It never ceases to amaze me when talking to a new client and hear how their past renewals have gone. They are spending thousands of dollars a year, and most of the time benefits are their second largest expense. I’ve heard stories of last minute decisions, faxed renewals, and hands thrown up in frustration. It does not have to be this way! By following these 5 tips you can ease into the renewal process and make informed intelligent decisions.
1. Start Early – the sooner you can get started with planning your renewal, the better. Remember, there are many things that have to happen before your renewal date. You need to review your renewal and their options. If you’ve gone to the market, you need to review those options and compare them to your current plans. Once you’ve settled on a plan, you need to communicate the plans to your employees, have them fill out any paperwork, and have them return that paperwork to you. Then the carrier has to go through their final underwriting process, get your approval, load eligibility and benefits into their claims system, and mail out ID cards. Sound like a lot? It is! Your Broker should be aware of the timeframes involved and keep you on track so that you hit the deadlines.
2. Work your renewal. Your current carrier’s underwriting staff sooner than you think calculating your renewal. There are many things that you and your Broker should be doing to make sure that the Underwriters are up to date and are running plan design alternates along with the renewal. Depending on your size and the carrier you work with, optional plan designs are run at different times in the process. Your Broker should be familiar with this process and request the alternates that have been discussed during your renewal planning sessions. Once a renewal is generated, you and your Broker need to work that renewal. Make sure that changes in your employee population have been taken into account by Underwriting. If you want to try and stay with your current carrier, let them know that – if your Broker is savvy he may be able to get you some rate relief by asking the Carrier the right questions and performing a little negotiation. In the event of a big renewal increase, you need to review your alternate plans. Your Broker should know your company well enough to suggest options that fit your philosophy and still save some premium. Of course, all this hinges on starting early! You want to have the time to go through this process and not be rushed into a decision.
3. Get Informed. A recent Texas Law has given smaller employers some very important tools to help the renewal process. Before this law, an employer group had to either self-fund their benefits or have at least 100 employees to get any real data on how their plan was running. With the new laws, if an employer asks correctly, carriers must provide month-by-month premium, life counts, and claims paid. In addition, the carrier must provide information on any claims in excess of $15,000. If he is up to date on the new rules, your Broker can guide you through the process of getting this information.
4. Make a plan. You should not just jump into the renewal process. A successful renewal begins with a good plan. You should know the dates of your renewal and have a timeline of what should happen and when. Before the renewal is even calculated, you should have an idea of what alternatives you have in case of a large rate increase.
5. Tie it together. You may have several benefit plans through several different carriers. One company may handle your health, another may handle your dental plan, and yet another may handle your life and disability. Over time, these plans may get disjointed and renew on different dates. Part of the renewal process should involve reviewing all of these plans to make sure they still work together and fit your goals. Does your dental plan renew in April and your medical plan renew in May? There are ways your Broker can negotiate a solution for this. Review plans to see if they can be combined with one carrier – you can sometimes negotiate multi line discounts and save administrative time.
These are just a few of the things that can help your renewal process run much smoother. Careful planning, having good data, getting started early, working your renewal, and staying on track are key to a successful plan renewal.
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