Every year it shows up the same way. A PDF lands in the inbox about 60 days before the effective date. Fifty-six pages. Somewhere on page four is the number that actually matters — the rate increase — and the other fifty-two pages are boilerplate nobody will ever open.
Here’s what happens next in most small companies: someone glances at the increase, mutters something unprintable, decides it’s “not that bad compared to last year,” and hits accept. Renewal done. Back to running the business.
We understand the impulse. Health insurance for a company under 100 employees feels like a menu with three items on it, all overpriced. Why spend a week analyzing something you can’t change?
Except that premise is wrong. There are more real, usable choices in the small group market right now than there have been in years. Most employers simply never see them, because nobody ever put them side by side on one page.
What You’re Really Saying When You Renew As-Is
When you renew as-is, you aren’t making a decision. You’re declining to make one. You’re saying that whatever plan design was chosen three or four years ago — under different circumstances, with a different headcount, a different age mix, and a different payroll — is still the right answer today.
It usually isn’t. Companies change. Your census changes. Networks change. Carrier pricing strategy changes year to year, and the carrier that was uncompetitive for your group last year may be buying business this year.
The renewal letter will never tell you any of that. It isn’t designed to. It’s designed to be accepted.
What a Real Renewal Review Looks Like
This is the work a second set of eyes should be doing on your renewal — every year, not just the years the increase is ugly.
Run the Full Market, Not Just the Incumbent
Alternate carriers, yes — but also the other plans inside your current carrier that you were never shown. There is almost always a plan one rung down that costs meaningfully less and is nearly indistinguishable to employees.
Look Hard at Network Options
Narrow and tiered networks aren’t the compromise they were ten years ago. In Los Angeles, some of the smaller networks include exactly the medical groups your employees are already using. If your team is concentrated in one geography, you may be paying a premium for hospital access in counties nobody on the payroll lives in.
Take Bronze Plans More Seriously
Bronze plans have a reputation problem. But a properly structured high-deductible plan opens the door to a Health Savings Account — and the premium savings frequently exceed what an employer would have to contribute to employee HSAs to make people whole. Employees end up with tax-free money they own and keep. The company spends less. That isn’t a downgrade. It’s a redesign.
Layer In the Pre-Tax Tools
Section 125, FSAs, dependent care, and Health Reimbursement Arrangements let you close the deductible gap with dollars that never get taxed. An HRA lets you buy a leaner plan and put employer money behind the specific expenses that actually hit employees — instead of buying a rich plan for everyone to protect the few who use it.
Model Contribution Strategy, Not Just Plan Design
How cost is split between employee-only and dependent tiers can move total spend as much as changing carriers. Most employers have never modeled it.
Put Level Funding on the Table
For groups of roughly 25 and up with a reasonably healthy census, level-funded plans are worth a serious look. They give you transparency into where the money actually goes, the ability to share in savings when claims run low, and stop-loss protection so a bad year doesn’t sink you — often with the same carrier name on the ID card. It isn’t right for everyone, but it belongs in the analysis.
A Word About the Noise
There’s a lot of chatter right now about ICHRA. Some of it is useful. Much of it makes employers feel the only choices are “do nothing” or “blow the whole thing up.”
ICHRA — reimbursing employees to buy their own individual coverage — sounds elegant on a webinar. In California, it is largely impractical. The individual market here has thin networks, limited carrier participation in many counties, and pricing that punishes older employees. You’re taking people out of a stable group pool and sending them to shop alone, and you’re taking on a compliance and administration burden to do it. We’ve reviewed it repeatedly for clients and it rarely survives the math.
The truth is that the majority of the savings we find comes from unglamorous work. Plan design. Network fit. Contribution modeling. Pre-tax structure. Boring, and it works.
Before You Accept This Year’s Renewal
Make sure your broker is looking under the hood. Not to sell you something — to tell you plainly what you’re currently buying and what the alternatives actually cost, side by side.
Worst case, you confirm you’re already in the right place and renew with confidence instead of resignation. Best case, you find real money.
We do this work every day for small and mid-sized businesses across Southern California. If you want a second set of eyes on your renewal before you accept it, reach out at Info@CorpStrat.com.
