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  • When you run a small business, offering group health insurance plays a critical part in attracting and retaining top talent. According to a study by MetLife, 81% of employees named health insurance as a “must-have” benefit, while only 3% said that it wasn’t needed. While other factors impact job decisions, it’s no secret that healthcare coverage plays a key role in making your business a more desirable place to work.

    The advantages of offering group health insurance are clear, but there is a drawback for businesses – it’s not cheap. Group health coverage can cost a small business thousands of dollars per employee, and those annual costs can add up depending on the size of your workforce. It’s also common for premiums to rise year over year.

    Want to know why premiums are getting more and more expensive? We’ll break down what impacts your premiums and why rising costs are a common trend.

    What Impacts Your Group Health Premiums?

    The cost of a group health insurance premium is driven by several different factors. Insurance companies use these different considerations to raise or lower your group’s rates. The biggest factors that will dictate how much you and your employees pay include the following categories.

    Group size and overall wellness

    The first thing an insurer considers when calculating your company’s premium is the size of the group. Larger groups tend to enjoy lower costs because other factors can be spread across a greater number of individuals, whereas small groups won’t enjoy the same economy of scale.

    In addition to size, insurers also evaluate the general health and wellness of a group. A group that presents a higher risk of costly claims is likely to pay higher insurance rates. This reality is simply because the insurer estimates how much they can anticipate in paying out for claims in any given year, which is why your premiums may be higher.

    Age of the group

    The unfortunate truth is that as an individual ages, medical issues tend to be more common. Insurers will typically use the average age of your group members to calculate your premium. If your group skews older, your premiums will likely be higher than average.

    Group member occupations

    Some occupations inherently carry more health risks than others. The level of risk based on certain industries or jobs directly impacts the cost of group insurance premiums. For example, a staff comprised mostly of accountants will present a lower risk than a group of construction workers. As such, the construction company is likely to have a higher number of claims and more expensive premiums in this scenario.

    History of claims

    Your past also plays a direct part in premium calculations. The total cost of past claims can negatively or positively impact your rates. If your group has several members undergo costly medical procedures, your premiums may increase the following year. This adjustment is the result of an insurer using current data to estimate how much your group should pay for its coverage.

    The Reasons For The Rising Costs Of Healthcare

    In recent years, the cost of offering health insurance seems to be on a never-ending upward trend. That perception isn’t an illusion – rising healthcare premiums are a real trend instigated by a variety of factors.

    Increase in medical expenses

    Demand for medical services has seen a big increase due to government programs such as Medicare and Medicaid. Many individuals who lacked coverage are now on these programs. This rise in demand and hospital visits effectively causes a similar rise in medical care costs and premiums. Prescription drug spending is also on the rise, which adds yet another layer to why the costs of health insurance keep increasing.

    Population growth

    Sometimes rising healthcare costs is simply a matter of having more patients. Our population continues to grow, which simply leads to greater national health expenditures. As a result, the overall population increase puts a greater strain on the healthcare system and leads to higher operational costs that impact everyone’s premiums.

    Advancing age of population

    The population of the United States is not only increasing, but also aging. As of 2020, there were approximately 47 million people in the United States over the age of 65. As recently as the year 2000, this number was only 31 million. The aging of the population won’t slow down anytime soon, either. It’s projected that our population will include 65 million people over the age of 65 by 2040.

    With an aging population comes increased healthcare expenses. The older we get, the more medical issues we face. Therefore, a country whose senior citizen population is increasing is going to see hospitals that are hit hard on resources. In addition, the average group age can increase, leading to a more direct impact on your small business’ premiums.

    Increase in chronic illness

    As a nation, we are facing more chronic diseases now than ever before. The largest culprit is diabetes, followed by high blood pressure and high cholesterol. Simply put, the growth of chronic illness in the country leads to long-term care and greater costs for constant coverage to treat these conditions.

    How Can a PEO Help Lower Healthcare Premiums?

    A Professional Employer Organization (PEO) allows businesses to balance the benefits of group health coverage with the costs of health care spending. A PEO like GMS can help you offer top-tier coverage through more affordable insurance options. This cost-effective approach is made possible through both economy of scale and expert benefits administration.

    Increased buying power

    When you partner with a PEO, you aren’t buying group health insurance on your own. One tremendous benefit of a PEO is that it represents many organizations rather than just yours. This network of relationships means that a PEO can treat several companies as a single group while dealing with insurance companies. This grouping of organizations means that your small business can see the same types of benefits and cost savings that can typically only be obtained by larger corporations.

    More importantly, a PEO will split its portfolio of organizations into separate groups based on their own demographics. This means that your company will not be grouped in with every other company under the umbrella of your PEO, but instead will be treated based on your own group’s ratings. This means you will see the lowest cost possible, without cutting back on your actual coverage.

    Benefits administration and payroll

    A PEO can also help ease your administrative burden by enabling your healthcare admin and payroll to integrate with one another for a streamlined process. For example, payroll deductions will be set up automatically when new employees are onboarded and opt into health insurance. Paycheck deductions can be automated, including determining what should be pre-tax and post-tax.

    The process of employees enrolling in benefits or renewing during open enrollment can also be simplified by a PEO. Dedicated account managers and online systems make it simple to educate employees on their options and help them choose their coverage elections in the same online portal.

    In short, a PEO makes your benefits administration simpler and more cost-effective. It’s almost a full-time job to simply deal with the health benefits for your employees. That’s why our experts can help you invest in quality, affordable coverage and save you valuable time by handling time-consuming administrative tasks.

    Are you ready to streamline your administrative processes? Contact GMS now to talk with our experts about all your health insurance needs.

  • As a small business owner, you’re in charge of making many critical decisions that impact your employees. Determining which benefits and employee perks you offer is one choice that plays a direct role in attracting top talent and retaining key members of your company.

    These days, health insurance is a major sticking point for new and current workers. The Society for Human Resource Management (SHRM) found that nearly half of employees ‘said health insurance was either the deciding factor or a positive influence in choosing their current job.’ That willingness to choose jobs based on health insurance makes a competitive benefits package even more important for a growing business.

    Of course, offering health insurance is also a notable expense for a small business trying to grow. Fortunately, the small business health care tax credit allows qualifying organizations to offset some of those costs and provide quality health insurance for their employees. Here’s what you need to know about this tax credit and whether it can help your business.

    Which Small Businesses Qualify for the Health Care Tax Credit

    While any business that offers health coverage would love to save money, the IRS does set some stipulations for which organizations will benefit from the tax credit. Your business will need to meet the following criteria to be eligible for the small business health care tax credit. 

    Your business must have fewer than 25 full-time equivalent employees

    Full-time equivalent (FTE) employees are typically counted as those who meet “an average of 30 hours of service per week for a calendar month or at least 130 hours of service in a month.” Any employee that performs services for your business would normally be counted, but the IRS requires employers to alter this calculation for the tax credit.

    Instead of counting 30 hours per week as one FTE employee, the health care tax reviews hours from an annual perspective. One FTE employee for the tax credits equals approximately 2,080 hours per year. Any part-time employees who combine to equal more than 2,080 hours would count as one FTE employee in these calculations.

    The IRS asks employers to not include the wages and hours worked by certain types of employees toward their 25 FTE employee limit. These individuals include:

    • The owner of a sole proprietorship
    • Any partner in a partnership
    • Shareholders of S Corporation owning more than 2%
    • Owners of more than 5% of the business or other businesses
    • Family members of the above
    • Seasonal employees who work 120 or fewer days per year

    Your business’s average wages must be lower than $56,000 per full-time equivalent

    In addition to meeting FTE requirements, your business must also meet certain wage thresholds. The IRS set the average annual wages at $50,000 back in 2014 and have adjusted the amount each year for inflation. As of the 2020 tax year, businesses must pay average wages of less than $56,000 to FTE employees to qualify for the tax credit. 

    Your business must offer a qualified health plan

    Any organization that wants to be eligible for the small business health care tax credit is required to offer a qualified health plan through a Small Business Health Options Program (SHOP) marketplace. There are also certain areas where a qualified health plan may not be available through SHOP. In those cases, an eligible business may still be able to claim the credit.

    Your business must pay health insurance premiums through a “qualified arrangement”

    According to the IRS, a qualified arrangement means that employers pay at least 50% of any premium costs for enrolled employee’s health insurance coverage. This arrangement only extends to costs incurred by those employees, meaning that any costs incurred by family or dependents do not affect the 50% threshold.

    How Much Can Organizations Receive from the Small Business Health Care Tax Credit?

    The exact amount of credit your organization receives depends on two main factors:

    • Whether your organization is tax-exempt or not
    • The size of your organization

    Eligible smaller businesses can receive a tax credit that covers up to 50% of the premiums paid for by the employers. Meanwhile, eligible employers who are tax-exempt can max out a 35% tax credit. This credit is available to both types of employers for two consecutive taxable years. Small business employers are able to carry that credit either forward or back as well.

    Of course, those numbers represent the maximum tax credit for your business. The exact amount your business can receive is based on a sliding scale where smaller employers will receive larger credits. According to the IRS, your maximum allowed credit will be reduced if you employ more than 10 FTE employees or have average wages of more than $25,000 (subject to change due to inflation).

    How to Claim the Tax Credit

    If your small business is eligible for the tax credit, you should fill out Form 8941 to calculate that credit. The IRS provides a detailed PDF with instructions on how to list your employees, their total hours, and how much you paid them. Meanwhile, tax-exempt organizations can file Form 990-T for their credits.

    How to Invest in the Right Benefits Package for Your Small Business

    Whether you qualify for a tax credit or not, it’s difficult to balance rising premiums and providing quality health care coverage that helps you attract and retain top talent. Fortunately, Professional Employer Organizations (PEO) like GMS make it possible for you to provide top-tier coverage at affordable prices.

    As a PEO, GMS is a natural fit for health insurance administration. We represent hundreds of businesses and can leverage our greater buying power to keep premiums down and give you access to quality plans at cost-effective prices. GMS also gives you and your employees access to experts who can help you stay on top of regulatory changes and educate group members about how to best use your plans.

    Let’s face it, benefits administration is confusing and time consuming. GMS helps you invest in quality, cost-effective coverage and allows you to reclaim your valuable time. Contact GMS today about group health insurance and ancillary benefits that makes sense for your small business.

  • Small business owners weigh many factors when deciding whether to invest in a group health insurance plan, but oftentimes the decision comes down to dollars and cents. The Kaiser Family Foundation’s 2016 Employer Health Benefits Survey notes that the high costs of insurance premiums are the primary reason why firms won’t offer health benefits. Even for business owners who do offer plans, rising insurance premiums can create a lot of stress and confusion, especially if the owner doesn’t know how these premiums are calculated and how they can manage them.

    Employers can have many questions for group health providers, and that includes exactly how much they can expect to spend. Here’s a rundown on what the insurance industry uses to calculate your group health insurance coverage premium, as well as some strategies that can lead to lower costs.

    Image of group health insurance plan premiums for small business owners.

    How are Group Health Insurance Premiums Calculated?

    According to the KFF 2016 survey, the average family coverage premium is $18,412 per year and single coverage is $6,435 per year. Of course, every business is different, so your premium may end up being higher or lower depending on a variety of factors that are used to calculate the costs for your plan. These factors include the following.

    Size and Health of the Group

    The total number of people on your group plan can impact how much you pay. This number includes not only your employees who opt in to your plan, but also any family members who also opt in to your plan through an employee. A larger group of people can help lower your premium by spreading the associated health risks of a few people over an entire group.

    However, the overall health of a group does affect your premium. While the Affordable Care Act doesn’t allow insurers to change premiums or deny insurance based on an individual’s pre-existing conditions and overall health status, the American Academy of Actuaries notes that the overall health of the group can play a role in determining premiums.

    “If a risk pool disproportionately attracts those with higher expected claims, premiums will be higher on average,” the Academy writes. This factor can work in your business’ favor, as the Academy also notes that “If a risk pool disproportionately avoids those with higher expected claims or can offset the costs of those with higher claims by enrolling a large share of lower-cost individuals, premiums will be lower.”

    Average Age of the Group

    While the ACA no longer permits insurers to use certain factors like gender to alter premiums, it still allows insurers to consider age in premium determinations. According to independent actuarial and consulting firm Milliman, “rating by age is still allowed under the law as long as the ratio of the highest-cost adult age band to the lowest-cost adult age band does not exceed 3:1.” In a group plan, this means the average age of your group can play a part in what you pay.

    An Employer’s Claims History

    All those visits to the doctor can add up. Insurance providers use the number of total claims and how expensive those claims are to determine adjustments to your premiums over time. When it’s time to renew your policy, an insurer will review your group’s claims history and adjust accordingly. If a few employees had some medical issues that led to frequent or costly visits, that may be reflected on your updated premium cost.

    Type of Occupation

    Different lines of work carry different levels of risk. Your insurance provider may adjust your rates depending on the general occupation of your workers. For example, clerical staff don’t face the same health risks as factory, construction, or offshore workers, so insurance premiums for a group of office workers may be less than other occupations.

    The Type of Coverage and Desired Add-on Benefits

    Not all small business health plans are the same. The level of coverage will play a big role in how much you and your employees pay. Better coverage and lower out-of-pocket costs can lead to higher premiums. Bundling extra add-ons such as dental and vision plans can also increase your premiums due to the extra coverage.

    How Can I Save on Group Health Premiums?

    Health insurance premiums can be expensive for a small business owner, but you don’t necessarily have to resign yourself to what your company is being charged. There are potential strategies that you can use to help you lower your costs and improve the health of your employees.

    Workplace Wellness Program

    Since the number of claims has a direct impact on your premiums, it can pay to improve the overall health of your employees. A customized workplace wellness program can help foster healthier lifestyle choices through health education and wellness activities. This in turn can lead to fewer doctor’s visits caused by preventable diseases, leading to a healthier, more active workforce and lower overall premiums. 

    Telemedicine

    Another way to limit the number of doctor’s visits is to give your employees access to a 24/7 mobile doctor. Telemedicine services give your employees the freedom to connect with a professional physician via phone, video, or online chat. This allows them to get the answers they need without having to schedule an in-person appointment with the doctor, meaning no copay for them and no extra claim for your plan.

    Economy of Scale

    Depending on where you get your insurance from, you may be able to take advantage of economy of scale. While larger companies have more employees and greater buying power, smaller business don’t have quite the workforce to take advantage of savings associated with economy of scale. However, a Professional Employer Organization can give you the buying power to lower premium costs. 

    A PEO can leverage the collective buying power of all their group health clients, acting as one large company that can purchase plans at lower premiums as a result. This helps your business avoid costly administration fees and save without sacrificing on the quality of your group plan. 

    Partnering with a PEO also opens you up to cost-saving strategies such as wellness programs, telemedicine services, and more. If you’re interested in learning more about how a PEO can help your business save on insurance premiums and make your businesses a healthier place, contact GMS today.

  • It’s always a good idea to get more information, especially when your business is investing in something as important as health care. For an employer, that extra information is essential when finding the right group health coverage.

    Even if you have a good grasp on the basics of group health insurance, it doesn’t hurt to ask a provider a few important questions before you purchase a plan for your business. Here are some key things that you should ask a provider when you’re ready to buy group health insurance coverage.

    Five Questions Small Businesses Should Ask Group Health Providers

    What are the different plan options available to my business?

    If you choose to offer health benefits, there are several types of group plans that you can offer to your employees. These plans include:

    • Fully-insured plans
    • Self-funded plans
    • Level-funded plans
    • PPO (preferred provider organization)
    • HDHP/SO (high-deductible health plan with a savings option)
    • POS (point-of-service plan)
    • HMO (health maintenance organization)

    Each one of these types of plans offer different types of benefits. As such, some plans may be better suited for your business than others. For a breakdown on the advantages and disadvantages of each type of plan, check out our post on the different types of group health insurance.

    While many businesses offer only one type of plan, that doesn’t mean that your organization is limited to a single offering. According to the Kaiser Family Foundation (KFF) 2021 Employer Health Benefits Survey, 25% of organizations offer two or more plan types in an effort to diversify and improve their overall benefits package for employees.

    What does my plan cover?

    If you’re going to purchase something, you should know what you’re getting. Make sure to ask your group health insurance provider for a detailed breakdown of what your plan covers so that you and your employees know what to expect.

    It’s also important to ask about additional benefits, such as dental and vision insurance. While some plans have add-ons for ancillary benefits, it’s not always the case. That distinction is important because nearly 90% of employees would consider a lower-paying job in exchange for better health, dental, and vision insurance. Your plan plays a pivotal role in attracting and retaining talent, so make sure your provider gives you everything you need to know about your plan coverage.

    How much will group health insurance cost me?

    According to KFF, the average annual health insurance premiums in 2021 are $7,739 for single coverage and $22,221 for family coverage. Employers contribute an average of $6,440 and $16,253 for single and family coverage respectively.

    Of course, those numbers are just the averages. Your business’ exact health insurance costs can go up or down depending on a variety of factors. The specific factors that insurance agents use to determine group health premiums include:

    • Size and health of the group
    • Average age of the group
    • An employer’s claim history
    • Type of occupation
    • Type of coverage and add-on benefits

    Who should my plan cover?

    As an employer, you do need to abide by some ground rules in terms of who is eligible for group health insurance coverage. Any business that provides health coverage must offer it to all full-time equivalent employees. However, that does mean that employers have some wiggle room in terms of part-time employees and family members.

    Simply put, employers can either decide to offer coverage to all part-time employees or none at all. The same principle applies to family members and dependents of eligible employees. Not offering coverage to these groups can help lower your costs, but may make your plan less attractive to certain employees. As such, you’ll want to iron out these details and determine which options align best with your business’ needs when buying group health insurance.

    Who can help me if I have any questions or problems?

    You shouldn’t feel like you’re stranded on an island when you have questions about health insurance. A good health insurance provider should have a team in place that can assist you with any potential questions and issues in the future.

    Ask each provider about their customer service to find out who your contacts will be and how their process works. If they don’t give you many details about who can help you, that’s a red flag that they may not have your back in the future.

    Group Health Insurance Coverage From A PEO

    It can be a tricky to find an attractive group health plan that won’t break the bank. Fortunately, a Professional Employer Organization may be able to help you find the best of both worlds.

    At GMS, we can help you choose a group health insurance plan that’s right for you and your employees. Thanks to a higher collective buying power and other cost-prevention strategies, GMS can help you lower your premiums and help you save. We also have the experts to help you make informed decisions about benefits management and oversee plan administration so that you have time to focus on the rest of your business.

    Ready to invest in quality group health insurance at a lower cost? Contact us today to talk to one of our experts about what we can do for your business.

  • As we approach the 2020 political season, healthcare remains an eternal “hot topic” issue; one that acts as an economist’s reoccurring bad dream. Much like a bad dream, the obvious warning signs of our domestic system’s atrophy disappear into the cognition of the economist’s mind and are forgotten by mid-morning. The economist, much like the rest of the country, has an eerie feeling due to this reoccurring healthcare nightmare, but can’t quite seem to pinpoint the root of their discomfort or begin to answer the lingering paradox of “How can we make healthcare in the U.S. financially sustainable?”

    The answer to that question is a large, complex, and convoluted issue to tackle. An alternative approach is to look at our ongoing mistakes as an industry and start to peel back some of the fraud, waste, and abuse at least long enough to get our collective head above water to propose a semi-legitimate long-term solution. 

    A doctor pocketing money from a staggering healthcare bill. 

    Diagnosing a Questionable Healthcare Diagnosis

    Individuals, facilities, insurance entities, CMS, and providers are just some of the key players necessary to stop the financial hemorrhaging. Not often enough do we evaluate the role of the physician from an economic standpoint and their direct effect on the industry. A recently released edition of “Bill of the Month,” a crowdsourced investigation of medical bills by Kaiser Health News and NPR, allows us to do just that. 

    To paraphrase the article: A New York City patient went to a PCP (Primary Care Physician) with symptoms of a head cold. About to leave on vacation, this individual thought nothing of a typical provider visit to address some minor discomforts before traveling. A throat swab, a quick round of antibiotics, and a $25 co-pay sends this patient (aka consumer, customer, client, etc.) seemingly out the door without a hitch. 

    Upon returning from vacation, this healthcare consumer has a staggering $28,395.50 bill from their provider relating to the previous “head cold” visit. This physician ultimately sent the throat swab (claiming to test strep, among a myriad of other unlikely diagnoses) to a non-network lab facility with which this patient’s insurer (BCBS) did not have an established contracted rate. Normally, these tests run through an in-network provider would run the same insurer about $653 – a 191 percent price difference coordinated through the discretion of this physician. 

    As I read through the article, a handful of painfully obvious questions came to mind. Namely:

    1. Why intentionally use an out-of-network lab service?

    a. The physician office had applicable and valid insurance info from the patient and could easily check for a list of in-network providers. They chose to use an out-of-network facility.

    2. Why were so many unnecessary tests run for likely influenza (common cold) diagnosis?

    a. “In my 20 years of being a doctor, I’ve never ordered any of these tests, let alone seen any of my colleagues, students, and other physicians, order anything like that in the outpatient setting,” said Dr. Ranit Mishori in Kaiser Health News. “I have no idea why they were ordered.”

    b. “There are about 250 viruses that cause the symptoms for the common cold, and even if you did know that there was virus A versus virus B, it would make no difference because there’s no treatment anyway.”

    3. Why were antibiotics prescribed for a viral infection? 

    a. There’s a lesser-known, but just as frightening scenario where continued unnecessary antibiotic use within the general population will lead to widespread antibiotic resistance that will affect not only our healthcare industry but veterinarian and agricultural industries as well. Antibiotics cannot effectively treat viral infections. 

    Here’s the kicker from Kaiser Health News: “The third reason for the high bill may be the connection between the lab and Kasdan’s doctor. Kasdan’s bill shows that the lab service was provided by Manhattan Gastroenterology, which has the same phone number and locations as her doctor’s office.”

    Undoubtedly, this physician or practice is getting a kickback from the lab’s profit by billing this patient’s insurer an absurd and unnecessary amount. Coincidentally, Kaiser Health News points out that “Manhattan Gastroenterology” (the out-of-network lab running these tests) “is registered as a professional corporation with the state of New York, which means it is owned by doctors.” Maybe this primary care doctor in particular? 

    Now the point of this blog isn’t to uncover fraudulent billing practices. Those occur every minute of every day within our healthcare system. Rather, its aim is to point out that if we want anything close to a sustainable system for the baby-boomer generation’s progress into older age, or for the generations that follow, we’re all responsible to do our part in turning this thing around. That means you too, physicians. 

    Regardless of which individual ends up settling the $28,000 bill from this PCP, the moral of the story is that billing tens of thousands of dollars to the healthcare system opposed to hundreds, by choice, are the decisions that, when multiplied and repeated over decades, gets us to where we are today: a seemingly insurmountable amount of debt. Furthermore, and most important to employers, high claims like these that could and should be otherwise avoided will ultimately lead to higher insurance premiums in future years for the employer and its employees. 

    What can we (healthcare consumers) do to mitigate national healthcare debt?

    Staying informed, asking the right questions, and taking ownership of our personal health habits are surefire ways to reduce the expenditure and volatility of our health system. Working with consultants from an employer-centric company like GMS can only help educate employers on the successes and failures within our system and how those points can be used towards the advantage of those offering benefits while mitigating unnecessary financial loss. 

    GMS is an employer for employers, constantly striving to provide transparency and sustainability for those we serve. Contact a local office today to begin your healthcare partnership with GMS.

  • Health Insurance renewals may be one of the most important decisions an employer makes each year. For most small businesses, group health insurance is one of the largest expenses they incur, meaning the process can be quite stressful. To help, we put together some guidance on the renewal period and what you can do to streamline the process for your business.

    Small business owners reviewing the different elements of the health insurance renewal process. 

    Why Do Renewals Happen on an Annual Basis?

    The renewal process is designed to give insurance carriers, employers, and employees the ability to make adjustments on an annual basis. However, those adjustments differ depending on the party involved. Insurance carriers use the yearly renewal process to keep plans compliant with any new regulations and calculate new health insurance plan premiums.

    As an employer, yearly renewals allow you to adjust your benefits plans as your business evolves. Over time, you may have grown or your employees’ benefits needs may change. Annual renewals allow you to add or adjust your plans, change contributions, and make any other changes to benefit both your business and your employees. 

    Likewise, your employees can use the renewal period to change their plan selection or renew the same plan as before. Potential changes include swapping plans if you offer more than one, adding a dependent, or even opting out to join a spouse’s plan.

    What are the Different Stages of the Health Insurance Renewal Process?

    The renewal process is made up of five main steps from start to completion. This process begins with health insurance carriers before turning to you and your employees.

    Stage 1: Reassessment 

    Before you see any new plan options, your insurance carrier needs reevaluate its new pricing for the upcoming year. This can  often involve the insurance carrier adjusting premiums because of new doctor’s fees, medical technology, general inflation, and other reasons. The insurance company will also assess your company for any change in risk levels and other factors that impact your potential premiums.

    Stage 2: Presentation 

    Once your insurance carrier reassesses its rates, it’s time to apply those rates to new plans. At this point, your insurance carrier will present you with different options for your company to use in the upcoming year.

    Stage 3: Selection 

    Now that you have a variety of plan options, you’ll want to figure out which is best for you and your employees. You’ll also need to determine how much your company will contribute to each employee’s plan after you decide on a plan.

    Stage 4: Employee enrollment 

    After you’re done making a plan selection and identifying contribution amounts, it’s time for open enrollment. At this point, you will present your employees with the plans you’ve chosen so they can weigh costs, compare coverage, and weigh any other factors that may impact their decision to enroll in one of your options or find coverage elsewhere.

    Stage 5: Completion 

    At some point, your employees will need to select a plan or opt out of your plans. Your insurance provider will then make sure that any eligible member of the company who selected a plan is effectively covered throughout the course of the new plan year.

    How Can I Prepare for a Smooth Health Insurance Renewal Process?

    While the renewal process may sound like a fairly simple five-step process, it can be anything but if you’re not careful. It’s important to prepare ahead of time to limit the stress renewals can place upon both you and your employees. Here are a few tips to help you get your company ready for renewal season.

    Communicate with your employees ahead of time

    It never hurts to give your employees advance notice about open enrollment. While some of your employees may be aware of your annual renewal season, others may not. As you or your health care provider go through the presentation and plan selection process, it’s good to send a message to your employees that open enrollment is approaching and share some basic info about what that means for them. This will help eliminate any confusion from employees who may not be as knowledgeable about insurance renewal season.

    Not only should you communicate with your employees ahead of the open enrollment period, you should also talk to them once they’re presented with new plan options. It’s good to educate eligible employees about any plan changes, whether it’s a new offering or something that’s no longer a part of the new coverage options. By explaining these changes, you can be upfront with employees, which can help mitigate any hard feelings from employees upset about surprise changes.

    Evaluate your company’s needs

    There’s a good chance that your company isn’t in the same position it was a year ago. Whether you’ve grown or not, you and your employees may have different health insurance needs than before. As such, it’s best to plan ahead to determine some specific goals for the plan selection process.

    As an employer, one of the first factors you need to identify is your budget. Has that number changed since this time last year? If so, that will likely impact the quality of the plan you select. You’ll also need to account for any potential rate increases given the aforementioned possibility of higher plan costs due to internal or external factors.

    You’ll also want to account for your employees as well. According to the Society for Human Resource Management, “56 percent of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job.” In addition, 46 percent of that same group said their health insurance was the deciding factor or a major reason why they chose their current job. Health insurance is a key retention and recruitment tool, so you’ll want to balance your employees’ preferences with your budget to have a plan in place during the renewal process.

    Find the right coverage options for your organization

    One of the most important parts of the renewal process comes long before you’ve ever presented plans. Finding the right group health insurance partner plays a massive role in not only the quality of your benefits package, but also the cost of your premiums. Small and mid-sized businesses may be subject to higher premiums since they have fewer employees than big companies that can spread risk out across larger group sizes. Fortunately, a Professional Employer Organization (PEO) can help your company enjoy some of the same advantages as a big business. 

    At GMS, we represent tens of thousands of employees, which allows you to leverage our greater group buying power to attain more cost-effective insurance rates. In addition to getting more bang for your buck, we also offer supplemental insurance coverage to tailor your plan around your employees. Our experts can also take the burden of employee benefits administration off your shoulders, making sure your company is covered and compliant while you use your new free time to focus on other business matters.

    Ready to revitalize your health insurance coverage? Contact us today to talk to one of our experts about what we can do to protect you and your business.