For many organizations, health insurance renewal has become an annual exercise in damage control. A renewal arrives with higher premiums, leadership reviews the numbers, difficult decisions are made and everyone hopes next year will be better.
But what if the better question isn’t “How much is our renewal?” What if it’s “Are we asking the right questions before renewal even begins?”
The employers who consistently make smarter benefit decisions don’t necessarily have bigger budgets. They simply start the conversation earlier—and ask better questions.
Here are three questions worth asking before your next renewal.
1. Are We Using the Right Funding Strategy?
Many employers automatically renew the same type of health insurance year after year because it’s familiar, but healthcare funding has evolved.
For some businesses, a traditional fully insured plan continues to make perfect sense. For others, alternative funding strategies—such as level-funded health plans—may offer greater flexibility and cost control.
A level-funded plan combines predictable monthly payments with many of the advantages of self-funding. Depending on your company’s size and claims experience, it may provide:
Greater transparency into healthcare spending
More flexibility in plan design
Opportunities to better manage healthcare costs
Strong provider networks and employee coverage
The important question isn’t whether level-funded plans are “better.” It’s whether they’re a better fit for your business. The only way to know is to compare your current strategy with the alternatives available.
2. Are We Missing Opportunities Outside Our Health Plan?
When employers think about reducing benefit costs, they naturally focus on medical insurance, but healthcare isn’t the only place where savings may exist.
One of the most overlooked opportunities is a Section 125 cafeteria plan.
Unlike changing your medical insurance, a Section 125 plan generally works alongside your existing health plan. It allows certain eligible benefits to be paid with pre-tax dollars, which can reduce taxable wages.
That creates two potential advantages:
Employees gain access to additional wellness and supplemental benefits.
Employers may reduce payroll tax expenses through FICA savings.
It’s a strategy many businesses simply haven’t revisited in years, even though it can create meaningful value without replacing their current medical coverage.
Sometimes the biggest opportunity isn’t changing your health plan at all.
3. Are We Waiting Too Long to Evaluate Our Options?
This may be the most important question of all.
Every year, businesses receive renewal notices and have only a few weeks to compare carriers, evaluate plan designs and make decisions that affect employees for the next 12 months.
That’s not strategic planning. That’s reacting. The organizations that often achieve the best outcomes start months before renewal. Why? They have time to:
Compare funding models
Evaluate tax-saving opportunities
Ask questions
Negotiate
Make thoughtful decisions instead of rushed ones
Even if they ultimately keep their current plan, they know they’ve explored their options.
Real Results Come From Asking Better Questions
We’ve seen firsthand what can happen when employers begin the conversation early.
One fabrication company reduced annual healthcare costs by more than $23,000 while improving employee out-of-pocket benefits.
A contractor reduced premiums by 29%, lowered deductibles and expanded provider access after evaluating an alternative funding strategy.
Other employers have implemented Section 125 cafeteria plans to generate meaningful FICA tax savings while enhancing employee benefits—all without replacing their existing medical plan.
Every business is unique, and results will vary based on workforce demographics, plan design and other factors. But these examples demonstrate why exploring your options before renewal is worth the effort.
Better Questions Lead to Better Decisions
There isn’t a one-size-fits-all approach to employee benefits.
Some organizations discover that a level-funded health plan offers the right balance of cost control and flexibility. Others find immediate value in implementing a Section 125 cafeteria plan while keeping their existing medical coverage. Some determine that their current approach is still the best fit.
The goal isn’t to force change. The goal is to make informed decisions based on facts rather than assumptions.
Start the Conversation Before Renewal Season
If you’d like to see whether a level-funded health plan makes sense for your organization, we’d be happy to prepare a no-obligation comparison. Simply send us the employee census from your most recent renewal.
If you’re interested in estimating potential savings through a Section 125 cafeteria plan, all we need is your total number of W-2 employees to provide an initial estimate.
You may discover there are more options available than you realized—and the best time to find out is before renewal season begins. Give our team a call to review your options before it’s too late.
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.