With Benefits, “Set It and Forget It” Costs Way More Than You Think

Why Employers Should Regularly Shop Medical Benefits

Many business decisions take a lot of time and effort, not to mention, sometimes, sweat, blood, and even a few tears. We’d love it if these hard decisions would matter for more than a year, but the ticking benefits renewal timeline means that decisions need to be made again on an annual basis. If the benefits plan is working, the temptation can be to skip the investment of effort and go with last year’s decisions; however, you should know that sticking with the same plan year after year can quietly increase costs and limit options, or, in other words, result in getting less plan for more money. A smarter strategy is to make an annual market review part of your regular benefits renewal cycle to be sure you’re getting the best benefits for your budget. Read on to learn more about how an annual market review can save money.

What does Shopping Benefits mean?

Shopping benefits is a short-hand way to describe the annual market review, which includes a look at

• Market: Comparing current coverage to market options
• Pricing: Understanding how plan pricing compares based on plan design and funding alternatives
• Goals/Needs: Validating that the plan still aligns with workforce needs

Change is incremental. While it may not feel like there have been dramatic changes when renewal time arrives, as time goes by, you, your employees, your business, and the benefits industry are all experiencing changes. An annual market review will highlight changes in pricing and plan structures. There may be new funding opportunities, network changes, or plan design enhancements. Staying informed can help employers provide better options for their employees.

Being prepared with a good understanding of the market can help an employer negotiate better rates with insurance companies. Finding a more favorable rate elsewhere may encourage the current carrier to reduce the renewal increase, so they can keep the client.

Renewal time is also a great opportunity to align coverage with current business needs. Has the employee count changed? Have demographics shifted? Have hiring needs changed? Are we approaching any compliance thresholds, such as the 50+-employee threshold to qualify as an “Applicable Large Employer” under the Affordable Care Act? Consider your annual benefits market review as a component of strategic growth planning.

Process: Strategic Annual Market Review

How do you conduct an annual benefits market review? Ideally, work with a trusted benefits advisor to help manage this process. Start early so you have time to evaluate your options and are positioned to negotiate when your renewal arrives. Doing so helps you avoid the common renewal pitfalls of rushed decisions, limited options, and reactive cost-shifting.

The process should comprise

• Benchmarking current plans,
• Evaluating alternative plan designs and network types, and
• Evaluating multichoice options (such as “base” and “buy-up” medical plans).

An experienced broker will guide this process by compiling the research and presenting recommendations that fit within your budget.

Strategic Approach for Better Long-term Outcomes

Completing an annual market review enables employers to develop an evolving strategy for medical benefits rather than viewing them as a static expense. A structured market review can provide clarity, even if the decision is to stay with the current plan. The goal of the annual benefits market review is to evaluate the options that are available and help the employer make decisions that fit their needs and budget. Shopping for benefits annually is one of the most important steps an employer can take to understand their options and control costs within the plan.

Have Questions?

If you’d like to discuss conducting an annual market review, please contact our team.