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2011 Benefits Renewal
Benefits & Compensation
2011 Benefits Renewal
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Our company currently shares the cost of health/dental/RX benefits with the employee. However, in the past few years the company has not been able to absorb the increasing cost which means more and mo
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Forums » Topic Forums » Benefits & Compensation » 2011 Benefits Renewal
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2011 Benefits Renewal
posted at 1/5/2011 5:08 AM EST
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Posts: 16
First: 7/26/2007 Last: 9/14/2011 |
Our company currently shares the cost of health/dental/RX benefits with the employee. However, in the past few years the company has not been able to absorb the increasing cost which means more and more of the burden falls on the employee.
Our plans run from October through September of the following year. It seems like we are always getting our renewal rate options at exactly the same time that we need to enroll employees. In an effort to avoid the last minute crunch I was hoping that some of you could give me an idea of how you handle your health and dental plans. What you offer, how you handle contributions, etc. |
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2011 Benefits Renewal
posted at 1/5/2011 5:51 AM EST
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Posts: 562
First: 11/12/2009 Last: 9/14/2011 |
You might want to describe the type of company/organization. If you're a small home service company, asking for info on forums such as these might produce info on how a Fortune 500 company handles benefits which won't do you much good. You would be better off consulting with your current broker, other brokers, going direct to carriers, or even doing some indepth cost reduction research on your own (probably your very first step).
Define exactly what you are looking to improve in your current benefits offering. For example, are you looking to just pass on cost increases to employees? Or are you willing to consider alternative strategies like reducing levels of benefits, increasing deductibles, PPO/HMO options, consumer driven plans, etc. Keep an open mind - as you talk to your broker, other brokers and carriers you are likely going to hear a bunch of new ideas. Also do some research on trade association benefits programs for your industry. For example, the American Electronics Association (AEA) offers health plans at reduced rates to member companies. As far as getting new rates in at the last minute, that's often a game the carriers play to make sure that their clients don't have enough time to switch plans because the clients haven't sourced alternatives. |
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2011 Benefits Renewal
posted at 1/6/2011 4:38 AM EST
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Posts: 16
First: 7/26/2007 Last: 9/14/2011 |
We are a smaller company with about 65 employees. We currently use a sliding scale to determine employee contribution based on salary.
We find that our current broker comes back with most carriers declining to quote because they can't match our current carrier. Which means we are "stuck" with out current carrier's options. The company hasn't been able to absorb the cost increase in the past few years so we have passed the increase to employees. We have offered 2 options for employees to choose, one with a higher contribution but lower out of pocket max, another with a lower contribution but higher out of pocket max. One plan that functions as a PPO and one as a POS. We have looked into trade association plans but find the cost is even higher. We have also looked into additional offerings (Aflac type plans) to supplement current benefits. |
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2011 Benefits Renewal
posted at 1/6/2011 6:43 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
"We find that our current broker comes back with most carriers declining to quote because they can't match our current carrier. Which means we are "stuck" with out current carrier's options"
We have that many employees, but many less actually eligible due to the way our companies are set up. I will say that our broker did get other quotes this year and all were higher than our 34% increased quote from the current insurer. So that is also the economy and state of health insurance right now. But I am a bit surprised that they won't quote at all. I would think about checking with another broker. Because your broker should be not only checking the market for you but showing you actual numbers. Also they should be getting quotes 60-90 days out which should give you 30-45 to make changes/decisions before open enrolllment! I think your broker is NOT being as open/forthcoming as they should be -- especially with being a "non-calendar" plan year. Usually end of the year is the busiest times for brokers/insurance companies...not late summer when you should be getting quotes! That said, over the past 3-4 years we have tried to keep the employer portion about the same. But to do so, we lowered benefits, increased copays/deductibles, went to a HDHP with an HSA, started having the ee contribute a very low amount, etc. This year, there was NOTHING left for us to change except how much the employer funded into the HSA. So while that can be a good strategy for a few years, there is a ceiling on how much -- and this year we hit it. Do you offer multiple levels? We did that at one point...where the employees could choose which premium/deductible combination they wanted. Most of mine chose the lower premium/higher deductible. |
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2011 Benefits Renewal
posted at 1/6/2011 7:08 AM EST
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Posts: 562
First: 11/12/2009 Last: 9/14/2011 |
I agree with rruperts suspicions about your broker. Saying that other companies are declining to bid is one thing; proving it through documentation is quite another. Brokers work on commissions, and it's not uncommon that brokers will push the plans most likely to put more $$ in their pockets.
I'd definitely look at other brokers. Get 2 or 3 in to interview with you, listen to their thoughts/recommendations, and go with the one you feel most comfortable with and whom you feel thinks at least as much about what's good for your organization as she/he does about what's good for his/her wallet. |
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2011 Benefits Renewal
posted at 1/6/2011 7:30 AM EST
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Posts: 4
First: 2/26/2009 Last: 1/6/2011 |
I manage a privately owned office with 28 EE's. Company has always paid 100% of the EE premiums and EE pays for dependents. Like you, we experience a rate increase every year. We've been able to negotiate enough to keep the increase the same or below 5% without changing our benefits in any way. This year negotiations didn't go as well. My task was to (simply) maintain the same monthly rate. I usually start getting quotes from other providers in July, four months before renewal, but it was still a crunch moment when we finally made our decision. To maintain our monthly cost, we ended up changing providers and increasing our deductable. This change also caused an increase for the cost of dependence. Bottom line, in my experience anyway, it's always crunch time when dealing with this issue. Its a competitive business so continue researching your options and negotiate hard when necessary. |
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2011 Benefits Renewal
posted at 1/8/2011 2:14 PM EST
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
It doesn't sound like you have a strategic plan in place, which isn't surprising since virtually no employers with less than 200 employees seem to have one. How successful can a company be when it comes to managing its health care plan without one?
In regards to your current broker, make sure he provides your renewal no less than 60 days prior to your renewal at the very least. I don't find other carriers not wanting to quote "suspicious", unless every year it's the same story. My recommendation would be to create a strategic plan ASAP. It's actually good timing since, if done properly, this will probably take a couple of months since other members of senior management should be involved in the process. Unfortunately, most brokers that operate in your market size are mostly transactional, so try to look for a "consultant" that provides all the brokerage basics, but also the strategic planning component. Where are you located? I might know of a local consultant you may want to at least have a discussion with since I have relationships around the country. Feel free to email me: matthew@heliosnm.com. |
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2011 Benefits Renewal
posted at 1/14/2011 9:15 AM EST
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Posts: 16
First: 7/26/2007 Last: 9/14/2011 |
Itlooks like our current provider gave us renewal rates on August 1 for our October 1, 2010 date. The other carriers that declined to quote all seemed to have gotten back to our administrator the first and second week of September. So it's hard to gauge when they actually sent out the request.
We are definitely working on a strategic plan. Clearly we haven't had one in the past. |
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2011 Benefits Renewal
posted at 1/14/2011 9:25 AM EST
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Posts: 562
First: 11/12/2009 Last: 9/14/2011 |
Getting back the declines that late does raise a suspicion that the broker may have solicited bids very late in the process. I've never heard of a provider not bidding because rates are too low. I'm thinking the declines were more a result of too little time to do the actuarial assessments and new provider implementation prior to October 1.
First year claims of a new plan tend to run low because of run-out claims charged against the previous provider, so the contention that rates are too low just doesn't seem quite right. |
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2011 Benefits Renewal
posted at 1/18/2011 4:49 AM EST
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
Coming back with results the first or second week of September doesn't really cut it. What if a carrier came back with better rates? Are you going to implement a new medical plan in 2 or 3 weeks? That's a nightmare waiting to happen.
There's no reason why your broker can't submit the RFP in July and later provide the renewal numbers if they are absolutely necessary. I doubt the other carriers are even going to need it if you only have 65 employees since claims credibility will be low. This would allow you to get competitive quotes, if they are out there, by mid-August at the very latest. My recommendation would be to focus on creating a strategic plan that included an off-cycle marketing. That way, you'll have plenty of time to review alternatives and have meaningful discussions about the direction of your medical program. |
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