HR

Article Autumn Hines

Renewal season for HR benefits is a critical time for businesses across both the private and public sectors. It’s more than just an administrative process—it’s a strategic opportunity to align employee benefits with your organization’s financial goals while meeting the needs of your workforce. 

This guide offers practical tips and strategies to help you maximize your HR benefit renewals, ensuring that you secure a plan that delivers value, cost savings, and employee satisfaction. 

Medical Insurance: The Big Cost Driver

Medical insurance often represents the largest expense in a company’s benefits package and is a top concern for employees. It also presents a key opportunity for cost savings. Here’s what you need to know: 

The landscape for company-sponsored medical insurance is evolving rapidly. Since the Affordable Care Act (ACA) was enacted in 2016, the government has been centralizing payment for benefits and pooling risk in larger groups through the public insurance marketplace. This shift is changing how insurance companies operate, leading some—like Humana—to exit the employer-sponsored insurance market entirely. 

Fewer insurance carriers mean small and medium-sized businesses often face limited options, making it harder to negotiate favorable pricing—especially after a high-claims year. Insurance companies are sensitive to risk, particularly with smaller groups where one or two employees can account for 80-90% of claims costs. One large claim can significantly impact pricing, with companies sometimes facing premium increases of 50% or more. 

Cost-Containment Strategies

Here’s what you can do to better manage these rising costs: 

  1. Get multiple quotes annually. Even if your broker is hesitant, shopping around every year is essential. Explore options not just with insurance companies (carriers) but also with plan designs. Never settle for the first quote you receive—it’s often not the best. 
  1. Expect your broker to negotiate. Your broker should be leveraging claims data and membership information to negotiate lower renewal costs, especially if high-claims conditions aren’t likely to continue into the next year. 
  1. Review your plan designs and claims utilization. How are your employees using your current plans? By adjusting plan designs, you might be able to reallocate premium dollars, offering a better package without increasing costs. 
  1. Consider joining association-sponsored plans. Local chambers of commerce or trade associations may offer negotiated pricing for their members. Many are easy to join with low dues, though they may have size limits—for example, some Kentucky Chamber plans are only available to companies with fewer than 50 employees. 
  1. Explore self-funding options. Though it may sound intimidating, partially or fully self-funding your plan can cap your risk and allow your company to benefit if claims are lower than expected. This approach can also give you greater control over administrative costs, Rx expenses, and claims management. 
  1. Join a captive. These plans enable you to pool risk with other companies, reducing costs and eliminating the insurance company’s profit margin. Captives work well for healthier groups experiencing large price hikes or low plan utilization but are less effective for high-claims groups. 
  1. Leverage ICHRAs to direct employees to the marketplace. With legal policy changes, companies can now set up Individual Coverage Health Reimbursement Arrangements (ICHRAs) to move employees into the public insurance marketplace, pooling their risk with millions of others to lower overall rates. 

Communication Is Key 

Benefits can be confusing for employees, and it’s often challenging to get them to fully understand the value of what you’re offering. Clear and simple communication is essential, especially during open enrollment. Show employees how changes will impact them individually, and make sure they have a point of contact to ask questions throughout the year. Often, employers don’t get enough credit for the benefits they provide, so consistent communication can make a big difference. 

Big Savings with the Right Approach 

When used effectively, these strategies can result in 20%-30% cost savings without sacrificing the overall quality of benefits. If this feels overwhelming, partnering with a trusted benefits advisor can help guide you through the complexities of the renewal process, identify cost-saving opportunities, and ensure smooth communication with your broker and employees. A good advisor can truly be a game-changer! 

Take control of your renewals and start exploring the opportunities today! 

This article was written in collaboration with On Plane Consulting.

Article Dean Dorton

Last night, the annual Best Places to Work in Kentucky awards ceremony was held at the Lexington Convention Center, where the Kentucky Chamber of Commerce and the Kentucky Society for Human Resource Management announced this year’s winners. Nearly 1,300 attendees joined in celebrating the 100 Kentucky companies who were recognized for their commitment to focus, measure, and move their workplace environments toward excellence. For the 13th consecutive year, Dean Dorton was a part of this prestigious list.

This year, Dean Dorton ranked #4 overall in the Medium Companies category (150 to 499 employees; determined as of November each year), having previously ranked #10 in the Small Companies category. This was Dean Dorton’s first year in the Medium Company category. Dean Dorton was also recognized as one of only six companies who has been a Best Place to Work for 13 years and is a member of the Best Places to Work Hall of Fame!

David Bundy, President & CEO,

“We are beyond proud and honored to be recognized in the Top 5 of Medium Companies in Kentucky this year. Our team members are the cornerstone of our success and their passion for each other, our clients, and their communities plays a large role in the overall culture of the firm. We strive to maintain a workplace that is both satisfying personally and professionally and through the information from the Best Places to Work in Kentucky survey, we are able to create and execute initiatives important to our team.”

The selection process, managed by Best Companies Group, is based on an assessment of the company’s employee policies and procedures and the results of an internal employee survey.

More about Best Places to Work in Kentucky and the full list of winners can be found at bestplacestoworkky.com.

Article Dean Dorton

On November 16, Dean Dorton provided its 12th version of the annual Accounting and Ethics Update. The firm utilized 17 presenters over nine sessions that covered a variety of topics from the latest in nonprofit reporting to human resources best practices. Here are some of the highlights from each session:

  • The importance of identifying and mitigating key business risks was discussed during the combined internal audit/accounting functions update. Tools such as identifying key risk indicators and auditing vendor management files were discussed as well. Updates were provided on Form 1099 and Form 5500 for benefit plans. Finally, the emergence of wellness programs was covered with a keen eye on IRS compliance.
  • The FASB update focused on the latest changes in revenue and lease accounting. All companies should have an implementation plan soon for both areas.
  • The GASB update included recent fair value, pension, and post-employment benefit plan changes.
  • The tax update included federal and state tax updates. Additionally, tax-related identity theft and fraud was covered, along with state tax incentive opportunities.
  • The tax exempt section included nuances of SMLLCs, sales tax exemptions, and the new financial reporting framework for nonprofit entities.
  • Cybersecurity continues to be the #1 business risk and our IT team presented on cyber threats and cyber protection methods, including multi-factor authentication.
  • Fraud stories were shared during the fraud session to help elevate the real risk present at every business. The Wells Fargo incident was dissected as well. Methods to set an ethical tone were shared including establishing a fraud hotline.
  • Our human resources team presented on I-9s, EEO-1 reporting, and the new overtime regulations. We now offer HR consultants as an added business service.
  • At Dean Dorton, we differential our annual update by including ethics training. Participants were reminded of the AICPA code of professional conduct, importance of social media, and recent enforcement actions.

As you can see, we are clearly are a one stop shop and stand ready to address any question you may have.

If you missed our Lexington event, you can attend our December 8, 2016 session in Owensboro, Kentucky.