How to read your renewal letter.
The letter is written to be signed, not read. Here is what each line actually says, what it hides, and the three responses available to you — with the honest note on when each one is right.
The letter, line by line.
The rate action
The headline percentage — what your total premium does if you change nothing. For 2027, proposed small-group increases run around +14% in early state filings (a labeled proposed figure, not a final one; final rates arrive state by state through the fall).
What to check: Whether the letter shows the dollar total next to the percentage. A 14% action on a $30,000-a-month bill is $50,000 a year — percentages are how big numbers hide.
Trend
The carrier's assumption about medical and pharmacy inflation for everyone in its pool — you pay it regardless of whether your own team was healthy.
What to check: Trend is the part no negotiation removes: it reprices the whole pool, not your group. Beating trend means leaving the pool, not arguing with it.
Age banding
Under ACA rating rules, each employee's rate follows their age on the federal age curve — so a team that simply got one year older renews higher before anything else changes.
What to check: A quiet compounding force: the letter rarely itemizes it, but a 55-year-old costs roughly three times a 21-year-old on the standard curve, and everyone moves up it annually.
Census changes
Who joined, who left, who added dependents. The letter's comparison of 'current vs. renewal' premium often mixes census changes into the rate action.
What to check: Ask for the rate action at constant census — otherwise you can't tell price increase from headcount change.
Plan-design changes
The renewal that 'held the increase to 6%' sometimes did it by raising the deductible or moving drugs a tier. The insurance got worse; the letter reads better.
What to check: Put this year's summary of benefits next to last year's. Deductible, out-of-pocket max, drug tiers, specialist copays — four lines tell you if the plan quietly shrank.
The level-funded fine print
About 37% of covered workers at small firms (10–199 employees) are on level-funded plans (KFF 2025 survey). There, your own claims year genuinely feeds the renewal: the letter reflects your group's experience, the stop-loss premium, and any surplus refund terms.
What to check: One expensive diagnosis can reprice the whole group — and the surplus refund you were promised often has conditions attached to staying. Read the refund clause before treating it as money.
Your three responses.
All three are legitimate. The mistake is picking one without pricing the other two.
Response 1 — Accept it
Sometimes right. If your renewal is genuinely competitive for the coverage — some groups' math works out, especially where the local individual market is thin — signing is the rational move. The point is to know that before signing, not after.
Response 2 — Negotiate or re-shop the group market
Your broker can shop other carriers and plan designs. Worth doing — and worth being honest about what it can achieve: every fully-insured quote prices the same regulated pool with the same trend, so the winning quote is usually a different trade-off, not a different market.
Response 3 — Price the other market
The individual market is priced from public rate filings, plan by plan, county by county — and an ICHRA lets you fund it with a fixed budget instead of renewing a group contract. Whether it beats your renewal is arithmetic on your actual roster, which is what the free audit computes. If your renewal wins, we say so.
Group single coverage now averages $9,325 a year (KFF 2025 survey). The question the letter never asks: what do the plans your employees could buy themselves cost, funded by a fixed budget you control? The full renewal comparison and the 2027 rate picture have the numbers.
The renewal-letter questions owners ask.
When do renewal letters arrive?
Typically 60 to 90 days before the renewal date, so January 1 renewals produce letters from late September through November. That timing matters because the individual-market Open Enrollment window also opens November 1 — the letter and the alternative are on the same clock.
Is the renewal increase negotiable?
Parts of it. A broker can re-shop carriers and adjust plan design, and for level-funded plans the stop-loss terms are quotable. What no negotiation removes is trend — the pool-wide inflation assumption — which is why groups that beat their renewal materially usually did it by changing markets, not carriers.
My renewal letter shows a smaller increase than last year. Am I fine?
Check the benefits summary before celebrating: a softened headline number sometimes rides on a higher deductible, a re-tiered drug list, or higher specialist copays. Compare this year's plan design to last year's line by line — then compare the whole package to the alternative.
Do we have to wait for the renewal date to change approach?
No. A first-time ICHRA can start any month of the year — employees get a special enrollment period when the offer begins — and for a January 1 start, the practical decision window is the fall. The 90-day employee notice and setup steps are covered in our notice guide.
What happens if we just do nothing?
Most letters auto-renew you into the new rate on the renewal date. Doing nothing is a decision — it accepts the rate action, the plan-design changes, and another year on the age curve. Ten minutes with the letter and a free audit of the alternative is the cheap insurance against deciding by default.
Read the letter. Then price the alternative.
Insurf, Inc. is not a licensed insurance agency, does not sell insurance, and receives no commissions; enrollment applications are submitted by an individually licensed insurance producer. This page is educational — not an offer of coverage, not a recommendation to accept or decline any renewal, and not financial, tax, legal, medical, coverage, or insurance advice. Figures are tagged with their sources; projections and proposed rates are labeled and are not guarantees.