Premium Stability
Predictable premiums and long-term cost control
Unpredictable renewals don't just hurt your budget, they erode your ability to plan, invest, and grow. When a single bad claims year can trigger a 15 to 25% premium spike, every financial projection becomes a guess. Our solutions replace that volatility with structures designed for long-term cost predictability, so you can budget with confidence and stop bracing for renewal season.
See How It Works ↓Taft Hartley is just one of the health insurance solutions we offer for the employee benefit challenge
Here are the 4 in which we specialize and why 70% of clients who request a quote say yes.
Taft Hartley is a multi-employer health insurance arrangement that pools businesses and sole proprietors together to improve rates through shared risk pooling. The money people pay for their health coverage goes into a trust and is regulated by ERISA laws. This requires that money in the fund only go out for medical claims and administration — not for executive profits. The main advantage of this plan is its premium stability where every business gets the same premium increases whether they are healthy or sick. Many clients report smoother claims administration and an enhanced customer service experience. Some clients have saved over 50% on their health premiums.
PEOs are a total business solution that help assist in 5 areas — payroll, HR, compliance, employee benefits, and (sometimes) workers' compensation — which typically helps them outcompete comparable businesses not in a PEO. Due to their structure, they provide unmatched compliance risk management that cannot be duplicated outside of a PEO. For many businesses, they also provide unbeatable health rates and voluntary Fortune 500 employee benefits options without enrollment and participation requirements. Our recommended PEO partners all have client retention rates between 91.8 to 95% and do not interfere with how ownership wants to run their business. Some clients have saved as much as 52% on their medical through PEOs.
Over the last decade, the popularity of self-funded plans has grown significantly as fully insured rates have skyrocketed. For businesses considered small groups, self funded options allow businesses to be rewarded with lower health-based rates that tend to be lower than fully-insured options. What makes these plans so effective is their customizability. Employers can choose their own TPA, pharmacy benefit manager, specialty med carveouts, direct primary care, etc. This level of customization can slash annual premiums with typical savings of 10 to 30%. 50% of employers with 20+ employees enrolled can expect savings of at least 25%.
For small groups, fully insured options are based simply on zip code and date of birth. As a result of not being able to determine rates in any other way, the carrier has to assume below average health. This tends to make fully insured advantageous for unhealthy groups. For large groups (ie 50+ FTEs), rates are still health-based. That said, unlike self funded plans, claims data tends to be not shared at all or highly delayed. The advantage for large groups is that the network and claims administrator are the same.
How a 26-Person Operations Company Escaped 9.6% Renewals and Locked in Predictable Costs, While Upgrading Benefits
Company Profile: A ~26-person operations and professional services company based in Massachusetts, with a mix of office-based and field employees. The company had been on fully covered group health plans for years and was growing increasingly frustrated with unpredictable annual renewal increases that disrupted budgeting and financial planning.
Prior Challenges
- Punishing renewal cycle: The company's most recent renewal came in at 9.6%, a $2,800+/month increase on a plan that was already straining the budget. With no claims data transparency, the company had no way to predict, negotiate, or control what came next.
- High-deductible plan eroding employee satisfaction: Employees were on an HMO plan with a $2,000 individual / $4,000 family deductible and an out-of-pocket maximum near $8,000. For a mid-market employer trying to compete for talent, the plan felt like a "Silver-level" offering at Gold-level prices.
- Administrative burden on employees: The HMO structure required referrals and pre-authorizations for specialist visits, creating friction and confusion. Employees regularly reported not knowing whether to pay the provider directly, wait for processing, or submit claims to the HRA administrator, leading to frustrated calls to HR.
- No leverage at renewal: As a ~26-person group on a fully covered plan, the company had virtually no negotiating power. Each year was a coin flip: accept the renewal increase or spend weeks shopping carriers for marginal savings.
- Budget uncertainty undermining growth plans: The unpredictability of benefits costs made it difficult to forecast total compensation costs, plan new hires, or commit to salary increases, because the company never knew what next year's renewal would eat up.
Capabilities Needed
- Renewal increases that are predictable and budgetable, ideally capped or historically low
- Premium rates that are NOT tied to the company's own claims history
- Benefits quality equal to or better than the current plan (no downgrade)
- Compatibility with the company's existing HRA
- Administrative simplicity, fewer referrals, less claims confusion
- A national provider network (BCBS preferred) for employees with out-of-state care needs
- No weekly payroll reporting or heavy administrative burden on the employer
Solutions Explored
1. Fully Covered, Shop Carriers
Assessment: The company explored shopping to other carriers. In the Massachusetts market, this approach typically yields only 5 to 15% savings because all carriers use the same community-rated or demographic-based rating methodology.
Projected impact: A best-case 10% carrier switch would save ~$2,900/month, but only for the first year. The next renewal would be equally unpredictable.
✗ Treats the symptom, not the disease (structural volatility)
2. PEO (Professional Employer Organization)
Projected cost: PEO master policies offer flat-rate premiums across all employees, typically at 15 to 30% below equivalent fully covered rates. Estimated savings of ~$3,000-$5,000/month.
Limitations: Requires co-employment relationship. Renewal stability is better but not guaranteed, PEO renewals of 5 to 10% are common.
◐ Strong option, but renewal structure still introduces variability
3. Self-Funded / Level-Funded
Assessment: Level-funded plans offer potential for high savings in good claims years, but at ~30 employees, a single high-cost claimant can significantly impact renewal pricing. Level-funded plans are experience-rated, meaning the company's own claims directly determine next year's cost.
✗ Higher ceiling, but also higher floor, reintroduces the volatility they're trying to escape
4. Taft Hartley Health Insurance Plan ✓ Selected
Monthly cost: ~$26,505/month total premium (vs. current $29,305/month)
Immediate savings: ~$2,800/month ($33,600/year)
Projected savings after next renewal cycle: $4,000-$6,000/month ($48,000-$72,000/year), because the company's current plan was expected to renew with another significant increase, while Taft Hartley rates remain stable
6-Year Projected Savings
Estimated monthly premiums by Year 6 (assuming historical renewal trends)
Fully Covered (8 to 10% avg. annual increases)
Taft Hartley (2 to 3% avg. annual increases)
Cumulative 6-Year Projected Savings
That's 23 to 27% less than what the company would have spent remaining on fully covered plans with historical renewal trends.
- Non-experience-rated: The plan is a Taft-Hartley trust covering thousands of members across hundreds of employers. The company's own claims history has zero impact on its rates.
- Non-profit structure: Any surplus is reinvested into the plan's reserves (currently 15 months of claims in reserve), not distributed as profit. This eliminates the incentive to maximize renewal increases.
- Track record: 2 to 3% annual renewal increases for six consecutive years. No other funding model in the market can match this track record for a group of this size.
Benefits Upgrade Included
The rate reduction came with a simultaneous upgrade from Silver-level to Gold-level benefits:
| Benefit | Before (HMO) | After (Taft Hartley BCBS PPO) |
|---|---|---|
| Plan type | HMO (referrals required) | PPO (no referrals) |
| Network | Regional HMO | National BCBS PPO |
| Individual deductible | $2,000 | $1,000 |
| Family deductible | $4,000 | $3,000 |
| Out-of-pocket max | ~$8,000 | $3,800 |
| Specialist access | Referral + pre-auth required | Direct access |
| Dental/Vision | Separate (additional cost) | Included |
| Life & Accident | Not included | Included |
The Decision Rationale
The company's leadership had a clear hierarchy of priorities: stability first, savings second, benefits quality third. The Taft Hartley solution was the only option that delivered on all three simultaneously.
The stability argument was decisive. The owner had spent years reacting to renewal increases, each year scrambling to decide whether to absorb the cost, pass it to employees, or downgrade the plan. This reactive cycle consumed management attention, created employee anxiety, and made it impossible to make multi-year financial commitments with confidence.
The Taft-Hartley structure fundamentally changed the dynamic. With non-experience-rated premiums and a six-year track record of 2 to 3% increases , the company could finally treat health benefits as a predictable operating expense rather than an annual wildcard, moving from "hoping for the best" to "planning with certainty."
The benefits upgrade sealed the deal. Level-funded and PEO options could have saved money, but both carried the risk of future volatility, and neither offered an immediate upgrade in plan quality. The Taft Hartley plan delivered lower costs AND better benefits simultaneously.
The administrative simplification was a bonus. Eliminating HMO referral requirements and pre-authorizations immediately reduced employee confusion and HR support calls. The PPO structure gave employees direct access to specialists.
Run Your Premium Renewal Stress Test
Use our free Premium Renewal Stress Test to model what your benefits costs will look like over the next 6 years under different renewal scenarios. See how switching from volatile fully covered plans to stable Taft Hartley rates could protect your budget, and your bottom line.
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