If you have a benefits plan, you have most likely gone through a renewal in the past. Now that the next one is just around the corner, you have the chance to work with your advisor to decide on a plan that will benefit both your employees and you organization. For human resource professionals, this is an excellent opportunity to further the positive impact of employee wellness.
When talking about experience rated insured plans (vs. fully pooled, refund, or ASO plans), there’s often a lot of numbers and some confusion when reviewing the reports, especially if you don’t have a dedicated HR staff to delve into the nuts and bolts of the renewal. The data provided on the renewals will include demographic changes, pooled rates, claims incurred, trend factors, credibility, weighting, and more. How these are broken down and explained to you will largely display your advisor’s knowledge.
What Will Your Advisor Consider During Renewal?
A knowledgeable advisor will breakdown the renewal into the following parts:
1. Pooled Benefits
Includes life insurance, dependent life insurance, critical Illness, long-term disability, and accidental death and dismemberment. Pooled benefits are influenced slightly by a company’s demographics change and changes to the amount of insurance. The bulk of the rates are based on the insurance carrier’s entire block to protect against large swings in rates.
2. Experience Rated Benefits
Usually the Extended Health and Dental benefits are in this category. In its simplest form, during the renewal process the past experience is reviewed to predict future claims.
Carriers will also account for trend – the increasing cost of services, new covered services, delisting of government coverage, and legislation. This data transcends to a ratio of premiums paid vs. claims paid. As advisors, we are working the math for the perfect balance to ensure the carriers have accounted for the claims, trend, and some profit. It’s the perfect benchmark to aim for.
3. Renewal Rate Summary
This is a summary of the current rates, the insurers requested rates and the negotiated rates. At Montridge, we also show our calculated rates (showing our math) and thus how we negotiated the rates with the insurance carriers. We never want the insurance carrier to be our opposition. We want a business partner that is willing to work together in the best interest of our mutual client; the employer and their team members.
Questions to Ask Yourself During a Benefits Renewal
In addition to these considerations, a great group benefits advisor will work with you to ensure that the selected plan is protecting the company from any liability and will prepare your company for any factors that might affect you in the future.
Here are some of the key areas to review or questions your advisor might ask you during renewal:
Retirement Planning – Do you offer your employees a savings or retirement plan? Do you provide financial education or planning assistance?
Executive Benefits – Do you offer management specialized benefits in addition to your core plan?
A renewal is a great time to review the company’s philosophy on Group Benefits to see if the current benefit plan is meeting those needs. The customization of a benefit plan will :
keep your company competitive in the marketplace,
foster a healthy workforce
provide higher retention of staff, attract new employees.
However, the best plan in the world needs to be understood and appreciated by your staff. Your Group Benefits advisor can support you in communicating with staff by:
providing a lunch and learn with your staff to go through the plan design.
provide staff with information on mobile app, direct deposit, access to forms, and a health library.
provide legislative updates and any changes to government sponsored benefit plans.
This year’s renewal is a chance for you to ask yourself these key questions to ensure that you do not miss out on opportunities for the upcoming year. Each company requires unique solutions and your advisor should be able to ask questions, assess your needs and find a solution that is right for your organization. Renewals are more than a change of rate or plan design. It’s an opportunity to further the positive impact of your employees wellness.
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It will give you the right information you need to be ready for your next renewal.
Get Ready For An Effective Employee Benefits Program
Benefits renewal time is a great opportunity to revise your current plan. Here’s what you need to know before you renew.