HR departments: control the costs of your social protection and curb rate hikes

Today's HR departments are faced with a major challenge: managing their budgets, and in particular the renewal of health and provident insurance contracts. Against a backdrop of unavoidable price rises, which could reach up to 10% for supplementary health insurance by 2025, companies need to arm themselves with strategies to keep these costs under control. Since the COVID-19 pandemic, healthcare expenditure has been evolving unpredictably, making it crucial to manage health and provident schemes to maintain financial equilibrium while meeting employees' needs. In this context, the role of the broker is essential. They support HR departments by providing solutions to counter the increases sought by insurers, while ensuring optimized contract management. However, it is also important for companies to challenge their brokers to ensure that all options are explored to optimize plans.

Regular monitoring of contracts: a must

One of the first pillars in limiting the impact of a sharp increase in renewal costs is rigorous, ongoing management of health and personal protection plans. By adopting a proactive management approach, with quarterly or half-yearly reports provided by the managing broker, it is possible to quickly identify deviations in consumption and react before increases become necessary.

Keys to steering :

• Analysis of medical consumption data: Which expenditure items are drifting? What are the consumption trends over specific periods?
• Alert monitoring: Significant discrepancies between forecasts and actual expenditure should trigger corrective action.
• Knowledge of the market: the withdrawal of the social security system, regulatory changes, etc.

Management enables the application of projective models based on the company's own consumption experience. The broker's role here is crucial: by anticipating, he can provide HR departments with factual elements to modulate cover and avoid sudden increases. However, it is also important for HRDs to remain active in this process, asking for adjustments and questioning their broker's choices.

Prevention and communication to avoid excesses

Contract management is not just reactive. It also involves an active prevention strategy to limit over-consumption. The broker, in collaboration with the company, can set up communication campaigns to steer employees towards less costly solutions.

Examples of actions:

- Encourage the use of partner healthcare networks to reduce out-of-pocket expenses while maintaining quality of service. The broker can also provide communication packages tailored to the company's needs. - Implement preventive health actions (wellness workshops, teleconsultations, etc.) to limit work stoppages and avoidable medical expenses. At Gerep, for example, our policyholders have access to free, unlimited teleconsultation with a psychologist, or to a cancer prevention service. The broker plays a key role in developing these strategies, but it's important for companies to hold the broker to account for the effectiveness of the actions implemented and the savings achieved.

Social dialogue as a lever for acceptance and negotiation

Renewals with increases in contributions, however justified, can create tensions with social partners. To avoid such tensions, HR departments need to establish regular social dialogue on the issue of social protection schemes, prior to rate increases, and the broker can support them in this process.

Dialogue objectives :

- Explain the reasons for changes, with precise data from reporting. - Share preventive measures and adjustments implemented to control costs. - Negotiate benefit adjustments or optimizations (e.g. reduction of certain less-used coverages, redefinition of beneficiaries, etc.). This dialogue helps maintain the confidence of the social partners, and makes it easier for them to accept the adjustments needed to guarantee the financial equilibrium of the contract. The broker's role here is to provide objective information to support the discussions.

Mastering data for effective negotiation

HR departments have a major advantage: control over the data supplied by their brokers. This information on medical consumption, absenteeism and death claims is essential when negotiating renewals with insurers.

Things to keep an eye on:

- Coverage rate: An optimal rate is between 90 and 92%, guaranteeing a high level of coverage without exploding costs. - Care network utilization: A high frequency rate indicates good utilization, but it is also important to ensure that it actually reduces the average cost of an expense. An optimal utilization rate for the optical care network is around 50%. - Changes in company demographics: An older or more sedentary population can lead to higher expenditure. The broker is responsible for presenting these data and challenging insurers' requests for increases. However, HR managers must also ensure that their broker proposes innovative solutions to keep costs under control over the long term.

Challenge renewals and consider device reengineering

Each renewal is an opportunity to reassess the contract. A price increase should not be imposed, but should be used to review certain guarantees.

Re-engineering possible :

- Review benefit levels for certain items (dental, optical, hospitalization) if their consumption is disproportionate. - Adjust the beneficiaries covered to better target real needs. Is the family contribution structure appropriate if 50% of employees are single members? - Implement control tools with your manager, such as analyzing quotes for health insurance or medical checks for provident insurance. - Challenge insurers' operating costs. A well-optimized contract gives you more room for negotiation, and enables you to set advantageous conditions in stone over several years.

Exploit intra-annual termination to boost competition

Since 2020, infra-annual termination has enabled companies to change their supplementary health insurance at any time after one year's service on the contract. This possibility strengthens their position vis-à-vis insurers. When an insurer offers an increase, HR managers can more easily take advantage of the competition. It is therefore essential to be attentive to market conditions. Brokers play a crucial role in this process, helping companies to identify the best offers at the right time.

Social responsibility and controlling healthcare costs

Last but not least, the rational use of healthcare services by employees can help contain increases. Is it really necessary to be reimbursed for inexpensive medicines such as paracetamol if you can afford it? Brokers can help raise employees' awareness of these issues to encourage more responsible consumption.

For HR departments, managing health and provident insurance renewals is not a matter of passively accepting price increases. By adopting a rigorous management approach, anticipating trends, establishing a constructive social dialogue, and making full use of available data, companies can not only control costs, but also take advantage of each renewal to adjust the contract and meet their employees' expectations.