How to stay ahead of a difficult 2026 renewal season.

Bryan Davis: Well, hello, everyone. My name is Brian, and we are gonna get started here in a couple of minutes, so we're just gonna give folks a couple more minutes to join. And, then we will… we will dive in. For the folks who are already in, you know, maybe drop where you're joining from into the chat. We'd love to see what parts of the, what parts of the world people are dialing in from.

I happen to be in the Pacific Northwest, right outside of Portland, Oregon. San Jose, love it. LA, very nice. New Hampshire, alright. That's close to you, Brandon.

Brandon Young: Yeah, not too far.

Bryan Davis: Yeah. Boise.

Colleen Locke: Too far from me in Connecticut, either.

Bryan Davis: Alright, Chattanooga, Franklin… Excellent. Chattanooga. I grew up in, I grew up in East Tennessee, so I always have a little bit of a smile when I see… when I see Chattanooga pop up on the screen, so… Good memories. Here we go. All right, we'll give everybody, like, one more minute, and then we will, dive in.

All right, well, let's go ahead and… and get started. We can flip to the agenda slide. So here's a… here's a quick look at, you know, what we're going to cover over the next, you know, probably 40-ish minutes. I don't think it's a surprise to most this year, in particular, shaping up to be a kind of uniquely difficult year in terms of renewal increases.

And so, right out of the gate, I just wanted to say this is a fairly heavy topic. Some of it does not paint the most rosy picture for, kind of, the state of employer-sponsored healthcare. And I think as such, we want to both understand the why behind what is driving some of this, and then talk about how we can best respond to it, and we'll walk through kind of both of those today.

So we're going to start by unpacking, you know, what's driving, again, kind of a pretty difficult 2026 renewal seasoning, both from a macro, landscape standpoint, and also some market-specific, dynamics. Then we'll take a closer look at, kind of, who's being hit the hardest, adding the, the… The sneak preview on that is everybody's feeling a little bit of pressure here. And then from there, we'll talk about why the traditional tactics that have been deployed over the last, you know, couple of decades aren't quite working anymore, and why the old playbook that, frankly, our industry has relied on just isn't delivering the results in this specific environment.

And then we'll share some ways that you can take back control, and set yourself up for success this year in this market, and hopefully for years to come. And so today, we hope you'll walk away with a deeper understanding of why the market is doing what it's doing, and then how you can best be prepared to respond to that. And so, with that, let's introduce our speakers for today.

I'll go ahead and start. Hi everyone, I'm Brian. I'm the National Practice Leader here at Nava. I've spent my entire career working on 26 years now. as a benefits consultant and an operator. And today, I head up our consulting and solutions team here at Nava, and we work with clients and prospects to help them identify their right strategies and their right tactics for their organization and for their, kind of their benefit goals, if you will. And I tend to get pretty passionate about this stuff, especially the topic we're gonna go through today, and I think while this year is a very difficult year, or will be a difficult year for a lot of employers, it's also creating a ton of opportunity for employers to take back control. And I think many are going to find this maybe a forcing function, or the nudge that they may need to sort of get them over that next step and taking back some control of their health plan. And so I'm really looking forward to unpacking that dynamic today, and with that, I will turn it over to Colleen.

Colleen Locke: Hi everyone, I'm Colleen Locke. I'm part of the solutions consulting team here at Nava. So I get to work with clients and prospects to really understand, their current benefits setup, their pain points, and really think through those strategic solutions that could bring their benefits program to a better place. So, I also tend to get very passionate about kind of arming our clients and prospects with knowledge about new things that might be out there in the marketplace, and, are excited to walk you through some of those potential solutions today. I'm Brandon.

Brandon Young: Thanks, Colleen, I appreciate it. I'm Brandon Young, I'm the Chief Marketing Officer at Garner. I've, let's see, I think at the end of this year, it'll be 27 years for me in tech marketing. Interestingly, I did get part of my start in PNC insurance and led a team there.

And have had the opportunity to manage a few HR and people teams along the way, too, so I feel a lot of deep empathy for what's going on today. It feels… it feels brutal, and I can really feel the squeeze between employees and the CFO for CHOs and benefits leaders today, so I'm really excited to get in and talk about some ways to get out of that squeeze, and feel like you can get a win with both.

Bryan Davis: Great. Thank you. So, we're going to take just a quick moment up front and just do a brief overview on Nava and Garner, just so you have some context on sort of who we are and what we do. So those of you who are not familiar with Nava, we like to think of ourselves as kind of your modern benefits co-pilot. And what that means for us is really three things. I mean, first, we're going to bring an AI-powered platform that helps make benefits management, managing your own internal benefits program. And making decisions around that, that program smarter and faster.

And second, we reimagined that experience with our Nava HQ platform, where employees and HR teams can get support and guidance from, you know, real experts. And then third, we stay engaged all year long, providing both strategic and tactical support, not just for HR leaders, but also for employees and their families.

And so, it's really for us about giving HR teams the tools and the insights, and then the right amount of that human touch, so that they can run a modern, sustainable benefits program. And so, it's a little about us, and I'll pass it to Brandon to give us a quick overview on Garner.

Brandon Young: Thanks, Brian So one interesting thing I learned when I came to Garner about a year and a half ago, and my background isn't marginally in healthcare, it was the fact that about 30-40% of what we spend in healthcare is wasteful. And really, a lot of that waste is created by the disparity between the best and the worst doctors in the country. And it's really a tragedy, because the best doctors in the country are doing the right things for their patients, usually at the cost of their own careers.

Meanwhile, there are a lot of doctors out there who are predatory, who are, you know, overutilizing care. You know, surgery isn't always necessary, but there's a lot of doctors who will take patients to surgery because it makes them a lot of money at the cost of the patient's health.

And at the cost of the… Ruby at the employer's bottom line. And so, Garner is out here to really try to cut through the noise. We are a unique way to approach reducing your healthcare spend, while also increasing the quality of the doctors that your employees are seeing. And we do this by sitting on top of the existing health plan. And driving more of your employees to the better doctors inside of that network. And the way we do this is we've established, really, what I would argue is a new standard in doctor rankings. We have the biggest data set in the country, about 5 times larger than any carrier, that covers about 320 million patients. And then the secret is we run that through about 550 clinical metrics, and what we're doing is we're evaluating doctors through every single episode, every patient that comes in the door, to understand, are they appropriately treating that patient? And what we found is the best doctors not only offer better quality.

But they also lower costs by about 27% per episode of care. I know, it's pretty shocking. You can get the best doctors, and you can pay less. The trick is finding them, and that's really what we've done. You know, we've found the top 20-25% of doctors in the country. But that's not enough. Like, finding good doctors is a great first step, but we need to get employees to visit those doctors.

And the beautiful thing is, when you can save 27% per episode of care, you can actually give some of that back to your employees to visit those better doctors. That's right, we can pay them to go to better doctors and still get a much better bottom line at the end of the day. And so we offer an incentive model that reimburses employees when they go to Better Doctors in your existing network. And the result is, our average client saves about 12% in the first year and ongoing against their health plan. And the more we can engage employees, the more we can drive that number up.

Bryan Davis: Thanks, Brandon.

Brandon Young: Yep.

Bryan Davis: So, we wanted to maybe frame this a bit. This was a recent quote from Business Group on Health. It was from an interview from about 2 weeks ago. specific to the cost trends employers are experiencing. And I'll just read it. So, the story this year is perhaps more daunting and sobering than it has ever been. And honestly, I think this really sums up what a lot of people in the employer health plan ecosystem are feeling.

This is not meant to be a scary statement, but rather just to remind us that this is an unusual year, and how we collectively respond as employers and advisors I believe will actually shape how this industry moves forward in a lot of ways. We're kind of in a unique position right now to vote with our wallets and our actions and, you know, ultimately, hopefully drive some change into this marketplace in terms of how employers are managing their health plans at the end of the day.

Which, in some ways, I would argue the industry needs. And I'm excited to see employers start to adopt new strategies. I'm really excited to see, you know, what the team at Garner is doing, and how that is really starting to take off with employers looking for kind of new, more innovative ways to sort of manage that spend. And, on that note, I'll, Brandon, I'll pass the mic to you to give us some color around some of the rising costs.

Brandon Young: Yeah, so it probably makes sense to start with something that we're all really familiar with, and I think we're all seeing, is this medical trend surge that's happened really since COVID, but has continued to skyrocket, and I think even this year, I think Aon was predicting something like a 9% trend. We're now looking at a 10% or 11% trend on average, which is crazy, like, unprecedented, and this is likely to happen for the next few years.

But the story that I think most people don't see, and if you're one of these… if you're one of these organizations, you're not alone. More and more employers are receiving a greater than 15% renewal. And I'm going to talk in a minute about why this is so impactful on employers' bottom line, and why it becomes an existential crisis, but if you can see the chart on the right.

Almost 3 times the number of employers just in 2 years now. are receiving a 15% plus renewal, and the optionality that employers have now, and how to deal with that 15% renewal is really getting locked down. So you're losing the power of how to, you know, really get out of the tough situation of trying to figure out how to cut costs when you get that 15% renewal, without a lot of options, you're kind of backed up against a wall. And you're not alone. You know, I think next year we might see this number surge to 30 or 40%.

So, it's really time to start to think about how we can build a much more sustainable cost management system around the healthcare surge that we're seeing. And if you could hit the next one for me. And so here's sort of the conclusion of that, right? Like, where does the bottom line, go? So, you know, this is an interesting stat on the left. If you kind of see the difference between overall healthcare costs for an employer against their profits.

Healthcare costs are now starting to eclipse the profits of the average employer in the U.S. And if you see the ramifications on the right, really, it's dangerously eating into profits, right? We now have more than one-third of employers who are seeing a 10% decline in profits simply from their health plan, which is kind of crazy.

Like, if you think about the implications of this, you know, we are going to see employers who are going to have to make a drastic decision, or potentially look at becoming insolvent. And this has become an existential threat, right? And for most of you in the room, if you're in HR or in benefits, the CFO is coming knocking and saying, hey, we have to do something. We have to do something today, and it has to be able to sustain for years, because we can't deal with this year in and year out. I'll turn it back over to you.

Colleen Locke: Yeah, and so this… this problem of accelerating medical costs isn't limited to just one segment, fortunately or unfortunately. We're really seeing this applied across every corner of the market, so individuals who have historically received benefits by going out to their state ACA marketplace are seeing 10-20% increases.

Employers who have utilized a PEO for, more competitive benefit options are now seeing significant increases. I'm working with one group right now who's examining options outside the PEO because they received a 29% renewal. And then, of course, the employer group market. Both small and large group employers are gearing up to receive these significant increases for 2026.

And if you just think about, you know, one of the other factors that could impact HR teams, or something else to think about is, you know, with this median proposed renewal increase in the individual market hitting about 18%, you might also see more of a shift of employees who may have gone to the marketplace before jumping onto your employer-provided healthcare plans now. And so.

Just another way that costs, you know, may increase, directly or indirectly related to some of the renewal increases that we're starting to see. So now that we've talked a bit about the what in terms of what to expect for the 2026 renewal season, we're gonna take a few minutes and talk about the why, and see what is exactly causing these spikes.

And starting first, focusing in on some of the ways that healthcare has been expanding and providing more comprehensive, but also more costly healthcare. So, I think if there's one kind of buzzwords within the benefits space that we've heard over the past year or so, it's got to be GLP-1. I feel like this has been coming up everywhere in every benefits article for quite a while now, and These drugs are just one example of new and medical care that has continued to evolve, that in addition to expanding coverage, has also dramatically increased costs.

So if… if we look at, just as of mid-2025, GLP-1s account for 21% of employer pharmacy spend, and 4-5% of combined medical and pharmacy. That's a relatively big percentage for one class of prescriptions, so you can just see how much of an impact that has had over the last couple of years.

And another area where pharmacy, in particular, has exploded is within the specialty space. So specialty makes up about 50% or so of total pharmacy spend, although it represents only 2% of the total scripts that are being filled. So, again, just an abnormally large percentage of cost for something that, you know, on a fill basis is relatively tiny. And oncology spend, although this is obviously exciting to see in terms of advancements around cancer care.

This is rising astronomically. So there was $99 billion in oncology spend in 2023. That's a… that's just a huge number, and is… is, due in partially because cancer care has become more personalized. So there's new tailored immunotherapies that we're seeing, there's personalized cancer vaccines, so one that we've been seeing is in, the area of treating melanoma.

And while these save lives, they are wildly expensive for health plans and can really lead to direct cost increases for employer-sponsored coverage.

And many of these treatments, you know, while they are promising and also costly, sometimes they come with medical waste, and they're not necessarily resulting in the better outcomes that we think they are. And maybe, Brandon, I'd love to get your perspective on that.

Brandon Young: Yeah, so one thing that's helpful to think about, like, there's GLP-1s specifically, but there's also GLP-1s archetypally, right? We're always going to see new treatments coming into market, and we look at the data anytime we see a new treatment come into market, and this is what we see day in and day out. as something becomes popular, more and more people go to their physicians and say, hey, I want to try out the new fad. In this case, GLP-1s, as we saw the surge start in 2021, more and more people became aware of GLP-1s, you know, it was on Oprah, and you can actually see that spike around 2023, where it really took off.

And, what happens is more and more folks go to the doctor and say, I want to try the new thing. The problem is, when they do that, you get more and more of these low-value prescriptions, more doctors who acquiesce to the patient and don't really want to push back and put them on the right treatment plan.

Bryan Davis: Now, the interesting thing for us is, you know, you can see, like, this is reaching almost 50%, and I think this will continue to go up.

Brandon Young: of scripts that are wasteful. And by the way, we define a wasteful script as, in this case, a patient who is dropping off the treatment before it becomes effective. You know, a lot of things that people don't know about GLP-1s is that it can cause you nausea, it can give you stomach pains, right? And so when a lot of people deal with these complications, they start to drop off the medication. And they didn't really get the warning label from their doctor.

And I think it's about a 65% drop-off right now in the first, 6 months with GLP-1s, which is crazy. So, you're paying for that first 6 months, and it's never going to be effective because the patient's dropping off due to complications. And so you can actually see, you know, when you look at it at the macro level, you see all these wasteful scripts, but it's really a minority of doctors who are driving these wasteful scripts. So what you're seeing here are the top 25% of doctors and the bottom 25% of doctors. And the thing you'll notice right away.

Is there's a 6 times greater rate of low-value scripts written by these bottom-performing doctors.

And this is why, you know, we really think about this as a core thesis behind Garner, right? As that new treatment comes out, if you have a top-performing doctor that your employees are seeing, they're going to be much more judicious in the way they're writing scripts like GLP-1s. for your employees, and then as a result, you're not going to see that surge in wasteful spend, and then therefore the surge in medical spend as a result. While your, you know, your competitors and peer companies are going to have to deal with a lot of that cost if they aren't managing the doctors that their employees are seeing properly.

Back over to you, I think, Brian. I'm sorry.

Colleen Locke: No worries. Yeah, really helpful context, and really interesting to break it down like that. You know, another driver here is around high-cost claimants, and this is probably not surprising, given, you know, this discussion that we're having around expanding expensive treatment options.

And these high-cost claimants are becoming much more prevalent and more expensive. Sun Life had reported that the rate of claims over a million dollars increased by almost 30% within one year, and claims over $3 million rose 47%. So those are really large, large claimants, and that prevalence rate just keeps continuing to climb. This is directly related to that increase in expensive medical care, the new treatments that are available, and also expanding life expectancy that's related to those two things as well.

And with this increase in high-cost claimants, the stop-loss carriers are… they're just struggling to keep their profit margins up. They're needing to increase premiums in order to keep up with these claim costs that we're seeing, and we expect to see that, you know, translated into the 2026 renewals and beyond. And I'll pass it off.

Bryan Davis: Yeah, thanks, Colleen. So, a driver of healthcare cost inflation that we sometimes overlook is simply that we are getting older as a population, and I think that old saying, like, you know, father time is undefeated, kind of really hits home with, like, some of this data.

So the U.S. population is aging at a pace that we have not experienced before. In 2013, 13% of Americans were 65 or older. Today, that number is 17, and by 2033, it will be over 21%.

That essentially means that 1 in 5 Americans will be in the highest cost age bracket within the next decade. And so, why does that matter for us as employers? Because we typically don't have a lot of 65-plus members on our health plan. Sometimes we have a few, but not very many. Couple reasons.

One. Because healthcare spending for those who are over 65 is obviously dramatically higher. It's over 5 times what we spend on children, and over 2.5 times more than what we spend on a working-age adult. That spending doesn't necessarily disappear from the system when employees go onto Medicare, for example. It influences the overall healthcare system by potentially squeezing the margins on hospitals and the capacity inside of hospitals. And those providers then pass on that cost to insurers through their reimbursement negotiations, and ultimately to us inside of our premiums. And, you know, Brandon, when we layer on top of this, you know, kind of what we call, you know, we like to call a care deficit, we kind of get a kind of a double whammy here. And can you explain that concept, a bit?

Brandon Young: Yeah, so I mean, maybe the simplest way to think about it is there are people who should be going to the doctor for preventative care today. And they aren't. And I'll talk in a minute about why that's happening, but first, you know, let's just talk about how much of an issue this is. There's some reports that have come out from the Commonwealth Fund, and the Federal Reserve also reports on this. But now, 4 in 10 adults are saying right now, at this minute, they are delaying or foregoing care. And I'll talk about why that's happening in just a minute.

And 2 or 3 of them are saying… two of… five of them, sorry, are saying that their health is now worsening as a result. Why are they not going to the doctor? It's really three things. And unfortunately, a lot of it is a result of the mechanisms that we've put in place as employers over the past decade to start to draw down on some of the costs that we've seen come in.

And the first one is, you know, we've really built this wall, right, for employees, and the first piece of that wall is the financial burden that we put on them, unfortunately, in terms of higher deductibles, right? When the deductible goes up. it becomes much more questionable for them whether they want to go to the doctor. And, you know, we reached this point 3 years ago, unfortunately, where the average American family has less in their bank account. than their high deductible is with their employer. And so what that means is they're making a decision about going into debt, potentially, when they are feeling knee pain, and having to go to the doctor.

And I understand, you know, this is something we had to do, or we would likely have had to pull back healthcare for employees, but this is the unfortunate result. There's two more. So there's also, you know, the physical constraint that's been put in place in terms of access. So as we start to narrow our networks, right, as we put in place health plans that aren't as broad, and, you know, we do this obviously to cut costs as well, what ends up happening is it's harder to find care.

And, you know, in our busy lives, it's hard to get to the doctor when you, you know, the one doctor in your town who has availability in the next two weeks, you know, is 15 miles away. Because we've narrowed that network, it means fewer people are going to go to the doctor. The third one is. really on the insurer's side, you know, we've started to see a much bigger increase in prior auth denials, right? So, what that means is people are going and trying to seek care. but they're running into a huge administrative burden to get there. And so the result between those three is we see more and more people who need care, probably preventative, who are delaying that care.

You know, and all that deferred care ends up being, you know, really a catastrophic health risk for each one of those individual employees. And I think there is a huge health burden in this country that we're not seeing as a result of these barriers to care access that have been put in place. And I think one of the exciting things for me is we're starting to see new solutions that allow employers to take back control and give their employees the access that they need to live, you know, fruitful lives and live healthy lives and be able to not have to make decisions about putting food on the table or paying their healthcare bills.

I'll get off my soapbox.

Bryan Davis: No, that was great, Brandon. I think, you know, the key takeaway here is that there are structural pressures inside of the system, and I think employers are obviously being hit, like, yes, by, you know, insurer pricing decisions, but I think there are also kind of long-term demographic shifts and, you know, This wave of delayed care that are just putting pressure on the system itself, you know, across the board.

You can flip to the next slide, and the… so the next… so the last driver we're going to unpack is consolidation. Both among providers and insurers. And so, on the provider side, hospital system mergers have shown in multiple studies, including a really interesting one from RAM Corporation, if you want to Google it. to increase costs anywhere from 3% to as high as 65%, particularly in markets where there's less competition. So, when hospitals consolidate, they gain pricing power, which shows up in, again, kind of in re-insurance reimbursements.

And ultimately, in our premiums. And so it's not just the hospital mergers, or kind of horizontal hospital mergers, if you will. The vertical integration is having an impact as well. And so that basically means when hospitals acquire physicians groups, or combine with outpatient services.

Research shows that it can drive premiums up by as much as 12%, increase specialist pricing by 9%, and primary care by 5%. And so, rather than driving efficiency, which is usually the company line when we see these in the press, the reality is often they're actually translating into higher costs inside of the system.

And interestingly enough, we're seeing this play out in real time with, 3 very large mergers that are going on right now in Connecticut, in Chicago, and in Ohio.

And these are examples, again, of things that are happening in real time, and as these come to fruition, those markets are going to change at a local level in terms of how the insurer and provider community interact with each other. But what we do know is those providers, because of the consolidation and the kind of decreasing competition, are going to increase their bargaining power and their ability to negotiate with insurers Which eventually, again, kind of ends up in our premiums.

And then on the carrier side, we're seeing vertical integration as well, mostly inside of, kind of in this PBM and carrier model, and so 4 of the 5 largest PBMs, or pharmacy benefit managers, are now owned or integrated with major insurers. Think CVS and Aetna, think Express Scripts and Cigna. Again, I'm sure you're kind of sensing a theme here. You know, competition is decreasing, and the choices are becoming a bit, a bit limited. If we think about, you know, kind of the so what, or the bottom line on this, is that in kind of competition, or consolidation is reducing competition across the system, and that, that lack of competition, almost always eventually leads to higher unit costs, less choice, less transparency, and I think, ultimately, kind of higher insurance rates, for, for employers.

So, with that as context, I'm gonna get on my soapbox for just a minute here, Brandon, and give our industry a hard time for just a minute, so forgive… everybody forgive me in advance. So, I think for years, you know, HR teams, along with their brokers, advisors, or consultants, have relied on a very familiar playbook in how to address these things.

We would play, you know, with the collective we, the royal we, we would play carriers against each other, and hope that just competition got us a better rate. Hey, I've got a 20% increase from Aetna, I'm gonna take it to Cigna, and hope that I can get some negotiating going back and forth. or we would push really hard in negotiations, and I think, you know, here on the slide, we have, you know, yelling in quotes, but it's a little tongue-in-cheek. But honestly, it's probably not far from the truth in some cases.

And then when everything else failed, we would, you know, as Brandon mentioned earlier, we would cost shift to employees. We'd raise deductibles, we'd put contribution, you know, shift contributions over to employees.

But the reality today, I think, is very different in this environment. The first thing is carriers are de-risking their books intentionally. They're being very intentional about targeting their worst risk pools, and then pricing them out. And what that means is, hey, if I'm Aetna, and I have I have a customer that I deem a poor risk for me. I'm gonna, as an example, maybe they're gonna get a 40% or 50% increase in their insurance rates. Well, if… I, as a broker, take that to UnitedHealthcare and say, hey, UnitedHealthcare, do you… can you get aggressive on this and reduce this cost? Well, guess what? UnitedHealthcare is doing the same thing on their book, and they are, kind of intentionally, not providing the rate relief that we have traditionally seen in that exchange or in that sort of negotiation. Because they're all kind of doing the same thing. And so, the bottom line there is there is less room to play the insurers off of each other, particularly if we're having some of those really high, really high renewals where they're essentially kind of trying to de-risk, de-risk their book.

I think the second comment here is, you know, I don't like to say this word out loud, but for all practical purposes, we are entering, or are in, a hardening market. You know, simply yelling louder or, you know, demanding that the price comes down doesn't really move the needle when the insurers Are really dug in on their price, and they are, you know, strategically trying to, again, kind of de-risk, de-risk that book.

And then lastly, I think employees are growing, you know, more and more disgruntled about just the cost shifting they're experiencing. I think, you know, especially in a high inflation economy, which is kind of where we are, frankly, today, where wages are struggling to keep up, it just becomes, as I'm sure you all know very well, increasingly difficult for employers to pass on cost increases to employees in this environment.

So, obviously, this paints a fairly bleak picture. It's not lost on me, and certainly this year is going to be hard for some employers as we kind of try to figure out how to navigate through this, especially if the old playbook's, you know, not working, and that's what we're relying on. So it begs the question, what do we do now? Like, what are our options?

And while we can't necessarily say, hey, this XYZ strategy is a silver bullet for you, or that strategy works for everyone, what we do want to do today is to give some framework on how to be intentional about setting ourselves up to evaluate and then determine the best path forward for our… for our organization. In other words, like, how do we go about making the right decision in this specific environment?

And so, in the spirit of that. We're going to cover 3 actions that you can take today. Knowing your numbers, knowing your priorities, and then knowing your options. And so, when we get those 3 pieces right, we really put ourselves in a position to make an informed and strategic decision that kind of fits your business and your employees.

And there's maybe one more comment I'd like to make before I dive into these. I think it's… this environment, or shift, I think, puts a greater spotlight on the role of the broker and the advisor or the consultant that's working with HR teams. It's… I don't… my personal opinion, I don't believe it's good enough anymore to sort of keep rolling out the old playbook and trying to, you know, work the market, if you will. I think the more successful brokers and advisors in this environment are going to help their clients truly understand their data, guide them through the trade-offs that they need to be aware of as they make these decisions. And, and bring forward and recommend, the right set of options for those, for those employers. And so, flip to the next slide.

So let's talk about knowing our numbers. And so this, I think, for us, fundamentally is about giving yourself clarity so that you can make, you know, smarter decisions, or more informed decisions, I should say. I think for small and mid-sized employers especially, fighting against a fully insured renewal and a hardening market is a really tall order.

And we're seeing it in the market today, you know, frankly. But having a solid grasp of our numbers kind of helps us choose the right strategy, and the clearer we are on our own story, I think the easier it is for us to weigh our options and just be really confident in what trade-offs we can absorb.

And so let's talk about demographics first. So this is just understanding what your workforce looks like by age, by gender, by location. What plans do they choose, and why do they choose those plans? you know, a younger workforce has a very different cost dynamic, and frankly, very different expectations of their employer than one that has, you know, a ton of dependents or a much higher age. And so. these demographics really become, I think, you know, the fundamental building blocks of every health plan decision that we make, whether it's out-of-pocket costs, contribution strategy, pharmacy design, the network that that we use. All of these should be weighed against the specific needs of our demographic, when we're thinking about, kind of, adding new, new or certainly innovative, innovative solutions.

The second is claims history and cost drivers. And so, I know everyone on this call doesn't… Doesn't get great, solid claim experience reporting today, and some may not get any at all.

Brandon Young: Which is, you know.

Bryan Davis: Soapbox over here. One of the fundamental problems we're trying to solve by taking back control of our health plan.

However, most plans over 100 employees will provide some claim experience, and so we want to be sure to ask for it, we want to be sure to work with our advisor or our broker to understand, you know, if and how that experience impacts your options. I think the more that you know, the better off you're going to be when we're trying to determine that best move, forward. I think the last is benchmarking. you know, it can be a very helpful strategic tool, especially when considering a change to a health plan. You know, where does our plan sit relative to our peers of similar size, industry, geography? Knowing this is important because it gives us an empirical way to determine if we have room to change our plan design. Or are there areas where we may want to invest in?

Or cut inside of our plans when, you know, kind of push comes to shove. And not to mention, I think benchmarks can be a great tool for helping communicate or even validate some changes to employees, especially more drastic-type changes if we're, you know, trying to drastically changing our strategy. Obviously, you know, done, thoughtfully and in the right situations, but can be very helpful for us. And so I think the bottom line Here is that while these things may be fairly simple to know, or seem like they're kind of simple data points.

They're incredibly important in helping filter all of the solutions that are available in the marketplace. And that filter helps us determine really early on, like, what may work for us, and I think more importantly, what doesn't work for us in terms of a health plan strategy, if you will. And really, so we're focused on… kind of focused on the right things.

And before I hop to the next one, Brandon or Colleen, anything to add to that?

Brandon Young: No, I'll let you keep going, Brian.

Bryan Davis: Thanks. Alright, and so the… The next step there is, once we understand our numbers, is getting clear on our priorities. And so.

I think if… I would encourage everyone, you know, if… if you don't get anything from this session today, like, you know, take a screenshot of this… of this slide, and… and kind of think through… think through some of these. It is… Arguably the most important piece of clarity that we have when we're facing any change inside of our benefits program, or in our, obviously, our medical plan.

So, every employer is balancing the same five levers, every year. It's cost versus benefits quality, it's cost versus the bandwidth that the organization has to make changes, it's cost versus the satisfaction that the employee has, and it's cost versus just tolerance for disruption. And, the, the… reality is that we can't maximize all of these at once. They all have some trade-offs relative to what we can absorb and what we can't, and so it's important to build that alignment early on across HR and finance and leadership around what these priorities are for your organization.

And that… that framework often becomes almost like an easy button decision filter. If we know where we stand on these, it really empowers us to make hard decisions much easier, if you will. And think, you know, for example, in years like this, where we're seeing significant cost pressure, the organizations that are going to be the most prepared to respond are those that already know where they can bend, and they already know what the most effective levers are going to be from them.

You know, a good thought exercise that we… I've done with some clients in the past is just to stack rank these under different situations, you know? Like, what are the most important to to me and my organization, in a… in an environment where I have a very manageable renewal. It's a flat, or a 5% increase. How do I… how do I find… how do I value these, against each other? And then write it down. And then imagine we had a 40% renewal, or a 50% renewal, whereas cost is not manageable anymore. How do the priorities now differ in those two scenarios? It can really be just a helpful thought exercise to… to frame what you're kind of truly open… open to in those situations.

And I think, you know, what… you know, we kind of remember that no strategy is perfect. There's always some trade-offs there, and we… if we're intentional about where we can flex and where we need to hold firm, we can really put ourselves in the best position to make a strong decision there. And that leaves us with our third option, which is know your options.

I'll pass it to Colleen.

Colleen Locke: Thanks, Brian. So, you know, once you've done those first two things and nailed down your, your numbers and your priorities, the third kind of piece of that puzzle, so to speak, is knowing your options.

And what we hear a lot of the time is that many employers go into renewal thinking that there's only a couple of levers that they have, in order to reduce costs, being plan changes, maybe a carrier change, maybe a no-market strategy, but those are pretty uncreative ways of thinking, and the reality is that there's a much bigger menu of strategies available for employers. They just have to be willing to explore them and be working with a partner who can guide them through that process. But being willing to try something new and taking a look at these alternative options are really where you can start to get traction on reducing costs and taking back some of the control of your plan.

So we have a number of examples here. I'm gonna walk through a few of these options, briefly, just to give you an overview of, you know, what's the high-level kind of TLDR on each one of these. And so if we start with. The bucket under self-funding. So, self-funding historically has had a reputation of being just for larger employers, but that's really not the case anymore.

There is expanding stop-loss protections that are available, and there's a lot of different modes of self-funding or alternative funding that are available under this umbrella. So things like level funding, gap funding, these are areas where small and mid-sized employers can really start to capture the upside of better claims, but still have, a lot of, you know, protections in place and effectively manage your risk. And one of the best things about moving into a self-funded or alternative funded scenario is that you can start to gain real visibility into driving your costs. So, if we think back to, you know, what Brian was saying, a lot of groups don't get deep insight into their claims experience. But you do start to get a lot more of that information if you're self-funding, and then you can start to do something about what's driving those costs, whether, you know, you can identify if it's specific conditions, if it's in the pharmacy, if there are plan design changes that could actually help underlying behavior, that's when you can kind of get under the hood and start making changes that are going to have some impact.

Another one that we think about is, care stewardage and navigation. So, steerage does not mean restricting choice for your employees, but really what it means is guiding them to the highest value providers. So Garner is one example of a navigation platform that allows members to do just that. And these stewards or navigation strategies improve outcomes and lower claims costs at the same time. So, you can add these to both fully insured and self-funded arrangements. They can be an added layer on top of an underlying plan, and they can really start to direct your employees to, high-quality providers that can have a really big impact on cost over time.

Another one that's a little bit newer relative to some of the other options that we're looking at at this list, is variable copay plans. So these are becoming more popular, and the most well-known one is probably UHC's Surest program, if that's something that some of you may have come across previously. But variable copay plans move away from the traditional, like, deductible copay model, and instead they give employees price clarity for different providers and services. So they really, they leverage transparency. to encourage employees to make smart decisions about, how they're accessing care and who they're going to, so to go to those high-quality, low-cost providers.

This can create smarter utilization, it can reduce some of that wasteful spend that we might see in other arrangements, and it also can improve employee satisfaction at the same time, because costs can be so much lower, in these arrangements, and there's so much transparency, so they know exactly what their dollars are going to. Reference-based pricing, or RBP, as you may have heard it called before, this has sometimes been given a bad rap due to the employee education and disruption that comes along with this funding model.

And historically, I think reference-based pricing was most often reserved for kind of the most dire of circumstances, right? So employers would really only, seriously consider this option if they were, they felt like they've exhausted their options and just needed some significant savings on the table. But today, a lot of those barriers and the poor member of experience Poor member experience have come such a long way, and there's providers and vendors in place that can do this sort of arrangement very well. Rbp sets fair and transparent prices based on a multiple of Medicare rates, and so it cuts out, again, a lot of the fat or the wasteful spending that can, exist in a traditional medical plan, and it can save up to 30% versus a traditional PPO pricing. So. You know, it does require some careful consideration, because there is a lot of education that goes on to make this successful and to mitigate some of the employee disruption, but it can be a really powerful way to, you know, reset your cost baseline, get some savings, and when working with the right vendor, can provide a pretty positive member experience as well.

And then the last one I'll touch on here is, ICRAs, so Individual Contribution, HRAs. And this is a pretty different model than most of the way that we think about, employer-sponsored healthcare. And an ICRA basically allows an employer to give their employees a flat dollar contribution. And the employee can go out to the marketplace and select their own healthcare coverage, and so it takes… some of the decision-making power, or the onus off of the employer, and put some of that power back in the hands of the employee to decide which plan is going to be the best fit for them and their covered dependents, if that is the case for that individual. But it is moving away from, the sort of. the way that employees are used to accessing care through their employer and, you know, gaining some of the additional levers of support and education around specific plans that have been selected to them. So, you know, the… another thing that we're thinking about or watching very closely when it comes to the ICRAs is just some of the volatility within the individual market. So, you know, one of the things that we said at the beginning of this presentation is that that is another area We are seeing some more significant increases being placed.

And so we're gonna keep an eye on that for sure over the next couple of years, and, you know, monitor to see if that continues to be a viable option. But it definitely is a alternative that can be a good solution to the right employer fit. So, I know the sheer volume of options that we're looking at here can feel a little bit overwhelming, and that's where, you know, those first steps that we talked about really matter. So, you want to align on knowing your numbers, knowing your priorities, and that, again, helps you sort of narrow down or filter these options to figure out, you know, what could be a potential fit for your organization and your employee base.

And I think the key takeaway here is that nothing changes if you don't take action, if you change nothing. Employers who are willing to put these new models on the table, And are really willing to dive in and seriously consider some of these alternatives, have the opportunity to set themselves up for success and set their medical programs up to be very sustainable long-term.

And anything, Brandon or Brian, you want to add there?

Brandon Young: One thing I was thinking about when you were talking about this earlier, Brian.

One maybe interesting thought experiment for a minute is to think about how you offer healthcare to employees in a slightly different way. You know, oftentimes we think about this as a benefit that we're buying from a vendor, like a carrier, right, and we're giving it to our employees. But really what we're doing is we're contracting with thousands of doctors on behalf of our employees to provide them care. But we really haven't had mechanisms in place to performance manage those doctors, right? In the same way we would other contractors.

And so what we've been doing is deferring that, right, that administration and management to the carriers. Right? You can pick the doctors who are in the network, and then counting on our employees without really any tooling to go and find the best doctor for them.

And I think with the situation we're in, when costs are where they're at, I think we have an opportunity to partner more with employees, and, you know, be a little bit more open and honest about what's going on with our healthcare spend, and the fact that it's much harder to get as much for our dollar.

And I think in that partnership with employees, it gives us the opportunity to give them the tools to make better decisions about the physicians they're seeing, and then as a result, lower costs for both of us, both, you know, the employer and the employee.

And that's, you know, that's really, like, one of the things we're trying to think about when the system is starting to break, in such a way that it's an existential crisis for employers. How do we start to partner with employees to make better decisions?

Because at the end of the day, that's the more sustainable path forward, where we don't have to continue to put access restrictions in place in the financial sense, in the physical sense, in the case of the network, or in the administrative sense, when we're dealing with prior auth and things like that, which, if you think about it in a way, is just kind of micromanaging the doctor's decisions.

Colleen Locke: Very well said. All right, so I think we can wrap up with some of our key takeaways here. And, you know, our discussion today was not meant to, you know, scare you going into this renewal season, but we really wanted to arm you with information to feel prepared and have a plan for how to tackle a renewal if you do receive a renewal that's higher than anticipated or higher than you wanted.

And while we expect the renewal volatility to, you know, unfortunately continue, there are these strategies that can allow you to take control of your plan and mitigate that impact. And a few of those are you want to make sure that you're working with a strong partner to evaluate your strategy. You want to be working with, you know, a team that can help provide guidance on the best way to navigate your options.

And you want to be doing all of this proactively to avoid surprises or a time crunch. So, if you haven't received your renewal quite yet, it's a good time to really start thinking about these things, thinking about, you know, uncovering your numbers, aligning your priorities, and making sure that you have a plan of action, to, approach any renewal challenges that might come your way. Alright.

So before we jump into Q&A, just wanted to quickly flag our next webinar that's coming up. It's going to be on September 18th, and Nava will be joined by Cleo to talk about caregiving, and not just child or elder care, but every stage in the middle. So, we're going to put a spotlight on the sandwich generation, those balancing kids and aging parents can be quite difficult. And share some strategies that HR teams can use to better support caregivers and strengthen retention. So, we hope to see you there as well.

Bryan Davis: We did have one question that came in through the chat, and it was, how are ICRA plans compliant with ACA?

I'll take a stab at that and, you know, Colleen or Brandon, please jump in as well. But essentially, there are two things that the employer has to meet in order for this to work. One is that the plans that the employees end up in are… provide minimum essential coverage. And the employees are actually enrolling in ACA-compliant individual plans inside of each state. So that… so that check… checkbox gets… gets, checked.

The second one is the plans have to be… have to meet the affordability criteria for AC. And so the employer has to basically provide enough seed money, if you will, for the employee to go use that money to purchase their programs on the individual market, and it just has to be at a high enough level to meet that affordability threshold.

Colleen Locke: Yeah, and there are specific vendors that specialize in this that can make navigating some of this as easy as possible, and, you know, make sure, for example, from an affordability perspective, you're setting yourselves up to be compliant. Thatch is one that Nava has worked with quite a bit, and so it's not something that you necessarily have to figure out on your own, but vendors are specialized in making sure that you're doing these things appropriately.

Bryan Davis: Any other questions, from the group? All right, well, if there aren't any more, we will, we will give everybody a couple of minutes back. Thank you all, for joining, and, you know, obviously, if there's any questions or follow-up, that you have from this, feel free to reach out to us, and we're happy to… happy to chat through it, but thanks for everybody, being, being on the call, and, look forward to, hopefully, chatting with you all soon.

Take care.

Colleen Locke: Thanks, everyone.

‍