Reading an Increase in Context.
A percentage increase on its own says little. What matters is how it compares with other groups in your market, how much comes from trend and how much from your own experience, and whether the plan has changed.
Two employers can both receive market-level increases and still be several points apart, because of filings, rating areas, demographics and plan design.
The first step is to put your number in context. The second is to decide whether anything can be done about it.
Is my renewal increase normal, or is it high?
There is no single normal. Michigan carriers filed 2027 small-group increases ranging from about 7 percent to about 15 percent with the state regulator, so two employers can both be quoted a market number and be eight points apart. What matters is where your increase sits in that spread, and whether your own claims experience or plan design explains the gap.
What is trend?
The expected rise in cost from medical prices, utilization and drugs, before your group’s experience is applied.
Does a high increase mean a bad renewal?
Not necessarily. It may reflect a rise in claims or a change in the market.
How do we compare with others?
By looking at filings and comparable groups. We do that in the read.
Normal depends on your size, your market and your claims.
A single percentage means little on its own. The same number can be reasonable for one group and high for another, depending on how the carrier rates groups of your size and what happened in your plan during the year.
The way to test it is to compare the increase against the carrier’s filing, against how your own claims would be weighed, and against what the market would charge for the same benefits.
Three checks.
The Filed Rate
Below the small-group cutoff, rates come from a filed table. We check that yours was applied correctly and compare it with the filing.
Credibility of Your Claims
Above the cutoff, the carrier blends your claims with a manual rate. We look at how much weight it gave your own experience.
A Market Check
Where it is worth doing, we price comparable coverage elsewhere to see whether the number holds.
Questions about increases.
Is a double-digit increase always high?
No. It may be, but the test is against comparable groups, not against zero. Some increases are explained by claims and some by trend alone.
Can I negotiate an increase?
Sometimes. It depends on the size of the group and how the rate was built. We tell you where there is room and where there is not.
What if my increase is within the filing?
Then the increase is legitimate for the table used. The question becomes whether another plan design or carrier changes the cost.
General information, not legal advice. Plan-specific questions belong with your counsel, and we will bring them in.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
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