Annual Renewal Due Diligence to Consider

By: Greg Watkins

Expanding on the The Watko Way. 

This year we have seen higher health care renewals than in previous years. Claims utilization drives renewals and claims have increased due to:

  • Delay in care, due to COVID-19
  • Inflationary trends in health prices
  • Higher incidence of cancer and heart-related diagnosis
  • Higher Rx spend; specialty drugs in particular 
  • An increase in the incidence of large claims, advanced treatment for dread disease conditions

There are many strategies to consider when determining how to mitigate rising health care costs and high renewal increases. Most consultants recognize these strategies. An old saying goes that “the proof is in the pudding”. Well, in this scenario the proof is in eating the pudding. It is clear to us, at Watko Benefit Group, that strategies must be customized based on digging deeper, clarifying client objectives, tolerance for risk, budgetary constraints, and the local healthcare market. Over the next month, we will address strategies that companies have dialed up to control costs most effectively. Some strategies include:

  • Implement a Health Care Concierge/ Health Navigator
  • Modify Contribution Strategy to Impact Desired Results
  • Move to a Self-Funded Plan
  • Consider a Benefits Captive
  • Introduce a Primary Care Clinic/ Near Site Clinic
  • Evaluate Drug Costs and Options with Specialty Drugs 
  • Implement Multiple Plan Options for Participants to Consider

In general, there has been less competition in the fully-insured marketplace, which is driven by 5 major carriers. These carriers have been directed into niches based on group characteristics. Simply going to market to find a better deal is rarely a long-term solution. At times this works effectively, while other times a different approach is a better long-term solution. Look for additional communication in the coming weeks to learn more about The Watko Way.

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