A renewal letter can feel like a yes-or-no question: accept the new rate or shop. In reality, the rate is only one part of the decision. A plan can renew at a modest increase while shifting costs to employees; another may cost more but preserve access to providers your workforce uses. Start by translating the packet into a few comparable questions.
Translate the rate into dollars
Compare the current and proposed monthly premiums by coverage tier, then estimate annual spend using realistic enrollment. Separate the employer share from the employee share. If enrollment or contribution levels change, the percentage printed on the renewal notice may not match the amount your business will actually pay.
Read what changed in the coverage
Check deductibles, out-of-pocket limits, copays, coinsurance, network design, and prescription coverage. Confirm whether the proposed renewal is a continuation of the same benefits or a change to the plan. Ask for a side-by-side explanation of anything employees would need to understand before enrolling.
- Which doctors, hospitals, and pharmacies remain in network?
- Are any commonly used medications moving to a different tier or requiring new authorization?
- How will payroll contributions change for employee-only and family coverage?
- Are dental, vision, life, and disability lines renewing on the same schedule?
Test alternatives without comparing unlike plans
If the increase is difficult to absorb, ask for a market comparison. This may include other carriers, a different network, a change in contribution strategy, or another funding arrangement. But a quote with a lower premium is not automatically better: make sure it is based on the same workforce and that the coverage differences are explicit.
Make room for implementation
Work backward from the effective date. Carrier deadlines, employee notices, payroll updates, and enrollment all take time. If the renewal arrives late, prioritize the comparisons you can complete credibly instead of promising a sweeping market exercise that cannot be implemented. A clear recommendation should show the available choices, the assumptions behind them, and who owns the next steps.
A simple way to calculate your renewal impact
For each coverage tier, multiply the new monthly premium by the number of enrolled employees and by twelve. Repeat with the current premiums. The difference is the estimated annual premium change if enrollment stays the same. Next, apply your employer contribution policy to each tier. This separates what the company absorbs from what employees see in their paychecks.
For example, a $40 monthly employer increase for 50 enrolled employees equals $24,000 across twelve months (40 × 50 × 12). That is only an illustration: actual spending changes with enrollment, plan selection, eligibility, and midyear events. Ask for the calculation in dollars by tier, not just a blended percentage.
What should an employer do when the renewal increases?
First, calculate the increase in annual employer dollars by coverage tier. Next, identify whether benefits, network access, or employee contributions changed. Ask your broker which alternatives were actually quoted and what each would mean for employees. Set a decision date that leaves enough time for enrollment and carrier processing. A larger increase deserves a documented comparison, not an automatic switch.
Walk through the renewal letter line by line
On the premium page, write the current and proposed monthly rates beside each enrollment tier. On the benefits summary, highlight changed deductibles and out-of-pocket limits. Check the carrier's current provider directory and drug formulary rather than assuming last year's access carries forward. Finally, compare the proposed employer contribution with payroll deductions and ask your broker to put any alternative plan on the same census and effective date.
Questions to take into the renewal meeting
- Is this an identical plan renewal or have benefits, network, or formulary changed?
- What is the employer's expected annual cost at our current enrollment mix?
- What would employees pay per paycheck under each contribution option?
- Which alternatives were actually quoted, and which assumptions differ?
- By what date must we decide to leave enough time for enrollment and payroll setup?
A good renewal recommendation answers those questions on one page, then keeps the carrier detail available for verification. The decision should be understandable to a finance leader and to the employee who will live with the coverage.