With Insurance Renewal Season Here, Are You Asking the Right Questions?

It’s that time of year again. As we move nearer the fourth quarter, employers are once again facing tough questions regarding their employee benefit plans. During this annual renewal and open enrollment period, more than ever, difficult decisions must be made. But in the end, the most important question
remains: Why do employers provide benefits in the first place?

The answer should be to attract and retain the best human capital. The goal should be to maintain a plan that mirrors your company’s values, while also promoting employee engagement and participation. In the ever-changing land-
scape of employee benefits, there are key considerations
that must be taken into account when creating your total
benefit package:

The Affordable Care Act. ACA has imposed factors that are complicating matters. Is your plan compliant? Does your plan meet the affordability threshold? Who is eligible under ACA? Finally, what does all of this mean to the bottom line? While the regulations set forth may seem daunting, it is worth noting that they can be used to your advantage. Education is imperative when seeking to know the guidelines and develop a strategy. These regulations are here to stay, but instead of swimming into the current, mold your business model in a way that works within the new set of rules.

Strategic, Long-Term Value. Does your work force value your benefits? Medical insurance in particular can be deeply personal to your employees. The right plan can create comfort and peace of mind, which in turn enhances productivity.  This is achieved by the stability and consistency of your plan. Switching carriers too often or drastic plan design changes are short term fixes that don’t address the more global issue of rising claims. Employers must develop long-term objectives and create cost-containment strategies that evolve with the marketplace. When making decisions about your plan design,
concentrate on true cost savings vs. cost-shifting.

For example, increasing your deductible doesn’t actually save money; rather, it shifts the liability from the insurance company to your employees. To realize real cost savings and maximize plan performance, look at strategies that focus on network discounts, administration costs, prescription drug utilization, disease management, and preventative-care
incentives.

The Total Package. Which products should you offer? Make sure that your benefit offerings complement each other and work in concert with your compensation structure. This may require examination of the fine print in your policies and consideration of when one benefit stops and another starts. Think of each product as a piece of a larger puzzle. Additionally, consider expanding your total benefit package. Incorporating cost-neutral options to include voluntary and work-site offerings can be of great value to your work force.  Even without a financial contribution, your company can provide superior products and discounted rates that employees cannot obtain on their own. These benefits allow customization to fit individual needs, while offering the advantages of being on a group platform.

A Tool for Recruitment and Retention. How do you compare to your competitors? This is an important question that should be asked when contemplating your benefits. More than ever before, candidates are now focusing on your benefit offerings and their costs when evaluating your job offer.

Inversely, employer contributions can equate to almost a quarter of an employee’s overall compensation. Ask your-
self: In the eyes of a prospective employee, do your benefits represent your company?  In some cases this is the first impression someone will have of your principals, standards, and ideals. 

Making the Right Decision. While the insurance industry is evolving
and costs are undoubtedly rising, don’t lose sight of why we offer benefits in the first place. Employees and their families depend on these policies as safeguards during challenging times and for reassurance while planning for their future. There are ways to reduce your costs without adversely affecting your employees, while maintaining a plan that you can be proud of.

You just have to ask the right questions.