When your health insurance renewal lands in your inbox, you have a decision to make: keep the current plan, shop around, or consider a different approach.
Figuring out what each option will actually cost and what your employees will get in return is what complicates your decision. Renewal percentages and industry averages can help, but they don’t tell the whole story. A smaller increase can still cost more, and a cheaper plan can change what employees pay for care.
A better comparison looks at total cost, coverage, and financial risk so you can see what each option really means for your business and employees.
Why Your Renewal May Look Different Than the Average
National averages can give you a sense of where the health insurance market is heading, but they don’t tell you whether your company’s renewal is competitive.
For 2027, KFF looked at proposed rate increases from nearly 300 insurers offering small business coverage across the country. The small business premium increase analysis found a median proposed increase of 14%.
That number gives you useful context for what’s happening in the market. But it doesn’t mean your company should expect a 14% increase. Your renewal can look very different based on your location, plan, and other details specific to your business.
Instead, use the 14% figure as a reference point, then focus on what’s driving your own renewal. It also helps to understand your small business health insurance options before comparing proposals.
Look at the Total Cost, Not Just the Percentage
A smaller percentage increase doesn’t always mean a lower price.
For example, consider these two proposals:
| Plan A | Plan B | |
|---|---|---|
| Renewal increase | 8% | 11% |
| Annual cost | $324,000 | $316,350 |
Plan A has the smaller increase, but Plan B costs $7,650 less per year.
That’s because the plans started at different prices. A percentage only shows how much the price changed, not which option costs less overall.
To see the real difference, calculate the total monthly and annual premium for each proposal. Include what your company contributes, what employees pay, and any HSA or HRA funding or applicable fees.
Then look beyond the premium. Employees may still pay significantly different amounts when they use their benefits. HealthCare.gov recommends comparing total healthcare costs, which includes both premiums and out-of-pocket costs for care.
Compare Health Plan Quotes on Equal Terms
Before comparing proposals, make sure you’re comparing quotes on equal terms. Even small differences in how a quote is built can change the price and make one option look more competitive than it really is.
For a fair comparison, use the same employee and dependent census across every proposal. Keep participation assumptions and employer contributions consistent, too. If one quote uses different information, adjust it before comparing the costs.
That way, you can see what you’re actually paying for rather than comparing numbers built on different assumptions.
Compare What Employees Get with Each Plan
Once you know you’re comparing the same numbers, take a closer look at the coverage behind them. A lower premium could come with a higher deductible, while a network change could affect which doctors or hospitals employees can use.
Compare what employees will pay when they need care, including deductibles, copays, coinsurance, and out-of-pocket maximums. The Department of Labor’s Summary of Benefits and Coverage template gives you a consistent way to review these details across plans.
Then, check the provider network and prescription coverage. Understanding the differences between an EPO versus PPO health plan can help you see how a plan change could affect employees’ access to care.
What to Compare Before Choosing a Health Plan
By this point, you should have the information you need to put each option side by side. Before making a decision, check that you’ve compared the following:
- Same employee and dependent census
- Same coverage tiers and participation assumptions
- Total monthly and annual premium
- Employer and employee contributions
- HSA or HRA funding
- Deductibles and copays
- Coinsurance and out-of-pocket maximums
- Provider and prescription-drug access
- Fully insured, level-funded, or self-funded structure
- Administrative fees and maximum employer liability
- Rate guarantees and renewal terms
- Implementation requirements and employee disruption
Consider the Longer-Term Cost of Each Option
Once you’ve compared the cost and coverage, consider what each option could mean after the plan takes effect.
For example, a level-funded plan can expose your business to different financial risks than a fully insured plan. Changing carriers could affect provider access or require employees to learn a new plan. Your team may also have additional work during enrollment and implementation.
Those factors can change the value of an option that initially looks less expensive. Look at how much your company could ultimately pay and what employees could experience under each plan.
You may also find opportunities to reduce healthcare costs or explore another approach, such as offering health insurance through a PEO.
Make a More Informed Renewal Decision
A renewal percentage gives you a starting point. But to truly understand your options, compare what each plan will cost your business and what employees will pay for care.
Want another set of eyes on your renewal? Schedule a free benefits audit with Helpside. In 15 minutes, our team will review your current plan and spending against market benchmarks so you can better understand where your benefits stand.
