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It may be that time of the year again for your employee benefits plan renewal. To assist last year, we provided a detailed FAQ for employee benefits plan renewals, outlining what you can expect from the process. In this article, we want to give you a quick six-step checklist that you can refer to during the renewal process.
While you might be ready to renew for another year, it’s always a good idea to take a little time to make sure your employee benefits plan is performing as you want it to, and meeting your expectations as well as those of your employees. Going through this checklist every year can ensure better plan continuity and success.
1. Review Last Year’s Benefits Plan Performance and Usage
While quarterly plan updates should give you an idea of how your plan is performing throughout the year, looking at the year-end review provides a comprehensive assessment. You can see how the plan performed, which services were used more often than others, whether plan spending is where you expected it to be, or not. This gives you the in-depth knowledge for step 2.
2. Discuss Renewal Rate Increases with Your Employee Benefits Consultant
At annual renewals, you can generally expect some rise in plan costs. However, after looking over the previous year’s review, you should have an idea where higher-than-average increases were generated from. A qualified consultant can help to explain the plan cost increases and also advise whether they are fair or not. Generally, higher than average increases are derived from higher-than-expected claims. While this suggests that your employees are loving the employee benefits plan, is this level of usage manageable? That’s when you move on to step 3.
3. Re-examine Your Employee Benefits Plan Objectives and Budgets
When you set up any new employee benefits plan, you usually outline a few key objectives and a budget for your plan. For example, you might want to attract top talent in the industry, become a recognized top employer, or cater to a diversifying workforce, etc. It’s important to identify if your plan is helping you meet those initial objectives, and if the budget is still manageable. Even with a higher-than-average increase, does the plan meet your desired goals? Is the cost increase consistent with the increase of your plan budget? In other words, is the benefit cost as a percentage of payroll consistent with last year, despite the rate increase? If not, how can you maintain your budget while still fulfilling your plan’s goals? The answer to this leads us to step 4.
4. Survey Your Staff for Feedback or Conduct an Industry Benchmark
While you might not think that paying for plan increases is worth it, sourcing additional feedback from your employees or information from the industry could provide some perspective. Perhaps your employees would be okay with sharing some of the plan costs, or maybe other competitors are offering a similar benefits plan structure, and it’s critical for your business to maintain the plan to support recruitment efforts. Having more information at your disposal can help you confidently move on to step 5.
5. Consider Any Plan Changes or Adjustments
After reviewing your plan’s performance last year, discussing any rate increases with your benefits plan consultant, looking over your plan objectives and budget, and seeking more information, you’re in a great position to decide how you want to proceed at renewal. Will you move from a full-coverage plan to a cost-split plan or to a flexible employee benefits plan? Will you make changes to the structure of your plan, or add more services? A qualified benefits consultant can propose some options that will help you get to step 6.
6. Outline a Renewal Strategy for the Upcoming Year
After considering all of your options, you can work with your employee benefits consultant to firm up your renewal strategy. Your consultant can present any plan changes or upgrades to the insurance provider, orhelp you find a new provider that meets your desired results. A qualified consultant should work on your behalf to negotiate fair rates for your plan, and ensure that you are getting exactly what you need from an employee benefits provider and plan.
Consider This Strategy for Effective Renewals with BenefitDeck
Once every year, or at least every three years, doing a more in-depth assessment at renewal can re-assure you and your management team that every penny going into your employee benefits plan is well spent. There are strategies in business that work, and there are strategies for benefit plans that work. This 6-step checklist is one of them, and our team at BenefitDeck is happy to help you through each step of the renewal process. Contact us for assistance with your employee benefits plan renewal.
Whether you are with a business, association, or owner operator, we have the solution for your needs.