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Every year, the renewal of your employee benefits plan will come up. While many company managers or owners will anticipate slight increases and are ready for the informal sign-here-on-the-dotted-line procedure, others will be bracing for worst-case cost increases and wondering if finding another provider can help them avoid going over budget.
What if I told you, neither experience is warranted?
Over the years, employee benefits plan renewals got a bad rap. Somehow in our industry, the process became all about the price. At BenefitDeck, we believe in a much more comprehensive approach, offering every client a full annual review that covers what we call the 3Ps of employee benefits plans: purpose, price, and plan design.
Cost considerations will always be a big part of any benefits plan renewal. However, if you consider how your employee benefits plan ties into your corporate objectives, and develop strategies for your plan which align with those goals, then there is far more that needs to be discussed at that point every year. These discussions can also help you understand and even justify any potential cost increases, or identify why some plan changes might be in order. Below are the three main points that every company should consider during an annual review.
1. Purpose: What Outcome Am I Seeking from the Benefits Plan?
A successful employee benefits plan is built around a solid strategy. Taking the time to assess whether your benefits plan is helping you meet your recruitment or business objectives is a first step. For example, maybe you have been looking to recruit top talent in a competitive industry or perhaps you were trying to lower turnover. Evaluating how your plan performed in relation to those objectives gives you an indication if there are any plan design changes that need to be considered. Additionally, perhaps this year’s focus will be on attracting more top-level executives or hiring for a new department? Re-evaluating your goals can help you make effective plan design modifications or decisions.
2. Pricing: Does the Plan Cost Fit within Our Budget?
Discussing the potential cost increases or decreases is must, but fully understanding them is far more imperative. There are reasons why plan costs go up, and reviewing your previous year’s claims can give you a clearer indication of what might be causing a premium jump. (Quarterly reviews can minimize surprises too) However, if the costs have risen but business objectives are being met, can the budget be stretched?
If the increase is not manageable for the company, other considerations such as moving to a flexible employee benefits plan, splitting premium rates with employees, or implementing a wellness culture could help alleviate the cost burden. Generally, switching providers in search of a better price is not the answer; find out why here.
3. Plan Design: Is the Plan Helping Us Meet Our Objectives and on Budget?
Once you have looked over the plan’s performance, re-evaluated your objectives for the plan and taken a closer look at the reasons causing any increases in plan costs, you’ll be able to make some informed decisions on plan design. If you need additional insight, polling your employees for their opinions on benefit preferences or overall satisfaction can help too.
Either way, looking over the plan design and determining whether it’s still working for your company’s benefit and bank account is the last and final step in the annual review. Perhaps in reviewing your claims from last year, you’ll notice one paramedical service such as massages are being claimed by a high percentage of employees. In this case, perhaps cost-splitting or a fixed-budget health spending account would be more beneficial. Or maybe an employee survey will indicate that a flexible benefits plan would suit your increasingly-diverse workforce, which at the same time could help reduce the plan’s costs. With a thorough assessment and review, many options on how to proceed for the upcoming year can be discussed.
Take Time for Your Annual Review
While it might seem easier to sign the renewal contract or find a cheaper insurance provider, the annual review provides the information you need to ensure your plan continues to benefit both your company and its employees. It’s an important yearly milestone that shouldn’t be solely centered on price, but on strategy as well. For more information about our services or for a comprehensive second opinion on your renewal, contact our team at BenefitDeck.
Whether you are with a business, association, or owner operator, we have the solution for your needs.