This is a guest post by FBS Benefit Consultant, Monica Leatherman.
Perhaps you are breathing a sigh of relief that your open enrollment has ended, your new plan year has launched successfully, and you don’t have to focus on your employees’ benefits for your next open enrollment for several more months. Actually now is the perfect time to discuss your current benefit offerings, employee participation, and possible benefit changes with your Third Party Administrator (TPA). The goal of this process is to ensure your employees have access to benefits which address their health concerns at competitive premium rates.
Assessing your Benefits Line-up
In addition to core benefits such as medical, dental, vision and disability, today’s marketplace offers policies for specific health events such as cancer and accidental injuries. There are hospital indemnity plans to assist employees with out-of-pocket costs incurred when either admitted into the hospital or receiving treatment in an outpatient facility; emergency transportation plans, telehealth plans, long term care plans and many more. For every plan type, there are multiple carriers wanting to convince you their plan provides the best value for your employees. The process of selecting which benefit plans to offer and which carrier to trust can seem overwhelming.
Your TPA can assist you in successfully navigating this process. The first step is to meet with your TPA to discuss your last open enrollment and employee participation in the various benefits offered and how your group’s participation compares to other districts. Although participation percentages may vary from group to group depending on demographics and location, trends for general product participation do exist. If your group’s participation in a particular benefit is significantly below the trend, that may be an indication that your employees do not understand the product, the benefits offered in the policy do not meet the needs of your employees, the monthly premium cost may be perceived as not providing a good value, or employees are simply not interested in the policy. Any of these reasons would suggest that a change may be needed; either in how the benefit is explained to your employees or in the benefit itself.
Benefit Carrier Tryouts
After this information is reviewed, the next step would be to discuss policy renewal letters provided by your insurance carriers. These letters would describe any changes in monthly premium rates and/or plan benefit levels and may also include the claims information supporting the renewal. Your TPA may then provide you with their assessment of the renewal offer. When a carrier provides a “rate pass”, that means that no premium changes and most likely no plan benefit changes are proposed for the specified timeframe, typically twelve to twenty-four months. If premiums and/or plan benefits are proposed to change, your TPA may advise you on whether or not those changes are warranted based on the claims information provided and the impact plan benefit changes may have on your employees.
Replacing a Player
The next step is to discuss how the information you’ve reviewed with your TPA will impact your next open enrollment. As discussed, participation significantly below trend levels may indicate a benefit needs to be revamped or replaced with one more suited to your employees. In the case of premium increases that do not appear to be substantiated by claims data, your TPA may recommend taking the product to bid; giving carriers the opportunity to compete for your business. With your input, your TPA should provide the carriers with guidelines as to the insurance products you are seeking as well as the plan designs. To establish continuity and stability for your employees, in regard to their benefits, your TPA may require a multi-year rate guarantee from carriers for their bid to be taken into consideration. A competitive bid environment encourages insurance carriers to put forth their best plan benefits at their most competitive premium rates to earn your business.
Put Together Your Playbook
Once carrier bids are received, your TPA should compile them in an easy to read format, highlight key features, and present all bid results for your review. This evaluation should include a comparison to the current benefit plan offered (when applicable) as well as their recommendations as to which bid provides the overall best value for your employees and the basis for their recommendation. In the end however, these are your benefits, and ultimately the final decision should be yours.
Bonus Points: Benefits as a Recruiting Tool
In today’s competitive work environment, employee benefits provided and offered are a key criterion when evaluating job opportunities. A comprehensive benefits package that provides a means by which employees may protect themselves and their families from health and life events most concerning to them will assist you in attracting and retaining your most valued assets. Once hired, employees rely on you to continue to offer relevant insurance products, plan designs are that current with insurance industry trends, and premium rates that represent a good value relative to their income.
If you feel your TPA is not assisting you in navigating this process and achieving these results for your employees and their families or want to discuss how FBS would partner with you to provide an exceptional experience and achieve exceptional results, contact us to speak to one of our experienced consultants.