Renewal Costs Rising: The ROI on Switching Providers
As health insurance renewals rates continue to rise, learn what to look for as you evaluate other providers to make sure the switch is maximizing ROI for you.
Healthcare costs keep climbing across the market, and a lot of businesses are heading into renewal season expecting the largest increases they've seen in years. ACA Marketplace insurers requested a median 14% premium increase for 2027, on top of a 20% increase the year before. Rising provider costs, prescription drug spending, and healthcare utilization are driving pricing adjustments across the broader insurance market beyond the ACA Marketplace.
If your renewal notice included a quote that made you wince, your first impulse might be to see which provider offers the lowest quote. However, other factors that offer tangible value worth considering include:
How stable future renewals are likely to be
Whether pre-tax savings come back to you
How well your plan options fit a changing team
How much staff time support actually takes off your plate
A Low Rate Isn’t the Best Long-Term Strategy
A low first-year rate might seem like a deal, but often means a significant increase for next year’s renewals. A more useful area to focus on is how your current provider approaches renewals and whether that’s based on stabilizing costs over time.
Quoting for Stability
Justworks' approach to renewals is grounded in establishing sustainable pricing from the start instead of an introductory rate that is difficult to maintain. We do this by looking at a complete picture of your workforce and benefits history upfront, then set pricing that minimizes unexpected renewals increases.
For the current renewal cycle at Justworks, 68% of Aetna groups and 61% of UHC groups on our plans received single-digit renewal increases this cycle. Further, overall Justworks renewals remain in the lower quartile of net increases across the PEO industry.
Why Renewals Stability Matters
Renewal stability can’t eliminate market-driven healthcare inflation. But it can give employers greater confidence in their planning, reducing the likelihood of an unexpected budget disruption.
That predictability carries its own return. Finance teams can forecast more accurately, HR teams have more time to communicate changes, and business leaders can make benefits decisions without the pressure of unpleasant surprises.
Don’t Miss Out on Payroll Tax Savings
Under IRS rules, when employees pay for health insurance with pre-tax dollars, employers save 7.65% in payroll taxes on those deductions. That's a fixed, known return, and it applies regardless of which provider runs your payroll.
Across an entire workforce, those payroll tax savings can become meaningful. Employers can reinvest the money in hiring, employee programs, technology, or other business priorities. As healthcare premiums increase, those savings can also help offset part of the added cost.
Not every provider returns those savings to you, but Justworks does.
The True Value of Support
Benefits administration extends beyond premiums and plan selection, including answering employee questions, resolving billing issues, managing qualifying life events, and keeping up with compliance requirements.
While it may not appear as a separate line item on a renewal notice, time saved through support is another invaluable factor to consider in your benefits cost analysis. Especially if that includes resolving issues faster, reducing the number of questions you field internally, and giving employees a reliable place to find answers.
The Impact on Employers
The Small Business "Bene-Fit" Gap Report found that 80% of small business decision-makers concerned about hiring and retention say it's difficult to find a health benefits solution that fits employees' needs. Separately, 27% spend more than 20 hours a year just researching and managing their health insurance.
At Justworks, we simplify the renewals process with guidance to ensure your plan fits your team's needs. That includes evaluating eligibility for other coverage options during the renewal process to ensure we can provide recommendations that may be a better fit.
More Options, More Savings
During renewals, plan optionality becomes an ROI question rather than a nice-to-have. Providers, like Justworks, that offer access to small group, large group, and individual coverage models make it easier to access quality health insurance without compromise. That means you can feel more confident your plan actually speaks to your team’s needs even as your business evolves.
The Impact on Employees
When your HR or operations team is leaner, and you only have so many hours, balancing employee benefits support with other work responsibilities can be tricky.
And, it’s clear from Justworks Open Enrollment Harris Poll research that younger employees are looking for strong benefits support:
51% said they'd blindly selected a health plan because they didn't understand the terminology
46% later regretted that decision
45% said they weren't sure where to direct questions during open enrollment
81% believed HR should provide more support.
That’s where switching to a provider, like Justworks, that offers direct support to employees can be a game-changer. Meaning you can spend less time fielding questions, and more time on hiring, employee development, and overall strategy.
To put that in context, over 94% of employees whose employers use Justworks rated their open enrollment as easy last year. And had the following feedback for us when asked, “This might have been the only painless digital experience I've had with healthcare in the US. THANK YOU.” and “Hands down the easiest process for selecting benefits I've experienced in 25 years of working.”
What to Look for When Evaluating a Provider
As you rethink your current PEO provider or consider using a PEO for the first time, here are the key things to look out for when making your choice.
Operational Scalability
Your PEO partner should…
Act as an all-in-one platform built to support your growing business at every stage.
Include tools to help you continue growing, from international hiring to simple integrations with third-party tools.
Provide real human support to help you scale your operational setup as your team's needs change.
Benefits Flexibility
Your PEO partner should…
Offer access to flexible health coverage—including small group, large group, and Individual health plans— so you can compare options and adjust as your needs change.
Offer access to 401(k), FSA/HSA, and added perks for mental health, wellness, and fertility and family planning.
Provide guidance during enrollment and renewals so you know what options you’re eligible for and can make the best choice.
Cost Savings
Your PEO partner should…
Have clear and transparent pricing upfront with no hidden fees or surprise balances.
Offer different plan options so your PEO capabilities can grow with your business.
Have one-on-one support to help you access the tools you need at a cost you can afford
Turn your tax savings into value for your business. Ask where your Section 125 (cafeteria plan) savings go: back to you, or to your PEO’s margins?
Help you offer a robust benefits package without increasing costs through employee-paid supplemental health benefits, plus included perks for mental health, primary care, fertility and family-building, and everyday well-being.
How Justworks Helps
If your renewal is coming up, Justworks can help you compare your current plan against our offerings to help you make the best choice for your team. With access to small group, large group, and individual coverage options, your team isn't boxed into a fixed model as it evolves. Plus, customers also receive support from a team that’s been recognized for nine consecutive years at the Stevie Awards for outstanding services. Get started today.
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