What if the biggest mistake employers make with healthcare isn’t choosing the wrong plan, but waiting too long to evaluate their options?
Every year, it happens the same way.
A health insurance renewal lands in an HR professional’s inbox or on a CFO’s desk. Premiums have increased—again. Leadership gathers to discuss the options, only to realize there aren’t many. With renewal deadlines approaching, the conversation quickly shifts from “What’s the best strategy?” to “How do we manage another increase?”
It’s a frustrating cycle, and one that many businesses have simply come to expect.
But it doesn’t have to be.
The Best Time to Evaluate Your Benefits Isn’t During Renewal Season
Most employers begin reviewing their health plan 30 to 60 days before renewal. By then, there’s little time to gather information, compare alternatives or make strategic decisions.
The businesses that often achieve the best outcomes take a different approach. They begin the conversation months before renewal.
Starting early doesn’t mean you’re committed to making a change. It simply gives you the opportunity to understand what’s available, compare options objectively and make decisions without the pressure of looming deadlines.
Think of it like budgeting or strategic planning. The earlier you begin, the more choices you have.
Rising Healthcare Costs Aren’t Going Away
Healthcare costs continue to challenge employers of every size. Many organizations feel trapped between increasing premiums and the desire to continue offering competitive benefits that attract and retain great employees.
As a result, employers often assume they have only three choices:
Accept higher premiums
Shift more costs to employees
Reduce benefits
Fortunately, those aren’t the only options.
Today’s benefits marketplace offers strategies that can provide greater flexibility while helping employers better manage costs.
The key is knowing what those options are—and determining whether they’re a good fit for your organization.
Looking Beyond Traditional Health Insurance
One strategy more employers are exploring is a level-funded health plan.
Unlike a traditional fully insured plan, a level-funded approach combines predictable monthly payments with greater visibility into how healthcare dollars are being spent.
For many businesses, that can mean:
More transparency into claims and plan performance
Greater flexibility in plan design
Opportunities to better manage healthcare costs
Strong employee benefits and provider access
Every company is different, and no single solution is right for every employer. However, evaluating alternative funding strategies before renewal can help determine whether a level-funded plan makes financial sense for your organization.
Real Results Matter
It’s one thing to talk about possibilities. It’s another to see what’s happened for other employers.
Recently, a fabrication company reduced annual healthcare costs by more than$23,000 while improving employee out-of-pocket benefits.
Another contractor reduced premiums by29%, lowered deductibles and expanded provider access through a more efficient funding strategy.
Will every employer experience the same results? Of course not.
Healthcare costs depend on many factors, including workforce demographics, claims history and plan design, but these examples demonstrate why it’s worth asking the question: “Could there be a better approach for our business?”
Another Opportunity Many Employers Overlook: Section 125 Plans
Health insurance isn’t the only place employers may be leaving money on the table.
Many organizations are surprised to learn they can enhance employee benefits while potentially reducing payroll tax expenses—without changing their current medical plan.
A Section 125 cafeteria plan allows eligible employee benefits to be paid with pre-tax dollars. That can reduce taxable wages, creating potential FICA tax savings for the employer while also expanding the value of employee benefits.
The best part? These plans generally work alongside your existing health insurance. They’re designed to complement your benefits, not replace them.
For many employers, it’s an opportunity that has been available for years but simply hasn’t been explored.
Employee Benefits Should Support Your Business Strategy
Employee benefits are often viewed as a necessary expense. The most successful organizations think about them differently.
Benefits influence recruiting, retention, employee satisfaction and financial performance. They deserve the same level of strategic planning as any other major business investment.
Sometimes, that means exploring a level-funded health plan. Sometimes, it means implementing a Section 125 cafeteria plan. Sometimes, it’s both. And sometimes, your current strategy is already the best fit.
The important thing is making that decision based on information, not assumptions.
Start the Conversation Before Renewal Season
You don’t need to wait for your renewal to arrive before understanding your options. If you’d like to explore whether a level-funded health plan could benefit your organization, the first step is simple: provide the employee census from your most recent renewal, and we’ll prepare a no-obligation comparison.
If you’re interested in learning whether a Section 125 cafeteria plan could create payroll tax savings for your business, all we need is your total number of W-2 employees to provide an initial estimate.
Whether you’re an HR leader focused on employee experience, a CFO looking for cost efficiencies or a CEO planning for long-term growth, understanding your options today can help you make more informed decisions tomorrow. Reach out to our team to review your options today.
Securities offered through Kingswood Capital Partners LLC (KCP), member FINRA/SIPC. KCP is an affiliated entity. Dannah Investment Group, LLC, may at times offer products or services that are unrelated to and unaffiliated with KCP and its affiliates. These products or services are unrelated to and unaffiliated with KCP and its affiliates. The employer examples above are provided for illustrative purposes only and are based on the specific circumstances of those organizations. Results will vary depending on factors such as company size, employee demographics, claims history, plan design, and implementation. Similar results are not guaranteed.