Most employers think renewal is when decisions get made.
In reality, by the time you’re reviewing renewal options, there’s very little you can do to meaningfully change the outcome. Simply changing carriers at that stage is rarely strategic, and often not efficient.
If I were sitting in a CFO or HR seat 6–9 months before renewal, my focus would be on understanding what’s happening now so I can influence what happens next.
If you’re still fully insured, this is the time to evaluate level-funded or self-funded options. Today, there are lower-risk paths available, even for smaller employers (as few as 12 eligible employees in North Carolina). Remaining fully insured often means being pooled with higher-risk groups and having limited control over your outcomes.
For those who have already moved to level funding or self-funding, it starts with the data. If you’re not actively managing your plan throughout the year, you’re accepting trend at best and, in many cases, passing higher costs and reduced benefits on to your employees.
Start with the data, but go deeper than the summary.
What is actually driving your healthcare costs?
- How much are you spending on pharmacy, and what percentage of total claims does it represent? (For most employers, this is typically 20%–40%.)
- Are costs driven by a small number of large claims or broader utilization across your population?
- Are high-cost claimants expected to continue, and are those members still enrolled?
- Were those claims tied to one-time events or ongoing chronic conditions?
- Are these patterns consistent year over year, or did you have a one-off bad year?
Just as important, are you getting reporting that helps you answer these questions?
- Is it clear and actionable?
- What key reports should you be looking at? High-cost claimants, top 20 prescriptions, ER utilization, and preventive care are a great starting point.
- Are strategy and next steps part of the conversation?
- Are you tracking costs throughout the year, or only reacting at renewal?
If you can’t clearly explain what’s happening in your plan, you’re not in a position to make informed decisions.
Understand the employee experience.
Data tells part of the story. Members’ experience fills in the gaps.
- Are members getting the care they need?
- Are they confused about how to use the plan?
- Are cost or access barriers preventing them from seeking care?
- Are employees defaulting to the Emergency Room when it isn’t necessary?
Day-to-day care plays a critical role in preventing more serious health issues and avoiding downstream costs. Getting this right is key to keeping your team healthy and out of the hospital system.
Then ask the more important question: what should change?
This is where strategy comes in.
What would actually strengthen the plan?
- Would Direct Primary Care improve access and reduce downstream costs?
- What plan design changes could remove barriers to care-especially around preventive care and cancer screening?
- Is your pharmacy strategy working—and why are you using your current Pharmacy Benefit Manager (PBM)?
- Is your PBM identifying alternative sourcing solutions for high-cost medications?
- Is your HDHP/HSA plan being used intentionally, or simply because it’s the lowest-cost option?
- Have you evaluated your stop-loss strategy, including how a group Stop-loss Captive can be used as a cost-containment tool?
- Do you have the visibility and oversight needed to fulfill your fiduciary responsibilities as a plan sponsor?
You don’t have to change everything at once.
But 6–9 months before renewal is the time to step back, evaluate your options, and ensure you have the right partners in place to both identify opportunities and actively manage your plan throughout the year.
A proactive, well-supported approach will consistently lead to better outcomes, for both the business and your employees.