What You Will Learn
- Why a renewal is an opening offer, not a verdict.
- The 9 questions to ask your broker 90 days out, in order.
- What a good answer sounds like, and what an evasive one tells you.
- The three answers that end the conversation.
- How to run this in one meeting without becoming the difficult client.
Written for: HR leaders, CFOs, and owners at 50 to 1,000 life employers who get a renewal number every year and are never told what to do with it besides approve it.
Your Renewal Is an Opening Offer
Direct answer: A health plan renewal is a proposal, not a determination, built on assumptions about your claims trend, your risk profile, and what you will accept. Every assumption is a place a conversation can happen. Employers who treat the renewal as an opening offer ask questions; employers who treat it as a verdict approve it.
The villain is not a carrier and it is not a number. It is a presentation style: the renewal delivered as a fait accompli three weeks before it is due, with two plan-design options that both cost more than last year and no account of how the number was built. A number you cannot interrogate is one you can only approve.
BeneSmart Insight: Nobody hands you a renewal and says “this is our opening offer.” That does not mean it is not one.
Why 90 Days
Direct answer: Ninety days is the point at which questions still have somewhere to go. Before it, the renewal often is not final and your broker can still influence the inputs. After it, you are compressed into accept-or-disrupt, and the alternatives that give you room no longer fit in the calendar: alternate carriers, a different funding model, a remarketed stop-loss layer. Question 6 is one you can act on at ninety days and can only regret at thirty.
BeneSmart Insight: The same question is a negotiation at 90 days and a complaint at 30. Calendar the meeting before the renewal arrives.
The 9 Questions
Direct answer: These nine work in order. The first three establish how the number was built, the next three test what was done about it, and the last three deal with your leverage and the relationship’s economics. Ask them in one scheduled meeting, in writing where you can.
1. What are the actual inputs to this number, each broken out: claims experience, trend assumption, pooling charge, fixed costs, and margin?
Show me the arithmetic. A renewal is an assembly, and each component is its own conversation. A good answer is a table. An evasive one restates the total from a different angle.
2. What trend assumption is built in, and what would the number be at a different assumption?
How much of this is my group, and how much is a forecast about the world? Trend is an assumption, not an observation. A surprising share of an increase lives there.
3. What did our own claims experience actually do this year, separate from trend?
A me problem or a market problem? Groups that improved their experience and still got a large increase have a very useful question to ask next.
4. Which of our costs are fixed and which are claims-driven? And what has happened to the fixed side over three years?
Administration, network access fees, stop-loss, and broker compensation: the part of your spend least connected to how sick your people were, and the part most likely to have drifted upward unnamed.
5. What did you do to try to lower this number before you brought it to me?
Negotiated or forwarded? There is a real difference between a broker who received your renewal and one who worked it. Asked calmly, this is the most revealing thirty seconds of the meeting.
6. What alternatives were marketed, to whom, and what came back?
Show me the shopping. Not “we looked at the market”: which carriers, which TPAs, which stop-loss layers, what came back, why did we stay? A good answer is a spreadsheet. An evasive one is a sentence about market conditions.
7. What would have to be true for a different funding model to make sense for us?
Still right, or just familiar? A broker who sells one model answers thinly. If self-funding is on the table, the traps in stop-loss coverage are what to understand next.
8. What will your firm earn on our plan next year: total, direct and indirect, in dollars?
The question that reframes the other eight. Broker compensation is part of your renewal, and in a commission model it rises when your premium does.
The figures below are illustrative, chosen to show the scale of the question, not market data, a benchmark, or a client result. At a 3% to 6% commission rate on a $1.5 million plan, the compensation line would run roughly $45,000 to $90,000 a year before overrides, bonuses, and persistency credits. Your actual number is the one that matters, and you are entitled to it in writing: under CAA Section 202 / ERISA 408(b)(2)(B), covered service providers must disclose direct and indirect compensation to the plan fiduciary in writing before an arrangement is entered into, extended, or renewed. We walk through that disclosure in the hidden costs of health insurance broker commissions.
9. If we accept this renewal, what is the plan for next year, and when does that work start?
Does a strategy exist, or does this happen to us annually? The answer separates a broker with a twelve-month plan from one with a twelve-month cycle.
BeneSmart Insight: Question 5 changes the room. Question 8 changes the relationship. If you only ask two, ask those.
The Three Answers That End the Conversation
Direct answer: Most answers land between good and incomplete, and incomplete is workable. Three are different. They tell you the negotiation is not happening on your side of the table.
“This is just what the market is doing.” Possibly true, also unfalsifiable, and it does not survive question 3. If your own experience improved, ask what the market did to your fixed costs.
“We did not market it because nothing would have come back better.” Maybe a correct prediction. Still a decision made on your behalf without telling you. The remedy is a standing instruction: market it every year, show me what came back, I will decide.
“I would have to check on that,” about compensation. Question 8 is the one every broker can answer immediately, because it is their own revenue. Under CAA Section 202 / ERISA 408(b)(2)(B), that disclosure must already be in writing before an arrangement is entered into, extended, or renewed. The document exists.
BeneSmart Insight: You are not being difficult. You are the plan fiduciary asking how the plan’s money is spent. That is the job description.
How to Run This in One Meeting
Direct answer: Schedule 60 minutes at the 90-day mark, send the nine questions in advance, and ask for written answers to questions 1, 6, and 8. Sending them ahead is what makes this collaborative rather than adversarial, and it produces real answers instead of improvised ones.
The email that sets it up: “Ahead of our renewal, I would like 60 minutes about 90 days out to walk through how the number is built and what alternatives were considered. I will send nine questions in advance, and I would like written answers on the component inputs, what was marketed, and your firm’s total compensation next year.”
An ambush produces defensiveness, not information. Ask for writing on the three that matter, because written answers become your plan file.
“In thirteen years I have never seen an employer damage a broker relationship by asking good questions ninety days out. I have seen plenty of employers damage their budget by not asking them.”
Rich Westermayer, Founder, BeneSmart
What Happens After You Ask
Direct answer: Three outcomes, two of them good. The answers come back complete and you renew as an informed client; or they surface something worth changing and the renewal gets renegotiated; or they do not come, and you have learned something more valuable than a rate.
Most of the time it is the first one. The renewal is defensible, the shopping was done, and you approve the same number you would have anyway, with one difference: next year you are the client who asks. That is the return. Not a guaranteed reduction. A different position in the conversation.
And you do not have to change firms to act on a gap. The most common good outcome is not a broker change. It is a better-aligned arrangement with the broker you already have. To see what it looks like when someone takes a whole plan apart, read what the first ninety days of a BeneSmart engagement look like.
Get a Second Read on Your Renewal Before You Approve It
In a free Find Your Fit call, 30 minutes, we will read your compensation disclosure and renewal package and show you where the structure is costing you money. Not a compliance review, not legal advice: a plain-English read on where your plan’s economics leak.
- A component-level read: what is claims-driven, what is fixed, what is assumption
- Your total broker compensation, converted to annual dollars
- What could realistically be renegotiated in the time you have left
Free, no obligation, and you do not have to switch brokers to find out. We take a limited number of new engagements each quarter, and Find Your Fit slots fill first.
Book My Free Find Your Fit Call · Browse the free Download Center
Frequently Asked Questions
What should I ask my broker about my health plan renewal? Start with how the number was built: the component inputs, the trend assumption, and your claims experience separately from trend. Then what was done about it and which alternatives were marketed. Then what your broker will earn on the plan next year in total dollars.
How far in advance should I start renewal negotiations? About 90 days out: late enough that a preliminary number usually exists, early enough that alternate carriers, a different funding model, or a remarketed stop-loss layer still fit in the calendar.
Can a health insurance renewal increase actually be negotiated? A renewal is a proposal built on assumptions about trend, risk, fixed costs, and what the employer will accept. Each is a place a conversation can happen. Whether the number moves depends on your group, your funding model, and the time left.
Is it reasonable to ask my broker what they are paid? Yes, and you are entitled to it in writing. Under CAA Section 202 / ERISA 408(b)(2)(B), covered service providers must disclose direct and indirect compensation to the plan fiduciary in writing before an arrangement is entered into, extended, or renewed. The figures that follow are illustrative, chosen to show the scale of the question, not market data, a benchmark, or a client result: at 3% to 6% of premium on a $1.5 million plan, that line would run roughly $45,000 to $90,000 a year before indirect compensation. Your own disclosure is the only number that counts.
What if my broker will not answer these questions? Incomplete answers are common and workable. A refusal on compensation is different, because that disclosure should already exist in writing. Document the request and the response for your fee-reasonableness file.
Do I have to change brokers to renegotiate my renewal? No. The most common good outcome is not a broker change. It is a better-aligned arrangement with the broker you already have, and a cycle that starts 90 days out instead of three weeks before it is due.
About the Author
Rich Westermayer, Founder, BeneSmart. Rich entered the benefits industry in 2013 and spent nine years working the carrier side of the business before going fully independent. He launched his own firm in 2017 and has led BeneSmart since 2022 as an independent, flat-fee alternative to commission-driven benefits brokerage for 50 to 1,000 life employers, and he personally leads every Cost Containment Blueprint engagement. Direct line: 314-798-7563.
This article is general information about plan economics, not legal, tax, or compliance advice. It does not create an attorney-client or fiduciary relationship. Consult your own counsel before acting on anything here.
BeneSmart · www.benesmartservices.com · info@benesmartservices.com · (314) 798-7563 · Schedule: https://calendly.com/benesmart/consult_teams