In our last blog, we talked about a new approach to benefits renewals, one that starts with the employer’s budget. Here’s a quick review of that strategy:
- The broker starts by asking the employer what their budget is for the year. Do they want to keep costs flat? Are they comfortable with a 5% increase?
- Then, the broker only presents plans that fit the employer’s defined budget. For instance, if the renewal on the previous year’s plan was 10%, the broker would either need to find creative ways to make the costs fit a 5% increase for the employer, or not present that plan option at all.
- With this approach, premium share is integrated into the discussion from the start, so employers have a more holistic view of costs and impact of each plan they evaluate (rather than just “total cost” which is often presented in traditional renewal discussions).
Get rid of the spreadsheets
Spreadsheets have a place in benefits planning, but they aren’t the most ideal way to present complex plan data to employers. Why? You may have experienced some of these scenarios yourself:
- To get all the relevant data to fit on a printed page, you often need to shrink the font down so small it gets hard for everyone to read
- As you are going through your presentation, various people in the room are often paging through the numbers and spreadsheets, instead of paying attention to the point you are making
- If a client wants to tweak a plan design option, it usually means going back to the office, drafting up new spreadsheets, and having another meeting to discuss the impact of that change
Now, imagine trying to use spreadsheets and complicated formulas to make each plan fit into a predetermined employer budget. There’s a reason the “traditional way” of presenting renewals has been the way it has for so long! Luckily, there are benefits technology tools available today that allow brokers to take advantage of new approaches to benefits planning.
Opt for a dynamic presentation tool
The best benefits technology tools to use for a budget-based approach to renewals should have a few important components. First, the tool should be a visual one, that makes data easier to understand, allows employers to see plans compared side-by-side, and keeps everyone in the room looking at the same thing. Second, the ideal solution is one that is dynamic, meaning the broker can easily manipulate plans and make tweaks in real-time.
The result? The employer sets a budget. The broker creates several plan options that fit the budget and load them into the presentation tool, prior to the renewal meeting. During the meeting, all options can be discussed, and changes can be made on the fly (adjusting deductible, premium share, etc.) to find the right fit for the employer. Decisions can usually be made in just one meeting.
Want to learn more about how brokers are taking advantage of a budget-based approach to renewals? Be sure and read our e-book, Budget-Based Benefits: A New Approach to Renewals.