The employee benefits renewal process is always a brain teaser, with pieces that can fit together in a variety of combinations. This year, the COVID-19 pandemic complicates the situation even further for small businesses that are planning their 2021 benefits packages.
Employers waiting to hear from insurers or their benefits partners about how much their health plans will cost next year should take this time to prepare for the upcoming renewal period, which could be uniquely challenging. Methodically approaching the task of benefits renewal and doing as much advance planning as possible will simplify the process and help maximize benefits spending.
Step 1: Review benefits
Assess your existing plans by looking at where people enrolled and which plans they seem to prefer. This will tell you how relevant the current plans were to your employees’ needs and will help to inform your budgetary and benefits offerings decisions for next year.
Step 2: Survey staff
Employee benefits should not be chosen in a vacuum, because they play a large role in boosting engagement and satisfaction levels. A late 2019 global survey about benefits attitudes found that 37 percent of U.S. workers would rather receive better benefits than higher salaries/wages.
Employee benefit surveys are good tools for understanding what your employees want and need, which has probably changed in the wake of the pandemic. As you make benefit plan decisions for the year ahead, incorporating feedback from your team about benefits they value most, what they’re willing to pay for them and how satisfied they are with their current options will help you retain and attract top talent.
Step 3: Establish a budget
Recognizing that health care benefits costs increase every year, review what you spent on the plans you offered employees this year and determine what you can afford to spend in the year ahead.
Step 4: Consider changes
After you’ve gathered all the information you can, you’re in the strongest position to begin shaping your 2021 benefits menu. Take those factors into account as you decide if you will change your plan’s structure, add new options or share more or less of the plan costs with your employees.
Step 5: Educate employees
The import of communicating with employees before and during the renewal process cannot be overstated. Many employees underestimate how much their employers pay for their benefits and, worse, often are unaware of all the benefits their companies offer. When they know and understand all of their options, employees tend to appreciate their employer more and make better decisions about how they use the plan.
Make sure to explain every available benefit, workers’ share of related costs and tips on how they can save on out-of-pocket expenses – for example, using in-network health care providers and only visiting the emergency room for crisis situations.
Implementing these steps prior to and during the annual benefits renewal period takes concerted time and effort but will help you make better-educated, more cost-effective decisions. Some small businesses – especially those with no dedicated HR staff or with small HR departments – may benefit from partnering with a professional employer organization (PEO) like Axcet HR Solutions. A PEO can manage every step of the renewal process, helping you put the benefits renewal puzzle together to create a win-win for both your company and your employees.