A health insurance renewal increase can change next year's hiring budget, employee contributions and the coverage your team can afford. Leadership needs enough detail to decide what to do about it.
Before approving your 2027 renewal, ask your broker for a written explanation of the increase and the choices available. For an Ohio employer, a useful review should connect the numbers to your workforce, your plan and the financial responsibility your business would retain under each option.
What the latest research tells employers
A study published September 4 in JAMA Health Forum reported that growth in health-care spending accounted for more than 90% of premium growth in the insurance markets studied from 2011 through 2024. The researchers also found that insurer markups, a measure that includes administration and profit, declined in percentage terms. Read the study.
The analysis covered large-group, small-group and individual insurance markets. It excluded self-insured employers, which pay their own medical claims. These historical findings do not establish what caused any particular employer's renewal increase.
For this renewal season, the practical implication is to ask how the proposed price relates to underlying costs. Carrier fees, broker compensation, contract terms and service performance still deserve scrutiny.
1. How was our renewal price calculated?
Start with the way your plan is priced. Ask which factors the carrier or administrator used and how much each contributed to the proposed increase.
Where the information is available and relevant, request a breakdown of medical spending, prescription spending, enrollment changes, administration and insurance charges. Ask which figures reflect past experience and which are projections for next year.
Your group's claims will not play the same role in every arrangement. For example, Affordable Care Act community-rated small-group coverage does not use an employer's enrollees' health history to set premiums. Ask for the explanation that fits your plan's rating method. CBO explains these differences.
2. What evidence supports the explanation?
A renewal presentation should make its assumptions visible.
Ask for the reporting period, the number of people covered and an explanation of any missing information. When reviewing claims, clarify whether a figure represents the amount billed, the amount allowed under the contract or the amount the plan actually paid.
Access to claims reporting varies by arrangement. If your group cannot obtain a detailed report, ask what information is available and what can reasonably be concluded from it. A useful adviser will identify the limits of the data before recommending a change.
Keep the discussion focused on authorized, appropriately protected reporting. An executive renewal meeting should not require employees' names or personal medical details.
3. What would a different funding arrangement change?
Funding alternatives deserve a comparison that includes responsibility as well as price.
In its September 1 report, the Congressional Budget Office estimated that the share of small-business health-plan enrollment in its “self-insured and other plans” category grew from 18% in 2014 to 46% in 2024. That category includes some association and union plans. Read CBO's report.
The report follows state-defined small-business markets, generally employers with 50 or fewer full-time-equivalent employees, with some states using a 100-employee threshold during the study period. Its findings should not be applied directly to a 200-employee company or treated as proof that switching plans produces savings.
For each option under consideration, ask who pays claims, which costs can change and what financial exposure remains with the employer. If the proposal includes stop-loss insurance, which reimburses eligible claims above specified thresholds, review those thresholds, exclusions and payment timing. Put the relevant contract terms beside the projected cost.
4. What changes for employees and their families?
A lower employer budget can come with higher employee payroll deductions, deductibles or costs when care is needed. Make those changes visible before calling an option less expensive.
Ask for a comparison using the same enrollment assumptions and coverage tiers. It should show employer contributions, employee contributions, deductibles and out-of-pocket limits, along with proposed changes to doctors, hospitals and prescription coverage.
Use representative employee situations to explain the tradeoffs, clearly labeled as illustrations. Avoid presenting a lower monthly premium as the complete financial result when access to care or other costs also change.
5. Who owns the work after renewal?
The renewal decision should include a service plan for the year ahead.
Ask your broker to identify the person responsible for each agreed action, the next review date and the information leadership will receive. Depending on your arrangement, that might include reviewing spending reports, resolving enrollment problems, explaining benefit changes or checking whether a new program is being used.
Choose measures that match the work. If a change is intended to improve employee understanding, decide how that will be assessed. If projected savings depend on a contract term or a change in how care is delivered, document the assumption and revisit it against actual results.
Put the answers on one page
Before making the decision, ask for a brief that records the explanation for the increase, the evidence behind it, the options compared, the employee impact and the responsibilities after implementation.
Some increases may be difficult to avoid. Leadership should still be able to see which assumptions were tested and why the recommendation fits the business.
Preparing for a 2027 renewal? Request an employee benefits review with Ready-2-Insure to discuss your proposal and the questions that need answers.