Benefits increase vs raise calculator: what does your renewal cost in pay terms?
A double-digit renewal can quietly use up the money you set aside for raises. This calculator turns a health plan increase into the equivalent raise, so you can see the trade-off.
Convert a renewal increase into an equivalent raise
Enter your headcount, what you pay for the plan per employee and the renewal increase.
Your estimate
This calculator gives a planning estimate only. It treats the increase as paid fully by the employer and ignores employee cost sharing and payroll taxes.
Why renewals and raises compete
Health coverage and pay come out of the same budget. When the plan renews at a high increase, the employer either absorbs it, passes part to employees or trims something else. Expressing the increase as a percent of pay makes the trade-off visible to leaders who think in terms of raises rather than premiums.
What to do about it
Before accepting a renewal, test options: plan design changes, a different contribution strategy, a market review and alternative funding. Even a partial reduction in the increase frees money for raises or retention. Our team can run those options with you.
Common questions
Does the equivalent raise include payroll taxes?
No. A real raise also adds payroll taxes and possibly other costs, so the true cost of a raise of this size is higher.
Can employees share the increase?
Yes. Many employers split it between company and employee. Enter only the employer part of the cost per employee to see the employer impact.
What is a typical renewal increase?
It varies by year, carrier and group. Use your own renewal letter.
How can I lower a renewal?
Options include plan design changes, a market review, funding changes and wellness or care management. Your broker can model them.
Laws and rules referenced
26 U.S.C. §§ 3101 and 3111 — Employee and employer Social Security and Medicare tax rates.
This tool gives estimates for education, not tax or legal advice. Rules change, so confirm your situation with a qualified advisor.
Talk to us about your renewal
Book a 30-minute call and we will look at your renewal, your claims and the options that could lower the increase. Visit us at 41000 Woodward Avenue, Suite 350 East, Bloomfield Hills, MI 48304, or call 248.370.8853.
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