Every summer finds us looking into the health and welfare benefits offered at the agency. We renew all the plans each year – from voluntary accidental coverage to life insurance to medical insurance. While the dollars tend to be more significant for the medical plan, we evaluate all the plans and shop for alternatives each year. We use a broker to help us with this – the good thing is the broker has relationships with multiple carriers and has their pulse on changes going on in the field. Definitely a good companion for comparison shopping!
We conducted a broad search for supplemental benefits when we introduced Allstate two years ago, along with Mutual of Omaha for life and disability plans. The plan designs and expenses do not move as dynamically as dental or medical plans, which made this part of our annual exercise pretty easy. These plans will continue for the coming year. Most importantly, there will be NO increase in the premium for these plans.
We did not shop for providers this year for the dental plan. The last time we went to market, we learned that while there are a couple of other plan sponsors out there, none of them had the reach with providers that we currently have with Delta. The vision care element was added to the dental plan a few years ago, and again, this bundled combination has served us well in terms of overall expense. Bottom line, we ended up with NO premium increase for the Delta Dental plan.
As usual, things are more sophisticated for our medical plan. Our intent was to stay with Gundersen and Quartz, provided it made economic sense to do that. Fortunately, the bids we received from other providers –including Health Tradition – was much higher than we received from Quartz. The market in our area is looking at average increases from 8 to 12%, and our initial offer from Quartz was at 7.5 %. After some negotiating, we managed to see the overall cost reduced to 6%. That rate is not bad overall, but we wanted to find a way to get it down a little more. After some number crunching, we settled on an increase to the annual out of pocket (OOP) limit as the most practical way to bring down the overall plan cost. In this case, the annual maximum out of pocket amount will go up from $2,700 to $4,000 for single plans, and from $5,000 to $8,000 for family plans. This change allowed us to do two things. First, it will adjust some of the burden for medical costs to those utilizing the benefit. Second, the premium increase for all participants will only be 2%.
Finally, the last bit of work we did this year was to get all of our plans on the same renewal date of October 1. Last year we started November 1 instead of October 1 for the medical plan so we could be prepared for everything that went into switching carriers. Moving all the other plans to November 1 would require a lot more work than moving our medical plan, so as part of our agreement we were able to start our new contract on October 1 so all the plans are now in sync. In other words, whenever there are premium changes those will take place October 1. As before, deductibles will always be based on the calendar year.
We will be having open enrollment meetings in the next month for all of our plans. Watch for a note to everyone for the location, date and time of these meetings. In addition to HR representation, we will have someone from the broker on hand at each of the meetings so it will be a great opportunity for you to ask any questions you may have.
As always, you can ask questions at any time about your benefits – stop by and see me or call!