Total Rewards Project Restless Nights Part 1: Group Benefit Carrier Change

Written By Scott Hitchcock

You’ve decided to take your group benefits plan to market. It’s part of a good governance strategy and it can lead to better service, cost savings, and improved efficiency.

Changing carriers sounds simple, but it’s a detailed, often messy project. 

Here’s what I’ve learned from being on the inside of these transitions—and how you can keep things on track (and actually sleep at night).

RFPs & Finalist Meetings

Yes, your broker or consultant probably has a solid RFP template. Use it—but add your voice. Make sure your organization’s culture and values come through. That’s not something anyone else can write as well as someone within your organization.

  • Be available to answer vendor RFP questions. Those conversations tell you more about culture fit than a slide deck ever will. Every touchpoint you have helps create a frame of reference.

  • Invite influential senior leaders who understand your people and your business—not just your Total Rewards team—to your finalist meetings. At Shaw and NWC, we included a VP in our meetings. At ApplyBoard, we included a broader panel of seasoned employees who knew the organization well. We added a few junior employees as a development opportunity. Never forget development opportunities!

  • Use scorecards based on, and weighted to, important criteria. Key areas can include financial metrics, service metrics, ability to match plan design, and fit.

Plan Design

Your high-level plan design goes into the RFP, but real-life functionality lives in the details.

Make sure you’re clear on what the proposed carriers can and (more importantly) can’t replicate from your current plan. Even small gaps in carrier capability or willingness can become major issues during implementation.

It’s not fun to find out halfway through that a small—but critical—feature isn’t available. In one implementation, we found out that a carrier’s standard COB didn’t match the incumbent, impacting employee reimbursement. That carrier was quick to adapt but it’s a small feature that can derail employee perceptions of that carrier.

Finance, FP&A, and Accounting

Carrier changes are the perfect time to review how your benefit accounts show up in financial reporting and budgeting.

  • Get Finance involved at the start. All of finance. Payroll, FP&A, Treasury, A/P, Controls, and others, are crucial to your success. 

  • Revisit how benefit costs are allocated and tracked. It’s been done one way forever. Does that mean it’s the right way? Not necessarily. Make sure you’re educated enough to make recommendations on assigning burdens, or how employer and employee costs flow through payroll.

  • Set up your new vendor(s)—yes, it’s obvious, but this gets missed more than you’d expect.

IT Security

If your project involves digital data transfers, your IT Security team will need to vet the carrier thoroughly—think penetration (pen) tests, security protocols, etc. Remember, IT Security, along with most of the other groups involved in this project are responsible for risk mitigation. They want to make sure their standards are met. At one very large tech company I consulted for, they asked vendors for test sites to complete their own pen tests. 

Some carriers want to kick off this step three months before go-live. Trust me: that’s too late. Start this conversation early or risk derailing your whole timeline. At one recent project, this took four months to complete. You aren’t the only project they have.

Legal and Compliance

Legal and compliance needs time. If you can, get a draft contract at the start of the project so they can begin redlining early. Most privacy reviews request more detailed privacy info than what’s on a carrier’s website.

Get a SOC-2 report early so you’re ready when it’s requested

Employee Data

Ask where your carrier stores data. If it’s outside Canada, you may want to think twice and update your employment contracts if you proceed. Having data stored in a different country may make those employees subject to certain laws in that country.

Always ask about data residency as part of your RFP.

Internal Communications

You can check all the boxes—great service, able to match plan designs, wonderful technology, but if employees don’t know what’s changing or how to engage with the new plan, it won’t matter.

  • Use a mix of communication formats that fit your organization and how employees ingest information: live sessions, videos, written guides, intranet updates have all been very helpful to the employees I support.

  • Allow media to be shown to spouses - invite them to your live sessions, make video available in ways other than the intranet. Coordinating benefit plans allows your employee and their family to get the best value from their plans.

  • Offer a real support line—email or phone—for employee questions. I’ve implemented plans in tech companies where intranet articles and live sessions are all that’s needed. I’ve worked at other places where employee groups do not have employer, or personal, email addresses. It’s your job to get in front of your audience and communicate using methods and language they understand.

Brokers and consultants bring expertise, but many haven’t worked inside plan sponsor organizations. They don’t always see the effort necessary to smoothly implement a plan.

If this feels overwhelming, it can be. TOH Enterprises can help. We’ve done this before—end to end—and we know what makes these projects succeed.


Scott Hitchcock