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Benefits & Insurance

Benefits renewal: What you don’t know, but should

by: | September 27, 2017

 Benefits renewal season is right around the corner, which means you should probably be expecting a visit from your friendly benefits broker. Whether you speak with your broker on a regular basis or only see them once a year, it’s critical that you ensure your benefits renewal meeting is informative and creates value for your organization.  

If you’ve found yourself being passive in the past or simply didn’t know what to ask, this year is your chance to take the initiative! By asking your broker the right questions you can start working together to build a strategic plan that will lower your costs and take advantage of the latest in benefits technology.

Along with easing your administrative burden, the right benefits strategy should include creative solutions to offer your employees more choice and flexibility to keep them happy, healthy, and productive.

To help you stay on track we asked Rob Galati, Group Benefits Consultant at League, to share a list of critical questions you should ask your broker during your benefits renewal process:

1. How much commission did you make last year from our account?

Might as well lead off with the big one!

Knowing how much commission your broker received for your business is a foundational piece of information you’ll need to evaluate their performance. FYI – Your commission fee is usually a percentage of your rate.

Ultimately, your commission fees are paying for your broker’s advice and any other work they do for you, so you’ll want to make sure you’re seeing a return on your investment. Once you know how much commission they received, you can start to think about whether that amount seems aligned with the quality of attention you received.

Was your broker very transactional during the year, or were they proactively approaching you to make suggestions and check your satisfaction level?   

Rob’s Pro Tips: “It’s really important to consider the commission you’ve paid when evaluating the ROI of the service you received from your broker. If you paid your broker $15,000 in commission last year, did they do more for you than just spend a few hours preparing your renewal? Your broker should be providing regular support and guidance throughout the year.”   

2. How much of your time was spent specifically on our group last year?

Hours worked is a helpful tool for linking your commission fee to the amount of service you received. If you’re wondering how to evaluate their answer, keep in mind that each organization has different complexities and these will go a long way in determining the answer.

Think critically. Does the size and needs of your organization warrant a large time commitment from your broker? Or are you a smaller organization with fairly basic requirements?

Is your benefits renewal coming up? Make sure you know the six things to ask your broker before renewing.

In addition to an hour count, it’s perfectly acceptable to ask for a high-level breakdown of where that time was spent. Then it’s up to you to decide if you feel you’re receiving fair value for your commission fees (good thing you already asked how much you paid in commission!)  

Rob’s Pro Tips: “With the commission paid and the hours worked you can start to draw your own conclusions. If you paid your broker $20,000 in fees and they worked 10 hours for you last year, do you feel like you got fair value? You’ll also want to compare the hours worked year-over-year. If the hours worked stayed the same but your premiums went up, you’ve paid more fees for the same amount of work. Ask why.”  

3. What parts of the plan should we transition first?

Transitioning benefits refers to moving non-catastrophic benefits like paramedical or vision care away from a “defined benefit” approach and into a much more flexible “defined contribution” approach. One of the most common ways to do this is with a Health Spending Account (HSA).

Offering transitioning options is one of the key ways your broker can show you that they are in tune with the strategy and goals of your employee benefits plan. What would it look like if you removed a certain benefit from your coverage and moved it into an HSA? Would there be cost savings? How would it affect your employees? Your broker should be modelling these scenarios for you.  

Rob’s Pro Tips: “In today’s workplace we have multiple generations working together and a wide variety of needs, yet at most companies all the employees are receiving the exact same benefits. So how can we make benefits more flexible? Transitioning things like Vision or Paramedical Practitioners into a Health Spending Account (HSA) could be an affordable option for many organizations.”

Next week we’ll be diving into more important questions for your broker, including if your administration expenses should be decreasing this year. If you want these and other updates on how to ace benefits renewal season follow our blog.

 If you’re eager for more tips to ensure your benefits renewal process is smooth and productive you can watch our “Renewal The Right Way” webinar now.

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