You have seven options before you sign a Utah health insurance renewal. Negotiate with your carrier, shop competing carriers, move to level-funded, join a PEO, switch to an ICHRA, change your plan design, or try reference-based pricing. Start at least 90 days before your effective date, while every option is still open.

The renewal notice is on your desk and the number went up. That’s common: a typical annual premium increase for small and mid-size businesses runs 10 to 30%.1 Signing it as written is one of your choices. Here are the other six, in order from the smallest change to the largest.

The seven options at a Utah renewal

“Most businesses have never been shown all their options,” says Jonathan Engle, Founder of Kingsfoil Health. The list below is the full set. You’ll probably keep two or three on the table long enough to price them.

1. Negotiate with your current carrier

Your carrier would rather keep you than lose you. Ask for your claims data and the reasons behind the increase, then put a competing quote in front of them. Carriers sometimes trim a renewal once they see you have somewhere else to go.

Good fit: a group with steady claims and a renewal that looks high for its history.

2. Shop competing fully funded carriers

A fully funded plan is the most common setup: you pay a fixed premium and the carrier carries the claims risk. Shopping means asking Utah’s regional carriers and national carriers to quote the same kind of plan. It typically saves 5 to 15%, though results vary.2

Good fit: an employer that likes its current setup and wants a lower price for it.

3. Move to a level-funded plan

A level-funded health plan charges a fixed monthly amount that covers expected claims, plan fees and stop-loss insurance (coverage that caps the company’s share of large claims). If claims come in low, the plan may return a portion of the unused funds as a refund or credit, depending on the carrier’s terms.3 We compare the two structures side by side in level-funded vs. fully insured in Utah.

Good fit: a group of 25 to 500+ employees that wants to see its own claims data. The larger the company, the better level funding tends to work.4

4. Partner with a PEO

A PEO (professional employer organization) becomes a co-employer of your staff and runs payroll, HR support and benefits under one contract. Your team gets health coverage through the PEO’s plan. We partner with PEOs instead of fighting them. If a PEO is best for you, we recommend it. Our PEO vs. independent broker guide walks through the trade.

Good fit: a company of 10 to 100+ employees that also wants help with payroll and HR.4

5. Switch to an ICHRA

An ICHRA (individual coverage health reimbursement arrangement) replaces the group plan with a tax-free monthly allowance. Each employee uses it to buy an individual health plan. You set the budget, and your employees choose their own coverage. ICHRA explained covers the rules.

Good fit: an employer that wants a fixed, predictable benefits budget, often with a team spread across different locations or needs.

6. Change your plan design

Plan design is the part of the plan your employees feel: deductibles, copays, the network, and how you split the premium with them. Adjusting it can bring the number down without changing carriers. Pairing a higher-deductible plan with an HSA (health savings account) or an HRA (health reimbursement arrangement) can offset some of the extra cost for employees.

Good fit: a group that wants to stay with its carrier and needs a lower number this year.

7. Use reference-based pricing

Reference-based pricing pays claims at a set benchmark instead of a carrier’s negotiated network discounts. The benchmark is often a percentage of Medicare rates, the prices Medicare pays providers for the same service. It usually runs inside a self-funded or level-funded plan.

Good fit: a larger, hands-on employer that’s ready to support employees through a different way of paying for care.

The seven options side by side

Option What changes Good fit Trade-off
1. Negotiate with your carrier The price; the plan stays the same Steady claims, a renewal that looks high Savings depend on your leverage
2. Shop fully funded carriers The carrier You like your current setup Still $0 back in a healthy year
3. Level-funded plan Who carries the claims risk 25 to 500+ employees A heavy claims year shows up at renewal
4. PEO partnership Who co-employs your staff and picks the plan 10 to 100+ employees who want HR help Less say over plans; bundled fees
5. ICHRA Who picks the plan You want a fixed budget Employees shop for their own coverage
6. Plan design changes What employees pay and where they go You want to keep your carrier Employees feel the cost shift
7. Reference-based pricing How claims get priced Larger, hands-on employers Provider pushback; more employee support

Where each option falls short

Every option has a weak spot. Here’s where each one tends to struggle.

  • Negotiating works better with a competing quote in hand. After a heavy claims year, the carrier has less room to move.
  • Shopping fully funded carriers can lower the price for a year and leaves the structure as it was. In a healthy year, a fully funded plan returns $0.4
  • Level-funded plans usually ask for health questionnaires or claims history before they’ll quote. A rough claims year can push up the next renewal, and a refund is never guaranteed.
  • A PEO bundles benefits with payroll and HR, which can make it hard to see what each piece costs. Leaving later means replacing your coverage and moving payroll back under your own tax ID.
  • An ICHRA puts plan shopping on your employees, and some of them won’t want that job. If you have 50 or more full-time employees, including full-time equivalents, the ACA employer mandate applies and your allowance has to meet its affordability rules.5
  • Plan design changes lower the premium by moving cost to employees. Push too far and the plan stops helping you hire and keep people.
  • Reference-based pricing can lead some providers to decline the price or bill employees for the difference. It needs strong employee support to work.

When to start

Timing decides which options stay open. New quotes, underwriting and setup all take time, so start at least 90 days before your effective date. If your plan renews on January 1, the decision happens in October and November.

A late start narrows the list. Negotiating and plan design changes can move fast. A level-funded plan, a PEO or an ICHRA needs more lead time for quotes and setup.

Before you sit down with your broker, read our five questions to ask your broker before renewal. As Jonathan Engle, Founder, puts it: “If the only response you get to a 20% rate increase is ‘we’ll shop it to a few carriers,’ you’re only seeing a fraction of the market.”6

Where this leaves you

Put the seven options next to your current plan and ask three things of each: what it changes, who carries the risk, and what it costs your team. For the wider picture of Utah’s market, start with the Utah small business health insurance hub.

We run this analysis for every client, free, no obligation. Kingsfoil Health is based in Lehi and is licensed in 13 states, including Utah. If yours isn’t one of them, tell us. Kingsfoil Health is paid by commission from carriers and partners, like every broker.

See all seven options on your numbers. Send us your renewal and we’ll lay out what each option could look like for your company before you sign. Get a renewal analysis.

Footnotes

  1. Kingsfoil Health, Rate Shock Survival Guide. States that the typical annual premium increase for small and mid-size businesses is 10 to 30%. ↩

  2. Kingsfoil Health, Rate Shock Survival Guide. States that shopping competing fully funded carriers typically saves 5 to 15%, though results vary. ↩

  3. UnitedHealthcare, What is a level-funded health plan?. Describes a possible refund of unused claims funds, or a credit toward the next year, depending on the plan’s terms. ↩

  4. Kingsfoil Health, Rate Shock Survival Guide. States that a fully funded plan returns $0 in a healthy year, that the level-funded sweet spot is 25 to 500+ employees, and that the PEO sweet spot is 10 to 100+ employees. ↩ ↩2 ↩3

  5. IRS, Employer Shared Responsibility Provisions. Applies to employers with 50 or more full-time employees, including full-time equivalents. ↩

  6. Jonathan Engle, Founder, in Kingsfoil Health’s Rate Shock Survival Guide. ↩