Tax Day, birthdays, Earth’s orbit and … the benefits window?
Not so fast, according to Eric Hannah.
Employees may think of the open enrollment window as a once-every-year event, but employers should view it very differently, Hannah said.
“The employers who have the smoothest open enrollment started thinking about it in the summer, said Hannah, vice president of employee benefits at Brown & Brown, an insurance brokerage and risk management firm with offices in East Lansing. “That probably sounds counterintuitive. But open enrollment is really just the finish line of a process that should be running all year.
“Two distinct events often get lumped together, and separating them matters,” he continued. “Renewal is a financial and contract event: What’s the plan going to cost, what’s the structure, who are the vendors? Open enrollment is an employee experience event: How do people make decisions, what information do they need, how does the technology support them?”
Employers who treat those as one thing tend to underserve both, Hannah said.
“The employers doing the work right now, mid-year, are the ones who will have real options when the renewal window opens,” he said. “Everyone else is reacting.”
In doing the work, what should employers keep in mind? Hannah has some useful insights.
TODAY’S TRENDS: HIGHER COSTS, FEWER OPTIONS
In today’s economic climate, Michigan employers are not insulated from what’s happening nationally, Hannah noted, with insurance rate increases possibly averaging 12% to 15% and fewer large carriers competing for mid-market Michigan business.
“And when competition shrinks, leverage shrinks with it,” Hannah warned. “That’s exactly why employer-owned plan structures are becoming a more serious part of the conversation earlier in the year. Employers who evaluate those options before renewal pressure hits have real choices.”
HEALTH CARE: STAY ON TOP OF CLAIMS
Health care costs also continue to rise, driven by the popularity of GLP-1 weight loss medications and large individual claims that are more frequent and severe, Hannah said. Controlling costs starts with visibility.
“Employers who review claims data regularly, have the right financial structure for their risk tolerance and actively manage their pharmacy benefits rather than accepting carrier defaults are finding real savings without cutting benefits,” Hannah said.
“You cannot manage what you cannot see,” he added.
EMPLOYEE RETENTION: PUT COMMUNICATION FIRST
While 78% of employers believe their employees are satisfied with their benefits, only 47% of employees agree.
“That’s not a benefits problem. That’s a communication problem,” Hannah said, adding that employers should treat benefits communication “like a marketing function, not an HR compliance task.”
“The national average tenure is about four years,” Hannah said. “That means your benefits strategy has roughly a four-year window to make an impression on any given employee. Most of that impression gets formed at open enrollment, which is often the only time employees engage with their benefits at all. An employer who uses that moment well earns something that doesn’t show up on a spreadsheet but absolutely shows up in retention numbers.”
BEST APPROACH: BE HONEST
Plan changes can be tough for employees to digest. That’s why employers need to be direct about what’s different.
“Some employers are going to have to make hard calls — adjusting premium contributions, changing plan designs, shifting vendors,” Hannah said. “What erodes trust is not the decision. It’s when employees feel like something changed and nobody explained why.
“The employers who navigate that well do a few things consistently,” he added. “They communicate early, before open enrollment opens. They explain the ‘why’ in plain language. And they give employees tools to understand their options rather than just a deadline to pick one. That approach doesn’t eliminate frustration. But it builds the kind of trust that survives a difficult year.”
DON’T BE AFRAID OF NEW STRUCTURES
Hannah advised Michigan employers in the mid-market range to access sophisticated plan structures that used to be reserved for much larger companies, such as self-funded arrangements, transparent pharmacy models, alternative financing structures or off-cycle vendor evaluation.
“These are not exotic or risky; they are what well-advised employers have been using for years to take ownership of their health care spend,” Hannah said. “If you have never been shown the full picture of what’s available to you, that is not your failure. It’s a gap worth closing.”
Hannah continued, “I stayed in mid-Michigan and built my practice here for a straightforward reason: I believe every employer in this region deserves to see the whole playing field before they decide what play to run. Most of them have never been shown it. That’s the problem worth solving.
“I’m an eternal optimist,” Hannah concluded. “Health care affordability isn’t as far as it seems. The right model, access to information and alignment can win.”
Omar Sofradzija
Omar Sofradzija was a newspaper reporter, college media adviser and journalism instructor at Michigan State University. He is now a digital marketing content specialist and freelance writer. He is a regular contributor of feature profiles to 517 Business.
