Five considerations when renewing employee benefits insurance

Employee benefits insurance renewals usually take place in January, April or November. During this period, it is the optimal time to determine whether the insurance plan has been working well for your company and employees. Ultimately, you want your employees’ needs to be covered as much as possible while maximising your investment.

In this article, we will be looking at 5 things you need to consider before renewing your insurance plan.

1) Employee Experience

Ask your employees to provide feedback on what they like or dislike about the current provider and their coverage. Be sure to take into account not only their individual needs, but also any family members that are part of the plan.

2) Cost

Find out your company's payable premium for next year. Due to medical inflation, it is common to see premiums rise. However, on many occasions, your company is being charged a higher premium because of the previous year’s high annual claim amount.

This is because insurance companies typically "load" your premium prices. This means the insurance providers will predict a certain amount that they will have to spend on every employee each year. This is the invisible “limit”.

Take for instance in a particular year, your company has many employees falling sick and they go beyond the threshold set by the insurance company. Although insurance companies will continue to pay the costs, they will load (bring forward) the premiums for the next year when your company renews the package.

Why do insurance companies load your premiums?

That is because they need to cover its losses amongst the uncertainties that may occur. More often than not, employers may be on the receiving end of a rude shock when they see that premiums have risen. Hence, it is wise to check the premium amount before you sign the insurance renewal.

For some companies, the employees may be under-utilising the provided benefits. Which brings us to the next point.

3) Utilisation

As mentioned, some companies have employees who are not using their benefits to the fullest potential. This could be because their employees are unaware of what’s covered or they do not require certain healthcare services that year.

Check your claim utilisation rate for the past 12 months and analyse where most of your money is being spent. For example, if you are paying for certain treatments that your employees do not require, then it is probably time to tweak the package to accommodate their needs better.

4) Coverage

Review the coverage and make sure it meets the needs of your employees. Does the plan cover all of their medical treatments? Are there any additional elements that you can include to enhance the package? Does the plan provide panels that are accessible for your employees?

Furthermore, be mindful of certain situations where employees may need extra coverage such as if they are travelling abroad, or if they are pregnant. Ensure that these additional costs will be covered by the insurance provider.

5) Competition

Do your research and check the market rates to get a better understanding of what packages are being offered by other insurers. This will help you to evaluate whether your insurance provider is providing competitive prices or if they should be offering more coverage.

These are 4 areas to evaluate when understanding other employee benefits providers:

A) Cost

Affordability of the benefits plan is often a huge consideration for many employers like yourself. You certainly want to pick a plan which can help maximise your investment in employee benefits. You no longer want to be surprised by your annual premiums, nor have to pay cash upfront. Instead, you're looking for a solution that only charges for the benefits employees actually use to help control costs and improve cash flow.

B) Network coverage

Have you had employees who face the hassle of having to travel a long distance before finding an in-panel clinic? It is important to find a benefits strategy that offers a sizeable coverage of in-panel health providers so that all your employees can visit one at their convenience.

C) Customer service

Is there a hotline you can call when in doubt? Are your queries attended to quickly? Having good customer service can help improve your employees’ experience when enjoying their benefits and reduce HR's workload.

D) Wellness perks

Back to the initial point regarding meeting existing demands, many healthy employees look out for wellness perks such as optical and dental care. In order to cater to the needs of different groups of employees, you and your HR will have to study carefully what each plan covers.

Related articles:

• The Ultimate Guide to Reducing Employee Benefits Costs
• 3 Ways of Employee Benefits Administration - Pros and Cons
• How to choose the right employee benefits software for your company

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