While visiting Cape Cod recently, I came across a simple sign that read: Warning Sharks. The sign was not there to scare people away. It was there to make sure people understood the risk before stepping into something they could not fully see.
Health insurance renewals have warning signs too. The difference is that many employers never see them.
For decades, employers have approached renewal season much the same way. They review the increase, negotiate with the insurance carrier or move to another one, adjust deductibles, increase employee contributions, and repeat the process the following year.
Those conversations are important. The problem is they often focus on the result instead of understanding what is actually driving healthcare costs.
As healthcare costs continue to rise, I have noticed something changing. The employers I speak with are asking different questions than they were just a few years ago. They are no longer satisfied with simply knowing what their renewal increase will be.
They want to understand where healthcare dollars are going, what is driving claims, how pharmacy costs are being managed, whether contracts are transparent, and whether employees can actually afford to use the health plan being offered.
That shift represents something much bigger than managing an insurance renewal. It represents a different way of thinking about healthcare.
Healthcare dollars are no longer just an insurance expense. They are business dollars. They affect profitability, cash flow, employee retention, productivity, wage growth, and ultimately whether employees receive the care they need before small health issues become larger and more expensive ones.
Recent ERISA fiduciary lawsuits involving employers, insurance carriers, pharmacy benefit managers, and third-party administrators have reinforced an important reminder for plan sponsors. Understanding how healthcare dollars are being managed is no longer optional.
Employers should be able to explain how their healthcare plan is funded, how claims are being managed, how pharmacy contracts work, how advisors are compensated, and what happens when the plan performs better than expected.
The answer is not to create fear. The answer is to create visibility.
That conversation naturally leads to another important question: how is the healthcare plan actually funded?
Many employers still believe the only options are remaining fully insured or taking on unlimited financial risk through self-funding. That simply is not true. Healthcare funding exists on a spectrum.
For many organizations, level-funded or alternative funding arrangements can provide greater transparency, greater financial control, and the opportunity to retain more healthcare dollars when the plan performs well. The details, however, matter.
How much surplus comes back to the employer? Who retains the savings when claims are lower than expected? Are pharmacy rebates included? Those answers are often found within the contract, not the marketing brochure.
Affordability deserves the same level of attention. Most employers know what the health plan costs the company. Far fewer ask whether employees can actually afford to use it.
A health plan can satisfy every compliance requirement while still leaving employees delaying care because deductibles, coinsurance, and out-of-pocket expenses create financial barriers.
Affordable healthcare is not simply about lower premiums. It is about creating access to care without financial strain. That is the difference between offering health insurance and building a healthcare strategy.
Healthcare costs will continue to rise. But accepting uncontrolled increases every renewal season does not have to become standard business practice.
The employers creating sustainable healthcare strategies are looking beyond premiums. They are evaluating transparency, funding arrangements, contract language, pharmacy management, employee affordability, and whether employees are receiving guidance before expensive healthcare decisions are made.
The warning signs are usually there long before renewal. The question is whether employers know what to look for.
Health insurance renewal should not be an act of faith. It should be a business decision built around transparency, accountability, and better care for the people depending on the plan.
The question is not whether healthcare costs will continue to rise. It is whether your strategy is designed to manage them.
About Ken Wosczyna
Ken Wosczyna of EBA-1 is a healthcare strategist specializing in employer-sponsored health plans, utilization analytics, and sustainable cost control. Based in Stamford, Connecticut, he helps employers develop long-term healthcare strategies that improve affordability for employees while creating more predictable healthcare spending for businesses. Through data-driven analysis and multi-year planning, Ken works with organizations to reduce overspending and build sustainable health plans that better serve both employers and their workforce.
For additional perspectives on employer healthcare strategy, cost management, and industry trends, visit https://eba-1.com/ or subscribe to Ken’s LinkedIn newsletter, K.I.S.S. Healthcare 101 — Keep It Simple & Smart, Monthly Health Insurance at https://www.linkedin.com/build-relation/newsletter-follow?entityUrn=7249889392675155968
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