With renewal season nearly uponus, brokers are beginning to build out plan options for theirclients. This time of year usually results in frustration foragency staff and customers, as the traditional renewal process does not focus on customerexperience or operational efficiency. Historically, the broker useda static spreadsheet to show the client several plan options withdifferent benefi­ts, including the total cost of each plan. Oncethe employer decides on a plan, the broker may help them decide ona contribution strategy to make the plan ­fit in their budget;other times, the employer has to ­figure out how to pay for theplan themselves.

The problem with this way of handling bene­fits renewals is thatit doesn't focus on what really matters to employers. Total plancost isn't the number that employers really care about. They areconcerned with the amount that they actually pay; however, thetypical plan renewal process doesn't integrate premium share intothe initial plan discussion. Fi­rst, the employer chooses a plan,then premium share is discussed. If the cost is higher than theemployer was hoping to pay, the employer is forced to either passoff those extra costs to employees or eat the extra coststhemselves. Alternatively, it opens up another round of discussionswith the broker to look at additional options to lower costs,leading to more meetings, more revisions to the already confusingspreadsheet of benefit plan options, and a long, drawn-outprocess.

This facet of benefi­ts planning is a major reason employers­find the process so cumbersome and frustrating. It is the one areawhere they can't budget ahead of time, which is detrimental foremployers of all sizes. But there is a different way of approachingthe renewal conversation, one preferred by employers. It beginswith the employer's budget in mind, then focuses on various planoptions that ­fit within that predetermined number. And it issupported by technology that simplifies the conversations andeliminates wasted hours back and forth.

Start with the budget

The renewal conversation should start with the employer'sbudget. What do they want to spend this year? Do they want to keepcosts flat, are they trying to save money where possible, or arethey comfortable with 3 percent increase? Understand that not everybudget will necessarily be feasible, but you can present plans that­fit within that initial budget and give the employer an ideawhether that number is reasonable or not.

When you start having these conversations with clients, they mayneed some explanation to understand the new approach. You may getclients who say, "Just negotiate it as low as possible." Explainthat you will of course negotiate on their behalf, but that isn'tthe intention of asking a budget. By establishing a number upfront, you can present only plans that fi­t their budget. Forexample, if the client has a 15 percent increase coming on theirexisting plan, tell them that, and ask how much they can afford orwant to spend. Maybe it's 6 percent. That gives you a startingpoint for the next step.

Now, take into account premium share and contributionstrategies. Using the 15 percent renewal example, in order to hitthe 6 percent budget, you would need to make that plan ­fit a 6percent  increase — or not present that plan at all.

Think outside the box a little. Though there are only so manyinsurers, there are essentially unlimited plan options you canpresent when you take into account different ways to apply premiumshare, add HRAs or HSAs, change deductibles, and otherelements.

Use digital technology to model quickly and simplifyconversations

Technology can help you execute this renewal strategy withouthaving to manage the manual and time-consuming practices that comealong with the traditional spreadsheet approach. Usingreal-time benefits modeling technology, you can easily build andpresent plans that start with the employer's budget and take intoaccount premium share and other important factors.

Modeling technology enables you to create several plans withinthe budget, presenting them side by side on a projection screen ina visual format. This real-time benefits modeling solutionincorporates medical, Rx and ancillary coverage options, fosteringstrategic, comprehensive benefits discussions. If a client hasquestions about any of the plans, you can dig deeper into thedetails to examine employer and employee impact.

Transform your business and your renewalprocess

Traditional benefi­ts planning focuses on total plan cost, butemployers want to know what their bottom line is. Budget-basedbenefi­ts planning differentiates your business and delights yourclients. Renewals take more than just shopping insurance policieseach year; they require a consultative approach and digitaltechnology to enable on-the-spot conversations. When you use astrategic planning model that keeps the client's bottom line inmind and the right technology to facilitate the process, it leadsto a less frustrating experience for staff and employers. Yourclients will feel the difference, and reward you with sales andretention.

Andy Nunemaker is vice president of Product Management,Benefit Solutions at Applied Systems.