication requirements.
5 things that get missed when a Small Business renews health insurance:
- Conducting Meaningful Open Enrollment Meetings for the Staff
Open enrollment is a period of time set aside by an employer in order to educate employees regarding their group insurance benefits. The goal of an open enrollment meeting is to ensure that all employees receive a comprehensive overview of the benefits offered. This overview will enable employees to make informed decisions on what is best for themselves and their families.
The open enrollment period is usually held annually and occurs for the 30 days prior to the policy renewal. During this time employees can enroll, change plans, add dependents, and make other changes. Remember that outside the open enrollment period, employees can only make changes if they experience a “qualifying event.”
The key to a successful open enrollment meeting is communication! An employer should provide enrollment kits to each employee, including summaries for benefits and coverage (SBC’s), all employee costs, any necessary paperwork, and the required annual disclosure notices. These meetings are a great time to deliver other important company messages as well.
- Shopping the Market: Compare All of the Insurance Companies’ Offers
Exploring what other insurance companies may offer begins with preparing a “census” that will be shared with the insurance market. This document must include each of the employees’ names, date of birth, gender, and home zip code. ADDITIONALLY, the same information MUST be provided for any spouses or dependents that will be covered. Small Business Health Insurance is now age rated. This means that every covered individual (including spouses and children) have their own rate based on age. An updated census is a good thing to have ready before you begin the renewal process.
Once the insurance companies deliver their quotes, an “apples to apples” comparison should be made. Remember, not all of the insurance companies will offer the exact same plans. Knowing that, comparing the plans that are “most similar” is the appropriate strategy. It will be easy to determine which of the insurance companies is offering the best coverage at the lowest cost.
This is also the time to consider the elements of the plans you offer. Take a look at the different plans available and compare the increase in risk (or out-of-pocket expenses) to any potential premium savings. Make sure you have the plan you want versus the plan you have always had.
- Offering Multiple Plans Will Meet Different Employee Needs.
You may or may not know that most insurance companies allow Small Businesses to offer more than one health plan at a time. Some small companies, like you, are offering three or four different plan choices.
Each of our employees has different needs and priorities when it comes to health insurance, because we all access care differently. Some of your employees are only concerned with the cost paycheck to paycheck. Others will report that the out-of-pocket expenses are their primary concern and that they might be willing to pay more for a more comprehensive coverage. You as the employer do not have to decide for them. By offering two different plans, you can meet each of these needs.
A multiple plan strategy need not cost the employer more. Different cost sharing programs are allowable (even encouraged) when there is more than one plan option.
- Solving the Cost Sharing Puzzle and Creating a Sustainable Strategy.
As you probably know by now, Small Business Health Insurance premiums have become “age rated” or they will become so soon. As such, the age-old percentage-based cost sharing calculation may no longer suit your needs. The problem with that approach is obvious – older people will have to pay more than the younger people. Many employers express that they are uncomfortable with this situation; they aren’t aware that they have options.
Creating a “cost to participate” can solve this particular problem, but it requires many employers to change the way they think about health insurance costs. Instead of looking at the actual monthly cost for each employee, employers must learn to seek the AVERAGE COST PER EMPLOYEE. This one small change in thinking will help Small Businesses find new and creative solutions on the cost sharing front.
There is a ton of data collected every year which can help a business examine and rework their cost sharing arrangement. Make it a part of your renewal process to participate in and review results from Small Business Health Insurance Surveys. They aren’t very hard to find.
- Starting Early is the key to Health Insurance Renewal Success.
In order to experience the best possible renewal, a Small Business is encouraged to start their renewal process 90 days in advance of the renewal date. It is important to be in touch with your broker, by phone or by email, to kick off the process.
At that time a census typically can be sent out for quotes. Additionally, the brokerage community will be able to discuss trends and help set your expectations.
Most importantly, you will be able to establish a timeline which will help you feel more in control of the process. Make sure that you are aware of all paperwork deadlines that apply to your group. Then you can work backward to build a timeline that will include: open enrollment meeting, market analysis, and time for education (your education).
You and your broker should always be on the same team – working toward the same goal! You and your employees deserve a smooth and educational renewal … every year.
If you would like more information about Small Business (2-49 employee) health insurance, or would like to discuss anything in this summary, please contact:
Marcus Newman, RHU, CBC
Small Business Benefits Consulting