Reviewing employee insurance on a routine basis is important. Benefits are not cast in stone. Circumstances change over time, and employee benefits need to be revised to reflect new conditions. A morale problem arises if benefits become antiquated or no longer used. Perhaps the most important review justification is to be sure that you are getting what you pay for from that policy. Many small and medium-sized organizations are focused closely on core business. It is understandable they forget certain things and review but is dangerous to do that. There are some warning signs decision-makers must notice and these indicate that a review is necessary:
- Sudden Increase in Premiums. Insurance carriers will increase the premiums due to bad claims loss. These premium increases could be due to poor health from aging employees or huge claims from certain expensive treatments. If the premiums increase rise beyond acceptable levels, a review is in order.
- Exit Interview Responses. The exit interview is a time when leaving employees share what they believe are the major problems of the company. These discussions may uncover problems with benefits programs. If the employee benefits insurance is a major reason for departure, a review is critical. You will be surprised that some employees stay because their children medical expenses are well covered by the current firm they are working for.
- Employee Survey Data. Management will from time to time survey the workforce to see what their likes and dislikes happen to be. Some very sensible questions regarding benefits and how the employees perceive them must be in the survey instrument. The statistics may uncover a pressing problem with employee satisfaction. If the employees do not like the medical benefits, it is time to find out why this is so.
- Unused Services. Not everything in an employee benefits insurance plan is used. Employees may pass over certain options because they don’t need them. Nevertheless, the employer will receive a bill for those procedures and services. A good claims audit will determine whether a treatment is used and how often. Sometimes, just looking at the history of the plan and it will reflect which are the unused medical benefits.
- Offer from Another Carrier. The insurance industry is very competitive. Your organization may be approached by an insurance company who wants to have you as a client. The offer may be attractive with very low prices, but there are times when buying cheap means getting poor quality benefits programs. The review of the existing insurance plan will determine if there is a need to go with someone else. It would mean a cost/benefit analysis and a determination of the rate of return on investment.
Many small and medium-sized organisations find reviews are easier said than done. It is because the decision-makers are not familiar with what goes into a good benefits review. That is understandable because they have concerns elsewhere. It helps to have a knowledgeable third-party. We have helped small enterprises conduct a comprehensive benefits review. Our whitepaper, [You Can Control Costs with Insurance Reviews], goes over some of the important elements of a good review, and we share other information as well.
Feel free to reach out to me if you have any questions on your employee medical benefits.
