A renewal increase arrives as one percentage, which is the least useful way to look at it. Here is how to take that number apart, benchmark it honestly, and work out which of your options are still open this year.
A renewal increase is a projection, not a bill. Before accepting one, find out what drove it, how it compares with the market, and which of your options are still open given your timeline. Most employers can answer none of those three questions when the number arrives, which is exactly why the number tends to stick.
In my experience, the increase is rarely the real problem. The real problem is that it shows up eight weeks before the effective date, with no supporting detail, at which point the only available responses are to absorb it or pass it to employees. Both are decisions made under a deadline someone else set.
What is actually inside a renewal increase?
A renewal number bundles at least four things: your group's own claims experience, the carrier's projected trend for the coming year, changes in your census, and adjustments to the carrier's own margins and fees. These move independently. An increase driven by one large claim that has since resolved is a very different situation from one driven by a structural rise in your population's utilization, and they call for different responses.
Ask for the decomposition. A carrier or advisor who can tell you how much of the increase is experience, how much is trend, and how much is demographics is giving you something you can act on. One who cannot — or will not — is handing you a number and hoping you sign it.
How do I know whether my increase is reasonable?
Benchmark it against what the market actually did, not against how it feels. The KFF 2025 Employer Health Benefits Survey put the average annual premium at $9,325 for single coverage and $26,993 for family coverage, with single premiums up 5 percent and family premiums up 6 percent over the prior year — against wage growth of 4 percent and inflation of 2.7 percent.
Two readings follow. If your renewal is in the high single digits, you are roughly where the market is, and a broker promising to negotiate that away is overselling. If your renewal is 18 or 25 percent, something specific is happening in your group, and the first job is to find out what — not to shop the plan.
The longer view is also worth holding onto. KFF reports family premiums up 26 percent over five years, against wages up 28.6 percent and inflation of 23.5 percent. Health costs have not exploded relative to everything else so much as they have compounded relentlessly, which is why one-year fixes keep disappointing.
What am I entitled to ask for?
More than most employers realize. Since December 27, 2021, ERISA has required people providing brokerage services or consulting to group health plans to disclose to plan fiduciaries detailed information about the compensation they expect to receive in connection with the plan, per the U.S. Department of Labor (2021). If you have never received that disclosure, request it.
This is not about assuming bad faith. It is about knowing whether the person advising you on plan design is paid more when your premium goes up. That is a reasonable thing to know, and asking is now routine rather than confrontational.
Ask for your claims data as well. In a self-funded plan it belongs to the plan and you should already have it. In a fully insured arrangement, access depends on your size and your carrier — but ask anyway, in writing, and note the answer. An employer who cannot see what is driving cost cannot manage it, and that gap is itself a finding.
What are my options, honestly?
There are five, and they are not equally available at every point in the calendar.
| Option | What it does | Lead time needed |
|---|---|---|
| Absorb the increase | Protects employees; hits margin | None |
| Shift cost to employees | Raises contributions, deductibles or out-of-pocket maximums | Weeks — but affects retention |
| Market the plan to other carriers | Tests whether your price is competitive | 60–90 days |
| Change plan design within the carrier | Adjusts networks, tiers or pharmacy structure | 60–90 days |
| Change funding structure | Moves to level-funded or self-funded with stop-loss | Six to nine months |
The bottom row is where the durable savings usually are, and it is the row most often unavailable because the conversation started too late. KFF reports 67 percent of covered workers are now in self-funded plans, and 37 percent of covered workers at firms with 10 to 199 workers are in a level-funded arrangement. If that is a direction you want to explore, the evaluation needs to start right after this renewal closes, not before the next one.
Where does the money actually go?
Usually to hospital facility claims, and usually at prices nobody in the room has examined. RAND's Hospital Price Transparency Study, Round 5 (2024) found employers and private insurers paid an average of 254 percent of Medicare rates for the same hospital services at the same facilities in 2022 — 279 percent for outpatient facility services and 184 percent for the associated professional services.
That gap is the reason a network discount tells you so little. A large discount off an unexamined charge is still an unexamined price. If your renewal conversation never gets to what you are paying per service relative to a public benchmark, it has not really started.
Pharmacy deserves its own look, particularly specialty drugs, where a handful of members can account for a disproportionate share of spend. A claims audit and a hard look at the pharmacy benefit manager arrangement often surface more than another round of carrier negotiation will.
What is different for a Utah employer?
Provider concentration. The Wasatch Front is served by a small number of large health systems, which limits how much leverage a network-shopping strategy can generate and raises the value of understanding your own claims. Where your employees receive care matters more here than in a market with a dozen competing systems.
Size thresholds matter too. If you are at or under 50 employees, Utah's Small Employer Stop-Loss Insurance Act gives you statutory protections on any stop-loss contract — minimum attachment points, a rate guarantee, a ban on lasering. Above 50, those protections stop and become terms you negotiate. Employers crossing that line during a growth year are often surprised by it. If you are weighing advisors as well as options, how to choose between a benefits broker and a consultant covers what to look for. Our practice works with employers across Salt Lake City and the surrounding valley on exactly these decisions.
When is it too late to change anything?
Later than employers fear for plan design, and earlier than they hope for funding. Marketing the plan to other carriers realistically needs 60 to 90 days before the effective date. A funding change needs six to nine months, because claims analysis, stop-loss underwriting, plan document work, and employee communication all have to happen in sequence.
If you are reading this with three weeks to go, the useful move is not a rushed structural change. It is to close this year cleanly, then start the next evaluation immediately with better data — and to put the renewal conversation on the calendar for nine months out rather than waiting for it to arrive.
My partner Skyler Cleveland has written publicly about the difference between reacting at renewal and planning year-round, and it matches what I see: healthcare is one of the least predictable and fastest-growing costs most employers carry, and most organizations only engage with it once a year. Skyler and I are two of the twelve contributing authors of Healthcare's C-Suite Solution (2023), whose argument is that the lever here sits with business leaders rather than with the healthcare system — which is only true if the work happens outside the eight weeks before a renewal.
What to do next
Take the increase apart before you decide anything. Ask for the split between experience, trend and demographics. Request your broker's compensation disclosure. Benchmark against the KFF figures above. Then pick from the five options with your actual lead time in mind rather than the one the calendar forces on you.
If you want a second read on a renewal that came in higher than you expected — including an honest answer that your increase is in line with the market and your plan is fine — start a conversation. The most useful version of this happens well before renewal, but it is worth having whenever you are reading it.
Related reading: if your increase is on the stop-loss layer rather than the medical trend, Utah's own stop-loss market data shows where attachment points and loss ratios actually sit, and group captives are the structure most often proposed to employers who want to own that layer instead of renting it.
Tyson has specialized in employee benefits since 2010, helping C-suite executives and HR leaders build custom health plans that reduce costs and improve employee access to quality care.
Skyler partners with Utah employers to design strategic, data-driven employee benefits programs that align financial outcomes with workforce wellbeing — bringing the same boardroom-level thinking featured in Healthcare's C-Suite Solution to every engagement.