What Every CFO Needs to Know Before Group Benefits Renewals Hit
Group Benefits Renewals Come Fast—Be Ready Before They Do
For most mid-sized businesses, group benefits renewals land during Q4—often with little time to plan and rising costs that feel non-negotiable. If you’re a CFO staring down a January 1 renewal date, now is the time to prepare.
Without a proactive health insurance renewal strategy, you could be looking at a double-digit increase in premiums, frustrated employees, and last-minute decision-making with little leverage.
Why Costs Keep Climbing—and Why Brokers Don’t Always Sound the Alarm
The average health insurance premium increase for employer-sponsored plans has hovered between 8%–14% in recent years, with some industries seeing even more. But why?
- Lack of benchmarking: Most companies haven’t compared their plan costs or design to peer groups.
- Vendor complacency: Brokers tend to stick with incumbent providers unless prompted otherwise.
- Minimal transparency: Many fees, administrative costs, and markups are embedded in plan structures.
Brokers often provide renewals just 60–90 days out, offering little room to explore options. And because many are paid commissions from carriers, the incentive to dig deep on savings opportunities just isn’t there.
A Smarter Health Insurance Renewal Strategy Starts Now
1. Begin with a Comprehensive Review
Request a detailed analysis of your current plan’s performance, including utilization rates, large claim details, employee contributions, participation levels, and fixed and variable costs.
2. Benchmark Against Industry Peers
Rely on data, not assumptions, to evaluate how your plan stacks up against similar companies and group sizes in your industry. Assess whether your deductibles, premiums, and vendor fees are competitive or inflated.
3. Avoid Automatic Renewals
Don’t accept a renewal recommendation without scrutiny. Insist on alternative proposals and performance metrics from other vendors, not just the incumbent provider’s renewal offer.
4. Evaluate Plan Design and Funding
Even minor changes to eligibility criteria, cost-sharing arrangements, or funding models (e.g., level-funded vs. fully insured) can yield substantial improvements in cost-efficiency and employee satisfaction.
5. Clarify the True Cost Structure
Disaggregate fees to uncover hidden costs. Be vigilant for embedded broker commissions, layered administrative charges, and other less-visible expenses that can significantly impact your budget.”
What You Can Do – Even if You’re Not Changing Brokers
You don’t need to part ways with your broker to improve your results. Independent platforms like PolicySmart evaluate your current coverage, uncover gaps and redundancies, and compare your plan against thousands of similar businesses—all without selling insurance or taking commissions.
This isn’t about greater market access and leveraging data.
Frequently Asked Questions (FAQs)
What is a group benefits renewal?
A group benefits renewal is the yearly process where your broker or insurance carrier presents updated rates, plan designs, and coverage options for your employer-sponsored benefits, typically including health, dental, vision, and other offerings.
How can companies control group health insurance costs?
Review your plan’s claims history, structure, and vendor fees. Benchmark these against similar companies. Explore alternative funding strategies with PolivySmart, such as level-funding, self-funding, Rx carve-outs, and captives. Partner with PolicySmart to uncover hidden costs and overpriced services.
What is the best time to review employee benefits?
While October and November are peak months for benefits renewals, the optimal time to begin your review is late summer, preferably 90 to 120 days before your renewal date. This allows your team ample time to explore alternative options and survey employees to determine what they are looking for.
Do I need to change brokers to reduce costs?
Not necessarily. Many businesses save money by using unbiased services like PolicySmart to conduct independent audits, benchmark against peers, and collaborate with their current broker, all while gaining added leverage.
Why do employee benefits get more expensive every year?
Rising medical costs, MD visits, prescription drug prices, administrative fees, and a lack of vendor competition all contribute to this situation. Without transparency and regular audits, these increases continue to compound yearly.
The Cost of Inaction is Rising
Your group benefits program is one of your biggest budget expenses and most noticeable to employees. Don’t wait until the last minute to ask the tough questions. A data-driven, independent approach can safeguard your bottom line while supporting your workforce, without sacrificing unnecessarily.
Want to benchmark your plan without switching vendors?
Contact PolicySmart™ to get started.