The annual renewal of your health benefits offering is an opportunity to assess your health plan to see what’s working and what needs improvement. In order to get the most out of your renewal negotiations, you will need to come prepared with a solid understanding of where you currently stand and the factors that influence how much you will pay in renewal premium. Conducting a benchmarking assessment and independent underwriting review can provide you with data and leverage at the negotiating table.
Benchmarking is the process of comparing your benefits offerings to districts similar to yours in size and region. Benchmarking is valuable in several key ways: it helps you evaluate the competitiveness of your benefits offerings and ensures plan design is in alignment with your district’s strategic goals. It can also provide a historical look at plan design and pricing in your region to help secure a fair and reasonable price on renewal. The key to successful benchmarking is data – prior to your assessment, gather as much of your district’s benefits claims data as you can, including high level utilization statistics, medical loss ratio reports, high cost claims information, etc.
Case study: An employer with 700 employees had not made many changes to their benefits offering since 2001. A comprehensive benchmarking analysis conducted by USI revealed both gaps in coverage and areas where the offering far surpassed their competitors. USI worked with the employer to implement changes and trim the benefits to a more competitive level, saving the company $342,000.
You can eliminate surprises at renewal and look for hidden cost-savings opportunities by completing an independent underwriting analysis prior to renewal. You can then use the results of the analysis to negotiate a more favorable rate with your benefits carrier. Conducting an underwriting review prior to renewal can help you understand the cost components and identify what’s driving claims and cost increases for your district.
A comprehensive underwriting review should provide your district with an independent validation of premium cost, rates and trend analysis. USI’s in-house underwriting and analytics team uses a multi-pronged assessment approach, including:
Clients have worked with USI to achieve an average premium reduction of 8-13%.
Case study: An employer with 470 employees changed carriers at their prior renewal and was facing a 23.7% premium increase. USI helped the employer by conducting a comprehensive underwriting review that identified several opportunities for negotiating a better renewal rate. Using the independent underwriting analysis, the client was able to negotiate a $776,000 reduction in renewal premium.
If after assessing your district’s benefit offering you decide to make a change, a process for thoroughly vetting new programs and solutions can help determine what changes, if any, are a better fit for your district and better support your goals.
Before you make any changes to your plan design, make sure you have a process in place to review the potential impact such a change would have on your district. Start by defining your goals and objectives. Next, complete an assessment of your current benefits offering: what are the strengths and weaknesses? Where is there opportunity to improve? Next, evaluate the strengths and weaknesses of the new program or solutions – how does the new program or solution help you achieve your district’s goals? What impact will it have on your employees and your budget?
The successful implementation of any new program or solution will require buy-in from the top down, from the board and administrators to the staff. You must be able to demonstrate the return on investment (ROI) and communicate the rationale behind the change – carefully documenting your benchmarking and underwriting analysis process can help you build your case with key stakeholders in the district. As you get ready to implement a new program or solutions, create a plan to proactively communicate to your employees what is changing and why, and provide resources to help employees make the most of their new benefits options. Monitor the progress of the new program or solution to ensure it continues to support and align your district’s needs and goals.
USI Insurance Services’ regional employee benefits professionals leverage a robust client database and specialist teams to provide solutions like benchmarking and analytics, but also provider engagement and accountability, employee engagement and population health management, strategic benefits planning, and custom plan design. These resources were specifically built to help employers develop and communicate competitive, cost-effective benefits programs and negotiate favorable outcomes with providers and insurance carriers. Contact your local USI representative to learn more about strategies designed by region to maximize the value of your benefits.
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