How to present a level-funded renewal

What arrives, and what is missing

A level-funded renewal packet normally contains the renewal illustration with next year's fixed monthly cost, a claims experience report for the year to date, the stop-loss renewal terms including any lasers, and a settlement statement once the year has closed. What it rarely contains is the comparison the client actually wants: what they paid, what their claims cost, and whether the arrangement worked.

If the funding mechanism itself still needs explaining, whether to the client or to a colleague picking up the file, that is level-funded health plans explained. This guide assumes the year has already been run.

Ask for anything missing before building the presentation. The two documents most often absent are the laser schedule and the paid-through date on the claims report, and both change what the numbers mean. A claims report paid through month ten of twelve is not a year of experience, and presenting it as one will be wrong in the client's favour, which is the worst direction to be wrong in.

The five numbers to compute before the meeting

1. Funded versus actual claims. The claims portion of what the employer paid, against what the plan actually spent. This one ratio is the story of the year.
2. Total cost of the year. Fixed monthly payments times twelve, less any surplus returned. This is what to compare against the fully-insured premium the group would otherwise have paid.
3. The fixed-cost change. Administration and stop-loss next year against this year, separated from the claims funding. Bundled renewals move all three at once and the client should see which moved.
4. The attachment point change. Both the specific deductible and the aggregate corridor. A renewal that looks flat can carry materially more employer risk.
5. Laser impact. For every lasered member, the extra exposure between the standard specific deductible and the lasered one, summed.

These come off documents that differ by carrier and rarely align by line item. Renewal analysis puts the current year and the renewal side by side with the change on each component, and document parsing reads the illustration and the experience report so the five numbers are extracted rather than retyped.

Presenting a year that produced a refund

Lead with the total cost of the year against the fully-insured alternative, not with the refund. The refund is the pleasant part, and it is also the part that invites the wrong expectation. A client who anchors on it will read next year's smaller settlement as a failure. Frame the surplus as evidence that the group's claims are better than community rating assumed, then move straight to what the claims data says they should do about it.

That is the moment the account gets defended. A renewal meeting that ends with three specific actions drawn from the claims report, whether that is a pharmacy conversation, a contribution change or targeted communication for a high-utilisation category, is a meeting a competitor cannot reproduce from a rate sheet.

Presenting a year that did not

When claims ran over the funded amount, say so in the first minute and show that stop-loss did its job. The employer's cost was capped, which is exactly what they bought, and the arrangement performed as designed even though it returned nothing. Then separate what is repeatable from what is not. A single large claimant who has since left the group is a different renewal conversation from a broad rise in utilisation across the population.

Expect the renewal to reflect the year. Show the alternatives honestly, including a return to fully insured, and price them. A broker who puts the fully-insured option on the table after a bad level-funded year keeps the account more often than one who defends the funding choice.

Four traps

• Comparing the wrong pair of numbers. Next year's maximum cost against this year's expected cost will always look like a large increase. Compare like to like, then show both.
• Assuming the refund repeats. Surplus is the result of one year's claims. Budget the client at the fixed cost and treat any settlement as recovery, never as forecast income.
• Missing a laser. Lasers appear in the stop-loss terms, not the illustration, so a renewal that reads as competitive can carry a much higher exposure on one member. Check the schedule every year.
• Forgetting run-out when moving. If the group changes carrier, confirm who pays claims incurred this year and presented next. This is the most expensive oversight in a level-funded move.

The structure that works

Three slides carry the meeting. One: what the year cost, against what it would have cost fully insured. Two: what the claims data shows, in three findings and no more. Three: the options for next year with maximum and expected cost for each, current carrier first. Everything else is appendix, and the appendix is where the laser schedule and the experience detail belong for the client who asks.

The general presentation structure is in how to present benefit options to clients. If the renewal turns into a funding conversation, level-funded vs self-funded covers the next step, and reading the stop-loss terms on a level-funded quote covers what to check on whatever comes back from market.