As the end of the year approaches Colorado business owners often ask us when the best time to review their small business health plan is? Letting your employer’s health insurance plan renew automatically might not be in your best interest because insurance markets change annually. This article explores several vital points to keep in mind.
When to Review a Small Business Health Plan
The simple answer is you should review your small business health plan 2-3 months before the renewal date. All group health plans have an annual renewal date. Many health insurance plans renew in the last quarter of the year, October-December.
In the past, a small business health plan renewal was relatively simple. As long as there was not a price rate increase, renewing was a breeze. However, things have changed significantly in the small business health insurance market.
All Colorado small business health plans will experience a rate increase on some level with each renewal period. When reviewing your company health plan for your employees, pay attention to where those increases stem from.
Individual rates for employer health insurance coverage in Colorado are based on the age of the employee. Each passing year brings slight rate changes for employees who remain with the company. Thus, there is rarely a year with no rate change to benefits.
Along with age-based rate changes, each group health insurance plan experiences a trend increase. Usually, the health insurer indicates the level of the rate increase on the renewal, and the health insurance rate increase is also noted in the renewal packet.
For groups under 100 employees in Colorado Springs and Denver markets, the price increase trend may range from 5% to 15%. If the renewal is above your comfort level, you can change health insurance plans with the current insurer. You can also find a new small business health plan from a new provider that better suits your budget.
If enlisting a local insurance broker, make sure to define budget constraints and the changes in coverage desired. A Colorado group health insurance broker can help guide you through this process.
Issues can still occur if you decide to change to a new group health insurance plan with the current insurer. A common problem occurs when the doctor network changes from a PPO to an HMO or a narrow-network HMO,
The prescription benefits and coverage can also vary depending on the plan. When this occurs, the substantial renewal increase may not mitigate the financial impact on your budget. A new, lower-cost plan doesn’t necessarily prevent this. However, changing health-care insurers may help.
Should You Change Employer Health Plans
As the time comes to review employer health plans, the details can feel overwhelming. Many small employers in Colorado dread changing health insurance plans because of the perceived hassle involved. But, if the change is well-informed and executed correctly, the health plan tune-up can be a good, seamless experience! When the doctor networks and prescription formularies are similar, the change isn’t disruptive.
Human Resource and Benefits Administrators should get open and detailed feedback from employees on doctor preferences and desired health plan coverage. And, provide employees with access to the new prescription specifications.
Make sure that all employees review the health insurance plan’s doctor networks and, know the prescription specifications of the new health plan. Learning the details of the plan change will help reduce employee and employer anxiety.
How Expensive is the New Health Plan?
After pinpointing the best time to review your small business health plans, review the extent of coverage offered by any new policy. How expensive are the plan designs with the new health insurer? Chances are, if a new health insurance provider is chosen, your company will remain with that plan through several renewal cycles.
Administrators should educate themselves and employees on the breadth of health plans offered by the new insurer. If a new medical plan is less expensive but lacks the coverage of an existing policy, consider these factors before changing providers. Conversely, if a new health insurance plan provides a broader scope of coverage, but is far more expensive, weigh the importance of these factors.
What is the price range of a new provider’s health plans? What does the spread of prices look like between different health plan designs? How many plan designs will they allow you to offer your employees? The new health plan will also fan out rate increases and you will most likely change to new lower-cost plan designs if you stay with that provider.
Choose the Right Insurance Broker
When determining the best time to review your small business health plans, affirm that you are working with the right group health insurance broker. A broker who is well-versed and who has researched the health plans that your company is looking for is vital. Health insurance plans are complicated. You need a group health insurance broker who will save you the effort of going through these steps by yourself. A broker should also handle health plan service issues like claims and enrollment meetings.
When choosing the best time to review your companies health plans, leave plenty of time to follow these tips. Be sure to review and research all the available options. A safe estimate of time to review and compare benefits is about two weeks. Have a staff meeting to collectively review, and receive employer and employee feedback.
If you do change group health insurance providers and plans, then it will be necessary to hold an employee enrollment meeting and allow for the completion of enrollment applications. Allow more time for larger groups. If you have a December renewal, start the review process in early October. The earlier you start, the easier the process.
Changing or updating company health plans is essential. By following these tips, the process is smoother.
Free Health Plan Review with a Group Business Health Insurance Policy Expert
Contact us today to schedule a free review of your current small business health plan. We promise you will walk away with great ideas for giving your Colorado small business employees of any age the health care benefits they want the most. We can answer your questions about group health insurance plans and provide reliable quotes.
Call (719) 599-7989
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