Once you’ve put in the work it takes to establish a benefits package for your employees, it’s easy for employers to think things are all set for a while. Actually, in most cases, things change over time, and your needs may outgrow your existing benefits plan. Premium renewal rates will fluctuate based on your group’s data, and you need a clear picture of what that means. And you certainly shouldn’t settle for annual rate increases that you don’t understand. Be sure to make time to plan before you renew your Employee Benefits. It’s OK to slow down, take a pause, and re-evaluate.
Working with an independent Employee Benefits Advisor can bring huge value to your organization’s decision-makers. Of course, a good Advisor will analyze your existing benefits plan; but more importantly, you need someone who will listen and learn about your organization’s goals. A true Advisor comes alongside you as a member of your team and a driving force in meeting those goals.
Planning for the renewal process should leave you feeling confident that the benefits your organization offers are good for you and good for your employees.
PRE-RENEWAL PLANNING
Preparation for your annual Employee Benefits plan renewal should begin several months in advance. Before the pressure of a deadline is looming, gather documentation such as existing plan information, employee demographics, financial documentation, and claims reports.
The employee benefits renewal process entails several important steps, starting with a thoughtful reassessment on your part, because you can be sure that your insurance carriers are likewise reassessing the terms and pricing of your plan. The carriers will modify costs and services based on any number of factors such as:
- inflation (higher prices to providers and suppliers)
- advances in healthcare technology
- new prescription drugs
- increases in healthcare provider fees
- utilization (increased use of services by plan enrollees)
- expiration of tax credits included in the ARPA of 2021
Without some innovation and expert guidance, you may find yourself feeling like you’re being held hostage by the insurance and healthcare systems.
So, get ready! We always recommend a joint discussion among your HR team, your financial team, and your Employee Benefits Advisor. Each will have a significant role in creating or modifying your employee benefits package, keeping your goals and desires in perspective.
EMPLOYEE BENEFITS RENEWAL PLAYERS
Your Human Resources Team
Of course, your HR team will take a lead role in landing on the right Employee Benefits. This team should have a good idea about what is important to your employees — what they want, what they need, and if they are currently satisfied. If we are working with an organization that really doesn’t know what’s going on in their employees’ heads when it comes to their benefits, that’s OK. We simply help you find out.
Ask us about our employee survey – a no-charge service to help point HR decision-makers in the right direction.
So you may be thinking, next, the HR team should meet with their trusted Employee Benefits Advisor to create the new year’s plan and present it to the organization’s financial decision-makers. Right?
WRONG! This is a big mistake!
Even if your HR team comes up with a renewal plan that represents what they feel is best for the company, without insight on financial goals and feasibility, the renewal could require a complete do-over. Moving through your Employee Benefits renewals without upfront input from the financial decision-makers is a sure-fire way to get behind, because you’ll essentially have to start over. So, don’t sidestep a joint conversation.
Remember that a rushed renewal process limits your Employee Benefits Advisor from exploring creative solutions – ones that could make you look like a hero to your leaders and employees.
Your Financial Decision-Makers
Your financial decision-makers play a crucial role in determining the best employee benefits package for your employees. It’s their job to have a clear picture of your company’s financial goals and to manage the impact on the budget. For most organizations, the cost of Employee Benefits is one of the top-five line items in their budget. So yeah, it’s a big deal.
Just be sure to bring them to the table prior to renewal. Quite simply (and we’ve seen it happen), if the finance team doesn’t participate in Employee Benefits renewal planning, you’ll find yourself wasting time over misunderstandings. Instead, come together as a team to verbalize what is good for the organization and what is good for employees. When your finance team is in the know, your Employee Benefits Advisor can guide your renewal choices and more powerfully negotiate on your behalf.
Your Employee Benefits Advisor
Your Employee Benefits Advisor needs to be an expert in the industry, but that’s not all.
At Peel & Holland, we strive to implement programs and solutions that seek to improve the bottom line, make management easier, and most importantly, improve the plan member’s healthcare outcomes. We focus on promoting responsible practices for the health plans we serve. Your Employee Benefits Advisor should educate both HR and finance teams about the vital role each plays and how they can work together toward the same goals. Our choices of programs and strategies always prioritize best outcomes at the lowest cost, in that order. It’s what you should expect from a reputable advisor.
Working as a team, we help employers stay focused on the responsibility of providing affordable coverage for their employees while respecting the financial integrity of the organization. When we listen and understand your goals, your Advisor will have the information needed to employ creative funding solutions, explore multiple carriers and networks, and formulate a strategy for controlling your employee benefits costs.
Sometimes a small adjustment can save employers in a big way. But how do you know where to adjust without a pro looking at your data and making expert recommendations?
That’s where we come in.
REASONS FOR CHANGE
Employees’ needs—and the ways that organizations are driving benefits enrollment decisions to meet those needs—have changed over recent years. The pandemic, a tight labor market, hybrid work arrangements, and a renewed focus on employees’ emotional well-being have altered the benefits packages that employers are offering.
You may have to consider some level-setting questions, and get answers from various perspectives. Ask your teams (HR, Finance, Advisor):
- Is the Employee Benefits Package you are offering rich enough to keep your key employees?
- Do your employees really know what’s in your benefits package and how to use it?
- Does your current employee benefits package offer the best value for money regarding benefits and price?
- Do you have a trusted advisor who can educate you and provide the information that you seek?
If your organization’s finances or employee demographics have shifted over the past year, these factors could indicate a need to upgrade or change the existing benefits package. For example, if many employees are married or have started families, they may be looking for a better health insurance plan. If the overall age of your workforce has increased, then employees may want to offer a more comprehensive retirement package.
The renewal process presents a perfect opportunity to assess both financial status and employee demographics to determine what type of benefits would best meet your budget and current employee needs.
Each year, operational factors could also change not only for you, but also for your insurance plan carriers. Keep in mind:
- changing legal regulations that will impact your HR team.
- the reasons for any rate fluctuations (good or bad).
- employees may have shifted their sentiment about what you’re offering.
- some of what you’re offering may not even be utilized any more.
- your recruitment competition may be offering more enticing benefits than you are.
Awareness of these changes is an important part of the annual renewal process.
How Does Your Plan Stack Up?
If you don’t know how your Employee Benefits plan stacks up against other employers in our area, we can help. Peel & Holland has done extensive regional benchmarking of Employee Benefits plans being offered across our region.
We can easily compare your spend, employee contribution, types of benefits, and more. Let us know if you’d like to see how you stack up.
Are your benefits working?
Potential factors to consider when looking at the ROI of your benefits include turnover, employee engagement target scores, absenteeism, self-funded health plan costs, and health plan claims costs. But stating ROI is never as easy as it sounds. Determining what to measure in advance is almost as important as the measurement itself. If reducing turnover by 10% is the desired outcome, a big part of your measurement has to be the “why” employees are leaving and the “why” they are staying. Only then can you make a reasonable judgement about how your changes in benefits have impacted your turnover.
The cost of health insurance often dictates the conversation around employee benefits. Only when companies stop and look at the broad picture of everything they do differently to attract and keep employees do they realize just how much additional time, energy, and money they spend on ALL employee benefits.
By understanding the unique characteristics of your workforce, your company and processes, and what is possible as you move forward, your company will be better suited to meet the needs and wants of your most valuable asset, your people.
WE WORK FOR YOU
If you know it’s time to take a fresh look at your options, Peel & Holland’s Benefits Team is here to guide your decisions and act in your best interest. We work for you, not the insurance carriers, and it’s our passion to help employers contain their costs while offering great benefits that will help them thrive.
Often employers take a route to control their costs by cutting benefits or raising deductibles to make their group health renewal affordable for them. This methodology has problems of its own. The most significant issue is inconsistent and high renewal rates.
At Peel & Holland, we have a different approach. We believe in addressing the underlying factors that cause your group health insurance costs to go up each year. We believe every business can control its Employee Benefits resulting in quality care while managing costs.
Let’s talk about how you can take a fresh look before your renewal. It may be time for a new plan before you renew employee benefits this year.
