Creating the right healthcare package for your employees is crucial when it comes to attracting and retaining top talent. A 2015 survey by a recruitment website found that 40% of employees valued healthcare benefits over a pay increase – which is why tuning into your staff’s needs is essential in order to offer the best package.
However, what may have been the best health benefits package for your workforce one year may not necessarily be the most relevant for the next. So, while automatically renewing can be quick and hassle-free, when it comes to updating your annual healthcare plan, is it really your best option?
Weighing up on automatic renewal
So here are the main factors to consider when deciding whether or not to instantly renew – both the good and the bad.
It can save time: Automatically renewing your company’s health insurance literally means your existing policy will be renewed at the end of the policy term unless you instruct your insurance provider otherwise.
Healthcare can involve a complicated negotiation process to arrive at the best deal for your company, so this alone may deter some businesses from revisiting the health insurance market.
Healthcare can involve a complicated negotiation process to arrive at the best deal for your company, so this alone may deter some businesses from revisiting the health insurance market.
Automatic renewal is convenient, time-saving and removes all the headache of re-researching the complex market. You’ll also avoid having to deal with all the paperwork and compliance that goes with switching to another provider.
But it may lead to additional costs: While letting your company’s healthcare policy automatically renew may be convenient, it may not necessarily save you money in the long term. Insurance markets change annually and premiums often rise.
A 2013 study in the American Economic Review of inertia in employer health plans found that workers were losing as much as USD 2,032 per year by continuing to stick with the same health insurance policy.
And existing plans being sold under the same name may still be subject to changes to their deductibles, co-payments and other features. Auto-renewing could mean missing a chance to review those changes.
Getting the best out of automatic renewals
If you decide to opt for automatic renewal, here’s how to make sure it works as efficiently as possible:
Check for key changes in advance: Regardless of your renewal method, healthcare plans can change annually, so make a note of when your company policy is due to renew and always double-check how critical details will be affected with your provider. This should include premium costs, healthcare provider networks, designated clinics your employees can visit, lists of covered prescription drugs and cost-sharing rules.
Consider the health needs of your workforce: You need to ensure that the health plan still covers the requirements of your employees. For example, does it include maternity cover or conditions that may require long-term medication. Also, it’s important to remember that employees don’t have to be ill to get value from health insurance. Look for additional benefits such as gym discounts, sports club memberships, weight-loss programmes, free annual physical check-ups, optician discounts and dental services.
You need to ensure that the health plan still covers the requirements of your employees.
Making the right choice for your company and employees
Renewal periods present a chance for your company to review its current benefits and premium costs, as well as the doctors and clinics offered in the network.
For some businesses that have been happy with their existing policy and that don’t have the resources to revisit the marketplace each year to research possible alternative deals, automatic renewal offers a straightforward solution. Provided you scrutinise the terms of your new policy going forward to ensure there are no surprises, staying with the same cover can make a lot of sense.
However, if you’re mindful of the ever-increasing cost of healthcare to your company, then it can pay to shop around for more cost-effective and appropriate wellbeing cover. It could save the company money as well as provide the best possible deal for your workforce.