For most U.S. employers, open enrollment for health insurance benefits came and went by Jan. 1. And if you’re like plenty of comp and benefits professionals, the experience left you exhausted and glad to be done with it.
Too bad. Now is the time to start planning for the next insurance renewal go-round. An early start will give you a fighting chance to keep costs under control in 2013.
Start by reviewing how your most recent renewal went.
No plan? Plan to fail
If you’re going to get creative about combating rising health insurance costs, you need a well-thought-out strategic plan.
It’s not enough to wait for the usual renewal offer from your carrier next fall—typically 60 days before your plan expires. Realistically, that gives you no time to explore alternatives, either from your existing plan or a competitor.
As you plan for next year, ask these questions:
• What problems did you have with last year’s renewal?
Make a list while it’s still fresh in your mind. Did you have enough time to fully explore alternative plan designs? Alternative funding arrangements? Alternative carriers? If you wait until the fall to focus on those issues, you’re more likely to confront the same problems you had before.
• Does your renewal date fit your business plan?
Would it make more sense to time renewal to coincide with your fiscal year or some other cycle?
For many companies, the fourth quarter is the busiest time of the year. That can make it hard to communicate benefits changes to distracted employees—and get them to turn in their paperwork.
Added benefit: Get ready for better service. Tying your renewal to the new year means you’re competing with almost every other employer for the attention of brokers and insurance carriers.
• What were the rates of the alternative plans presented the past two renewals?
At each renewal, most carriers provide several alternative plans in addition to your current plan. Refer back to your old renewals to begin the process of estimating the cost of migrating your employees to alternative coverage.
If your broker or carrier presented the same or similar alternatives the past two years, you’ll be able to see how those plans are trending compared to yours.
• How do your retention and turnover figures compare to your goals?
If you conduct exit interviews, have employees mentioned dissatisfaction with health benefits as a reason for leaving? Your next plan may be able to address those concerns.
Ask your broker or carrier to prepare total compensation statements to educate employees on the value of company-provided benefits.
Tip: If you can, check with HR colleagues in other organizations. If they have better retention numbers, find out if better benefits are enticing employees to stay. If so, ask for a referral to a new broker or carrier.
• How much of an increase for future renewals can you afford?
Here’s where you need to be tuned into your organization’s overall fiscal plan. Engage leaders now in a real conversation about how much they are willing to commit to benefits.
• Can your next plan lower costs by helping employees stay healthy?
Disease-programs can help prevent a catastrophic claim from developing. But what about implementing a to prevent chronic conditions from manifesting in the first place? Waiting until an employee or a dependent becomes a diabetic and then figuring out how to manage those claims invariably means higher costs for everyone in the plan.
Now is the time to explore adding a wellness program to your plan.
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