Rising Healthcare Costs Underscore the Value of Partnership
In recent years, small and mid-size employers have experienced unprecedented health insurance premium increases, up nearly 20%(opens in a new tab). This leaves employers questioning what they need to do to continue to offer the benefits employees expect, whether that includes absorbing the cost, modifying coverage, shifting costs to employees, or exploring a different model. For small businesses, the stakes can feel higher, even existential, tied not only to their ability to care for their team, but also the long-term health of their business. That’s especially true when you factor in that benefits are the second-largest expense for small businesses, and most can’t just absorb major price increases the way big corporations can.
Research we conducted with The Harris Poll found that nearly half (49%) of small business decision-makers are concerned their current benefits offering could make it harder to hire or retain employees. In the same research, 86% of employees said flexibility in choosing their health insurance provider matters when they're evaluating a job offer.
Great benefits help small and medium sized businesses (SMBs) compete for the best talent and take care of their teams, and many small businesses clearly worry that their benefits packages aren’t strong enough. SMBs need a trusted partner that helps them confidently offer quality benefits, no matter their team size, location, provider preferences, budget, or how the market shifts around them. I’m proud to say that’s where Justworks comes in.
When speaking with small business leaders, I always relay these principles. They’re critical to keep in mind when thinking about how to structure benefits for their teams:
Choosing the most expensive plan doesn’t necessarily mean employees will get the coverage that’s best for them. First, understand what employees want, then evaluate your budget well enough to forecast a few years down the line. The last thing you’d want is to pick a plan, then not be able to afford it a year later. To take that a step further, your forecast is only as good as how your platform prices come in from the start.
Truth is: rising health insurance costs aren’t going away, and they aren’t specific to a single provider. Your HR partner plays a significant part in helping you manage costs without sacrificing quality care. That goes beyond the relationships your partner has with carriers. How is your partner working with you to ensure you can offer great coverage to your team? For Justworks, that means optionality—the ability to offer great coverage year after year even as your business and team evolves. In addition to large group plans, we offer access to small group and CHOICE arrangements (formerly ICHRA).
As we wade through the current landscape and rising costs, Justworks is doing everything we can to make sure you can take care of your teams. We combine disciplined underwriting, flexible coverage options, and expert support to help businesses navigate employee benefits confidently from day one through renewals.
If you've been caught off guard more than once going through a renewal season, even after switching to a new plan or coverage model, that’s more than just the market. It's likely a reflection of the fact that the initial quote wasn't built for long-term stability. Some HR platforms set rates low in year one to win the business, then correct hard at renewal causing tumult for small businesses. Second-year price hikes can trace back to how the business was priced from the start, which means who you choose as a partner matters more in the long run than which plan you pick today.
Justworks doesn’t offer a one-size-fits-all approach. By offering access to all three coverage models, customers get a fuller picture of the market to continuously choose a plan that feels right for their team and budget. And, when plan rates increase, we don’t just call it a day after delivering the new quote. Instead, we show up as a partner by proactively helping customers consider all options available by providing advanced notice on renewal trends, education on alternatives they’re eligible for, and weighing costs, risks, and tradeoffs.
Renewal season is one of the few moments a business has a built-in opportunity to ensure their benefits stay competitive before it shows up as a declined offer or a resignation. In an unpredictable market, the businesses that keep winning talent are the ones who can offer consistent coverage their team actually wants and needs, including perks for mental health and family-building care fit for a modern workplace. Small businesses deserve a partner that can help them achieve that so they’re always in the running for the best talent and able to take care of their teams.