//How to Review Your Employee Insurance

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How to Review Your Employee Insurance

The cost of having employees is more than just wages. As an employer you need to look at the benefit costs and assess the value of what you offer to employees. Reviewing the employee insurance benefits is the best way to determine if the coverages are worthwhile. Such a review will at the same time determine what changes, if any, need to be made.

Employee surveys are the traditional way of doing this kind of review, but there is a problem; not every employee is going to answer your survey. You may only have a handful of responses, and that alone is not sufficient for a good review. Fortunately, there are some other options you can utilize in addition to the employee survey to get needed information.

The Claims Experience

Claims experience reveals the true cost of employee medical insurance coverage. Reviewing what treatments or illnesses generate the most expense can help a company reconsider how much coverage ought to be allowed for given medical procedures. Claims experience can also identify what is not getting much use. These minor expense areas can be cut from the insurance plan and generate cost savings.

Claims Administration

No employer wants to have expensive claims experience but it is possible that the claims administration is poor. Delayed payments of justifiable expenses are going to cause a great deal of employee dissatisfaction. Tracking the turnaround from the time the claim is filed until it is paid helps in reviewing the policy. The appeals of claim denials should not be ignored. Not every claim merits payment but there has to be a reason for an appeal being denied. Once again, this is a situation where employee satisfaction matters. Too many claim denials will make the health insurance policy unappealing to the workforce. The appeals process should be fair as demonstrated in the reasons why claims were denied.

Comparison Review

This essentially is finding out what the other guy is doing. An organization can look at its employee insurance as contrasted to the marketplace. It can help determine how competitive the existing employee insurance is, and if any revisions need to be made.

Insurance reviews do more than just keep costs down. It could happen over a period that benefits offered are no longer viable. They become antiquated and need some fine-tuning. A review is going to allow an organization to have a better understanding of what they’re offering employees. The results can be better benefits for a vendor that provides high-quality replacing an older one. The review can also allow an organization to see how it compares to other employers in the industry. A favorable comparison is a very effective means of recruiting top talent.

A Good Review Brings Necessary Change/Improvements

All employee benefits are in a state of change given the global economy. There is also a well-understood need to attract and retain millennials. These young people have great technical skills, but they expect more than just a paycheck. Employee insurance should be designed to give these talented employees a reason for staying.

A solid employee review program, which will include an employee survey, will verify if the existing employee insurance is effectively attracting and retaining talent. A good review can also suggest the kind of improvements that will keep employees for a longer period. Information gleaned from the review will identify not just changes in the insurance policies, but the addition of other types of insurance that younger staff members find attractive.

When to Schedule a Review?

Employee insurance programs ordinarily are annual contracts. The benefit cycle is either from January 1 to December 31, or July 1 to June 30. The timing of the review is essential to get a good understanding of the data. Consequently, the first quarter is not going to be good; the year has just begun. Perhaps the best time to do a full evaluation would be in the first month of the third quarter of the plan year, with the results completed before the start of the fourth quarter. It provides the information needed for the company to instruct the insurance provider to make changes, or let this third-party know that the contract might not be renewed

A review can be rough for a benefits manager because it may uncover poor decisions that were made earlier. Nevertheless, in the interests of premium savings and retaining valuable employees an analysis of the insurance programs is worthwhile. It allows scarce dollars to be spent wisely.

A small to medium-size company may not have the resources necessary to develop an insurance review. It takes the expertise of a trained expert to create a process whereby value is analyzed. Read about measuring the success of your employee medical benefits program.

David Ho
Benefits Designer

2018-09-11T10:27:22+00:00