Four Simple Checklists to Analyze Your Benefit Plan Design

For HR professionals around the country, the beginning of Summer means that it’s already time to start thinking about your next open enrollment period. This means looking at your current benefits plan, making adjustments, and trying to quantify the differences between this year’s benefits plan and next year’s benefits plan. This can be a daunting task when done appropriately due to the massive scope of the project. In a matter of weeks, you need to:

• Analyze your benefit plan design with a fine-tooth comb, ensuring that you understand the ins-and-outs of every last detail.
• Identify areas that your current benefits plan doesn’t cover, or areas where it could be improved.
• Record the dollars-and-cents differences between various plan design options.
• Do market research to compare your current plan to what the rest of the industry is doing.

In addition to being time-consuming, this can get expensive. Hiring an actuary to analyze one plan design, for example, can cost thousands of dollars. If you want to compare three options to give your organization a holistic picture of their options, the cost can be staggering. That’s why we recommend leveraging a health analytics tool that has plan design analysis features built-in.

As you analyze your current benefits plan design and start to make changes, we want to help you stay on track. That’s why we’ve put together four simple checklists that can act as guideposts to keep you focused on what’s most important.

Does Your Current Benefit Plan Design Have Its Ducks in a Row?

The first thing to consider when running a plan design analysis is looking at your current plan as it exists today. You want to make sure that you’ve made all of the decisions below deliberately. It’s okay if you don’t have a benefit listed below, but you need to have a deliberate reason for not including it.

Here is a simple checklist of questions that you should be able to answer if your current plan is well-defined.

• Have you identified your primary objectives in offering benefits to your employees?
• Do you have defined health plans selected for your population to pick from?
• Have you selected additional voluntary or supplemental insurance plans?
• Have you selected your pharmacy plans?
• Have you established details around your retirement package?
• Have you established wellness programs within your organization?
• Do you have a solid, established relationship with the proper benefit brokers and advisors necessary to ensure that all of these plans are carried out?

For most HR professionals, that checklist is a breeze. You should know all of the answers to those questions without doing much homework. If that’s you, congratulations! You’re ready to run a needs assessment on your benefits plan.

Conducting a Needs Assessment on Your Benefits Plan

Next, you’ll want to conduct a needs assessment on your current benefits plan to identify areas where you could improve. This is vital, because an optimal benefits plan covers what employees want to be covered, while also understanding what benefits may not be necessary depending on your population. This is a very delicate balance, and when done poorly, can result in having a population that is woefully under-covered.

To prevent under-covering your population, complete all of the following items before revising your benefits plan.

• Survey your current population, asking questions like:
• How do you believe our benefits package compares to our competition?
• In what areas are you satisfied with our benefits package? In what areas do we fall short?
• What areas are currently not covered under our insurance plan that you would like to see covered?
• Conduct a utilization review of your current benefits to understand what benefits are currently used and what benefits go unused.
• Analyze your existing workforce demographics to assess current and future needs.
• Leverage a predictive analytics tool like Springbuk to identify the future needs of your population.
• Conduct a legal audit, ensuring that your benefits plan is compliant with all state and federal laws.

Once this is done, you should have a comprehensive list of items that you should add to your plan. Make a list of any needs or wants that have arisen and compare that list to your current benefits plan. Now, you can craft and compare benefits plans to determine the best fit for your organization.

Compare and Contrast Several Plans At Once

Now that you have a comprehensive understanding of your current plan, in addition to a full view of areas where you could use additional coverage, it’s time to design some new benefits plans. The objective here should be to provide a menu of options to your organization, with a complete understanding of the costs and benefits of each. Ideally, you would design “small” plans that are designed to cut costs, “medium” plans that are designed to keep coverage similar, but optimize around the edges, and “large” plans that are designed to increase coverage.

Here’s a list of three things you can do to provide your organization with a strong menu of options.

• Craft 3 – 5 benefits plans, Think “Small, Medium, and Large”
• Run an actuarial analysis of all plans to understand the cost and coverage details of each
• Proofread each analysis to ensure that you didn’t make any mistakes in your plan design, adjust where necessary

Once you’ve completed these tasks, you’re ready to compare your benefit plan designs to the rest of your industry

Benchmark Yourself Against Your Industry

Finally, as you dial in your benefits plan, you want to compare your plans to your competition.

Here are three things you can do to identify how your benefits plan stacks up against your competition.

• Ask your insurance broker and other benefits advisors for an understanding of how your plan compares to other organizations similar to yours.
• Measure your financial and health outcomes against other organizations like yourself. Once again, this is where a health analytics tool could be extremely useful.
• After you roll out your new benefits plan, survey employees to understand how they think you compare to the rest of the industry.