When should a small to mid-sized employer begin annual renewal planning?

Large companies should start their annual renewal process four to six months prior to the renewal date. Unfortunately, most small to mid-sized employers don’t start the annual renewal planning process until the broker picks up the phone, calls the insurance carrier and obtains the renewal. Why is that? Most brokers are not proactive, they are reactive, and do not give employers the time they need to make the best renewal decisions possible.

Large employers have access to detailed plan data including claims experience, in particular – they are reviewing their plan’s metrics throughout the year, not just at renewal. This allows the large employer to better define goals and objectives, something most smaller employers never have the time to do. The lack of good performance metrics in small to mid-sized plans makes it critical for the employer to go to market early to get competitive information that can be used effectively to negotiate with the vendors.

The time advantage created by a well-organized renewal process exponentially increases the odds of a successful open enrollment with lower medical rates, this outcome cannot be reached with 60-days lead time or with a reactive broker.

To overcome a poorly managed renewal process, a small or mid-sized employer should hire an experienced, well-organized broker who will drive the renewal process including open enrollment communications and negotiations with carriers to achieve the best outcome for the employer and employees.