Reading a small-business group health renewal
The letter gives you a number. What matters is the three questions the number does not answer.
By Warren Tisdale, Cedar Landing Benefits
A renewal letter arrives with one figure in bold and several pages of nothing much. Owners read the figure, feel the jolt, and then have ninety days at most to do something about it — often far less.
Here is how we read one.
Three questions the letter will not answer
Why did it move? Ask for the claims experience behind the figure, or the pooled rating action if you are too small to be experience-rated. What changed in the plan design — deductibles, copays, networks — beneath the headline percentage? And what does the same plan cost from two other carriers on the same census?
Without those three answers you are not negotiating; you are accepting.
Levers that are not a carrier change
Plan design, contribution strategy and tier structure move total cost substantially without disrupting staff. Raising a deductible while funding part of it for employees often costs the business less than the increase it avoids, and lands better in a staff meeting.
Changing carrier is a real lever too, but it is the most disruptive and rarely the first one to pull.
The calendar is the real tool
Ninety days out, a renewal is a negotiation with alternatives priced and ready. Nine days out, it is a signature. The single change that saves small employers the most money is starting the conversation a quarter earlier.
We diary every group's renewal at ninety days and start the work whether or not the letter has arrived.
An estimate for planning, not a quote. Medicare and the Marketplace set your real figures.
Have a question this raised?
General writing only goes so far. Your doctors, your medication list and your dates decide what the right answer is for you.
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