Key Considerations for a Smooth Group Insurance Renewal

*This post is from CMB partner Finuity Wealth. Find out more about group benefit solutions here.

Revisiting Your Group Benefits Plan

Group insurance renewal is an important annual milestone for businesses, providing a valuable opportunity to assess your employee benefits package. While renewal may simply extend the current plan for another year, it’s worth considering whether your coverage still aligns with your company’s evolving needs. Changes in organizational structure, staffing, or budgetary constraints can significantly impact your plan’s suitability.

Before your renewal, confirm your insurance renewal date. You should receive information from your advisor about your renewal at least 30 days before that date. It’s crucial to have enough time to assess any necessary changes or updates, especially if new benefits are being considered or organizational shifts have occurred over the year.

Assessing Organizational Changes

A thorough evaluation of your company’s structure months before the renewal date is critical to ensuring the plan continues to meet your needs. This includes any recent expansions, the addition of new divisions, or changes in the types of employees—such as new part-time workers, contractors, or commission-based employees. These factors can significantly impact your coverage requirements.

For instance, a growing workforce may call for broader health benefits, while a shift to part-time employment could mean some employees are no longer eligible for coverage. Understanding these changes can guide adjustments to your benefits plan, ensuring it remains aligned with both your budget and employee needs.

Review Usage Trends and Plan Performance

To ensure your benefits plan is working for both your company and employees, take the time to analyze its performance over the past year. For organizations with more than 25 employees, you can request aggregate data on health and dental claims, as well as Employee Assistance Program (EAP) usage. Are employees using all aspects of the plan, or are certain benefits underutilized? Perhaps vision care or wellness programs are being overlooked while mental health services are being maxed out.

Knowing how employees are using the benefits will help you make informed decisions about where to invest in enhancements or make cuts. For example, if the utilization of vision care is low, you might consider reallocating that budget to expand mental health or wellness coverage. Employee feedback, gathered through anonymous surveys, can also offer insight into areas that need improvement or additional coverage.

Confirm Premium Cost Sharing and Plan Affordability

As part of the renewal process, review your premium cost-sharing arrangements. Does your organization cover 100% of the premiums, or do employees share the cost? If your budget is tight, you may want to shift some of the financial responsibility to employees. This could be done through voluntary coverage or by offering benefits with a mix of employer-paid and employee-paid options.

It’s essential to clearly understand how premium increases will affect your company and your employees. If there are significant changes to the plan’s cost-sharing structure, employees should be informed well in advance to avoid dissatisfaction, especially if the changes mean additional out-of-pocket expenses for them.

Proactively Plan for Renewal Discussions

Scheduling a meeting with your benefits advisor 90 to 120 days before your renewal date allows for thorough preparation. Your advisor will help you assess your current needs, validate any organizational changes, and realign your objectives with your group insurance contract. By proactively discussing your plan’s performance, coverage options, and cost-sharing strategies, you can ensure that your group insurance continues to meet your company’s needs while controlling costs.

Evaluating Plan Costs and Rate Increases

During this review, ask your advisor to explain your plan’s running claims experience, which is the ratio of total claims paid versus premiums collected. Your plan’s target loss ratio will indicate whether rate increases are justified. If higher-than-expected claims have driven up costs, your advisor can help determine whether these increases are fair and sustainable. In addition, reviewing stop-loss claims—claims that exceed a certain threshold and are excluded from your claims experience—will provide insights into ongoing high-cost treatments or medications that could impact future costs.

At renewal time, expect some fluctuation in plan costs, particularly if your workforce has grown or the number of claims has risen.

Additionally, it’s important to understand the other factors contributing to rate increases, such as demographic changes, industry trends, regulatory shifts, and drug pricing. Your advisor should explain any rate changes clearly, helping you decide if adjustments to the plan design are necessary to maintain affordability while still meeting your employees’ needs.

Aligning Your Plan with Business Goals

A group benefits plan should reflect your broader business objectives. Whether you aim to attract top talent, support a diverse workforce, or maintain your reputation as a top employer, your insurance coverage needs to align with these goals. Regularly reviewing your plan ensures that it remains competitive and continues to meet both your financial and strategic priorities.

It’s also a good time to check if the current benefits are still in line with your organization’s values. If your goal is to attract top talent or to support long-term employee retention, ensure the plan is helping you meet those objectives. For example, adding a Health Care Spending Account (HCSA) or increasing mental health support could enhance the overall appeal of your benefits package and show that you prioritize employee wellbeing.

Employee Feedback: A Vital Component

To ensure your benefits package meets both organizational and employee needs, consider conducting a company-wide survey. Anonymous surveys allow employees to provide honest feedback without divulging sensitive medical information. The insight gained can highlight areas where the plan is working well and areas requiring improvement. This can be particularly valuable if you plan to make significant changes or adjustments, as employees will feel more engaged in the process.

Feedback is also critical when determining whether to maintain or change certain benefits. If employees highly value a particular service, removing it could affect employee satisfaction and retention. On the other hand, benefits that are underutilized can be revised or replaced with more relevant options.

Preparing for Negotiations

When armed with detailed performance data and a clear understanding of your company’s changing needs, your advisor can enter renewal negotiations with the insurer well-prepared. This ensures that any changes or enhancements to the plan—whether in terms of coverage, services, or costs—are aligned with your organization’s goals. The result is a benefits package that remains competitive in the market and tailored to your company’s specific requirements.

Your advisor will negotiate with insurers on your behalf, aiming to optimize the terms of the contract and secure the best rates. Whether you’re seeking to enhance coverage or reduce costs, an informed and proactive approach to these discussions is key to achieving favorable outcomes.

Communicating Plan Updates

Once the renewal is finalized, it’s essential to communicate any updates to your employees. Whether through in-person meetings, webinars, or email communications, ensure employees are aware of any changes to the benefits they can access. Well-informed employees are more likely to take full advantage of their benefits, which in turn supports their overall well-being and satisfaction.

Consider scheduling these communications at times that suit the majority of your workforce, and use multiple touchpoints to ensure everyone is informed. Providing on-demand learning materials, such as videos or digital guides, can also be a helpful resource for employees who may need to reference this information later.

Partnering with Finuity Wealth for Group Insurance Success

Taking a strategic approach to your group insurance renewal ensures your benefits package evolves alongside your company’s needs. By working with experienced financial advisors like those at Finuity Wealth, you can make informed decisions that support both your business goals and your employees’ satisfaction. Finuity Wealth specializes in helping businesses navigate the complexities of group benefits, offering expert advice on plan design, cost management, and employee engagement. With a thorough review process and a commitment to personalized service, Finuity Wealth helps companies secure sustainable and competitive group insurance plans.

Connect with Finuity Wealth today to ensure your group insurance renewal is a success and that your plan delivers the best value for both your company and your employees.