As the Managing Partner of your firm, you are responsible for the decision making when it comes to the firm’s medical insurance renewal. It is more likely than not, that medical insurance is your single biggest expenditure after payroll. So it’s all handled in an orderly and timely manner right?
Does this scenario sound familiar?
You delegate the process to someone else. Your broker shows up a month before the renewal date. Some options are put in front of you and you have to pick something, usually with plan changes, to offset a rate increase. You have an uneasy partner meeting where you summarize the options (get cross examined painfully by your partners) and pick the plan that seems right.
There is a better more organized way to make this crucial decision. The renewal process should function on a timeline that begins six months before your renewal date:
180 days before the renewal – Your broker should be having a mid-year meeting with you to find out if anything has changed within your firm, how your business is doing and if you are hiring or laying off. S/he should also educate you on new products that are available, update you on cost trends and give you benchmarking of what other law firms are doing.
150 days before the renewal – Conduct (with your broker doing the work) an annual employee survey to determine satisfaction, plan usage and acceptable trade-offs in terms of plan changes. This allows you to become proactive buyer rather than a reactive one.
120-90 days before the renewal – Behind the scenes, your broker should run quotes, or send a Request for Proposal to insurers depending on your size. If you have more than 100 employees your broker is analyzing claims experience and reviewing the renewal calculation. They should also be analyzing the survey results to determine what plans to recommend.
90-60 days before the renewal – All the data from the usage survey, and claims data if available, is being crunched and analyzed by your broker pulling everything together and creating spreadsheets and other analysis reports to present to you.
45-55 days before the renewal – Your broker should be meeting with you. Their presentation should incorporate what was discussed at the mid year meeting and the results of the employee survey. These things should tie in with the broker’s recommendations and provide the rationale for which plan design(s) you should implement.
Working off of a six month timeline will make you a more informed and calmer insurance purchaser. In this scenario, there will be time for employee meetings and a smooth transition should you decide to change insurers.
