How Early Should You Start Preparing for Your Group Benefits Renewal?

Six Months Before Renewal: Start Looking Ahead

If your plan renews in January, the summer and early fall can be a good time to start the conversation.

You do not necessarily need a final decision six months in advance. The objective at this stage is preparation.

Review:

• Current monthly costs
• Employer and employee monthly cost sharing
• Major plan design features
• Recent claims information
• Changes in employee demographics
• New benefits employees may need
• Previous renewal concerns

This is also a good time to tell your broker about upcoming workforce changes.

If you expect significant hiring, layoffs, acquisitions or changes to employee classes, those changes can affect the plan strategy.

Four to Five Months Before Renewal: Review the Current Plan

Now move from general preparation to a more detailed review.

Ask:

• What is working well?
• What are employees actually using?
• Are there benefits employees rarely use?
• Are there services employees are asking for?
• Have your company's priorities changed?

For example, an employer that has grown from 20 employees to 60 employees may have very different benefits needs than when the plan was originally established.

A growing company may also need a more structured benefits communication strategy.

Three to Four Months Before Renewal: Analyze Cost Drivers

This is where claims and utilization data become especially important.

Look at the major benefit categories separately.

Prescription drugs, dental, paramedical services, mental health services, disability and other benefits can have very different cost patterns.

Do not settle for a statement that says, "Claims are up."

Ask where they are up and why.

If prescription drug costs are the issue, the solution may be different from a situation where dental claims are driving the increase.

Two to Three Months Before Renewal: Evaluate Alternatives

If the renewal is expected to be significant, this is the time to examine options.

Possible strategies may include:

• Adjusting deductibles or coinsurance
• Reviewing annual maximums
• Changing reimbursement levels
• Adding or modifying drug management features
• Introducing or changing an HSA
• Reviewing employee monthly cost sharing
• Testing the market with other insurance company's
• Restructuring certain benefit classes

Every change should be evaluated for both financial impact and employee impact.

A $20,000 annual saving is not automatically a good decision if it creates a major gap in coverage that employees rely on.

One to Two Months Before Renewal: Make the Decision

By this point, employers should have a clear understanding of the options.

The decision should consider:

• Total employer cost
• Employee cost
• Coverage levels
• Claims experience
• Contract terms
• Insurer service
• Administration
• Future sustainability

If you are changing insurance company's, additional implementation time may be required.

That can include employee enrolment, plan administrator setup, communication, evidence of insurability for certain benefits and coordination of termination and effective dates.

Before the Effective Date: Communicate

A benefits change is not complete when the employer signs the paperwork.

Employees need to understand what is changing.

Explain:

• What is changing
• When it takes effect
• Why the change is being made
• What employees need to do
• Where they can find plan information
• Who to contact with questions

The communication should be clear and practical.

Employees usually do not need a technical explanation of every insurance company pricing formula. They need to understand how the change affects them.

After Renewal: Don't Put the Plan Back on the Shelf

A renewal should create a starting point for the next review.

Track:

• Claims trends
• Employee feedback
• Benefit utilization
• Major cost changes
• Changes to the workforce
• New benefit priorities

This gives employers a much stronger position when the next renewal arrives.

Why Starting Early Matters

Starting early gives employers something that cannot be recovered later: options.

If an employer waits until the last minute, the discussion can become:

"The renewal is up. What can we cut?"

With more preparation time, the conversation can become:

"What changed, what do our employees need, what alternatives exist, and what combination gives us sustainable coverage?"

That is a much more useful renewal discussion.

At Next Benefits, we help Canadian employers review their benefits strategy before renewal becomes an urgent problem.

If your renewal is coming up, do not wait for the renewal letter to start asking questions.

*CLHIA 2025 Facts, plus insurance company plan/renewal education.*