That gap costs you at renewal, because part of the increase you are about to absorb may be their paycheck.

Here is the part that surprises owners. Broker pay often rides inside your premium and the plan’s vendor contracts. Base commission, of course, but also bonuses, overrides, an extra cut on your stop loss coverage, sometimes a per-fill fee on every prescription your people run through the plan. Some of it is disclosed. A lot of it is not. And the incentives do not always point at your lowest cost. Sometimes they point the other way.

You already know how this feels, because you fixed it everywhere else. You made your retirement advisor disclose in real numbers. Your benefits broker probably handed you a line that reads “we may earn other income that does not affect your cost.” That is not a disclosure. That is a shrug in legal font. And it is not even true, because that income can absolutely affect your cost.

The Consolidated Appropriations Act, a 2021 law, gives you the right to the real number. Your broker owes you a written accounting of what they get paid, from every source. Most owners have never asked. Most have never seen it.

Sit with what that means at renewal. The person advising you on a 15% increase might get paid more when your premium goes up. That is not a conspiracy. That is how a percentage commission works. And how is that working for you?

What to do this fall: ask for the disclosure in writing. Every dollar, every source. Not “roughly.” In writing. Then go read the contracts, the fully executed ones, and when you don’t have them (it happens more than you’d think), get them and read them. We built a set of AI prompts that walk you through exactly what to look for. Download The Benefits Contract Review Prompt Pack

I disclose my compensation and certify the document. Every client, every year. That is how we run. Not because I am a saint, but because you would demand it from anyone else touching this much of your money, and you should demand it here.

You hold every other vendor accountable. Renewal season is the moment to hold this one too.

Curious what your broker actually makes off your plan? Ask them, then let’s talk about the answer.

Here is a test. Picture any other vendor in your business raising their price 20% and answering “that’s just the market” when you ask why. You would want the math. You would get the math, or you would get a new vendor.

Health insurance is the one line where owners accept the shrug. The renewal shows up like weather, you brace, you pay, you move on. The big benefits consultants are forecasting somewhere around 9 to 10% for 2027 (Aon says 9.5%, pushing the average cost past $19,000 per employee). That is the market average. Midsize employers without leverage routinely see worse.

The average is not the story. Whether you can see the math is the story.

I have fully insured clients this year staring at increases north of 20%, a few north of 40%. I also have self-funded clients, same size, same headcount, whose renewals are barely moving. Same market. Same year. Wildly different letters. The difference is not luck and it is not size. One group can see exactly what their claims did and why the number moved. The other gets a number and a shrug.

That is the whole game. A renewal you can explain is a business decision. A renewal you cannot explain is a bill someone handed you. When claims run high in a plan we can see into, the increase makes sense and I can live with it (it doesn’t matter if I can live with it or not… the client needs to be able to live with it – rephrase). When the increase arrives with no visible math, that is not a market problem. That is a visibility problem, and it is fixable.

What to do this fall when the letter comes: do not ask “can we get it down.” Ask “show me the math.” Ask what drove the number. Ask what you are paying for and who gets paid inside it. When nobody can answer in plain language, you have found the real problem, and it is not the market.

You negotiate every other number in this building. This one is not weather. It is a decision someone made, and you paid for it.

Want to know what your renewal is actually telling you? Let’s talk.

Sit with how strange that is. A buyer begging to spend more – and the market has nothing on the shelf.

You already pay for predictability everywhere

Fixed rates instead of variable. Multi-year vendor contracts. Hedges on fuel, currency, materials. You pay premiums all over your business to make numbers stop moving, because stable numbers let you plan, price, and borrow with confidence. This is basic financial management.

Then the health plan walks in with a one-year term and a fresh repricing every renewal, and everyone shrugs.

Why nobody sells it

Annual repricing is not an accident of the market. Every year of volatility creates another negotiation, another commission cycle, another number you cannot plan around. For the people who assemble your renewal, volatility is the business model. (You have met the business model. It shows up every October.)

Predictability is built, not bought

No carrier hands out a guaranteed three-year number. But you can design toward one: structures that cap your exposure, contracts that span more than a single plan year, transparency that removes the annual surprise before it gets assembled. It takes engineering and runway – which is exactly why this work starts mid-year, not at renewal.

The math the quote already did

That CEO was not being dramatic. He had done the math on what a stable number is worth to planning, pricing, and borrowing. $900K was his price for certainty.

What is yours? Let’s find out what a designed-for-stability plan looks like. [LINK]

A cost center. (The department running your largest spends. A cost center. Sit with that.)

The org chart disagrees with the budget

Sales gets a strategy. Operations gets a budget. Finance gets a seat at the table. HR gets a compliance checklist and a renewal deadline – and then takes the blame when benefits costs jump 12 percent. The department with the least authority to restructure the spend is the one held accountable for it.

That is not an HR problem. That is org design – and nobody chose it on purpose. It calcified while everyone was busy running the business.

Your broker already knows this

Notice who the renewal meeting gets scheduled with. HR – not you. A renewal presented to someone without the authority to restructure it gets accepted. The same presentation in front of a CFO gets questioned. The current system works because of that gap, not despite it.

What changes when the label changes

Treat benefits strategy as what it is: capital allocation. Give HR the mandate, the data, and direct access to an advisor who answers hard questions – then back them at the table. When HR can challenge structure, contracts, and funding with your authority behind them, this spend starts behaving like every other managed spend in the company.

You built a department around every major dollar in this business. This one already exists. It is just waiting for the mandate.

When did you last send HR into a renewal meeting with real negotiating authority? If the answer is “never,” let’s change what happens this October.

Now ask who plays that role for your health plan. (Go ahead. I’ll wait.)

That silence is the subject of this post.

The duty exists whether anyone mentioned it or not

Under ERISA and the Consolidated Appropriations Act, health plan sponsors carry real obligations: select and monitor vendors prudently, make sure fees are reasonable, act in your employees’ interest. That duty sits with the sponsor – a person, a committee, your company. Not your broker. Not the carrier. You cannot outsource it, and signing the renewal every year does not discharge it.

Here is the asymmetry: your health plan spends multiples of what your 401(k) match costs, with a fraction of the oversight.

Why this one got skipped

The retirement plan learned discipline the hard way – years of scrutiny made committees and benchmarking standard practice. The health plan never had that reckoning. It grew up as an HR purchase – renewed annually, advised by people whose pay rises with the spend, presented as a done deal every October. Nobody convened a committee because nobody said the word “fiduciary” out loud in that room. Ever.

What meeting the duty looks like

Nothing exotic. The same discipline you already run on the retirement side: know what your advisor is paid, and get it in writing. Benchmark your vendors. Read the contracts before signing, or have someone read them for you. Document the process.

A calendar and a folder, used consistently. That is most of it. This is stewardship of the plan your employees depend on, and of money that is ultimately theirs and yours.

You already know how to do this. You do it every quarter for a plan a fraction of this size.

So: who is the fiduciary for your health plan? If you had to stop and think, that is worth a conversation.

Pharmacy pricing is opaque by design, and you will not fix the industry from your office. That part is out of your hands. Your contract is not. A clean(er) contract in a dirty business is a real, achievable thing – and most employers have never seen one.

What dirty looks like

It hides in definitions. What counts as a “rebate” decides how much money finds its way back to you. Spread pricing – the gap between what the pharmacy gets paid and what you get billed – decides how much never does. Add audit rights you don’t have and a termination clause that locks you in for three years, and the contract stops being paperwork. It becomes the business model. (You signed it. They wrote it.)

You do not need the PBM to be a villain for this to cost you. Blind trust does the job all by itself.

The only test that matters

Forget the rebate math for a minute. Here is how you know whether your contract is clean: when a solution that cuts your drug spend shows up – direct sourcing, a cash-pay option for a high-cost generic, a lower-cost channel for a specialty drug – can you plug it in without a fight?

A clean contract says yes. A dirty one tells you to wait three plan years, or pay your way out.

What to demand

Definitions in plain English. The right to audit and verify where the money flows. Termination without hostage-taking. And written freedom to add cost-cutting solutions as they emerge, because they emerge constantly.

Your PBM contract should be a tool. For a lot of employers, it is a trap with a signature on it.

When did someone last walk you through yours, line by line? If the answer is “never,” let’s fix that in 30 minutes. I read these for a living.

Nobody mentioned that the line works a lot better for them than it does for you.

The lie has a business model

An advisor who can only sell four carriers’ products will discover, reliably, that every problem has a four-carrier solution. “You’re too small” is inventory talking, not analysis. (They are describing their shelf. Not your company.)

What companies your size actually do

Employers with as few as 100 employees restructure their funding, join captives (groups of employers pooling risk together), contract directly with providers, and fix their pharmacy pricing. Every day, all over the country. None of this is exotic. The big-box counter just doesn’t stock it.

And the claims objection – “your claims are too bad” – gets the same answer from me every time: that is our specialty. Ugly claims are exactly what these structures were built for.

The tell

When an advisor says “you have no options,” they have just told you something useful – about themselves. The options were there the whole time. Nobody showed them to you because the person across the table couldn’t sell them.

Most executives who finally dig in don’t get angry about the money first. They get angry that nobody ever told them.

What has your advisor never shown you? Ask me what employers your size are actually doing.

Why does that feel normal?

The one room without leverage

You built this company by never accepting a first offer. Freight, software, banking, raw materials – every major contract gets scrutiny, benchmarks, and a real alternative on the table. Then the health plan shows up as a number, not a conversation, and nobody blinks. That is not how it has to be done. It is just how it has always been done.

Meanwhile, the people advising you on that number often earn more when you spend more. Not villains. Misaligned incentives that nobody in the room has ever questioned. Advice follows incentives – you know this about every other vendor relationship in your business. This one somehow gets a pass.

What accountability looks like here

The same discipline you apply everywhere else. Full compensation disclosure from your advisor – what they make, from whom, certified in writing. Contract terms you can read without a law degree. Real benchmarks, not reassurance that “everyone is seeing these increases.” And options beyond the same four carriers wearing different logos.

None of that is radical. It is routine, everywhere else in your budget.

This is stewardship, not procurement

You negotiated everything else that built this business. For most companies your size, this spend sits behind only payroll. Every dollar a misaligned vendor extracts from your health plan is a tax on what you created. The renewal room is the one room you have been walking out of without leverage, and someone told you that was fine.

Nobody meant you harm. But it was not fine. And how is that working for you?

Try one question at your next benefits meeting: “How exactly do you get paid on our plan?” Then book 30 minutes with me and compare answers.

Except one line. Every year, your health plan reprices the cost of employing every single person on your payroll. No proposal. No sign-off. A renewal letter shows up and the number is just… different. (Higher. The number is higher.)

Drift is not a decision. It costs like one.

A raise is a decision. Trend is drift, and drift compounds: a plan trending 8 percent a year doubles in nine years. Nobody in your building approved that. Everyone in your building pays for it – you in margin, your employees in deductions that quietly eat their raises. Sorry – that openly eat their raises. There is nothing subtle about it.

The strange part: we treat it like weather. A 12 percent increase gets a groan, a budget line adjustment, and a “see you next year.” Imagine your freight vendor or your software supplier repricing 12 percent annually, on autopilot, while everyone shrugged.

The repricing happens upstream

That number gets built from things you never see: network contracts, pharmacy pricing, intermediary incentives that reward higher spend. The people assembling it do not work for you. Opacity is the business model, and your annual increase is its invoice.

Make it a decision again

Employers who control this spend treat the health plan like a managed cost, not a fixed one. They see what drives the number: what the contracts actually say, what the pharmacy actually costs, who gets paid what along the way. Then they decide – structure, funding, vendors – the way they decide everything else in the building.

Your workforce got repriced this year. The only question is whether you were part of the decision or just on the distribution list.

Want to see what actually drives your number? Book a 30-minute review.

It sounds responsible. It is a decision to pay more, dressed up as patience.

The options have already collapsed

Your renewal lands in October. It gets built over the summer – claims data, carrier positioning, and your advisor’s incentives, all locked in months before you see a number. By the time the meeting happens, you are not negotiating. You are attending a presentation. (A polished one. There will be slides.)

Then you get three choices: accept the increase, shop the same product with a different logo, or stall. None of them touch what drives the number. You will also be told there is no time to try anything else this year. Conveniently, that will be true.

Waiting is the expensive part

A Chief Commercial Officer told me his sales quota went up by $8 million this year. Not because the business grew. Because the health insurance renewal did, and his team now has to sell enough to cover it. That is what “we’ll fix it at renewal” looks like when the bill lands on someone’s number.

Think about how you run every other major contract. You start early, set the terms, benchmark alternatives, and walk in with leverage. Now look at the health plan: one of the largest spends in the company, repriced every year, on a timeline where you hold zero cards.

The increase gets your attention. The year most companies spend not acting costs more than the increase itself. Structural changes – how the plan is funded, what the contracts allow, how pharmacy gets priced – need months of runway. Ask for them in October and the answer is “next year.” Every year.

The calendar is the strategy

The employers who control this spend work on it in June and July, while there is still time to change the structure instead of arguing about the price. They renegotiate contracts, restructure funding, and test alternatives before anything gets locked. They walk into October with a renewal they shaped, not one they received.

It is July. Your renewal is under construction right now. Are you in the room, or are you waiting for the reveal?

Book a 30-minute mid-year review. October will feel very different.