Employee Benefits Renewal: A Guide for Employers
As a business owner, your company-sponsored group health insurance plan is one of your most significant annual investments, affecting your most valuable resource: your employees.
Employee health benefits renewal is an essential time of year for companies of all sizes and their employees.
The annual employee benefits renewal allows employers to review their contribution strategy and plan offerings for the year ahead. Providing competitive employee benefits is a powerful tool to attract and retain top talent, but the renewal process can be daunting for many employers – especially if you’re a small business without an HR department.
Administering employee benefits and managing the purchasing process can be overwhelming, but it doesn’t have to be. In this article, we’ll review our top tips for managing the annual employee benefits renewal process from start to finish.
Start early to get ahead of open enrollment.
Maximizing the period between plan renewal and open enrollment is critical to successful enrollment. The business insurance market is only open for a short window, and renewal periods vary among insurance carriers. So, starting the process early is best to ensure you have time for benefit plan research, negotiation with vendors, and communication with your employees.
Review your health care plan performance.
Multiple components must be considered when determining the success of a health care plan and how well it works for the employer and its employees. Examine your previous year’s costs, usage, and scope of coverage. Have your company’s needs or the health insurance landscape changed since last year’s renewal? Evaluate other plans, plan designs, and carriers to help contain costs and provide the most value for the premium. Reviewing affordability, employee impact, and market trends are three variables to consider when designing the contribution structure.
Consider your employees’ perspective.
Health insurance and benefit offerings are critical to talent recruitment, retention, and employee satisfaction. Conduct a focus group or survey if you’re unsure of your employees’ benefit needs and interests. Involving employees in the evaluation process provides leadership with valuable feedback to design competitive benefits packages that meet the needs of employees and their families.
Gather health plans and pricing.
Approximately two to three months before your renewal date and open enrollment, health insurance carriers will notify employers of all plan changes for the coming year, including rates, premiums, and coverage. Employers utilize this information to negotiate rates and decide which health insurance plans and benefit options to provide their employees. This is an opportunity to review other carriers in the market and request quotes to ensure your current plans and rates are competitive.
Evaluate the external market.
A multitude of factors shape the rapidly changing employee benefits landscape. Market research should consider benchmark data, cost analysis, industry trends, regulatory compliance, healthcare costs, economic volatility, and state and federal legislation to make informed decisions for their business and workforce.
Conduct an effective open enrollment.
During this time, employees can select new insurance plans and ancillary benefits, add or remove dependents, or waive coverage. A successful open enrollment period involves clear, consistent communication with employees and multiple opportunities to ask about their coverage and rates. Informing employees of employer-paid benefits is an excellent reminder of an organization’s investment in their employees and bolsters attraction and retention.
Partner with a PEO.
Professional employer organizations (PEOs) leverage economies of scale to negotiate better insurance rates with carriers on your behalf. Businesses benefit from this negotiating power, accessing desirable employee benefits and services traditionally reserved for large corporations. In addition to providing better insurance options and benefits packages, PEOs provide enrollment technology for benefits administration and help employees confidently select the best plan.
At Connectify HR, we understand the complexities of benefits renewal. Our team of HR experts handles the entire employee benefit procurement, compliance, and administration process on your behalf, regardless of your company’s size or industry.
Schedule a free consultation with our friendly HR specialists to learn more.