Here's what the renewals process looks like for businesses.

Here’s What the Health Insurance Renewals Process Looks Like

Posted September 1, 2017 by Justworks in Benefits and Perks
Every year, companies either renew or sign up for new health insurance plans. We show you what to expect during that process.

If your company provides health insurance plans to employees, or is considering offering it for the first time, you’ll have to become familiar with the annual renewals process.

Health insurance renewals are a yearly occurrence in which companies adjust their rates and offerings and allow employers to select the best plans. The process includes insurance companies, employers, and employees at various stages.

Why Do Health Insurance Renewals Happen Every Year?

For employees, renewals occur annually to allow you to change your plan based on your current needs. As an employee of your company, you’ll have the opportunity to switch plans, add a dependent, or opt out if needed. You can also keep things the same as they were in the previous year.

As an employer, renewals are an opportunity to change which plans your employees will have access to and your company’s contribution.

For insurance carriers, renewals happen annually to make sure plans are up-to-date with rules and regulations, adjust pricing to take into account inflation in the health insurance industry, and reassess risk.

What Does the Renewals Process Look Like?

  1. Reassessment stage. Insurance companies reassess pricing for the upcoming year and then decide on any altered costs and services to the employer. These costs generally rise year-to-year with inflation rates in the healthcare industry due to technology, research, administrative costs, and other factors.
  2. Presentation stage. Insurance providers present available plans to companies. You will be presented with the options your employees will have access to and pricing for the upcoming year.
  3. Selection stage. You’ll have the opportunity to select the plans your employees will have access to. Your employees can have access to up to four plans, and you can make your selections online. Once you make your selections, you’ll choose your contribution amount (how much you want to contribute per plan for each of your employees).
  4. Employee enrollment stage. Once you’ve selected which group plans your employees will have access to, open enrollment will begin for your employees. They’ll be presented the plans you’ve selected to be available for them. This is their opportunity to switch due to different life circumstances and based on their budgets.
  5. Completion stage. Once your employees have selected their plans, coverage is effective on the date your insurance provider or PEO stipulates.

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What is the Timeframe for Renewals?

Not all plans renew on the same calendar year schedule. If you’re with a PEO, you’re on a master policy that must renew at a specified time, regardless of when your company signed on. Although you can’t choose the renewal date, master policies are what allow PEOs to give small businesses enterprise-level rates.

If you use Justworks, your renewals will go into effect in November and start in late August.

Still Have More Questions?

You can learn more about how insurance renewals can actually benefit your company.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.