Each year, employers are responsible for renewing employee benefits. During the renewal period, a business must decide whether to keep the groups’ existing coverage for the next year or change insurance companies and switch to a different plan.
The open enrollment period also allows employees to choose new plan options or modify their plan options based on qualifying life events. If an employer offers cost-sharing contributions to employee health plans, the contribution amount can also be modified at this time.
Businesses have the option to enroll in a health plan at any point during the year. However, most companies choose to renew their group health insurance plan in the fall during their area’s open enrollment period or during the small business special enrollment period. After enrolling in a group plan, the renewal process occurs annually. Employers may choose to have the insurance plan renew automatically.
What Is Employee Benefits Renewal?
If a company provides employees with access to health insurance plans, or would like to offer a plan for the first time, it is important to become familiar with the employee benefits renewal process. Each year, health insurance carriers adjust their offerings and rates due to factors like inflation, changes in business structure, number of employees and number of claims in the previous year.
Employers, employees and insurance companies are all involved in the benefits renewal process. Employers are responsible for comparing providers and choosing a plan that best fits their unique needs and budget. Employees must sign up for, renew or modify their health plan annually. They may choose to add a dependent, switch plans or opt out completely.
Group health insurance is a major investment for businesses and is one of the most important benefits for employees. It is important for companies to be proactive in their attempt to choose the right group health insurance plan during the renewal period. Good communication, research and guidance from an experienced benefits consultant can also help ensure that a business chooses a provider and plan that will deliver the best product and value.
What Does It Mean to Renew Employee Benefits?
Group health insurance renewals are a crucial component of the employee benefits planning process. It is not uncommon for employers to experience increased health plan rates, or for employees to find out that their premiums, copays or deductibles are going up.
Benefits renewal allows both employers and employees to determine if the price and terms of their existing plan are sufficient or if they should switch or opt out of the plan entirely. In some cases, employers and insurance carriers are able to negotiate pricing for the upcoming year. Companies can also do their part throughout the year to try to keep benefits costs as low as possible.
When to Renew Employee Benefits
Not all health insurance plans follow the same renewal schedule. Businesses that work with professional employer organizations (PEOs) are generally on a master policy which means that they must renew at a specified time each year. However, master policies are what enable PEOs to give businesses better rates on health coverage.
The health insurance benefits renewal process starts several months before the open enrollment period. A benefits consultant will generally reach out to the business to gain feedback which is then used to make a recommendation for the following year based on the business’ specific needs.
Before renewing health insurance benefits, there are several things that employers should consider.
Determine If Your Current Provider Is Meeting Your Needs
Businesses grow and change over time and the plan that worked for a particular business last year may not be adequate next year. Consider what changes the business has experienced and if the current health plan is able to properly support employees and the business as a whole.
Companies that are expanding out of state or out of the country may need to review the terms of their current health plan. Not all group health plans cover employees who are located in a different state or overseas. Businesses can save time and money by carefully structuring their health insurance plan to support employees company-wide.
Determine If Renewing Encourages Employee Satisfaction
When making the decision to renew employee benefits, consider if renewing will result in greater employee satisfaction. According to the Annual Survey of Employee Benefits Trends conducted by MetLife, 71 percent of employees reported that they are loyal to employers that offer satisfactory benefits.
Employers are able to determine employee satisfaction with the current group health insurance plan by several methods of requesting feedback from employees. This can be accomplished via a survey, email or anonymous message through an online platform.
Determine If Renewing Can Save You Money
In some circumstances, employers may find that renewing health insurance benefits actually results in savings. It can take considerable time, money and resources to search for a new provider or plan. When a business chooses to renew their existing plan instead of switching, they can actually save money and streamline the renewal process.
There are certain costs associated with transferring a business to a new group health insurance provider. Businesses may also encounter other unexpected costs, especially if they are unfamiliar with the terms of the existing or new plan. Working alongside an experienced benefits consultant helps to eliminate many of these common concerns.
Consider Benefits Consulting with Business Benefits Group
Many employers do not look forward to employee benefits renewal due to the complexity of the process. Benefits renewal is not always as simple as renewing the existing plan. When circumstances change that require a new insurance company or plan, businesses are forced to look elsewhere for coverage. Choosing the wrong health plan could result in lost money and unhappy employees.
Consider hiring a qualified benefits consultant to provide a researched-backed recommendation based on the business’s specific needs and budget. To learn more about the employee benefits renewal process or to speak with a benefits consultant, reach out to the experts at Business Benefits Group today.