Do not wait for a problem to expose an outdated scheme
Annual renewal is the natural review point, but it is not the only one. Review sooner after substantial hiring, restructuring, acquisition, ownership change, a new workforce location, benefit-budget pressure or repeated employee and administration problems.
The Financial Markets Authority recommends revisiting insurance regularly and thinking carefully before reducing, cancelling or switching cover. For an employer scheme, that means allowing enough time before renewal to understand the current arrangement and any proposed change rather than treating the renewal date as a purchasing deadline. Read the FMA’s insurance guidance.
Build one review pack before comparing anything
- Current policy wording, benefit schedule and eligibility rules.
- Renewal terms and a clear explanation of material policy or premium changes.
- Current membership, salary-linked benefits and employee categories.
- Employer and employee contribution settings.
- Starter, leaver, leave and salary-change administration processes.
- Employee communications and the questions people repeatedly ask.
- Claims-process feedback that can be reviewed without circulating unnecessary health information.
Assess seven connected parts of the scheme
1. Purpose and workforce fit
Confirm what the scheme is meant to achieve and whether the eligible workforce, locations, occupations and employment patterns have changed.
2. Cover and definitions
Compare benefit amounts, salary links, waiting periods, benefit periods, definitions, exclusions and optional cover against the current objective.
3. Eligibility and participation
Check who joins, when cover starts and ends, how leave is handled, and whether eligible employees are actually enrolled and understand their choices.
4. Cost and sustainability
Separate premium movement from workforce growth or salary changes, then test contribution settings and likely affordability over more than one renewal.
5. Employee understanding
Check whether employees know what cover they have, where its limits are, how to update details and what to do when they may need to claim.
6. Administration and service
Review starters, leavers, salary changes, invoices, renewal data, insurer response times and recurring work created for HR or payroll.
7. Claims support
Assess whether employees have a clear starting point and whether responsibilities between the employer, Employee Lab and insurer are understood.
Compare what could be lost, not just what could be gained
The FMA says changing policy or provider must be carefully worked through. Differences can include cover, qualifying periods, pre-existing-condition exclusions, premium patterns, financial stability, service and claims processes. It advises keeping the existing policy running until replacement cover is in force.
The FMA’s insurance-advice guidance also says an adviser recommending a change should explain suitability, exclusions, limitations and any reduction or loss of pre-existing-condition cover. Read the FMA’s insurance-advice guidance.
- Do not cancel existing cover before confirmed replacement cover is in force.
- Record material differences in definitions, exclusions and eligibility.
- Check new qualifying, stand-down or underwriting requirements.
- Model likely affordability beyond the first renewal.
- Plan employee communication and transition administration before changing.
Use enough information to review the scheme—without collecting unnecessary health data
The Office of the Privacy Commissioner describes health information as sensitive personal information and says an employer generally cannot ask a doctor for medical information without the employee’s agreement. Scheme-level reviews should normally use aggregated operational information and keep identifiable claim or health information limited to people who genuinely need it. Read the Privacy Commissioner’s employer guidance.
Turn the findings into a controlled renewal plan
- Collect the current scheme and renewal evidence
- Confirm the employer objective and workforce changes
- Score cover, eligibility, cost, communication, administration and claims support
- Prioritise improvements and any insurer comparison
- Agree the renewal decision and employee communication plan
Record what will change, what will stay, who owns each action and how employees will be told. A review has little value if its findings disappear into a renewal email.