Every year, employers have the opportunity to assess healthcare coverage and determine whether it is in line with company and employee needs. During this renewal period, employers can compare the type of current coverage with other healthcare funding options. An experienced benefits consultant will guide you through the procedure.
This five-stage process usually requires completion by January 1 for the majority of companies that have calendar year renewals. However, plans have differing renewal schedules. One caveat: If the employer is a Professional Employer Organization, they must adhere to the PEO master schedule.
Healthcare Renewal Process Stages
Medical insurance regulations are always changing. Insurance carriers must ensure their healthcare plans comply with new laws annually. This is why the yearly renewal process is necessary. Here’s how it works:
The initial stage takes into consideration pricing for the following year. Factors included in the reassessment include new fees, new pharmaceuticals, new technology, and inflation. It’s also the time that a business reassesses its benefits. Health insurance needs, a major employer expense, do not remain static.
Once the pricing reassessment is completed, the insurance carrier determines the employer’s new premium.
Employers may also want to consider surveying their employees to see how they liked the health plan and ask what employees would like to see next year.
Employers receive information from the insurance carrier regarding how the new rates affect their plan. Carriers provide information about the various options available to employees.
During this time, small-to-mid-sized businesses might want to investigate whether a PEO would work for them. PEOs can save companies money by offering economies of scale unavailable to the business on its own.
Employers go over the options presented and make a decision on which plan to move forward with. At this point, employers choose the best plan for the company and its workers. This is also when the employer decides how much it contributes to the employee’s plan.
4. Employee enrollment
Open enrollment begins. During this period, employees can change or elect their healthcare and other benefits. November and December are common months for open enrollment for companies whose plans start January 1. There is no minimum amount of time for open enrollment. Four weeks is the general range. Open enrollment usually ends a few weeks before New Year’s Day to leave time for all paperwork to be completed. Most companies try to target December 15 as the last day of open enrollment, so they have time to process enrollments with the carriers.
The last stage is when the employees choose their plan or opt-out. Once the selection is made, coverage begins on the date specified by the insurance carrier.
Tips For a Successful Healthcare Renewal Process
- Good communication is the key to a successful renewal process. When selecting a carrier, survey workers to find out what is most important to them in a healthcare plan. This feedback helps employers select the appropriate plan.
- Educate employees about changes in the plan. Let them know about any new offerings or if there are items no longer covered. A benefits broker will supply the necessary information.
- Establish a chat channel so employees can ask questions. There is no one-size-fits-all when it comes to health insurance. The needs of a young, single employee will differ from those with children or approaching retirement age.
- Make sure employees understand they cannot change their options until the following open enrollment period. The only exceptions are “Qualifying Life Events,” including marriage, divorce, or the birth or adoption of a child.
Those seeking to adjust their healthcare plan should consider speaking with an expert who can help them understand the best way to solve their employees' unique needs. You can also read the previous blog post about the insurance options that are available here. If you're considering a plan switch, contact our team at WD & Associates to get even more information!