Health Plan Cost Review: Sample
Sample report. The company, its claims and the six quotes are illustrative; every market figure is real and sourced at the end.
Client: manufacturer, Central Texas, 85 enrolled employees, one fully insured PPO, January 1 renewal. 2026 premium: $1,323,360.
Scope and fee: standard scope, $7,500 flat, set in the engagement letter. The extended scope, $12,500, adds a self-funded structure; it was not the right comparison at this size. Nothing paid, and nothing using your documents or claims, starts before the engagement letter and broker-of-record letter are signed.
Bottom line
The 2027 renewal is +19.4%, or $256,732 more next year. The market is running 8 to 9%. The gap is real, but it is mostly explained: one large claim, and last year's unusually light renewal catching up. It is not mainly the carrier padding the number.
Four of six carriers quoted below the renewal. The closest like-for-like option is Carrier B at +14.8%, same hospitals in network.
Recommendation: take Carrier B's quote back to the incumbent and ask for 13% or better. If they hold at 19.4%, move to Carrier B and save $60,875 with no network disruption. Carriers need a signed decision by mid-November for January 1.
Where the Snapshot left off
The Renewal Snapshot set this renewal against market trend, broke it into the factors in the carrier's own renewal exhibit, compared the plan with Form 5500 peers and read broker pay as filed. It found a +6.6 point experience adjustment that the exhibit did not explain, and called for this Review at the standard scope. This Review starts there: with 24 months of claims, received under a signed business associate agreement, and with the market.
What the claims show
The large claim. One member's treatment ran about $410,000 in claims over the past twelve months. The carrier counts the first $175,000 of any one person's claims against the group, spreads the rest across its whole book, and then prices in the chance the treatment continues. That is most of the 6.6 points. The claims report is anonymized: I see the dollars, never the person.
Pharmacy. The claims report supports the exhibit's +1.6 pharmacy load. Specialty drugs and GLP-1s are running ahead of overall trend in this group, spread across several members rather than one prescription.
Retention and fees. The +1.2 is the carrier's own margin plus the broker pay shown further down. The quotes below test it directly.
What six carriers would charge
Quotes run from +9.6% to +19.4%, a $129,689 spread for the same benefits. Every carrier priced the same census, the same claims disclosure and the same deductible, copays and out-of-pocket maximum, so the differences are price and network, not plan design.
| Carrier | Funding | Network | 2027 change | 2027 premium | What to know |
|---|---|---|---|---|---|
| Carrier D | Fully insured | Narrower | +9.6% | $1,450,403 | Lowest fully insured price. One major hospital system is out of network; check where your people actually go before taking it. |
| Carrier E | Level-funded | Broad PPO | +11.2% (maximum) | $1,471,576 | Worst-case cost. Excludes the large claimant from part of the stop-loss coverage. Refund possible if claims run low. |
| Carrier B | Fully insured | Broad, same hospitals | +14.8% | $1,519,217 | Closest like-for-like match. No conditions. |
| Carrier C | Level-funded | Broad PPO | +16.5% (maximum) | $1,541,714 | Quoted only with the large claimant carved out of stop-loss, at a higher individual limit. Little saving for the added risk. |
| Carrier A (incumbent) | Fully insured | Broad PPO | +19.4% | $1,580,092 | Renewal as issued. Prices the large claim at full weight. |
| Carrier F | Level-funded | Broad PPO | Declined | Declined to quote after reviewing the large-claim disclosure. |
Why the fully insured quotes carry the comparison. At 85 employees I requested level-funded quotes alongside fully insured ones. Level-funded carriers underwrite each group's medical history, and the large claim changed their answers: one declined, and the two that quoted would only cover that member at reduced protection. Fully insured carriers cannot exclude or carve out an individual, so their quotes are the clean, like-for-like comparison. A decline is information too: it tells you how the market reads this group's risk, and it is one reason the incumbent's number is not simply inflated.
What a "laser" means for the employer. The employee stays fully covered; nobody can be dropped from the plan because of their health. The laser applies to the employer's stop-loss protection, not to the employee's benefits. In Carriers C and E, stop-loss would normally start paying after $50,000 on any one person. For the lasered member it starts at $250,000 instead (sample figures). If that treatment continues, the employer pays up to $200,000 more on that one person before protection kicks in.
This is how a level-funded group ends up "on the hook" despite having stop-loss. Before choosing a lasered quote, ask three things:
- Does the quoted maximum cost include the laser exposure, or sit on top of it?
- Can the carrier add new lasers at next year's renewal if someone else gets sick? A "no new lasers" renewal guarantee caps that risk.
- What does it cost to go back to fully insured next year if claims stay high?
What the broker is paid in each quote
Broker pay is not why this renewal is high, but it is a line you should see. The incumbent renewal carries $32 per enrolled employee per month (PEPM). The other quotes carry my $35 PEPM. On 85 employees that is $32,640 a year against $35,700: mine is $3,060 a year more. Every premium in the table includes the broker pay shown here.
PEPM fees are built into the premium and listed in the contract, but rarely shown to the person paying. In my experience, $25 to $45 is typical, depending on group size and how much service the group needs. The incumbent's $32 is within that range, and so is mine. The point is to know the number and decide whether the service earns it.
My pay is the $35 PEPM in Carriers B through E. It covers me and the agency and general agent I place through, itemized in writing, in dollars and per employee, before anything is signed. This Health Plan Cost Review is $7,500 flat, the standard scope set in the engagement letter. It followed a $0 Renewal Snapshot, a read with no claims on individuals and no quotes, which called for this Review. Nothing paid, and nothing using your documents or claims, starts before the engagement letter and broker-of-record letter are signed.
Options, in order of preference
Negotiate first, move second. Every option below keeps the same benefits for employees; employer cost assumes the company keeps paying about 75% of premium, as it does today.
| Option | Saves vs. renewal | Employer cost increase vs. 2026 | Trade-off |
|---|---|---|---|
| 1. Incumbent at 13% (target, using Carrier B as leverage) | $86,018 | $128,086 | No change for employees. Depends on the incumbent moving. |
| 2. Move to Carrier B | $60,875 | $146,952 | New ID cards and a transition for anyone mid-treatment. Same hospitals. |
| 3. Level-funded, Carrier E | $108,516 or more | $111,207 at most | Lower worst case and a possible refund, but the large claimant is carved out of part of the protection. Wrong fit if that treatment continues. |
| 4. Carrier D, narrower network | $129,689 | $95,320 | Biggest saving. Only works if few employees use the excluded hospital system. |
| Accept the renewal | $0 | $192,626 | The default if nothing else moves. |
What I would not do this year: drop coverage. At 85 employees the company is an applicable large employer under the ACA, so dropping the plan exposes it to the employer penalty and hands employees a 2027 individual market that is also rising sharply. If the goal is a fixed dollar amount per employee, an ICHRA is the compliant structure. A health care sharing ministry is not insurance and cannot be reimbursed through an ICHRA.
For groups under 51: small group plans are priced on age and location, not the group's own claims, so a large claim does not drive their renewal the way it does here. In Texas, small group carriers filed an average +16.9% for 2027, against a 14% national median.
Assumptions and sources
Sample assumptions. 85 subscribers: 45 employee only, 12 with spouse, 10 with children, 18 family. 2026 monthly rates $780, $1,640, $1,410 and $2,300, close to the national averages for 2025 ($777 single, $2,249 family). Employer pays 85% of employee-only cost and 60% of the dependent cost, about 75% of total premium. The carrier counts any one person's claims up to $175,000 against the group. Quotes, carrier letters and the large claim are illustrative. In a live report every figure comes from the client's own renewal, claims reports and carrier quotes.
Market figures
- Marsh (formerly Mercer), 2027 projection: +8.2% per employee after plan changes, 11% before; GLP-1s about 1 point of it.
- PwC, Behind the Numbers 2027: group medical cost trend 9%, highest in 17 years.
- Peterson-KFF, small group 2027: 14% median proposed increase across 295 insurers.
- ACA Signups, Texas 2027 filings: Texas small group averaging +16.9%.
- KFF Employer Health Benefits Survey 2025: average premiums $9,325 single and $26,993 family.
Advisory analysis, not legal or tax advice. Your CFO stays your lead advisor.
Matthew Ragudo, CLTC®, CRPC® · mattragudo.com · aloha@mattragudo.com