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Shopping Your Group Health Renewal
Your renewal arrived with a bigger number on it. Here is what moved it, what you are allowed to do next, and what we do before your renewal date.
A renewal increase is priced off a pool you share, not off your own team: an issuer here must treat everyone enrolled in all of its non-grandfathered small group plans in a state as a single risk pool and price off that pooled experience (45 CFR 156.80). What you can do about it is shop — federal law puts the decision to continue the coverage in your hands, requiring the issuer to renew at the option of the plan sponsor, which in a small business is you (45 CFR 147.106).
A renewal letter arrives as a number and a date, rarely with the mechanism attached. So this page takes it in order: why a renewal exists, how the rate is assembled, what is allowed to differ between two quotes, and what shopping one involves. Every mechanism is cited to the regulation it comes from.
It will not tell you why your renewal moved — no honest source could. It sets out the things that may move a rate, which is enough to read your own letter.
Why there is a renewal at all
A renewal exists because federal law requires the issuer to keep your coverage in force if you want it kept in force, and the regulation is explicit about whose option that is: an issuer in the individual, small group or large group market is required to renew or continue the coverage at the option of the plan sponsor (45 CFR 147.106). In a small business the plan sponsor is the employer. The option is yours.
That single sentence reframes the envelope on your desk. A renewal with an increase attached is not an insurance company deciding whether to keep you. It is an insurance company exercising its pricing rights inside a contract that you, not it, decide whether to continue. You hold it as the group policyholder, and in this market your rating area comes from your principal business address rather than from where each of your employees happens to live (45 CFR 144.103).
The option is not unconditional — the rule carries it subject to a set of exceptions. That list is short and it is closed, and it is where we start when an employer asks us whether looking around is safe. We come back to it below.
The number is built out of a pool you share
A book of business, not a report card on your team
An issuer must treat the claims experience of all enrollees in all of its non-grandfathered small group plans in a state as one risk pool, Exchange enrollees included (45 CFR 156.80). Your rate is assembled from that pooled experience, so a renewal increase is largely a statement about a market rather than about your business.
That is a statement about rating only — participation and contribution rules are separate machinery, as is the funding arrangement behind a plan. But when a number moves for reasons belonging to a whole market, the reasonable response is to see what the rest of that market quotes.
Everyone on your census is a year older than last year
Age is one of the few factors that may lawfully vary premium here, and the regulation says exactly when it is read — the enrollee’s age as of the date of policy issuance or renewal (45 CFR 147.102). A group that did nothing but get a year older is a group whose rate can move with no change in behavior, benefits or claims. It is the least contestable answer to “why did it go up,” and nobody puts it in the letter.
What may not vary premium is just as useful. Health status is not on the permitted list; the rating factors are a closed set, and an issuer cannot reach outside them because a group had a hard year.
What is allowed to differ between two quotes, and what is not
Shopping only means something if two quotes can be compared. The rules make that possible in two directions at once: they hold a great deal constant, and then they name — exactly, and exhaustively — the things that are allowed to vary.
The floor every quote stands on
Small group coverage must include the essential health benefits package, built from a fixed list of categories (45 CFR 147.150), and the metal labels express actuarial value — how plan and enrollee split covered costs on average — not quality and not network size (45 CFR 156.140). Two plans in one tier can still differ sharply in network and cost sharing.
The five things a plan’s rate may move on
Every plan an issuer offers in a state market must price off the same market-wide adjusted index rate. A particular plan’s rate may then vary from that index rate only on a closed list of actuarially justified, plan-specific factors: the plan’s actuarial value and cost-sharing design; its provider network, delivery system characteristics and utilization management practices; any benefits it provides in addition to the essential health benefits; administrative costs; and, for catastrophic plans, the expected impact of their eligibility categories (45 CFR 156.80).
That is the federal government naming the axes along which two quotes may honestly differ. Knowing which axis a difference sits on is most of the work.
Shopping cannot get your group dropped
This is the fear behind the hesitation, and it deserves a direct answer. An issuer may nonrenew or discontinue group coverage based only on one or more of a listed set of grounds: nonpayment of premiums; fraud or intentional misrepresentation of material fact; failure to comply with a material plan provision on employer contribution or group participation rules under applicable state law; termination of the product or the issuer’s withdrawal from the market; no enrollee remaining who lives, resides or works in a network plan’s service area; and the end of membership in a bona fide association (45 CFR 147.106).
The regulation states on its face that the list is exhaustive. A group’s claims year is not on it, collecting competing quotes is not on it, and declining a proposed increase and renewing anyway is not on it either.
The two grounds that are genuinely about you
Two items on that list are the ones an employer can actually trip, and the same regulation defines them: an employer contribution rule concerns the minimum level the employer puts toward the premium for enrolled participants, and a group participation rule concerns the minimum number who must be enrolled relative to a specified percentage or number of eligible employees. Both are set at state and issuer level, and both sit outside the promise that an issuer must offer its products to any employer that applies (45 CFR 147.104).
What shopping a renewal actually involves
Mostly documents and dates. Three pieces of federal machinery do the work, and each is something you can ask for by name.
A standardized summary you are entitled to ask for
Issuers must provide a written Summary of Benefits and Coverage for each benefit package, without charge, in a uniform format using terminology an average enrollee can understand. It is required on application, again on renewal, reissuance or automatic re-enrollment, and — the provision that makes shopping practical — on request, when a group health plan or its sponsor asks about a product (45 CFR 147.200).
Read that last clause carefully: you can demand a standardized document about a plan you are only considering. That turns a comparison into two pieces of paper with the same headings in the same order. When we market a renewal, the SBCs are the spine of what comes back to you.
An increase large enough to be reviewed is not a private number
Congress directed the Secretary, working with the States, to run an annual review of unreasonable increases in premiums and to require issuers to justify one publicly before implementing it (42 U.S.C. 300gg-94). The implementing regulation covers the individual and small group markets, sets a level at which an increase becomes a rate increase subject to review, allows a state-specific level approved by the Secretary, and provides that CMS adopts a state’s own determination where that state operates what the rule calls an Effective Rate Review Program. Rate Filing Justification information is made public; grandfathered coverage is excepted (45 CFR part 154).
That is the general federal framework and no further. Which states run their own review program, and what any one state’s threshold or filing process looks like, deserves a state-by-state answer rather than a national sentence.
What has to be disclosed to you before you renew
A service arrangement between a group health plan and a covered service provider — and any extension or renewal of it — is not reasonable under ERISA unless a defined set of disclosures has been made in writing to the responsible plan fiduciary, which the statute defines as the fiduciary with authority to cause the plan to enter into, extend or renew the arrangement. In a small business that is the employer, and brokerage services provided with respect to selecting insurance products are named in the statute’s own list of covered services (29 U.S.C. 1108(b)(2)(B)).
What must be described is specific: the services; whether the provider acts as a fiduciary; all direct compensation expected; all indirect compensation expected, with the payer identified — expressly including compensation from a vendor to a brokerage firm under a structure of incentives not solely tied to your plan; any compensation set on a transaction basis, such as commissions based on business placed or retained; and any compensation on termination. The timing lands on this page’s subject: it must come reasonably in advance of the date the arrangement is entered into, extended or renewed.
That is a rule we work to, written here as a rule rather than a comparison. It applies to employer group health plans and anyone advising one.
Changing who advises you changes the service arrangement, not the policy
Employers ask us this quietly, near the end of a first conversation. Two contracts are in play and they are separate: the coverage is between the issuer and your business as group policyholder; the advice is an arrangement for services whose authority — to enter into, extend or renew — the statute puts with the employer.
The federal government says plainly that an employer may change who helps it: healthcare.gov tells small employers they can use their current registered agent or broker or find a new one. And the issuer’s obligation to renew at your option runs on the closed list of exceptions above, which says nothing about who advises you.
The one step here that is our inference, not a quoted rule
Employers want to hear that a change of adviser cannot move their rate. We think that is right, and we would rather show our work than hand you a sentence that does not exist. Premium here may vary only on the closed list in 45 CFR 147.102, and a plan’s rate only on the closed list in 45 CFR 156.80. The agent or broker is on neither. Because both lists are exhaustive on their own terms, it follows that the rate cannot lawfully move because the adviser changed.
That is a conclusion drawn from two lists, not a quotation from any regulation about brokers, and it matters that we say so. The industry phrase for it, “broker of record,” is not a federally defined term — the one federal regulation squarely about agents and brokers here does not contain the phrase (45 CFR 155.220). It does confirm that agents and brokers are licensed and regulated at state level, including on conflicts of interest. Use the industry phrase if it is the one you know; do not expect a statute behind it.
What can change mid-year, and what waits for your renewal
Four separate rules answer four versions of this question, and they are worth keeping apart.
Your rate holds for your plan year. Rates here move on a regulated schedule, and a new rate reaches an employer only when its coverage is issued or renewed. Once it attaches it applies for that group’s entire plan year (45 CFR 156.80). A later market movement reaches you at the next renewal, not partway through this one.
Plan design moves at renewal. An issuer may modify the coverage for a product offered to a group health plan only at renewal, and in the small group market that modification must be consistent with state law and applied uniformly among all group health plans holding the product (45 CFR 147.106). Design changes in a renewal packet are not aimed at your group; they reach every group on that product.
A material change outside a renewal carries its own notice. Where a material modification affects the content of the SBC, is not reflected in the SBC already provided, and occurs other than in connection with a renewal or reissuance, advance notice has to go to enrollees (45 CFR 147.200). The structure of the rule is the point: changes belong at renewal, and one arriving outside a renewal is the exception.
Your employees’ own elections are a closed permission. If you run a Section 125 cafeteria plan so contributions come out before tax, an employee may revoke an election mid-year and make a new one only as that regulation provides — on a special enrollment right, or on a listed change-in-status event, such as a change in legal marital status or in the number of dependents, where the new election is consistent with it. The plan is not required to permit any of them (26 CFR 1.125-4).
What none of them settles is whether an employer may terminate and replace coverage partway through a plan year: that turns on the policy’s own terms and on state law. Ask us and we will read your contract rather than generalize.
Everything in the renewal packet, not just the medical line
We use a renewal to put every benefit line on the same desk at once. The ancillary lines are priced and placed separately from the medical plan, so a medical increase need not be absorbed by cutting the medical plan alone.
The medical plan itself — what an issuer must offer your group, and what the metal tiers describe.
Priced and contracted separately, and treated differently under federal law for a reason worth knowing.
Its own contract, with its own rules on what your employees may decline.
Protects the paycheck rather than the treatment, and who pays the premium decides who pays the tax.
A death benefit alongside the plan, with a tax-code threshold that changes what employees owe.
Your state changes part of the answer
Several mechanisms here are federal frameworks with a state-shaped hole in the middle. A state may require the individual and small group markets to be merged into one risk pool if it determines that appropriate (45 CFR 156.80); participation and contribution rules operate under applicable state law; and rate review runs through a state’s own program wherever CMS has determined it meets the criteria (45 CFR part 154).
So the honest answer to “how does this work where I am” is that part is federal and identical everywhere, and part belongs to your state. We are licensed in 9 states and will give you the state-specific half rather than a national average of it:
Indiana, Tennessee, South Carolina, Florida, Illinois, Ohio, Kentucky, Colorado, Texas.
What you are actually hiring us to do
We are an independent brokerage. Asked to shop a renewal, we take the group to more than one issuer, put the results back in a form where the columns line up, and say which differences are real and which are presentation. That means collecting SBCs on the alternatives, reading the renewal against them on the axes the rating rules permit, and checking the contribution and participation conditions that decide whether an option is open to your group at all.
It also means saying when the answer is to stay: a renewal that moved with a pool is not automatically one worth replacing, and a lower headline number on a narrower network is not a saving.
What it costs you: nothing separate. We do not bill an employer a fee to shop a renewal. We want to be plain about the status of that sentence — it is our own commercial arrangement, not a rule, and no regulation fixes what a broker charges an employer. That is a different thing from the written compensation disclosure described earlier on this page, which is a federal obligation and which we owe you before anything is entered into, extended or renewed. We are keeping the two apart on purpose, because a promise and a legal duty should never be allowed to lean on each other.
The work is done by Nate Jones, CPCU, under Wexford Insurance, LLC, National Producer Number 19887690. If you would rather talk it through, call 317-942-0549.
Starting from nothing rather than renewing? That is the other half of how we work: First Time Looking Into Group Health.
The renewal rules, in their own words
Pages that pair with this one
Federal text on renewals and rating
- 45 CFR 147.106 — guaranteed renewability, and the closed list of exceptions
- 45 CFR 156.80 — the single risk pool and permitted plan-level adjustments
- 45 CFR 147.102 — the rating factors, and when age is measured
- 45 CFR 147.104 — guaranteed availability, participation and contribution
- 45 CFR 144.103 — who the group policyholder is
Federal text on disclosure and comparison
- 29 U.S.C. 1108(b)(2)(B) — what a service provider must disclose, and when
- 45 CFR 147.200 — the Summary of Benefits and Coverage
- 45 CFR part 154 — rate increase disclosure and review
- 42 U.S.C. 300gg-94 — the premium review process
- 26 CFR 1.125-4 — when an employee may change an election
- healthcare.gov — using your current agent or broker, or finding a new one
Questions employers ask after a renewal letter lands
Why did our rate go up when nobody on our team had a bad year?
Because in this market your rate is not built from your team’s claims. An issuer has to treat everyone enrolled in all of its non-grandfathered small group plans in a state as one risk pool, and price off that pooled experience (45 CFR 156.80). A movement in that pool reaches your renewal whether or not anything happened on your census. Age is the one factor read off your own people, and it is measured again at renewal (45 CFR 147.102).
If we shop around, can our current insurer refuse to renew us?
Not for shopping. An issuer may decline to renew group coverage only on a closed list of grounds — nonpayment, fraud or intentional misrepresentation, failure to meet participation or contribution rules under state law, withdrawal of the product or the market, no remaining enrollee in a network plan’s service area, or the end of bona fide association membership (45 CFR 147.106). Getting competing quotes is not on that list, and neither is turning down a proposed increase.
Does changing brokers change our premium?
We draw this conclusion rather than quote it, and we would rather say so. Premium in this market may vary only on a closed list of factors (45 CFR 147.102), and a plan’s rate may vary from its market-wide index rate only on a second closed list of plan-level factors (45 CFR 156.80). Who advises you appears on neither list. No regulation we could find says this in a sentence about brokers — the conclusion comes from the two lists being exhaustive.
Can our rate be raised in the middle of our plan year?
The rate that attaches when your coverage is issued or renewed applies for that group’s whole plan year (45 CFR 156.80). New rates reach coverage issued or renewed on or after their effective date, which is why your renewal date is the decision point and a later market movement reaches you at the next one rather than partway through this one.
How do we compare two plans without reading two whole contracts?
You ask for the Summary of Benefits and Coverage. Every issuer must provide one for each benefit package, without charge, in a uniform format with terminology a plan enrollee can follow — on application, again on renewal or reissuance, and on request when a group health plan or its sponsor asks about a product it is only considering (45 CFR 147.200). That last one is what makes a side-by-side comparison real rather than aspirational.
Our renewal packet changed the plan design. Can they do that?
At renewal, yes, within limits. An issuer may modify the coverage for a product offered to a group health plan only at the time of renewal, and in the small group market the modification must be consistent with state law and applied uniformly among all group health plans holding that product (45 CFR 147.106). So a design change in your packet is not aimed at your group — it reaches every group on that product.
Is anyone checking these increases, or does the insurer just set them?
Congress directed the Secretary, working with the States, to run an annual review of unreasonable premium increases and to require issuers to justify one publicly before implementing it (42 U.S.C. 300gg-94). The implementing rules apply to the individual and small group markets, set a level at which an increase becomes subject to review, and provide that CMS adopts a state’s determination where that state runs an Effective Rate Review Program (45 CFR part 154). Grandfathered coverage is excepted.
What does it cost us to have you shop the renewal?
Nothing separate. We do not bill an employer a fee to shop a renewal — that is our own commercial arrangement, and we want to be plain that no regulation sets it one way or the other. What is set by law is disclosure: before a service arrangement with a group health plan is entered into, extended or renewed, our compensation has to be described to you in writing.
Send us the renewal and we will shop it
Send the renewal letter and your current plan documents and we will read them against what else is open to a group your size in your state. No fee, no obligation to move.