The post below is a guest blog from Jordan Whichard, IV, GBA who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.
If you operate a startup company, or your established business has recently grown larger than 50 employees, one of the most daunting items on your 2017 to-do list may be implementing a group benefits plan for the first time. Starting a benefits plan from scratch can be an intimidating – not to mention time-consuming – process, especially without a partner to help you understand the background and minutiae of it all. Here are some tips if you find yourself staring down a brand new group benefit plan in 2017:
- Know your timeline and stick to it
Whether you want your benefits plan to begin in June or January, you’ll want to begin the process at least six months in advance of your anticipated start date. That will give you ample time to evaluate different benefit options, plan designs, funding platforms, and other factors that you will need to consider. Medical carriers will generally be able to offer early numbers about three months prior to your effective date. You’ll want to approach the carriers as close as possible to that date in order to start understanding your potential rates.
- Firm up your census
Changes in your workforce are bound to happen, especially if you operate a rapidly growing business. But beware, medical carriers reserve the right to re-rate your population if your census changes by more than 10% between the date of the quote and the date of final implementation. If possible, holding your workforce numbers relatively stable for several months before your first open enrollment will help alleviate any stress that a re-rate would generate.
- Know your population
All workforces are different, but knowing your employees wants and needs can be a big help when designing your first benefit plan. A brief employee survey could be a valuable tool in determining what benefits your employees are most interested in. By the same token, many benefit plans have participation requirements – a percentage required to guarantee rates in the first year. If you have less than that, the benefits may be more expensive than originally thought.
- Beware individual underwriting
Depending on the size of your group, some medical carriers may require individual employees to go through an underwriting process to help the carriers determine the risk associated with your group. If you have a stable workforce and know everyone wants coverage, that may not be a problem; but groups with a geographically or economically diverse workforce will want to think twice before committing to the individual underwriting process. Either way, you should understand that the first numbers a carrier presents may not necessarily be their final proposal!
- Tie it all together
Once you have all of your plans in place, you’ll want to make sure that the benefits are working effectively for you and your employees. Ensure that the appropriate plans are written under Section 125 of the IRS code so that employees are able to pay their premiums before any taxes are deducted from their paychecks.
If these tips sound like things that you’d like explained or explored further, contact a consultant at HCW today. Implementing the plan is just the beginning – next comes developing your long-term strategy, ensuring regulatory compliance, and managing your costs. We’re ready to help guide you through the process from start to finish.