PSA: Start your health plan renewal early this year

Aug 14, 2020

By Tracy Hill

This is the year for HR and People teams to get aggressive with benefits renewals! Health insurance carriers have had record profits in 2020 because plan utilization went waaaay down. Elective, non-emergency surgeries were canceled or postponed, and those who needed medical care overwhelmingly shifted to Telehealth services (vs. more costly physical office visits).

This means employers have the best benefits negotiation opportunity in years.

But it’s critical that you initiate the process early, so a pinched timeline doesn’t back you into a corner. A “wait and pressure” approach is a common tactic carriers (and some brokers) use to box you in. Why? Your carrier has no incentive to reduce your rates, and your broker’s commission is higher if you pay more.

4 Tips for a Better Renewal

Business operations consultant Nina Ross, of Nina Ross Business Solutions, encourages HR professionals to be proactive with benefit renewals every year, and she offers this advice:

  1. Always get bids for your company's insurance products at least 45 days BEFORE the cancellation deadline of your current policies. That should be enough time to review the info and leave your current carrier per their Agreement if your company wants to make a change.
  2. Find another broker if you don't believe you're getting the best prices or just to get a "second opinion”.
  3. Take the time to compare cost versus benefits since cheaper isn't always better.
  4. Ask for any and all special pricing and make sure "special pricing" does NOT diminish the benefits.

A Parting Tip

A favorable renewal rate could provide a hefty discovered budget for your critical people initiatives (like funding for DE&I consultants, anti-racism programs, mental health beyond EAPs, etc).

For more insights into how renewals are typically run from a carrier and brokerage perspective, the Good Renewal Playbook shines a light on the murky process.

About the Author

Tracy Hill is an Employee Benefits Communication Strategist at Lumity. Her days are spent crafting materials to help employees understand their health plan options. She taps into 17+ years of marketing experience at high tech companies where she focused on explaining complicated systems in layperson terms, and now she applies her communication skills to unraveling the mysteries of health insurance. She's also a community steward and steering committee member of the HR for HR online community. 

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