It’s common for employee benefits renewals and analysis to sit at the bottom of business leaders’ to-do lists until the deadline approaches. And most brokers agree that this is the best time to start drilling into the data and gathering information from the carriers.
This is not true. Although common, 60 days is really the bare minimum amount of time to complete a renewal. In this amount of time, you can guarantee that your employees will not experience a lapse in coverage, but not much more.
Restart your renewal cycle with your employee benefits company to begin in the spring this year. It seems like a quick turnaround now, but once on this new renewal calendar, you’ll have a set timeframe that does not feel cluttered or rushed for years to come.
3 Reasons to Start Thinking About Renewal Today
- Big Decisions Take Time – Sixty days is not enough time to properly evaluate a benefits package. Would you make any other life-decision in two months? Imagine having to buy a car, house or any other large purchase with a small window of time. The employee benefits packages you offer will affect the lives of every employee in your company; and large purchases require as much time as needed to be sure that you are making the right decision.
- Analysis Is Critical – The renewal process should begin with an in-depth analysis of your current benefits situation, often using claims data from your carriers, as well as a review of employee perception. Your employee population changes every year. New hires and employee turnover are one aspect of this constant change, but current employees experience changes in health, have children, or get married. Any life change will affect their needs and how they are utilizing your benefits packages, and these changes will in turn change their perception of your offerings. Surveying employees is a necessary part of renewal that many employers overlook.
- Shopping for Pricing Takes 60 Days – When you contact multiple brokers 60 days before renewal to “shop” your insurance, it is the insurance company that comes back with the lowest premium and essentially chooses the broker, not the employer. In most cases, all the brokers you engage will be able to acquire the same prices. The real value of your broker comes from the analysis and renewal processes that take place prior to the 60-day shopping period.
The only advantage to the typical process beginning 60 days ahead of the renewal date, is that you may already have confidence in your broker and have evaluated your plan designs prior to the renewal period. If you’ve completed analysis, this process allows the broker to go to the market to secure the pricing for the plans that have already been established as the desired package and will allow you to focus on the open enrollment meetings and communication to the employees just ahead of the effective date.
If you haven’t completed the necessary data collection, a 60-day timeline will cause unnecessary stress during renewal. Avoid the headache and get started on a renewal in the upcoming months.