By Step 1: What two documents do you need?
Without both, you are guessing.
- Your current enrollment census. Pull it from payroll or your benefits administration software. A census lists employees, dependents, ages, plan elections, current contributions and total premium.
- The carrier's renewal. This gives you the actual rates for your area, your state and your group.
Step 2: How do you compare benefits before cost?
Start with the Summary of Benefits and Coverage (SBC) for your current plans: deductible, out-of-pocket maximum, office visits, prescriptions and network. Those are the things people actually care about. Then find the closest equivalent in the renewal and measure a like-for-like increase.
Carriers usually do a good job matching current plans to next year's, but check what changed and write it down. If employees end up paying more and losing some benefits, you will need to explain why.
Step 3: How do you build the premium?
- For each covered person, find their age.
- Move across to the plan they selected and take that rate.
- Repeat for every employee and dependent on the census.
- Add up all the member-level premiums.
Use current enrollment and current elections as your baseline, and take the result with a grain of salt. Nobody knows what people will choose until open enrollment is done. It's a model of what next year could look like based on who's enrolled today. A bigger census, more dependents and richer plan choices all produce a bigger premium.
Step 4: Why start with total premium instead of contributions?
Because the carrier collects one amount, from you, the employer. That is what makes it an employer-sponsored plan. You then recover part of it through employee payroll deductions or COBRA payments. Looking at the full monthly and annual premium first gives leadership the financial baseline before deciding how the cost should be divided.
Common questions
What do I need to model a health insurance renewal?
Two documents: your current enrollment census and the carrier's renewal with your group's rates.
What's a census in group health insurance?
The list of covered employees and dependents, with ages, plan elections and contributions. It's what the premium is built from.
Why compare the SBC before the price?
So you know you're comparing like for like. A cheaper renewal plan with a higher deductible isn't the same plan.
Should we decide contributions first or total premium first?
Total premium first. Contribution strategy is how you split a number you need to know first.
Steve Taylor, founder of Thinq HR & Insurance Services, has 15 years in employee benefits, HR, payroll, PEOs and insurance, including time inside Paychex, ADP and TriNet. He runs this analysis for client groups every renewal cycle.