Our client faced a staggering 30% increase in renewals this year due to a high claimant on their plan — one that was no longer an employee during the renewal process. Their employee left the company in July, yet the previous high claims were included in the cost of the renewal.
Price hikes like these are unfair and should be reversed.
After careful analysis and digging into plan data we were able to move this client to a different insurance environment that recognized the difference in reality and were able to secure a 15% decrease.
This allowed the company to cultivate their culture and achieve their goals — to give back to their employees. They are now able to provide enhanced benefits that take better care of their people.
Another client had a 25% increase. After an appropriate risk evaluation and pursuing alternatives that work for them, we achieved a 19% decrease. The money gained by that change was then used to lower employee contributions (that came out of their paychecks), essentially giving their people a pay raise.
Many companies face the same dilemma.
You need to consistently evaluate your plan, dig in, and appropriately assess your risk in order to pay a more reasonable rate. If not, you could end up paying these unfair prices that can negatively affect your entire business.
From the CEO to the employees, a sharp increase in expenses can impact your people, on an individual level. For example:
- CEO’s who are responsible for the culture of a business, keeping the people happy, and maintaining positive numbers each quarter are heavily impacted by increases so large.
- A CFO wants to provide a generous and competitive plan to employees that doesn’t break the bank. Steep increases in renewal costs can alter this plan and force CFO’s to face an erosion of bottom-line performance and possible destruction of budget forecasts causing undue stress.
- From an HR perspective, that increase erodes employee compensation, affecting overall employee morale, happiness and satisfaction negatively impacting retention and recruitment.
- Employees dealing with increasing premiums, deductibles, and copays can leave them feeling frustrated and disappointed creating an unhappy workforce. This can lead to increased employee turnover or a policy that is underutilized.
If you have a fully insured plan, you may be used to seeing outrageous price increases of 30 to 40%, but there is a way to reduce these costs, alleviating stress and strain across the entire workforce.
We need to reduce the costs and give back.
Working with a professional, like us, to conduct an appropriate risk assessment and negotiate on your behalf can help you reduce high percentage increases, saving you money that you can use to give back to your people.
Keeping track of group changes including claim history, group size, and demographics throughout the year is an ongoing responsibility to ensure you achieve the best price and plan. Insurance companies use these details to estimate your rates, which is fair, as long as those rates aren’t well above current claims, which can happen quite easily.
For our clients, their renewal was $473,000, with a thorough assessment a new price of $309,000 was secured. We were able to achieve a reduction of $70,000 from what they were currently spending, significant savings that can be used for company culture, structural or process improvements, and giving back to employees.
By using your health plan to effectively solve these problems and manage the risks involved, key stakeholders within your business can take home a win. We have saved our clients hundreds of thousands by assessing plan data and making the necessary changes, don’t hesitate to reach out with any questions.