Why did my group health insurance renewal increase so much?

A large renewal increase usually comes from a combination of medical and prescription cost trend, your group’s own claims experience where the group is large enough for that to be credited, changes in your census, plan design and network changes on the carrier’s side, and carrier margin decisions. Some of those you can influence. Several you cannot. Knowing which is which is the whole point of a renewal review.

4J Insurance Brokerage is an independent employee benefits and commercial insurance brokerage in Frisco, Texas, serving North Texas employers with approximately 50 to 200 employees.

Drivers you cannot control

• Overall medical and prescription cost trend.
• Carrier repricing across a block of business.
• Regulatory and mandated benefit changes.

Drivers tied to your group

• Claims experience, where your group is large enough for experience to be credited.
• Census movement: age, family tier mix, geography.
• Enrollment and participation changes.
• High-cost claimants and whether any are ongoing.

Levers you actually hold

• Funding structure. Whether fully insured still fits, or whether level funded or self funded arrangements deserve evaluation. The comparison of the three structures covers the trade-offs, and stop-loss is what makes self funding survivable.
• Plan design. Deductible, coinsurance and out-of-pocket structure.
• Network. Broader versus narrower, and what that does to disruption.
• Contribution strategy. How cost is shared, and how that interacts with Affordable Care Act affordability.
• Prescription strategy and formulary structure.
• Whether the plan was marketed at all.

What to ask for before accepting the number

Ask for the renewal exhibit showing how the increase was built, your claims experience if the carrier will release it, at least two alternative plan designs, and a written note on what was marketed. If none of that is available, that itself is information.

You can also check your affordability position for the coming plan year with the benefits tools.

Request a Renewal Second Opinion

This page is educational and does not constitute legal, tax or benefits advice. Employer-specific questions may require review by benefits, tax, legal, payroll or compliance professionals. 4J Insurance Brokerage is a broker and does not underwrite risk or issue policies.