7 Questions to Ask Before Your Employee Benefits Renewal

For plans that start on January 1, employee benefits renewals usually arrive in late summer or early fall. Before your renewal numbers arrive, take the time to evaluate whether your benefits program is delivering the value your business and employees need. The following seven questions can help you identify your priorities and determine whether to renew your current plan or adjust your benefits strategy.

1. Are your employees using their benefits?

Enrollment numbers tell you how many employees opted to participate in their benefits. If you have utilization data available to you, see how many participating employees are actually using their benefits. If utilization is low, consider why. Are employees confused about or unaware of some of their benefits? Are benefits too expensive or hard to access? Or do the benefits simply not meet their needs? You may need to conduct employee surveys to determine the issues.

2. Are your employees satisfied with their benefits?

Utilization only tells you half the story. You also need to know how your employees feel about their benefits. If your workers are dissatisfied with their benefits, your benefits program may be falling short, and this can undermine the ROI of your benefits strategy. Try to determine the source of dissatisfaction. Do the benefits leave employees with too many out-of-pocket costs? Do employees want different benefits? Are the benefits confusing? Once again, employee surveys may provide valuable insights.

3. Are your benefits helping you meet your goals?

Consider what you are trying to achieve with your benefits program. Is your goal to attract top talent, or to strengthen retention of existing workers? Do you want to improve productivity by supporting worker well-being? Are you trying to maximize your compensation dollars by offering cost-effective benefits? Then consider whether you’re achieving these goals, and how adjustments to your benefits strategy could help.

4. How does your benefits program compare with your competitors’?

Benchmarking data can provide valuable insights into how your benefits program compares with the benefits offered by other employers of a similar size and in a similar industry. Are you paying the same amount as your competitors, or are you paying more or less? Do you offer the same basic benefits, or are there major differences? Are your benefits more or less attractive to job seekers? Knowing where your benefits stand in the market can help you determine whether you should adjust your benefits strategy.

5. How much are your benefits costs increasing?

Employers expect to see health care cost increases of around 10% in 2027, according to the International Foundation of Employee Benefit Plans. Yours may go up more or less, depending on your claims history and your carrier. Once you receive your employee benefits renewal notice, you can see exactly how much your costs are increasing and whether the figures fit into your budget.

6. What are your main cost drivers?

If you have access to claims data, you can use it to see what’s driving health plan cost increases. If you don’t have access to claims data, you may still be able to get an idea of your biggest cost drivers based on general trends, such as increasing GLP-1 and specialty drug use, as well as the demographics of your workforce and the types of benefits you offer. Once you understand your cost drivers, you can start thinking about ways to control costs, such as adjusting your networks or formularies or offering cost-effective telehealth options.

7. Would other benefit options better meet your needs?

If you are not completely satisfied with your benefits program, consider making changes instead of simply renewing.

You could:

• Add or remove benefits. For example, you could add a standalone telehealth benefit, or you could add or change supplemental health benefits.
• Add or change vendors. Consider whether your pharmacy benefit manager, third-party administrator or other vendors are still a good fit, or whether you could use an additional service.
• Adjust your plan design. Consider whether changing the plan’s deductibles, cost-sharing, networks or other design elements could provide better value.
• Switch plans or carriers. If plan design changes aren’t enough, you may find the improvement you’re looking for with a different plan or carrier.
• Explore alternative funding options. If you currently have a group health plan, consider whether a self-funded or captive benefits plan could better meet your needs.

Your employee benefits renewal is an opportunity to evaluate and refine your strategy. Heffernan Insurance Brokers supports employers with employee benefits solutions, benefit advisory services, technology solutions, compliance resources, employee communications and advocacy. See how our benefits solutions can help your business.