Your group health renewal came in with a big increase: what to do before it takes effect

The renewal letter and the number that made you sit down

It arrives a couple of months before your plan year ends. Most of the pages are boilerplate, and then there is the table: current premium, renewal premium, percent change. The percent is bigger than your revenue grew. Your first instinct is to absorb it, because switching plans feels like a project and your employees are used to their doctors. Your second instinct is to drop the benefit altogether, which you know would cost you people.

I help businesses in Murphy, Plano and across the Dallas area with exactly this, and I want to say up front that a renewal is an opening position from one carrier, not a verdict on what coverage costs. Most of the time, there are alternatives that were never put in front of you. Sometimes the right answer is to stay and restructure the plan. Sometimes it is to move. Occasionally the renewal is actually fair. The point is that you cannot know until the market has been asked.

This guide explains what pushes a renewal up, what you can check yourself, what the realistic options are for a small or mid-sized employer, and how a broker runs the comparison, at no cost to you, because carriers pay the broker rather than the client.

What is actually behind the increase

A few things move a group renewal. Medical costs rise every year regardless of what your group does, so a baseline increase is built in. The age of your group matters, because in most small-group plans each employee is priced by age, and a workforce that is a year older is a little more expensive even if nobody changed. If your group is large enough to be experience-rated, the claims your employees actually filed last year feed directly into the number, and one serious illness can show up as a steep renewal.

Plan design matters too. A plan with a low deductible and rich benefits climbs faster than a higher-deductible plan paired with a health savings account. Carrier strategy plays a part: a carrier that wants to reduce its exposure in a segment will price renewals to encourage groups to leave. And sometimes the increase reflects a change in your group: more enrollees, more dependents, a shift in who elected coverage. The renewal rarely explains which of these is doing the work, which is why the first step is to find out.

• Baseline medical inflation that affects every plan
• Age changes within your enrolled group
• Claims experience, for groups large enough to be rated on it
• Plan design, especially low deductibles and rich copays
• Carrier appetite for your segment in a given year
• Changes in who is enrolled and how many dependents

What to pull together before you talk to anyone

Start with the renewal itself: the full document, not just the summary page, including the rate tables by age or tier and any notes about plan changes. Then find the current census, which is the list of enrolled employees with dates of birth, zip codes, coverage tier and whether they have dependents. Pull your current summary of benefits so you know exactly what the plan covers today. If you have had the plan for a few years, gather the prior renewals too, because the pattern tells a story.

Then ask your employees, informally, what they value. Is it the network and their current doctors? Low out-of-pocket costs? A lower paycheck deduction? You do not have to design the plan around a survey, but knowing whether your team would accept a higher deductible in exchange for a lower contribution changes what is on the table. Finally, write down how much the business can contribute per employee per month. That number is the real constraint, and a quote is only useful measured against it.

Check the dates. Most renewals require a decision a few weeks before the effective date, and carriers need time to install a new group. Starting sixty days out is comfortable. Starting two weeks out means your choices are limited to what can be done quickly.

• The complete renewal package with rate tables
• A current census: ages, zip codes, tiers and dependents
• Your current summary of benefits and prior renewals
• A sense of what employees value most
• The monthly contribution the business can afford
• Your renewal decision deadline and effective date

When accepting the renewal is fine, and when to shop it

If the increase is modest, your employees are happy, and a quick market check confirms the carrier is in line, renewing is a reasonable choice and saves everyone the disruption of new ID cards and new networks. The mistake is renewing by default without that check. If the increase is well above what you have seen in past years, if your group has changed in size, if you have never compared carriers, or if you are considering adding dental, vision, life or disability for the first time, this is the year to shop it.

The same applies in reverse for employers offering benefits for the first time to hire and keep staff. The market for a group of five looks different from the market for a group of fifty, and the options are broader than most owners expect. In my experience the comparison itself costs nothing but a census and a conversation, and the result is either a better plan or confidence that the one you have is fair. Either way you know.

How I shop a renewal and what the alternatives look like

The process starts with your census and your current plan. I take both to multiple carriers, including BlueCross BlueShield of Texas, UnitedHealthcare, Aetna, Cigna, Humana and others, and ask each to quote comparable designs as well as alternatives. Plans increasingly look alike on the surface, so the work is in reading the differences: network size, how prescriptions are tiered, what the deductible really applies to, and how the premium is split across age bands or tiers.

The alternatives depend on your group. For many small employers the choice is among fully insured plans from several carriers, with plan designs that trade premium against deductible, often paired with a health savings account so employees can set aside pre-tax money for the gap. For groups with stable, healthy claims, a level-funded plan can make sense: you pay a fixed monthly amount that includes stop-loss protection, and if claims come in under expectation, part of the surplus may come back to you. Larger groups may consider self-funding. A professional employer organization is another route, where your employees join a larger pool for benefits and HR is bundled in, which works for some companies and not for others.

I lay the options side by side, with the employer cost and the employee cost for each tier, and I walk you and, if you want, your team through them. You pick. Then I handle the paperwork with the carrier, the enrollment meetings and the transition, and I stay as your contact when a claim or a billing question comes up during the year. All of this is at no cost to you; the carriers pay the broker, and the premium is the same whether a broker is involved or not.

• Census and current plan reviewed, with the renewal decoded
• Quotes from multiple carriers on comparable and alternative designs
• Fully insured, HSA-compatible, level-funded, self-funded and PEO options as appropriate
• Side-by-side comparison of employer and employee cost by tier
• Enrollment, carrier paperwork and the transition handled for you
• Ongoing service through the plan year

What drives the premium, and what you can actually change

You cannot change medical inflation or the age of your workforce. You can change the plan design, which is the largest lever most small employers have. Moving from a low deductible to a higher one with an HSA, adding a second plan option so employees choose between richer and leaner coverage, or adjusting the employer contribution strategy all change the number. You can change carriers, and in some years the same design is priced noticeably differently across the market.

You can also change funding. Level-funded arrangements shift some risk to you in exchange for a lower expected cost, and they suit groups whose claims have been steady. You can change the mix of benefits: sometimes trimming the medical plan slightly and adding dental, vision or life for the same total budget gets you a more valued package. Talk to a licensed broker and, for tax questions about contributions and HSAs, your CPA; the right combination depends on your group, and I am careful not to prescribe one without seeing the census.

Choosing a benefits broker

Ask how many carriers the broker actually quotes. An agent captive to one company can only tell you what that company offers. Ask whether the broker will present level-funded and PEO options alongside traditional plans, and whether they will tell you when the renewal is fair and not worth moving. Ask who you will reach when an employee has a claim denied in March. Ask about Medicare: if you have employees approaching 65, a broker who understands how group coverage and Medicare interact saves you and them trouble.

Confirm the broker is licensed in Texas and ask how they are compensated. There should be no fee to you for the comparison or the service, and anyone proposing one should explain exactly what it buys.

• Appointed with multiple carriers, not captive to one
• Presents alternative funding and plan designs, not just one quote
• Willing to recommend staying put when that is the answer
• Available for claims and billing issues all year
• Understands Medicare for employees nearing 65
• Licensed in Texas, with no fee charged to you

Mistakes I see employers make at renewal

The most common is renewing by default because the deadline arrived. The second is comparing on premium alone, then discovering the cheaper plan has a narrow network that excludes the hospital system your employees use. The third is dropping coverage entirely to save money and losing two good employees within the year, which costs more than the increase did.

I also see employers who change plans every year chasing the lowest number, which exhausts employees and erodes trust in the benefit. And employers who never explain the plan, so staff do not understand what they have and do not value it. A short enrollment meeting where someone walks through the plan in plain language does more for retention than most owners expect.

What happens after you reach out

You send me the renewal and the census, or we build the census together over a short call. Within a few days I have quotes back from the carriers and I put together a comparison that shows your current plan, the renewal, and the alternatives with employer and employee cost for each. We go through it together and I answer every question, including whether I think the renewal is worth keeping.

If you decide to move or restructure, I handle the applications, coordinate the effective date so there is no gap, and run enrollment with your employees, in person or online. After that I am your contact for the plan year. If you are a sole proprietor who needs individual coverage, or an owner or employee turning 65 who wants Medicare explained plainly, I do that too. The service is at no cost to you, and the goal is a benefit your people value at a price the business can sustain across the Dallas area.

Questions people ask me