Ask the most avid baseball fan you know – “What can you tell me about Jim Creighton?” – and you might be met with a blank stare.
So, why bring him up?
In 1858, Jim Creighton gained recognition as the first baseball pitcher to attempt to throw the ball past the batter instead of throwing the ball to the batter. Before that point, there was no concept of “balls and strikes,” and what is now a common-sense aspect of the game was not so common when the game first began.
A significant majority of employers renew their health plans on January 1 each year without stopping to consider if it is the best option.
Let’s dive into the topic of selecting a plan anniversary: considerations, pros and cons, and the process for changing to a date that better aligns with your natural business cycles.
Don’t get me wrong, there are advantages to renewing your plan on January 1. Many activities converge at the start of the year, and these considerations can make for a clean process:
This date works particularly well for very large employers. The law of large numbers provides predictability and stability to their plan and rate structure, and carrier changes are far less commonplace. As a result, the timeline for open enrollment can occur as early as October.
For middle-market and smaller employers, renewal decisions, open enrollment, and carrier changes are often pushed deeper into the year where they collide with the holidays and the carrier busy season. Carrier turnaround times are longer, and priority is given to the highest revenue clients and opportunities.
If 60% of US companies renew on January 1, 40% renew in the other 11 months combined. This will produce several downstream effects:
Coordinating accumulators during a carrier transition is the most significant challenge to an off-peak renewal. With plan accumulators typically running on a calendar year basis, a carrier transition might mean that employees with significant out-of-pocket payments may need to coordinate their payment history with the new carrier to ensure they receive full credit under the new plan.
While this typically impacts a small number of participants, it is worth some added care and attention to ensure a smooth transition.
Your company size, industry-specific peaks and troughs, fiscal year, and program type can all impact our recommendation.
Jim Creighton’s groundbreaking ability to challenge the norms of baseball in 1858 inspires us to get curious about new approaches and strategies. We excel at finding winning solutions that benefit your company and your team members.
CCIG can act as an extension of your HR team, identifying optimal program structures, funding arrangements, and opportunities to improve cost and quality, ultimately ensuring your program functions in a way that is beneficial and financially successful.
This article is part of CCIG’s First Quarter 2024 Curious Corner: Insurance Market Insights newsletter.
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