Get Started

Our 3 steps to understanding and selecting the right benefits for you

I

Watch the Video

Why Group Benefits?

2. Find the right approach

3. Get the Quote

Group Programs

Our most popular plans with premium coverage and stable rates

Pooled Programs

More Programs
5

Essentials

5

Lifestyle

5

Franchise Program

9

Specialty Programs

5

Experienced Based Programs

5

Group RRSP

Individual Solutions

Individual Insurance for your and your family

9

Individual Insurance Solutions

5

Individual Insurance Planner

5

Simplified Planner

9

Contact us

9

Our Story

9

FAQ and Forms

Group Benefits- First-Year Renewals

Benefits, Claims

First-year renewals can be complicated. Sometimes rates change or the plans change. How can you make sure you are getting fair first-year renewals? What do you need to know about first-year renewals? Let’s discuss both of those questions.

Understanding the Basics of Experience-Rate Renewals

Many Advisors and their Clients come to us when they receive their first-year renewals they are uncomfortable with. The conversation often starts with why they experienced unexpected rate volatility.

Teaser Rates are almost always the main reason for rate volatility, especially at the first few renewals. Teaser Rates generally have no correlation with actual expected usage. This creates an unrealistic expectation of what that level of benefits should have cost in the first place.

A properly priced and structured plan can allow for steady and reliable premiums each year. That’s how we show we have client priorities first in our minds.

An artificially low initial premium inevitably leads to abnormal premium increases in the following years. Why? Well, the insurer needs to bring the premiums into line with the actual cost.

Managing Expectations

Extended Health and Dental

Depending on the size of the group and length of time with the current carrier, premiums for these benefits may be partially based on the experience of the individual group and partly pooled.

For larger groups, premiums for these benefits are semi-pooled initially. But, gradually become based on the experience of the individual group. The larger the group, the sooner rates are based entirely on your own claims experience.

You can expect changes in premiums as a result of the following:

  • Discount recapture (as applicable)
  • Establishing IBNR Reserve – can have a significant effect on rates at first-year for Experience-Rate plans
  • Claims experience
  • Inflation trend – Dental approximately 6% per year
  • Inflation trend – Extended Health & Prescription Drugs – approximately 11% per year
  • Changes in the average age, gender, occupation, insurance volume, and family status, of the staff

There is usually very little difference in rates for Experience-Rate plans between carriers by the time you have had your plan 2—3 years. A properly priced and efficient plan design is the most effective method of containing and managing the premiums of your Experience-Rated benefits program.

Life, AD&D, Dependent Life, Disability Insurance and, Critical Illness

These are usually fully pooled benefits. Rates are based on the demographics of the group such as age, volumes, gender, and occupation. The insurer’s claims experience of its pool impacts these rates.

Demographics

A lower average age can help decrease pooled and health rates. Occupations help determine the risk class for pooled benefits. A higher volume of insurance will reduce some of the pooled rates while increasing others.

It is important to structure the plan in a way that encourages normal usage. How? Here are some examples:

  • Start with a plan you can grow with
  • Expand coverage at a future date in place of a raise
  • Use of co-insurance to help encourage stable claiming patterns
  • Waiting period for new employees

Renewal Cost Containment

A properly priced and structured plan allows for steady and reliable premiums each year. An artificially low initial premium can lead to initially abnormal premium increases the following year. The insurer needs to bring the premiums into line with the actual cost.

Conclusion

We hope that this blog will shed some light on first-year renewals and how to keep costs low.
If you have any questions, click here to contact us!

Take a look at one of our other blogs which is closely related to this one. Acquisition Pricing Hurts Clients – Why and How? Click here to read.

Follow Us On Social Media!

Looking at Benefit Plans for your business?

Health and Dental Premium Relief Extended for June

Health and Dental Premium Relief Extended for June

The health and dental premium reduction we provided to plan sponsors for April and May gave relief in real-time. In implementing this, it reflected the anticipated decrease in plan member health and dental claims due to pandemic closure of service providers. We...
Support For Small Businesses

COVID 19: Support For Small Businesses In BC

Small Business BC Support For the latest information on small business supports, resources and advisory services during COVID-19, please visit Small Business BC. Advisors are ready to help by phone at 1-800-667-2272, email and daily digital meetups. See how COVID-19...
Prescription Drug Cost

Prescription Drug Costs Breakdown

Understanding the total cost of a prescription drug claims means learning the 3 main components: 1) Ingredient Cost Actual cost the pharmacy pays the drug company or wholesaler to buy the drug. 2) Pharmacy Markup Percentage charged to cover the expenses involved in...
Why we ask for detailed quote information

Why Ask For Detailed Quote Information?

Why we need detailed quote information from your current plan? Detailed Quote Information tells us a story, enabling us to create the right solution Getting involved in a Group Benefits program is different than purchasing a commodity. Most consumers are...
long term disability

Non Evidence Maximums for Long Term Disability plans

ClearBenefits.ca is pleased to announce new Non-Evidence Maximums (NEM’s) for Long Term Disability in our Pooled Programs. The following enhanced LTD Non Evidence Maximum table applies to new business in both our Essentials and Lifestyle programs:                    ...

Medical Cannabis Coverage

Groups with over 100 lives can request to add medical cannabis coverage to their Extended Health coverage. Medical Cannabis Coverage In October of 2018, recreational marijuana will be legalized in Canada. The legalization of recreational marijuana has sparked a...

Experience-Rated Program: Finding Facts

Since the launch of our Experience-Rated Program, we get asked to provide both Pooled and Experience-Rated quotes. We believe the 1st priority is to understand the client need and what outcome they are trying to achieve. Fact-Finding - A Better way to do...

ClearBenefits.ca Pooled Programs – YTD Performance

We just completed our monthly review and thought I would share an update on the YTD performance of the pool: Fiscal year-end: Nov 30 Renewal rate implementation: June 1 As of August 31, 2018 we are 9 months into our fiscal year Claims are below target for...

Looking for a Company Plan?

Receive a personal call from an advisor right now!

Great! An advisor will reach out to you now. Please check your inbox