Employee Benefits Plan Renewals – the Right Approach
Renewal time for your employee benefits plan shouldn’t be a stressful time – so why is it so stressful for too many Canadian businesses? Too often business leaders are surprised by unexpected, large rate increases. The possibility of switching to a different provider and the work it will entail are an uncomfortable pressure hovering in the background.
While your traditional broker is doing the right thing by shopping your traditional plan every year, what if there was a different approach all together?
At GroupHEALTH, we think there is. Our non-traditional approach is to proactively review not just your plan design, but the platform it sits on every year, in order to make the best upgrades to keep your plan and pricing competitive.
Having this type of renewal starts way back when you choose the right provider for your employee benefit plan.
- Choose the right provider
At GroupHEALTH, we think that your provider shouldn’t just be a glorified shopper to find you the best rate. You need a provider that will do things differently. Building a long-term relationship should be the starting point. You want a provider that can think outside the box and look at employee benefits differently. Your provider should be able to recognize a pain point in the employee benefits experience and then create a solution to fix it. When you start off with the right provider, your employee benefits plan renewal looks very different than what you may have experienced in the past.
- Design the right plan
The right approach to employee benefits plan renewals starts with designing the right plan to begin with. Instead of just shopping the market for the best rate, we think you’ll get more value thinking of your broker as a “benefits engineer”. This means thoroughly analyzing all the data, then designing a benefits plan based on that intel.
Looking at your workforce demographics, past claims and budget are pretty standard. But a real engineer has to then add the goals for the plan into the mix. They’ll have to weave in solutions to any pain points the plan has experienced in the past, and they’ll have to look for opportunities to enhance the benefits experience. They’ll recognize how industries and businesses are different and use that knowledge which designing the plan.
- Build cost containment into the plan
An important part of changing the employee benefits plan renewal experience is building cost containment into the plan at the onset. Renewal time too often has meant large, unanticipated rate increases. To change this paradigm, cost containment must be part of the equation right from the start. There are many ways to incorporate cost containment. At GroupHEALTH, we’ve developed some cost containment mechanisms specifically to target the largest cost drivers of benefit plans.
We start off by incorporating disability management services into our plans. Professional disability management services help both ill or injured employees and their employers. Employees receive practical support during the claim, including help completing paperwork, setting up medical appointments and facilitating a return to the workplace. Employers receive non-confidential updates so they can plan for coverage during the absence. The result is a decrease in total disability claim costs. Employees are supported and that support helps get them back to their pre-disability health sooner, and back to the workplace.
Another of our cost containment strategies, Smart Rx Solutions, is designed to target prescription drug costs. Prescription drug costs usually account for a large portion of total employee benefit costs. Options that utilize a central dispensing pharmacy or a well-designed drug formulary help contain costs while giving employees the prescription drug coverage they need.
These sorts of innovative cost containment mechanisms are key to preventing large rate increases at renewal time. In order to have a better renewal experience, starting off with cost containment when the plan is designed is essential.
- Plan for growth and change
Businesses grow and change, and their employee benefits plan should as well. Designing a plan with this in mind is important to ensure the plan meets the needs of the company over time, as well as to reduce disruptions if changes are needed. In essence, the plan should be designed like software, with the idea that updates and bug removals will be required over time.
If your employee benefit plan is engineered correctly, your renewal should be predictable. With a long-term, sustainable approach to employee benefits, there should be no surprises at renewal.
To use a more familiar metaphor, let’s pretend your employee benefits plan is a car. Every year it’s a good idea to get a 30-point “tune-up” on your car to maintain optimal performance. The same is true for your employee benefits plan. GroupHEALTH automatically does this by reviewing your plan and suggesting changes at renewal. In the case of a car, if the mechanic tells you that you need to spend a lot of money at tune-up, it’s either because:
- Your car got hit with something unpredictable
- You bought the wrong car to begin with
The same holds true for employee benefits. If you begin with the right plan, and you review and “tune-up” the plan on a regular basis, your renewal will be very different than renewals you may have experienced in the past. You don’t need to go out and get a new car (or plan) every year if you choose the right car (and plan) to begin with and maintain it along the way.
The bottom line is you don’t need to shop your plan every year for something new. If your broker has worked with your company to design and maintain a plan that is right for your business, then this long-term approach is far more effective than short-term price discounts.
Good Advice is Key
Are you tired of being shocked at renewal time? Has shopping the market become the norm? If so, it’s time to try the right approach to employee benefits plan renewal. Review your options with one of our licensed advisors on the phone, or contact us for a comparison quote.