The end of the year is the perfect time for small business owners to take stock of their operations, including one of their most critical investments: health insurance coverage. Employee needs, business growth, and healthcare regulations change year to year, making it essential to review your current health insurance plan to ensure it still meets your business’s needs.
Even if you’ve already concluded that you are happy with your current health insurance plans, you will almost certainly have to make a choice going forward into the new year. According to the website at Healthcare.gov,
“To continue or change the insurance you offer your employees, you typically must renew each year. You may get a notice from your insurance company when your business is approaching its renewal date, but this may vary by insurance company.”
At J.C. Lewis Insurance Services, we understand the importance of aligning your health benefits with your company’s goals. Let’s explore why an annual review is crucial and the key factors to consider when reassessing your coverage.
Why Annual Health Coverage Reviews Are Essential
Sometimes, what seemed like a great plan a year ago no longer serves the evolving needs of your company and staff. For example, one source suggested four “signs” that you may need to change your plan options for the new year:
- You’re struggling to afford your current plan: One of the first signs you may need to switch is when your health plan premiums become too costly for your business.
- Your employees aren’t happy: High turnover may be a sign that your employees aren’t happy with your health plan.
- Your business has grown: Growth is the heartbeat of any company, and it’s especially true for any start-up or small business that’s just getting off the ground.
- New and better options are available: Buying your health insurance direct, without going through a broker, may mean you are missing out on new, innovative health plan products and competitive rates.
In addition, to these indicators, there are several valid reasons why reviewing your health plan each year is essential.
Employee Needs Evolve
Your team’s circumstances may have changed over the past year. New employees may have joined your business, others may have experienced life events like marriage or the birth of a child, and some might now require more comprehensive healthcare options.
By reviewing your health insurance plan annually, you can ensure that your offerings align with your employees’ needs, which boosts satisfaction and retention.
Healthcare Costs Are Increasing
Health insurance premiums often increase year-over-year, and coverage options may change as providers update their plans. As one company noted recently,
“Health insurance premiums generally rise each year to keep up with rising medical costs. And this year is no different. According to a KFF review of 324 insurers planning to offer plans on the marketplace in 2025, you can expect to see a median premium increase of 7%.”
Conducting an annual review allows you to evaluate whether your current plan is still cost-effective or if a better option is available.
Stay Compliant with Regulations
Healthcare laws and regulations evolve frequently, particularly at the state level in California and Arizona. An annual review ensures that your business remains compliant with current laws, avoiding potential fines and penalties.
Plan Options Change
Providers often update or introduce new health insurance plans that could offer better coverage, lower premiums, or additional benefits. A review allows you to stay informed and make adjustments that could save money or enhance employee benefits.
Business Growth or Downsizing
If your company has grown or reduced its workforce in the past year, your health coverage needs may have shifted. For example, if your business now employs more than 50 full-time employees, you may have additional legal obligations under the Affordable Care Act (ACA).
Key Factors To Consider During Your Annual Health Insurance Review
At J.C. Lewis, we understand that not only can the considerations of health coverage be overwhelming at time, but most business owners or HR managers have precious little time for this type of project each year. One of our goals is to help you simplify and streamline the process. So, here is a list of the five key factors that you need to take into account when considering health plan changes.
- Employee Feedback
One of the most important steps in reviewing your coverage is gathering feedback from your employees. Ask questions like:
- Are employees satisfied with the current plan options?
- Do they feel their healthcare needs are being met?
- Are they facing any challenges with network providers or out-of-pocket costs?
This feedback provides valuable insights into whether your current plan is meeting expectations or if adjustments are necessary.
- Cost Analysis
Examine your total health insurance costs, including premiums, deductibles, and out-of-pocket expenses for employees. Compare these to your company’s budget and evaluate whether the plan is offering sufficient value.
If premiums have increased significantly, consider whether switching providers or plan types might save money while maintaining quality coverage.
- Network Availability
Healthcare provider networks can change from year to year. Ensure that your employees’ preferred doctors, specialists, and facilities are still included in the network. If not, you may want to explore plans that better align with your team’s needs.
- Coverage Gaps
Review your current plan to identify any gaps in coverage. For example:
- Are mental health services adequately covered?
- Does the plan include dental and vision benefits?
- Are prescription drug costs manageable for your employees?
Addressing these gaps can enhance your benefits package and improve employee satisfaction.
- Legal and Tax Implications
For small businesses, offering health insurance often comes with tax advantages. Review your eligibility for tax credits, such as the Small Business Health Care Tax Credit, and ensure you’re taking full advantage of these benefits.
Additionally, confirm that your plan complies with ACA requirements and other state-specific regulations to avoid costly penalties.
The Important Role Of J.C. Lewis In Your Annual Review
At J.C. Lewis Insurance Services, we specialize in simplifying the process of reviewing and updating health insurance plans for small businesses. Here’s how we can help:
- Comprehensive Plan Analysis
We evaluate your current plan against new options from top providers, ensuring you have access to the best coverage available. Our goal is to help you maximize your investment while meeting the needs of your team.
- Tailored Recommendations
Every business is unique, and a one-size-fits-all approach doesn’t work for health insurance. We provide personalized recommendations based on your company’s size, budget, and employee demographics.
- Expertise in Compliance
Staying compliant with healthcare laws is critical. Our team stays up to date on regulations in California and Arizona, helping you navigate the complexities of healthcare law with confidence.
- Employee Education
We assist in educating your employees about their benefits, ensuring they understand their options and how to maximize them. This reduces confusion and helps employees make informed decisions about their healthcare.
- Ongoing Support
Our commitment doesn’t end once you’ve selected a plan. We provide continuous support throughout the year, assisting with renewals, claims issues, and any changes that arise.
Four Common Plan Types To Consider
As you review your health coverage, it’s essential to understand the options available. While the specific details and features will vary from plan-to-plan and by provider, the fundamental plan structures remain unchanged:
- Health Maintenance Organization (HMO)
HMOs offer lower premiums and predictable out-of-pocket costs but require employees to use a network of providers and obtain referrals for specialists.
- Preferred Provider Organization (PPO)
PPOs provide greater flexibility by allowing employees to see out-of-network providers, though this typically comes with higher costs.
- High Deductible Health Plan (HDHP) with HSA
These plans pair a high-deductible insurance policy with a Health Savings Account (HSA), offering tax advantages and lower premiums. They’re an excellent choice for businesses with younger or healthier employees.
- Exclusive Provider Organization (EPO)
EPOs combine elements of HMOs and PPOs, offering lower premiums than PPOs but requiring employees to stay within the provider network.
Your Partner For Informed Health Insurance Choices
Choosing the right health insurance plans in the new year involves careful consideration for a small business. This includes understanding your employees’ needs, evaluating plan options, managing costs, ensuring regulatory compliance, and promoting wellness. With expert guidance, businesses in California and Arizona can continue to provide valuable health coverage that enhances employee satisfaction and supports overall business growth.
Working with a specialized insurance firm like J.C. Lewis Insurance Services can provide the expertise and support needed to navigate these complex decisions successfully.
Start the New Year with Confidence
The beginning of a new year is a fresh opportunity to ensure your business is on the right track. Reviewing your health coverage not only helps you stay competitive in attracting and retaining top talent but also ensures you’re managing costs effectively and staying compliant with ever-changing regulations.
At J.C. Lewis Insurance Services, we’re here to guide you through this critical process. With our local expertise in California and Arizona, we provide tailored solutions that meet the unique needs of small businesses.
In addition, we work with seniors seeking Medicare supplemental and prescription drug plans. If you have inquiries about Small Group Insurance (1-50 Employees), the Small Business Health Options Program (SHOP), or any other concerns that an employer may encounter, J.C. Lewis can guide you toward the ideal solution.
Contact us today and let our team help you find the ideal solution to meet your unique needs, create a thriving workplace, and achieve your business goals for the new year.
