Broker renewal calculator

Model the renewal

Enter the group's total monthly premium, the carrier's increase, the share the employer pays, and a competing quote if you have one. The default is a 30-person group at $18,000 a month with a 14% renewal and a 75% employer contribution, which is roughly what a fully insured small group looks like after a bad claims year.

Everything runs in the browser. No census, no member data and nothing that identifies an employee leaves the page, so you can use it in a meeting without a data question.

What each number means

Renewal premium is the contract rate the carrier is offering for the new plan year. Monthly increase is the difference, and it is the number the employer will actually budget. Employer annual increase applies the employer's contribution share, which tells you whether the company is absorbing the increase or passing it to staff.

Employee monthly change is the group's total employee share of the monthly increase at the contribution share, not one person's cost. If the employer pays 75% of the premium, the group's employees carry 25% of the increase between them; divide by the employee count for a rough per-person figure, and note that the per-person split depends on each person's tier. That number is small in the total but large in a household budget, and it is the number employees actually compare to their paycheck.

Savings against a competing quote is the annual difference between the renewal and the alternative. Use it only when the alternative covers the same population, the same benefit level and the same effective date. A cheaper quote that drops a tier or narrows the network is not a saving until someone prices the difference.

When to run this

• At the carrier's first indication. Even a rough number is better than silence, because it starts the client budgeting process.
• Before you accept a rate hold. A hold that costs an extra fee may be worse than the increase.
• When a design change is on the table. Run the renewal as quoted, then the same premium with the changed deductible.
• When a competing quote arrives. Put the alternative against the renewal on the same page.
• Before the employer sets contributions. The employee share of the increase is decided here, not at open enrollment.

The useful habit is to run the renewal the day you receive it, not the week before the deadline. A number you can change in a meeting is a plan; a spreadsheet that arrives after the client has already seen the carrier's letter is a defense.

If the group has more than one rate class, run this once per class or use the blended total premium. For small groups the carrier typically applies the increase across all classes, so the blended figure lands close to the sum of the parts.

A worked renewal

If the carrier offers a 9% renewal with a $1,500 deductible increase instead, rerun the comparison with the new rate and put the deductible change next to it. Employees see the deduction every pay period and the deductible only at the pharmacy counter, so a smaller increase with a larger deductible is often the harder sale.

Presenting the renewal without losing the client

Lead with the driver. If the increase is trend, say so. If it is the group's claims, say that too, and say what the group can do about it. The worst renewal conversation is the one where the client learns a percentage and nothing else, because the client fills the gap with the assumption that you are not managing the account.

Then put the numbers on one page in this order: renewal premium, employer monthly and annual impact, employee monthly impact, alternatives with their effective dates, and the decision deadline. Everything else is supporting material.

If the client is considering a change of carrier or structure, the deadline drives the calendar. A competing quote needs a census and roughly four to six weeks, and a broker of record change adds paperwork that will not compress. Start early or accept the incumbent's number.

Contribution policy decides who pays the increase

The employer share input matters more than most brokers expect, because it determines whether a renewal is a company budget problem, an employee relations problem, or both. An employer that pays a fixed percentage absorbs a defined part of any increase and passes the rest on. An employer that contributes a fixed dollar amount keeps its own cost flat until it resets the contribution, so employees absorb the additional premium in the meantime, and the employer absorbs the employee backlash when the contribution is reset.

Enter the proposed share in the second field when the client is considering a contribution change. The calculator then prices both today's share and the proposed one against the renewed premium, and shows the difference the change makes for employees and for the employer's own budget. Rerunning it at a single share cannot show that shift, because it applies the same percentage to the old and the new premium.

Affordability rules also enter here for employers with 50 or more full-time equivalents. A contribution that leaves the cheapest self-only plan above the affordability threshold creates pay-or-play exposure, and our affordability calculator checks the current limit.

What this calculator cannot tell you

It models premium, not total cost. Deductibles, copays, out-of-pocket maximums, network breadth and prescription formularies all change what employees pay, and none of them appear in a premium percentage.

It assumes the census is unchanged. If the group grew or shrank, run the renewal on the actual census before comparing it to anything, because the rate is often priced on last year's enrollment.

It does not model claims or the plan's funding arrangement either. A level-funded renewal includes a claims reserve and a possible refund, so the rate the carrier quotes is not the whole of what the group pays, and a self-funded arrangement has its own exposure. Use this for the premium trend and read the funding document for the rest.

It does not model taxes or the employer's pre-tax benefit. Section 125 treatment changes the net cost of an employer contribution, and a full comparison should include it. Our paycheck calculator handles the employee side of that arithmetic.