Employers may want to make changes to their benefits plan for a variety of reasons. For example, they may be in search of more favourable pricing; in fact, a lot of advisors tell employers that they should “shop their benefits plan” every two to three years to attain the most advantageous pricing. Another reason to change benefits carriers is to attain more favourable or different plan provisions.
Although there are many good reasons to change a benefits plan, re-enrolling in a new benefits plan is a time-consuming process. You must review the new carrier’s proposal, cancel the current plan, re-enroll all employees, and learn new administrative procedures and systems.
Understandably, you may be wondering if it is possible to change components of your benefits plan without having to go through re-enrollment. If you have a conventional benefits plan, you will likely not have the flexibility to make changes to your plan without completely cancelling and re-enrolling.
However, there is a solution!
Working with a Third Party Administrator Removes the Need for Re-enrollment
A Third Party Administrator (TPA) is an organization that manages employee group benefit plans on behalf of an employer, including the entire claims process.
If your TPA has professional relationships with many insurers, they can easily make changes to your plan without re-enrollment – providing both flexibility and convenience! This is why it is essential to work with a TPA that has established relationships with numerous insurance carriers, rather than one that has an exclusive arrangement with only one insurance carrier. In the latter scenario, that TPA would not be able to change your benefits plan without re-enrollment.
A TPA with access to a wide range of insurers expands the range of opportunities available in the insurance industry, when appropriate or required. Because your TPA has all of the information about your business and your employees on file, they can do 98% of the work for you!
You will also avoid any major disruptions to your day-to-day administration and overall benefits plan. Everything will be done in full transparency and your employees will receive an updated booklet letting them know their previous insurer for a specific component has changed and who their new insurer is for that component. That’s it!
Changing Health and Dental Benefits with a TPA
Another benefit of a TPA who provides budgeted Administrative Service Only (ASO) contracts is that you don’t need to shop health and dental benefits. Under an ASO plan, employers are only paying for administration and claims.
With no hidden fees, reserves, or unnecessary premiums, health and dental benefits do not need to be shopped around.
Changing Insurance Benefits with a TPA
Insurance components such as life insurance, critical illness, or long-term disability are the parts of your benefits plan that you do want to shop around to find the most favourable arrangement.
Your TPA should regularly survey the marketplace and propose alternatives from other insurers. You should not be charged additional fees for this service; it should be a part of the suite of services your TPA provides. We recommend – as with our standard practice at The Benefits Trust – that this survey of the marketplace be done every two to three years as part of your renewals analysis.
With a trusted TPA partner, you will be able to change the insurance components of your benefits promise to the most competitive and appropriate insurer as often as necessary, without re-enrollment or major disruption to your plan or employees.
Contact us today to discover a better, more customizable way to administer and manage your employee benefits plan.
See our video explaining TPAs and The Benefits Trust.
More on TPAs from The Benefits Trust:
- Are All Your Eggs in One Basket with Your Benefits Plan? Add Stability and Flexibility with a Full Service Third Party Administrator
- How Do You Transition from a Conventional Benefits Plan to a Healthcare Spending Account?
- I Want an “Administrative Services Only” Benefits Plan: Should I Choose a Pay-as-You-Go or Budgeted Plan?
