A manufacturer, a little over a hundred employees, sat down with me this fall to talk about a renewal.
The owner said something I wrote down word for word: “We look at every other expense that we have and scrutinize it. Materials have been pretty flat. We have never looked at what our medical expenses have been.”
He was not embarrassed. He was surprised. This is a company that prices its product off every cost input it has: materials, labor, freight, energy. Health insurance is the second-largest line on the P&L after payroll, and it had never made it into that math. Not because anyone decided to leave it out. It had never occurred to anyone to put it in.
If that sounds familiar, you are in good company. Most owners I meet are in the same spot, and the ones who get out of it are the ones who notice.
How a good operator ends up here
This company tracks scrap. They renegotiate freight. They know the price of steel to the week, and that number flows straight into what they charge.
The health plan skipped all of that because it arrives once a year as a single number with a presentation attached. Every other vendor sends an invoice you can read. This one sends a letter they expect you to accept.
A number with no math behind it does not get scrutinized. It gets paid.
The one question that changes the meeting
The 2027 forecast sits around 9 to 10% (Aon’s number is 9.5%, with average cost per employee now past $19,000). Midsize employers without leverage see worse. A few in my book saw 20% and 40% this year.
The average does not matter. Whether you can see what drove your number does.
Ask: “What changed, in dollars?” Which claims. Which drug line. Who gets paid inside the premium. A clear answer means you have a business decision in front of you. A shrug means you have a bill someone handed you.
The manufacturer asked. The answer took a week to arrive and did not add up. That week told him more than the renewal letter did.
Before December 31
Most of you have a December 1 or January 1 renewal. Signed or not:
✔️ Ask what changed, in dollars, by claim category.
✔️ Ask who gets paid inside the premium, and how much.
✔️ Ask what the plan would cost if you could see inside it.
A blank stare at any of these is a visibility problem, and those are fixable.
Want to know what your renewal is actually telling you? Let’s talk.
