The Most Important Questions to Ask During Health Insurance Renewals

When it comes to certainty, the only thing that gives death and taxes a run for their money is the insurance renewal process. Every year, like clockwork, insurance renewals show up on the desks of HR managers worldwide — and the first question they have to answer is whether or not it’s time to consider a new insurance provider. 

Companies should assess the healthcare market every three to five years. Changing plans more often will result in undue stress. You can also do yourself a disservice by changing too often, as new providers may see your account as potentially high risk. In the long run, you could cost yourself more money.

Whether you are wondering if it’s time to look at new plan options — or you’re ready to make the move — there are many questions to ask and things to consider. Let’s dive in!

Why are you changing plans?

When I talk to clients, the most common reason I hear for wanting to change plans is the price. That’s probably not a surprise to anyone. Healthcare Finance reports that U.S.-based employers expect medical costs per employee to rise 6.5% on average in 2023, so costs are bound to be on everyone’s minds. 

But let’s think about this more holistically. The insurance renewal process is an opportunity for employers to tailor a benefits package to align with team needs. We suggest checking in with your team to truly understand where their pain points are. Are they struggling to find in-network doctors or certain types of care?

Once you understand what your concerns truly are, you can evaluate whether the problem lies with your carrier or in the larger system. If it’s a systemic problem, changing plans isn’t likely to solve the issue. For instance, 30%-35% of healthcare costs typically come from pharmacy plans. Each company sets its drug formulary list, but they don’t usually differ widely enough to make a big difference in pricing. So, if you’re looking to save money on your drug costs, switching plans probably is not worth it. 

On the other hand, if employees are facing problems getting fertility treatments covered or finding a therapist that takes their insurance, this may be a problem you can solve by switching carriers. If a new plan looks like the right option, it’s time to start thinking about costs.

What will it cost to change health insurance plans?

Typically, the cost to change plans is about 10% of the overall expense. With that in mind, I often advise clients not to switch health insurance plans unless they’re saving at least 15%-20%. 

Saving money may be the top motivator for changing insurance plans, but sometimes saving money can cost you. One of the most common ways to reduce your healthcare premiums is to move to a plan with a higher deductible. But there are often hidden costs when companies fail to consider the ramifications of changing to less expensive plans. 

For example, if you choose a plan with a $10,000 deductible for a company where the average salary is $55,000 per year, you have effectively eliminated healthcare for most of your employees. A move like that can lead to high turnover, costing you more in loss of productivity or recruiting than you save in healthcare premiums. So before you make the change, do your due diligence to truly understand what the unintentional costs of switching plans may be.

Five questions to ask insurance companies

If you ultimately decide it’s time to shop for a new health insurance plan, it’s important to ask the right questions. Not only is this integral to properly evaluating the plans, but you will never have more power than you do at the beginning of a negotiation. Asking the right questions at this stage can result in some benefits you didn’t even know were possible. 

Assessing the health insurance market can be overwhelming, especially for small departments. So, here are five questions we suggest asking potential health insurance providers:

1. What are your add-ons? From wellness credits to GoodRX discounts, insurance companies offer many add-ons to help plan members stay healthy and get more bang for their buck. (You may even want to ask about an EAP, which can help solve mental healthcare accessibility issues.)

2. Can I see your provider network? What good is a health plan if your employees can’t see their preferred doctors? Be sure to examine the provider networks of each contender before making a decision. This is also a good time to ask about out-of-area providers. Will your employees be covered when they travel out of state? This is especially important for our clients in the non-profit and INGO spaces, as employees are often on the move.

3. What’s the formulary for prescriptions? You want to ensure your employees’ most used medications will be covered. 

4. What are the out-of-network benefits based on? Insurers will either base their out-of-network reimbursement rates on Medicare or what’s “reasonable and customary” (RNC). Over the years, many insurers have moved to the Medicare model, but RNC is often better for the clients — and this is often negotiable at this stage.

5. Ask specific questions about employee challenges. If you’re changing plans, you probably have a few specific employee complaints that must be addressed. Now is the time to talk about them. For instance, infertility is often only covered for diagnosis — treatment is often out-of-pocket for the patient. Be sure to clarify points like this before making the move. 

If the process seems overwhelming, the good news is that brokers like Allegiant Global Partners are here to help. We go to great lengths to ensure our clients get the best deal possible, often by asking the questions employers just don’t know to ask. We bring our underwriting experience to the table to get answers to provide our clients with real value. Set up a consultation to see if Allegiant Global Partners can help you find a better value plan.