Navigating the annual health insurance renewal process can be a complex and overwhelming task for employers and employees alike. As businesses prepare for the year ahead, selecting the right group health insurance plans becomes a critical priority. This period demands a thorough evaluation of evolving needs, market trends, and strategic objectives.
For employers, factors such as fluctuating revenues, changes in workforce demographics and new regulatory requirements add layers of complexity to the health insurance renewal process. Simultaneously, employees face their own challenges, with shifts in health status and family circumstances necessitating more personalized and robust benefits.
Recognizing these challenges, the employee benefits experts at Axcet HR Solutions are dedicated to guiding you through the annual health insurance renewal process. We aim to provide clarity and support, ensuring that both employers and employees make informed decisions for the year ahead.
RELATED: PEO Insurance - The Key to Affordable Employee Benefits >>
The annual health insurance renewal process allows employers to tailor benefits to employee needs and the company’s finances by evaluating existing plans, making revisions or selecting new plans, and, as needed, resetting both business and worker contributions to the plan.
Employees may also make new choices about the coverage that best suits them. Some of the most common changes employees make during the renewal process are switching out certain benefits, adding a dependent or opting out of coverage – for example, enrolling in a plan offered through a spouse’s employer.
Health insurance renewals are the logistical means through which employers provide employees with medical coverage for the coming year. It’s a critical period because group health insurance is among the larger expenditures – as well as a key recruitment and retention tool – for small business owners.
Small business owners who do not rely on a professional employer organization (PEO) like Axcet HR Solutions to handle benefits should contact their insurers 90 days before the end of the annual contract to learn of any changes to coverage options and pricing. This gives these employers enough time to comparison-shop other carriers before deciding what plans to offer employees and to manage the renewal process internally.
Employers that are PEO clients will renew at a specific time of year, regardless of when the company started working with the PEO. The PEO will facilitate each stage of the renewal process on the employer’s behalf, reducing the legwork required of small business owners.
RELATED: Benefits Renewal Process Checklist >>
Small business owners should familiarize themselves in advance with the health insurance renewal process to maximize the time available to choose the best options for their teams and companies. Here is a general step-by-step guide to what you can expect:
First, insurers reevaluate and often increase rates for the upcoming annual contract period based on inflation, physician and drug fees, and the costs of medical technologies.
Insurance carriers also assess their insureds’ use of the plan over the past year, including changes in risk levels and other factors that impact the cost of premiums.
Carriers typically finalize this step about 90 days prior to the renewal date.
Once they determine their new pricing, insurance carriers typically present that information to employers, along with descriptions of the plans available to employees.
Small businesses that work directly with an insurance carrier or with a broker, rather than with a PEO, should proactively request pricing 90 days before their existing contracts end if the information has not been provided by that time.
During the selection phase, employers choose which of the available plans they will offer their employees. They also determine in this stage how much the company will contribute toward the cost, or premium, for each employee’s plan.
If your small business offers employee health benefits and has more than 50 employees, your company must offer an “open enrollment” period each year. All small businesses that work with PEOs will follow this practice, regardless of the number of people they employ.
Employers should let employees know open enrollment dates as soon as they are scheduled. Workers will have an opportunity to participate in an open enrollment meeting that will acquaint them with each plan being offered, including the costs, how coverage works, and other considerations that will help them make informed decisions.
During open enrollment, eligible employees can opt in or out of the employer-offered plans as best fits their personal health circumstances and budgets.
After eligible employees have enrolled in their chosen plans, coverage becomes effective on a date the insurance provider designates. ID cards for insured employees typically arrive within 10 business days of the provider receiving employee enrollment information.
Finding the right group health insurance plan for your employees is key to ensuring a high-quality benefits package and reasonable premiums. It also plays an important role in maintaining high job satisfaction levels and good health among employees – but it’s time-consuming and potentially confusing for small business owners who do it independently.
We suggest leaning on an experienced healthcare PEO like Axcet HR Solutions to help you alleviate renewal period-related stress and stretch your budget while still providing your small business employees with Fortune 500-level benefits.
.png){kind=logo}
Let us know what you think...