Companies that provide employees with access to health insurance plans are responsible for signing up for a new plan or renewing their plan from the previous year. Health insurance renewals are typically an annual occurrence in which insurance carriers adjust their offerings and rates. During this period, employers have the opportunity to compare plans and choose the right insurance for manufacturing companies that best suits their budget and needs.
Enrolling in a group health insurance plan can be beneficial for both employees and employers. A group health insurance plan is typically more affordable than an individual healthcare plan as the risk is spread across a large group rather than a single plan participant.
Employees typically pay less each year in taxes as premiums can be paid using pretax dollars. Employers also save money by paying lower payroll taxes and using annual contributions as deductions during tax time. It is important to understand what to expect during group health insurance renewals to ensure that no aspect of the renewal process is overlooked.
Checklist for Group Health Insurance Renewal
1. Review Plan Performance, Usage and Renewal Rates
Look back on quarterly benefit plan updates to measure how the plan has performed over time. Year-end reviews generally provide an assessment that details what services were used most often and where the bulk of the spending was allocated. Businesses can expect some increases in plan costs due to reasons like rising healthcare and a lack of insurer competition.
2. Evaluate Employee Benefits Plan Objectives
Consider key objectives when renewing group health insurance. Health insurance benefits may be offered as a way to attract top talent or to remain competitive in a crowded market. Include budget in the list of objectives and determine if any cost increases still fall under budget or if changes need to be made to cut costs elsewhere.
3. Conduct a Renewal Survey and Collect Feedback
About three months before the renewal date, consider sending out a renewal survey to employees. This feedback can tell business leaders how workers feel about certain aspects of the plan, including costs, services and overall plan structure. Use this feedback to make plan recommendations.
4. Note Plan Changes or Adjustments
When renewing group health insurance, it is essential to check for recent updates or changes in compliance law. Health and welfare benefit plans often experience modifications from year to year and manufacturing companies must become familiar with these changes to avoid penalties.
The COVID-19 pandemic has greatly impacted the cost of Affordable Care Act plans in 2021. In response to the crisis, many insurance companies have chosen to lower their rates or implement a small premium increase during the renewal period.
Applicable large employers (ALEs) are required to report all information relating to employer-sponsored health coverage to the IRS on Form 1095-C. The IRS then uses this information to verify coverage. Businesses are responsible for determining which ACA reporting requirements apply to their company and what is required of them for reporting purposes.
Under the ACA, employer-shared responsibility rules stipulate that ALEs must provide full-time employees and their dependent children with health coverage at a minimum value. To be considered affordable, an employee’s required contribution to the health plan must not exceed 9.5 percent of the employee’s household income for that taxable year. Failure to provide affordable health coverage to staff may result in penalties.
5. Promote Employee Health Plan Enrollment
Part of the group health insurance renewal process involves choosing a plan. There are several different types of group health insurance plans for manufacturing companies to choose from, such as:
- Preferred Provider Organization (PPO) – A PPO gives employees the freedom to see the provider of their choice. However, seeing a doctor outside of the insurance company’s network may result in a lower coverage amount. With a PPO, employees are not required to choose a primary care physician (PCP).
- Health Maintenance Organization (HMO) – An HMO requires employees to choose a PCP and to request a referral to see specialists as needed. In addition, employees are required to see providers in the insurance company’s network as doctors outside of the network are generally not covered.
- Exclusive Provider Organization (EPO) – An EPO has features of both a PPO and an HMO. Employees are not required to choose a PCP, but there may not be coverage for providers outside of the insurance company’s network.
Employees have the opportunity to choose a plan available through their employer or make changes to their existing coverage to account for qualifying life events.
6. Confirm the Terms and Complete Renewal
Shortly before the renewal date, work with a benefits consultant to review the finalized plan. The benefits consultant will handle any paperwork required by the health insurance carrier and provide a renewal date based on information provided by the health insurance company.
Speak With The Experts About Insurance For Manufacturing Companies
Renewal can be a confusing time for manufacturing companies regardless of the number of employees or type of plan. The experienced team at New City Insurance can make the process easier by helping businesses find the right insurance products for them. For more information about group health insurance renewal or to speak with an employee benefits consultant, contact New City Insurance.