HEALTH PLAN RENEWAL: WHAT THE INCREASE DOES TO YOUR BIDS.
The renewal quote comes in close to the renewal date, and the new rate starts on that date whether the contractor has priced it or not. The increase has several causes: medical cost trend, the age and size of the enrolled group, changes in plan design and, depending on the plan type, the claims of the group itself. Health premium paid by the employer is part of the labor burden, so a higher renewal raises the cost of every labor hour, and bids already priced and bids still open are priced on the old rate. The fix is to put the renewal date and the expected increase on the 13 week cash forecast and in the burden rate before the quote comes in.
A renewal is a known date with an unknown number, which makes it one of the few cost increases a contractor can see coming. This page explains what moves the number, how it becomes an increase in the cost of every labor hour, what the owner's choices at renewal do to cash, and how to budget it.
WHAT IT MEANS.
A group health renewal increase is the change in the monthly premium a carrier charges an employer when its group health plan renews for the next plan year. The employer pays the new rate on every enrolled employee from the renewal date forward.
This page covers cost and cash, not which plan to buy. A licensed broker or benefits advisor places health plans, and plan rules, tax rules and state law differ. The owner checks the details of their own plan with the plan advisor and a tax professional.
WHAT MOVES THE RENEWAL NUMBER.
The quote comes in late and the date does not move
Carriers and states differ on how much notice an employer gets, and many contractors see the renewal quote only a few weeks before the plan year starts. The renewal date is fixed. The new premium is billed from that date, and a contractor who is still comparing quotes in the last week is also deciding in the last week, with employees waiting for an answer. The way to avoid that is to ask for the renewal early, which is what the fixes below do.
The pool or your own claims, depending on plan type
For a fully insured plan in the small group market, federal rules limit what the carrier can use to set the rate. The permitted factors are geographic area, age, family size and tobacco use, and health status, claims history and industry are not allowed. In that case the group's rate follows the carrier's experience across its whole pool in the area, and your own claims do not set it directly. A level funded or self funded plan can be priced in part on the group's own claims, and a carrier can add or raise an individual deductible on one high-cost member. What counts as a small group differs by state, and a larger fully insured group may be rated differently from a small one. The broker confirms which rule applies to your plan.
Medical cost trend
Insurers who file small group rates describe higher prices for hospital care, physician services and prescription drugs as the main reasons for increases, along with higher use of care and higher labor costs inside the health system. This part of the increase has nothing to do with the contractor's own crew, and it appears at almost every renewal.
Age and enrollment changes
A group that is a year older costs more to insure, so part of a renewal increase can come from the same people being older. Enrollment changes also move the quote. If the workforce got smaller, or the healthier employees left the plan, the rate per person can go up. Adding a crew that enrolls changes the total premium even when the rate per person stays the same. Seasonal hiring and layoffs are the kind of change that makes a contractor's headcount on the renewal date different from the headcount for most of the year.
Plan design
A renewal quote is for a specific plan. The deductible, the out of pocket maximum, the copays and the network are all part of the price. A carrier can also stop selling a plan, so a contractor can be quoted a different plan than the one it has. Comparing the new quote with last year's means checking that the two plans cover the same things, because a lower premium on a plan with a higher deductible does not cost the same amount of cash.
What recent national data shows
The KFF 2025 Employer Health Benefits Survey reported an average family premium of $26,993 for employer coverage, up 6 percent from 2024, after increases of 7 percent in each of the two years before. The average single premium was $9,325, up 5 percent. Those are national averages across all employer sizes, not a forecast for one contractor. A renewal for a small group can be above or below them, and the quote is the only number that counts for a budget.
WHAT IT LOOKS LIKE IN DOLLARS.
Take 10 employees, each enrolled, with the employer paying $750 a month per employee. The renewal is 10 percent. That is $75 more a month per employee, $750 more a month for the crew and $9,000 more a year. If each employee works 1,800 hours a year that can be billed or assigned to jobs, the crew has 18,000 hours. $9,000 divided by 18,000 is $0.50 more burden on every labor hour.
A bid with 4,000 labor hours priced on last year's burden is $2,000 short once the new rate starts. If the contractor has 30,000 labor hours in open and unfinished bids, the same $0.50 is $15,000 of cost that was not priced. Work already won at a fixed price cannot be repriced, so the increase comes out of that job's margin.
The $750 a month is a new line on the cash forecast, starting on the first billing date after the renewal. Over a 13 week forecast that begins in the month before the renewal, one month of premium at the new rate is on the forecast. Over a year it is $9,000 that has to be collected from customers on top of what was collected before.
WHAT WE CHANGE.
SPM puts the renewal date on the calendar and asks the broker for the renewal quote 90 days before it. The request includes the census the carrier is using, the plan being quoted and whether the carrier priced the group on its own claims or on the pool. Early quotes leave time to see another quote before the plan year starts.
SPM builds the labor burden twice, once at last year's premium and once at the expected increase, and shows the owner the dollars per hour and per year. When the real quote comes in, the model is updated with one number. The labor burden page covers how health premium is built into the hourly cost.
When the new burden is set, SPM lists the bids that were priced on the old rate, the bids still being built and the labor hours in each. The estimator changes the burden rate in the estimating tool, and any bid that is going out after the renewal date uses the new rate. Jobs already won at a fixed price are tracked against their new cost so the margin change is seen in the job report.
SPM adds the new premium as its own line on the forecast, starting on the first billing date after the renewal. If the owner decides to pass part of the increase to employees through payroll, SPM reduces the line by that amount from the first paycheck it applies to. The 13 week cash forecast page shows how the forecast is built.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
You stop touching the books.
Everything in Core, and we do the bookkeeping and the controllership as well. Your office stops answering coding questions and stops fixing a reconciliation that will not balance on the last day of the month.
We do the books. No payroll.
Every job shows its margin while it is still open.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the books, the job costing, and the software. No payroll.
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