Why Group Health Insurance Premiums Are Going Up, and What Employers Can Do About It
If your group health insurance renewal came in higher than expected this year, you're not alone. Fully-insured carrier premiums are up significantly across the board, and most Texas employers are feeling it, regardless of industry or workforce size.
It's a fair question to ask: why is this happening, and is there anything an employer can actually do about it? Here's what's going on, and what's actually working for employers right now.
What's Driving the Increase
Fully-insured carrier premiums have risen somewhere in the range of 20 to 30 percent for many groups this renewal cycle. That's a substantial jump, and it's happening across the industry, not just to a handful of unlucky employers.
This kind of increase reflects broader trends in healthcare costs, claims experience, and how carriers are pricing risk right now. It's not a reflection of anything an individual employer did wrong, and it's not something any broker can simply negotiate away. Rates go up. That's the reality of where the market is.
What's Actually Working Right Now
The good news is that a straight renewal at whatever rate a carrier offers isn't the only option. More employers are exploring level-funded and self-funded alternatives, plans where the pricing structure is based more directly on your specific group's claims experience rather than a broad community rating.
For the right group, this kind of structure can offer more predictable costs and, in some cases, meaningful savings compared to a traditional fully-insured renewal. It's not the right fit for every employer, and it takes real research and comparison to know whether it makes sense for yours. But it's an option worth understanding rather than dismissing.
Renewal Coming Up? Here's How to Get Ahead of It
If your renewal hasn't landed yet, this is exactly the right time to start preparing, not after the number comes in. Rates for level-funded and self-funded alternatives typically need to be evaluated well before your renewal date, and the earlier that process starts, the more real options you have on the table.
Waiting until a renewal notice arrives to start asking questions usually means reacting to a number instead of shaping it. Employers who start the conversation 90 days out, before rates are even released, tend to have far more room to build a strategy rather than scramble to respond to one.
A Word of Caution: Not Every Alternative Is a Good One
As more employers start looking outside traditional carrier renewals, it's worth knowing that not everything marketed as an alternative is legitimate. A quick search for lower-cost health plans can turn up options that aren't properly licensed, aren't backed by a real carrier, or simply won't hold up when a claim actually needs to be paid.
This is exactly where having a knowledgeable, independent broker matters. Part of the job is doing the research to separate a genuinely strong alternative from something that looks appealing on paper but carries real risk. That vetting process is where a lot of value gets created, and it's not something most employers have the time or resources to do well on their own.
Finding the Right Balance
The goal isn't finding the cheapest possible plan. It's finding the right balance of coverage, network, and cost for your specific workforce. Sometimes that means a traditional renewal is genuinely the best option. Sometimes it means exploring a level-funded structure. Sometimes it means a mix of strategies across different parts of your benefits program.
The right answer depends on your workforce, your claims history, your budget, and your goals, and figuring that out is exactly the kind of strategic work a dedicated account manager focuses on. Rather than presenting a single option and moving on, that means genuinely researching what's available and building a recommendation around what fits your company specifically.
What This Means for Your Next Renewal
If premiums are rising and you're wondering whether there's a better path forward, that's a reasonable thing to explore, especially with enough lead time before your renewal date to actually evaluate the options.
Curious what your options look like this year? Book a discovery call at theshieldsagency.com and let's talk through what's happening with your renewal and where there might be room to build a stronger strategy.