When Should a Company Shop for Group Health Insurance?
The ideal time to compare group health insurance is before the current plan renews, but renewal is not always the only opportunity to review coverage.
The right decision depends on the potential savings, differences in benefits and how a change would affect employees.
When Is the Best Time to Begin?
The ideal time to begin reviewing group health insurance is generally 90 to 120 days before the current plan renews.
Starting early gives the employer time to:
- Gather the rates being paid now
- Review the new rates scheduled to begin at renewal
- Download the current subscriber or enrollment report
- Review the current Summary of Benefits and Coverage
- Compare available insurance options
- Check provider networks and prescription coverage
- Present the results clearly
- Communicate with employees
- Complete enrollment without rushing
You Do Not Have to Wait for the New Renewal Rates to Begin Preparing
The rates being paid now, subscriber report and current benefit information can often be collected before the insurance carrier releases the new renewal rates.
Once the renewal arrives, the rates being paid now can be compared with the new rates scheduled to begin on the upcoming effective date.
Is It Too Late If We Renewed Last Month?
Not necessarily.
A company may still be able to compare or change health insurance plans shortly after renewal when another option provides enough savings or improves the overall coverage enough to justify moving.
Even one or two months after renewal, changing plans may still make financial sense when the improvement is significant for both the employer and employees.
However, the premium is not the only consideration.
Some employees may have already paid toward their deductible or out-of-pocket maximum. Others may be receiving ongoing treatment, taking important prescriptions or preparing for a scheduled procedure.
Before recommending a change after renewal, Alabama Health Solutions reviews:
- Employer premium savings
- Employee premium savings
- Differences in deductibles
- Differences in out-of-pocket maximums
- Deductible and out-of-pocket progress already made
- Whether deductible or out-of-pocket credits may be available
- Doctor and hospital networks
- Prescription drug coverage
- Ongoing treatment
- Scheduled procedures
- Enrollment timing
- Potential employee disruption
When the savings and coverage improvements are substantial, changing plans may make sense. When the benefits do not outweigh the disruption, preparing early for the next renewal may be the better decision.
Can a Company Change Health Insurance Carriers During the Year?
A company may be able to change health insurance carriers before the current plan year ends.
The more important question is whether changing carriers makes sense for the overall benefit package.
A lower premium does not automatically mean the new plan is better. The new option may have a higher deductible, higher copays, greater coinsurance, a smaller provider network or different prescription coverage.
Before recommending a midyear change, we compare:
- Premiums
- Deductibles
- Out-of-pocket maximums
- Primary care and specialist copays
- Urgent care and emergency room costs
- Hospital and outpatient benefits
- Prescription drug benefits
- Provider networks
- Employee deductible progress
- Ongoing medical needs
- Potential employee disruption
The goal is not simply to change insurance companies. The goal is to determine whether changing plans provides a better overall result for the employer and employees.
Need help understanding deductibles, copays and coinsurance? Read our Health Insurance Terms Explained guide.
When May It Be Better to Wait Until the Next Renewal?
Waiting may be the better decision when:
- Employees have already made significant deductible or out-of-pocket progress
- Important doctors or hospitals are not included in the new network
- Ongoing treatments or prescriptions could be disrupted
- The savings are not large enough to justify changing plans
- The company does not have enough time to communicate and complete enrollment properly
Even when changing plans immediately does not make sense, reviewing the options can help the employer prepare earlier and make a stronger decision at the next renewal.
What If the Company Does Not Currently Offer Health Insurance?
A company starting a new group health insurance plan does not have to wait for an annual renewal.
The company may begin reviewing options during the year. The available effective date will depend on the insurance carrier, the employee census and the time needed to complete enrollment.
Whether a company is offering health insurance for the first time or replacing a plan that never existed, the same careful comparison of rates, benefits and provider networks applies.
What Information Should We Gather Before Comparing Plans?
If the Company Already Has Insurance
We generally need:
- The rates being paid now
- The new rates scheduled to begin at renewal
- A subscriber or enrollment report
- The current Summary of Benefits and Coverage
If the Company Does Not Currently Have Insurance
We generally need:
- A complete eligible employee census
- A clear indication of who is expected to enroll
- The expected coverage level for projected enrollees
- The name, date of birth and gender of each spouse and child expected to be covered
A Review Does Not Require Your Company to Change Plans
Requesting a comparison does not require the company to cancel its current coverage or move to another carrier.
If the current plan remains the best option, the employer receives confirmation that the existing coverage is competitive.
If another option provides meaningful savings or improved benefits, the employer can make an informed decision based on the complete comparison.