Health Insurance Renewal: Why Employers Should Get a Second Opinion

Open enrollment is coming.

And for a lot of business owners, that means the same uncomfortable routine is about to begin.

Your renewal arrives.

You open it.

The rates went up. Again.

Then comes the spreadsheet.

Current plan. Renewal rate. Maybe two or three alternative plans. Different deductibles. Different copays. Different networks.

Pick a column.

Sign here.

See you next year.

But with the increases employers are facing right now, I think we need to ask a bigger question:

Is a spreadsheet really enough?

The Pressure Is Real This Year

Employers are already trying to balance payroll, hiring, retention, operating costs, taxes, and everything else it takes to run a business.

Then health insurance renewal lands on the desk.

Now you're trying to decide:

Do I absorb the increase?

Do I pass more of it to my employees?

Do I raise the deductible?

Do I change carriers?

Will my employees' doctors still be in network?

Will changing the plan cause employees to leave?

And how much more can everyone realistically afford?

Those aren't spreadsheet questions.

They're business questions.

When Did Renewal Become "Here Are Your Options"?

There is absolutely a place for spreadsheets.

I use them too.

You need to compare rates, deductibles, copays, networks, prescription coverage and employer contributions.

But the spreadsheet should be part of the conversation — not the entire conversation.

(A spreadsheet is a tool. It isn't a benefits strategy.)

Before we start moving numbers around, I want to understand what is actually happening inside the company.

Who is using the plan?

What are employees complaining about?

Are people avoiding care because they don't understand their deductible?

Are employees actually using the benefits the company is paying for?

Has the workforce changed?

Are you trying to recruit?

Have you lost employees because of benefits?

What can the business realistically afford over the next three to five years?

Those answers matter.

And Then There Is the Broker Relationship

This is the part I think employers sometimes struggle with.

You may really like your broker.

You've worked with them for years.

They answer your calls.

Maybe they're a friend. Maybe they were referred by someone you trust. Maybe they've been with the company longer than some of your employees.

So when someone suggests getting a second opinion, it can feel like you're being disloyal.

You're not.

Getting a second opinion doesn't automatically mean changing brokers.

It means making sure you have all the information before making one of the larger financial decisions your company makes every year.

We get second opinions on medical decisions.

We get multiple estimates before replacing a roof.

We compare financing before buying equipment.

Why wouldn't we take another look at something that can cost a business tens or hundreds of thousands of dollars every year?

(A strong professional relationship should be able to withstand a second set of eyes.)

What Should a Second Opinion Actually Look At?

It shouldn't just be another broker bringing you another spreadsheet.

I would want to know whether anyone has looked beyond the obvious options.

Is the current funding arrangement still appropriate?

Would another carrier make sense?

Are there level-funded options worth reviewing?

Could voluntary benefits help strengthen the overall package without dramatically increasing the employer's contribution?

Would telehealth, direct primary care or another strategy solve a specific problem?

Are there benefits employees are paying for but don't understand?

Could changing the employer contribution structure make the benefit more sustainable?

Are prescription costs driving part of the increase?

Are there compliance considerations that need to be addressed?

And sometimes, after reviewing everything, the answer may be:

Stay exactly where you are.

That is still a valuable answer.

Because now you know.

I Don't Believe Every Renewal Needs a Change

Changing insurance just for the sake of changing insurance creates its own problems.

Employees have doctors.

Families have prescriptions.

People are in the middle of treatment.

Networks matter.

Formularies matter.

Deductible credits can matter.

Change has consequences.

Sometimes the best strategy is keeping the current plan and finding another way to manage the cost.

Sometimes the plan absolutely needs to change.

The job is figuring out which situation you're actually in.

Your Employees Feel This Too

Employers aren't the only ones worried about renewal increases.

Employees see it in their paycheck.

A $20, $40 or $80 increase per pay period means something very different to an employee trying to pay a mortgage, buy groceries, put gas in the car and raise a family.

Then we hand them a benefit booklet filled with insurance language and expect them to understand what they're buying.

This is why employee education has become such an important part of what I do.

Employees should understand:

• What their deductible actually means

• What happens when they go to urgent care versus the emergency room

• How to check whether a doctor is in network

• How their prescriptions are covered

• What their supplemental benefits actually do

• Who to call when something doesn't make sense

A company can spend a lot of money on benefits and still have employees who don't feel like they have good benefits.

Sometimes that isn't a plan problem.

It's an education problem.

Open Enrollment Shouldn't Be the First Time We Talk

One of my biggest concerns with the traditional renewal process is how reactive it can become.

Renewal comes in.

Everyone panics.

We scramble.

We make a decision.

Enrollment happens.

Then nobody talks about benefits again until next year.

That cycle doesn't work very well when healthcare costs continue rising.

I would rather start thinking about next year's renewal before this year's open enrollment is even finished.

What worked?

What didn't?

What did employees need help with?

What surprised us?

What should we be watching?

That creates a benefits strategy instead of an annual fire drill.

Before You Sign the Renewal...

If your renewal is sitting on your desk and the increase makes your stomach hurt, you don't necessarily need to fire your broker.

You don't necessarily need to change carriers.

And you definitely don't need another person simply emailing you a prettier spreadsheet.

You may just need another set of eyes.

Ask questions.

Understand why your costs changed.

Look at what else is available.

Think about what your employees actually need.

And make sure the decision works for the business beyond January 1.

Because open enrollment shouldn't just be about choosing next year's health insurance.

It should be about building a benefits strategy that your business and your employees can actually live with.

Need a second opinion on your renewal?

I'm happy to take a look.

No pressure. No assumption that you need to change brokers. Sometimes I find another opportunity. Sometimes I confirm that what you already have is exactly where you should be.

Either way, you walk into open enrollment knowing you asked the right questions.

Cheryl Houtz

Houtz Insurance LLC

Your Insurance Friend with Benefits