Mastering Employee Benefits Renewal
Benefits renewal time – a semi-chaotic mix of questions and answers. Questions such as, “Do we continue with our current plan,” “Do we switch the plan but keep the same provider,” or, “Have we evaluated our business from the ground up to ensure we are staying under budget?” For many businesses of all sizes, these are obstacles presented annually. That’s why, in this installment of CenterStage, Zach Gerhardt, a Market Analyst at ClearPath Benefits, offers advice for how to become a master of managing your employee benefits renewal.
Long and Short-Term Forces Employers Need to Know
As an employer, the focus of the business should always be on the future of the organization’s growth and development in a positive fashion. Directly, this comes from the attraction, retention and overall satisfaction of employees. Zach noted many employees today admit to staying with an organization not solely because they enjoy flexible hours, the ability to work from home or sufficient time off, but rather their insurance coverage. Employees prefer a company that looks out for them in times of injury and illness. Far too often, many small and mid-sized businesses fail to retain their employees, because they cannot offer insurance to their employees. This forces them to pay large out-of-pocket costs because of a lack or total non-existence of benefits. After all, happy employees are healthy employees.
Alongside the need to adequately provide for employees is the need to keep them informed and updated with things relevant to their coverage. Employee communication methods are no longer limited to sluggish methods. In years past, communicating information to employees required holding a meeting or placing information on a bulletin board, often leaving employees who “didn’t get the memo” not knowing the changes affecting them. Thanks to technology, employers are capable of releasing updates to insurance policies and procedures through emails, synchronized calendar notifications, and text messages. Technology also allows employees to wield the power of active insurance choosing by visiting an open enrollment portal and choosing the best plan fit for them. Through effective communication, gone are the days of employees becoming surprised by change at a clinic or unsuspected bills from insurance companies or the IRS.
Changes on the Horizon
Buyers beware of the many changes taking place within the employee benefits market but do not let change scare you away. Plan holders and their employees can expect to see attractive pricing in their overall cost of coverage/care. Prescription tiers have become a creative way to combat heightened prescription drug costs by charging only for medications necessary. These tiers of medication are:
- Tier 1 – Generic medications
- Tier 2 – Brand name medications
- Tier 3 – Non-preferred brand-name medications
- Tier 4 – Specialty medications (3-tier programs do not have a unique tier for specialty medications)
Zach mentioned it’s important to note that some carriers are making further changes to these tiers based on who they have the best-negotiated contracts with. For example, while you may only pay $10 for a prescription at CVS, you may pay $30 for the same prescription at Rite Aid. Each tier now consists of a “preferred” and “non-preferred” in-network cost. That’s why it’s crucial for you to do your research but also partner with an advisor who will know the ins and outs of these carriers’ choices.
A medication may be placed in tier 3 or 4 if it is new and not yet proven to be safe or effective, or there is a similar drug on a lower tier of the formulary that may provide you with the same benefit at a lower cost. Over 50% of the Rx drugs waiting to be approved by the FDA are considered “specialty drugs” and will likely come with high costs. What’s more – carriers will continue to work to decrease pharmacy and physician pricing by referring their clients to doctors and pharmacies with whom they have established relations. Think of this as the friends and family discount for your coverage pricing, which leads to an increase in the number of discounts available. Among these discounts includes lower urgent care and virtual visit costs, yet an increased co-pay for ER visits. All of this is done in efforts to maximize availability and access to care where and when it is needed.
Zach noted many businesses transferring from a fully-insured plan to partially self-funded at or before renewal time can see cost decreases. For many small to mid-sized businesses, managing increased responsibility on employers and employees in managing who and how they are insured is critical in managing and combating larger costs. Additionally, Zach pointed out partnering with a purchasing coalition to increase your company’s economic stance in the benefits market. For those who are unaware of what a coalition is, and how a coalition can benefit your company, speak to Zach or any other ClearPath Benefits advisor to learn how to unlock this secret to success.
What Can a Partner in Benefits Renewal Do for Me?
Renewal can be a slippery slope to scale if you go at it alone and uninformed of what is available to your business. Do not navigate alone – let ClearPath guide you toward cost-saving options for your coverage. ClearPath shares the vision you have for your company and works toward making it achievable by crafting a personally designed plan that lowers your costs as much as possible, without sacrificing the level of benefits your employees need. There is no longer a status-quo, and benefits have and never will be one size fits all – it’s time to evolve.
What does this evolution of benefits look like? It is truly revolutionary. A method that puts you in proactive control and engagement as opposed to reactive and chaotic. Evolving is about changing for the better; acting out front rather than reacting to change while it is happening. Be an innovator. Choose to evolve in your benefits. Talk to Zach today at 614.754.1936 or visit us at www.clearpathbenefits.com.