Archive for October, 2014

December renewals & Grandmothering: Keeping us busy, but happy

October 24, 2014


We’re closing in on the end of October and we’re in a mad dash to wrap up our December Renewals. There are two key issues you should be aware of as the month draws to a close: Volume of December renewals and Grandmothering.

December renewals…As many of you know, last year the ACA and carriers allowed employers to take an early renewal effective December 1st, 2013. For many employers this was a great idea and so about 70% of small employers accepted the December renewal. This means that in December 2014, 70% of the small group employers in California will renew. I mention this for a couple of reasons

  1. Brokers have approximately 70% of their business renewing on Dec 1st so they’re working like mad-men to review, analyze, prepare, and present renewals to their clients. If your consultant looks a bit stressed when you meet that may be why.
  2. The carriers also have approximately 70% of their business renewing Dec 1st which means they may be overloaded at times and have difficulty responding to questions as quickly as we all would like.
  3. My point is that your broker, carrier, and BEN-E-LECT have been preparing for this renewal for an entire year but nothing can overcome the sheer volume of work to be done. However, it will get done.
  4. Finally, after presenting several renewals myself I must brag about our Annual Financial Reports (AFR) and about our renewal team. You will discover by reviewing the Annual Financial Report (AFR) what makes the most sense for your business. Renewals are never easy but seeing an employer’s plan results, as presented in the AFR, allows your broker to present the best solution for your renewal.

Grandmothering…which is our industry’s codename for keeping your current plan one more year. That’s right, the ACA along with our California State legislature decided to allow employers to keep the 2013 plan they are on for one more year, at the carrier’s option. This was/is a carrier decision and in California, every carrier but Aetna decided to offer the Grandmothered plans.

So, as you renew, your broker will probably show you every plan in the market as well as how to keep your current plan for one more year. Most employers are staying on their current plans (Grandmother) and if that is the best thing for you, your broker will advise you of that.

The Annual Financial Report for your BEN-E-LECT HRA plan will help you and your broker review the market and decide which solution works best.

We discussed the December renewal period above for two reasons. One is so that you would be aware of what is happening in the small group health plan arena. But we also brought it up to help set expectations.

Your broker and the carriers will be working to their maximum trying to accommodate everyone. There may be times when people’s patience could wear thin or simply wear out. The carriers are trying their best, your broker is trying his/her best so if you sense that they are weary…offer a kind word. It may help. Either way the work will get done but we know it will be a tough 60-90 day period.