Let me tell you about a recent renewal meeting. A small employer with about 40 employees enrolled was facing a renewal that had them spending $880,000 in total premium. Platinum plan, fully insured with an insurance carrier. Solid coverage, but the cost? Unsustainable.
New ownership came in mid-year and asked the right questions. And here’s what we found:
By moving them from fully insured to alternate funding with the same carrier, we saved them $300,000.
Same benefits. Same card. Better plan design. $580,000 total premium instead of $880,000.
That’s $300,000 in savings for a group under 50 enrolled lives.
Here’s What You Need to Know
This employer’s previous broker could have done this. They didn’t.
It’s easier to renew a fully insured plan, collect your commission, and move on. The old broker was making more moneykeeping this employer on a fully insured plan.
When we presented the alternate funding strategy, the client’s reaction was: “What’s the catch?”
There is no catch. Just a different approach to benefits consulting.
The Math That Matters
- Previous renewal: $880,000
- Alternate funding solution: $580,000
- Savings: $300,000
- Per employee savings: Over $7,500
For a small employer, that’s real money. That’s hiring another employee. That’s reinvesting in the business. That’s stability.
And the employer didn’t have to sacrifice coverage. In fact, they maintained their platinum-level benefits.
Why This Happens
Most brokers in our industry fall into one of three categories:
- They take the easy route by pushing the easy button. Spreadsheet comparison, cost-shift to employees, maybe shop carriers. They’re not analyzing your actual claims data or exploring alternate funding.
- Misaligned incentives mean they push solutions that maximize their commissions and bonuses rather than your savings. Fully insured plans often pay higher compensation than alternate funding arrangements.
- Limited expertise means they simply don’t understand the strategies available or won’t roll up their sleeves to design a plan built to last.
If you’re getting low increases in the fully insured world, you should be questioning whether alternate funding makes sense.
Stop Accepting “Normal” Increases
If your broker is celebrating a 5-8% increase as a “win,” it’s worth asking what else might be available.
There are solutions out there: aggressive, sustainable strategies that combat healthcare inflation. But you need an advisor who’s willing to do the work.
You need someone willing to show you what other brokers aren’t.
DM me for more information about how alternate funding strategies could work for your organization, or if you want to know what questions to ask your current broker.