Before you sign a renewal, ask your broker five questions: what alternatives cost, what your claims show, how the renewal was negotiated, what ideas they have, and how they’re paid. The answers show whether you’re seeing all your options. Send them in writing a few weeks ahead so the meeting starts with facts.
Renewal is the most important window in your benefits year. It’s when you find out whether the plan still fits and whether the broker relationship is doing its job. A lot of employers walk into the renewal meeting without a list and walk out with a signed renewal. These five questions fix that.
1. “What do level-funded and self-funded alternatives cost for my group?”
Many renewals arrive as a fully insured quote, sometimes with quotes from two or three other fully insured carriers. Level-funded and self-funded pricing often doesn’t show up unless you ask. For a healthy group, those structures may cost less, and you won’t know until you see the numbers.
Ask for:
- At least one level-funded quote. Level-funded plans tend to fit groups of 25 to 500+ employees, and the larger the company, the better they tend to work.1 A smaller group may still qualify with some carriers, so ask.
- A self-funded quote through a TPA (third-party administrator), if your group is large enough for one to quote
- A side-by-side comparison of total expected cost across all three structures
If a broker says alternative structures “aren’t right for businesses your size,” ask for the specifics: which carriers they checked and what each one said. A clear answer is useful either way.
For background, see The 3 Types of Employer Health Plans and Level-Funded Health Plans Explained.
2. “Can you share my claims data for the past 12 to 24 months?”
In a fully insured plan, the carrier holds your claims data, but you can usually request at least summary-level reporting.
Ask for:
- Monthly claims totals against premium (so you can work out your loss ratio, the share of premium spent on claims)
- A large-claimant summary (how many claims crossed a set dollar threshold this year)
- Your top five cost categories
- Pharmacy spend split by generic, brand and specialty
If your carrier won’t share anything, that’s worth knowing too. Level-funded and self-funded plans usually give you more claims reporting as a standard feature.
Claims Data: What You Should Be Seeing walks through what this reporting should look like.
3. “What was the carrier’s original renewal proposal, and how did we negotiate it?”
Negotiating the renewal is one of the main things a broker does. The simplest check is to ask what the carrier first proposed and what changed.
Good answers sound like:
- “The carrier’s first proposal was higher. We challenged how they read your claims experience and they brought it down. Here’s the email thread.”
- “We got quotes from other carriers at lower numbers and used them to push the incumbent. The final renewal came in under the first proposal.”
- “The first proposal put a laser (a separate, higher deductible) on one of your employees. We negotiated it out.”
Weak answers sound like:
- “They held firm on the renewal number.”
- “It’s just what the market is doing.”
- “I looked, but nothing moved.”
A broker who can walk you through the specifics did the work. If you only get the weak answers, ask for the details in writing.
4. “What ideas do you have for lowering my costs this year?”
Some broker relationships run on a yearly cycle: wait for renewal, quote the incumbent and a few competitors, collect a signature. A broker worth keeping brings ideas through the year.
Good signs:
- Plan design suggestions based on your claims data
- Pharmacy savings opportunities
- Stop-loss recommendations sized to your group
- Wellness ideas tied to results you can measure
- New products in the market that might fit your group
- Compliance updates flagged early
Weak signs:
- “We could raise the deductible to save money.”
- “I’d have to look into what’s out there.”
- “Most of our clients don’t change much year to year.”
A broker who only shows up at renewal is processing a transaction. One who brings ideas all year is helping you run the plan.
Transactional Broker vs. Year-Round Partner covers the difference in more depth.
5. “How are you paid on my plan?”
It’s a routine question. Under the Consolidated Appropriations Act of 2021, brokers must disclose their expected direct and indirect compensation in writing before new sales, renewals, or changes. Most brokers are paid by commission from carriers, built into the premium. Any pay model can work, so weigh the answer alongside the first four: which options the broker compared, how hard they negotiated, and the service you get.
For background, see How Health Insurance Broker Commissions Work.
How to use these questions
Send them to your broker a few weeks before the renewal meeting and ask for written answers. That helps because:
- Written answers tend to be more specific than spoken ones
- You’ll have a record to compare against next year
- It tells your broker you expect a thorough renewal
A broker who answers all five clearly is probably worth keeping. Vague answers on several of them are a reason to get a second opinion.
For a structured way to compare your options once you have the answers, download The Rate Shock Survival Guide.
Keeping or replacing your broker at renewal
Most renewal disappointments (a big increase accepted, alternatives never priced, claims data never shared) come from a relationship nobody revisited. These five questions before renewal give your broker a fair chance to show their work and give you what you need to decide either way.
They don’t take long to ask. The answers tell you whether to keep your broker or look for a new one.
Want the renewal questions plus the rest of the playbook? Download The Rate Shock Survival Guide. Get your copy here.
Footnotes
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Kingsfoil Health, Rate Shock Survival Guide. States that the level-funded sweet spot is 25 to 500+ employees, and that level funding tends to work better the larger the company. ↩
