Category: Broker’s Desk

One of the more complicated parts of evaluating an Individual Coverage Health Reimbursement Arrangement, or ICHRA, is understanding what happens to employees who may already qualify for Marketplace premium assistance or Medicaid.

This can matter a great deal for a small employer.

We recently worked with an Ohio employer considering an ICHRA whose workforce includes employees with very different health insurance situations. Some currently obtain coverage through Medicaid. Others may be able to purchase individual coverage with help from a Marketplace premium tax credit. Others may earn too much to qualify for either and would otherwise pay the full individual-market premium.

An ICHRA can work across a workforce like this, but the outcome is not necessarily the same for every employee.

The employer contribution is only one part of the equation.

An ICHRA Can Affect Marketplace Premium Tax Credits

The Premium Tax Credit, or PTC, is what people often mean when they refer to a Marketplace health insurance “subsidy.” It is a federal tax credit that can reduce the cost of qualifying health insurance purchased through the Health Insurance Marketplace.

Eligibility depends on several factors, including household income and whether the person has access to other qualifying affordable coverage.

Under current federal rules, an employee offered an ICHRA generally cannot receive both the ICHRA and a Marketplace premium tax credit for the same period.

The key question is whether the ICHRA is considered affordable.

If the ICHRA is affordable, the employee generally cannot decline it and receive a Marketplace premium tax credit instead.

If the ICHRA is unaffordable, the employee may decline, or opt out of, the ICHRA and potentially receive a Marketplace premium tax credit if the employee otherwise qualifies.

The IRS explains these rules in its Questions and Answers on the Premium Tax Credit.

That distinction can make the amount of the employer’s ICHRA contribution important for reasons beyond simply deciding how much the company wants to spend.

How Is ICHRA Affordability Determined?

The affordability calculation looks at the employee’s cost for the lowest-cost Silver plan for self-only coverage available in the applicable individual market, after subtracting the employer’s available ICHRA contribution.

Household income is also part of the employee-side affordability calculation.

For 2026, an ICHRA is considered affordable when the employee’s monthly cost for the applicable self-only lowest-cost Silver plan, after the ICHRA contribution, is less than 9.96% of one-twelfth of the employee’s annual household income. HealthCare.gov provides a practical explanation of ICHRA affordability.

For plan years beginning in 2027, the IRS has increased the required contribution percentage to 10.22%.

The percentage changes over time, so employers should use the current standard when evaluating an arrangement.

The important point is that ICHRA affordability is not determined simply by saying:

“The employer is paying 50% of the premium.”

Two employees can receive the same employer benefit structure and still have different circumstances because affordability and potential Marketplace assistance can depend on household income, employee age, location and the cost of the applicable individual-market benchmark.

The Same ICHRA Can Affect Employees Differently

Consider three employees working for the same company.

Employee One: No Marketplace Premium Tax Credit Available

One employee has household circumstances that do not produce eligibility for a Marketplace premium tax credit.

For that employee, the ICHRA may simply provide valuable employer-funded assistance toward the cost of individual health insurance.

Instead of paying the entire premium personally, the employee uses the employer’s ICHRA contribution toward qualifying coverage.

Employee Two: Potentially Eligible for a Marketplace Premium Tax Credit

Another employee has household circumstances that may otherwise qualify for a Marketplace premium tax credit.

Now ICHRA affordability matters.

If the employer’s ICHRA is affordable for that employee, the employee generally cannot opt out simply to obtain a premium tax credit.

If the ICHRA is unaffordable, the employee can choose to decline it and apply for Marketplace coverage with a premium tax credit, assuming the employee satisfies the other eligibility requirements.

The employee cannot use both the ICHRA and the Marketplace premium tax credit for the same period.

This creates an important decision point that employers should understand when establishing the ICHRA contribution.

What About Employees Who Qualify for Medicaid?

Medicaid operates differently.

ICHRA affordability does not determine whether someone qualifies for Medicaid or the Children’s Health Insurance Program, or CHIP.

HealthCare.gov specifically explains that when someone qualifies for Medicaid or CHIP, it does not matter whether the HRA is considered affordable. If the employee enrolls in Medicaid or CHIP instead, the employee declines or opts out of the ICHRA.

That means an employer could have an employee who remains eligible for Medicaid even though the employer is offering an ICHRA to the workforce.

This can be particularly important for employers with lower-wage employees or employees whose household circumstances vary significantly.

The employer does not need to become the Medicaid eligibility expert.

Medicaid is a joint federal-state program, but eligibility and enrollment are administered through each state’s Medicaid program. Employees who believe they may qualify should verify their circumstances with the Medicaid agency in their state.

Ohio employees can use the Ohio Benefits Self-Service Portal to check potential eligibility and apply for Medicaid and other benefits.

Think of This as Three Different Paths

It may be easier to think about an ICHRA workforce in three broad categories.

ICHRA + Individual Coverage

The employee accepts the ICHRA and uses the employer contribution toward qualifying individual health insurance.

Marketplace Coverage With a Premium Tax Credit

If the ICHRA is unaffordable and the employee otherwise qualifies for a premium tax credit, the employee may opt out of the ICHRA and choose Marketplace coverage with the tax credit instead.

Medicaid or CHIP

If the employee qualifies for Medicaid or CHIP and enrolls, the employee opts out of the ICHRA and uses that coverage instead.

One employer can potentially have employees in all three situations.

The Employer Does Not Determine an Employee’s Marketplace Premium Tax Credit

The employer establishes the ICHRA contribution and provides the required information about the arrangement.

But the employer generally does not know everything necessary to determine an employee’s actual Premium Tax Credit eligibility.

Household income is one obvious reason.

An employee’s salary from the company is not necessarily the same thing as household income. A spouse may work. There may be other household income. Household size and other eligibility factors can also matter.

The Marketplace evaluates the employee’s circumstances when the employee applies.

That is a much safer process than an employer or broker attempting to predict every employee’s final eligibility.

Applicable Large Employers Have Another Consideration

For an Applicable Large Employer, or ALE, there is another layer.

An ALE is generally an employer that averaged at least 50 full-time employees, including full-time-equivalent employees, during the preceding calendar year, subject to the applicable federal counting rules.

An ALE using an ICHRA as its health coverage offer needs to consider the Affordable Care Act’s employer shared responsibility requirements.

The employer still determines the ICHRA contribution, but affordability becomes part of evaluating whether the offer satisfies those requirements.

Because an employer generally does not know each employee’s household income, federal rules provide employer affordability safe harbors. Separate ICHRA rules also address how the applicable lowest-cost Silver premium is determined for employer shared responsibility purposes.

That employer compliance analysis is related to, but not necessarily identical to, the actual Premium Tax Credit determination for an individual employee.

For a smaller employer that is not subject to the employer shared responsibility provisions, those employer-mandate requirements do not apply. The employer may therefore have more flexibility from an employer-mandate standpoint when establishing its contribution.

But the contribution can still affect employees because it may determine whether an employee’s ICHRA is affordable and therefore whether Marketplace premium assistance remains available.

There Are Actually Two Different Silver Benchmarks

One detail can make this discussion particularly confusing.

The lowest-cost Silver plan is used in determining ICHRA affordability.

The amount of an employee’s actual Premium Tax Credit, when the employee qualifies for one, is generally calculated using the second-lowest-cost Silver plan applicable to the employee’s coverage family.

The IRS explains the second-lowest-cost Silver benchmark in its Premium Tax Credit Q&A.

Those are two different calculations.

The employee also does not have to enroll in either benchmark plan merely because that plan was used for a federal calculation.

That is another reason employers should be cautious about assuming that a reference to a “Silver plan” tells them what coverage employees will actually choose.

The Contribution Is More Than a Budget Number

One of the attractive features of an ICHRA is that an employer can establish a defined contribution toward health insurance.

But that contribution does more than establish the company’s cost.

For some employees, it may simply reduce the cost of individual coverage they would otherwise purchase without assistance.

For another employee, the contribution may affect whether the ICHRA is considered affordable and therefore whether a Marketplace premium tax credit remains an option.

Another employee may qualify for Medicaid under separate eligibility rules and decide not to use the ICHRA at all.

That does not make an ICHRA a bad fit.

In fact, a workforce with very different income levels, locations and existing coverage situations can sometimes be one of the situations where an ICHRA deserves serious consideration.

It does mean the employer should understand what it is offering.

With an ICHRA, the employer contribution does not just determine how much the employer spends. It can also affect which coverage pathways remain available to employees.

That is why evaluating an ICHRA should include more than choosing an allowance and looking at a spreadsheet of individual premiums.

The employer should also understand how affordability works, how employees will evaluate Marketplace assistance, what happens to employees who may qualify for Medicaid, and where employees should go to receive an actual eligibility determination.

That is part of deciding whether the ICHRA will work for the workforce, not just for the employer’s budget.

Frequently Asked Questions

Can an employee use an ICHRA and receive a Marketplace premium tax credit at the same time?

Generally, no. An employee cannot use an ICHRA and receive a Marketplace Premium Tax Credit for the same period.

If the ICHRA is considered affordable, the employee generally cannot decline it and receive a premium tax credit instead. If the ICHRA is unaffordable, the employee may be able to opt out of the ICHRA and qualify for a premium tax credit if the other eligibility requirements are met.

What happens if an ICHRA is considered unaffordable?

An employee offered an unaffordable ICHRA may choose to opt out of the arrangement and apply for Marketplace coverage with a Premium Tax Credit if the employee otherwise qualifies.

The employee cannot receive the ICHRA reimbursement and the Premium Tax Credit for the same period.

Does offering an ICHRA make an employee ineligible for Medicaid?

No. ICHRA affordability does not determine Medicaid or CHIP eligibility.

An employee who qualifies for Medicaid or CHIP may enroll in that coverage and decline the ICHRA. Medicaid eligibility is determined under the rules applicable in the employee’s state, so employees who may qualify should verify their circumstances with their state Medicaid agency.

Can two employees with the same ICHRA allowance have different Marketplace subsidy outcomes?

Yes.

Employees receiving the same ICHRA allowance may have different affordability or Premium Tax Credit outcomes because household income, age, location, household size and the applicable individual-market premiums can differ.

The employer contribution may be the same, but the employee’s personal circumstances may not be.

Does the employer decide whether an employee qualifies for a Premium Tax Credit?

No.

The employer establishes the ICHRA and provides information about the contribution. The Marketplace determines whether an employee qualifies for a Premium Tax Credit based on the employee’s circumstances and the applicable federal rules.

This is important because the employer generally does not know everything that may affect an employee’s eligibility, including total household income.

Is the Silver plan used for ICHRA affordability the same Silver plan used to calculate the Marketplace Premium Tax Credit?

Not necessarily.

ICHRA affordability generally uses the applicable lowest-cost Silver plan for self-only coverage.

The amount of a Marketplace Premium Tax Credit, when an employee qualifies for one, is generally based on the applicable second-lowest-cost Silver plan.

Neither benchmark requires the employee to enroll in that particular Silver plan.

Do Applicable Large Employers have different ICHRA affordability considerations?

Yes.

An Applicable Large Employer, generally an employer with at least 50 full-time employees including full-time-equivalent employees under the applicable federal counting rules, must also consider the Affordable Care Act’s employer shared responsibility requirements.

An ALE still determines the ICHRA contribution, but affordability becomes part of evaluating whether the employer’s offer satisfies those requirements. Federal affordability safe harbors may be used because employers generally do not know each employee’s household income.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses and their owners evaluate health insurance and employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations and observations that come from helping small businesses navigate health insurance.

Talk With McCarthy Stevenot Agency

If your Ohio business is considering an ICHRA, the contribution amount is only part of the decision.

Employers also need to consider the individual plans available to employees, how the contribution will be established, what may happen when individual-market premiums change and how affordability rules may affect the arrangement.

Contact McCarthy Stevenot Agency to discuss whether an ICHRA or traditional group plan makes sense for your business, or call 513-891-9888.

Related Resources

• ICHRA for Ohio Employers
• ICHRA vs. Group Health Insurance for Ohio Employers
• Why Small Businesses Should Build a Health Insurance Renewal System
• Health Insurance Prescreen for Ohio Small Businesses

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio small businesses and their owners navigate health insurance. Some articles explain a process. Others examine the tradeoffs behind real employer decisions. Client-identifying details may be omitted or generalized to protect privacy.

ICHRA contribution strategies, individual-market premiums, plan availability and affordability calculations vary by employer, employee circumstances and location. Federal requirements may also change over time. This article is intended to explain practical considerations involved in evaluating an ICHRA and is not legal or tax advice. Employers should review their specific circumstances with appropriate insurance, tax or legal professionals.

ICHRA renewal volatility works differently from renewal volatility under traditional group health insurance. One of the commonly cited advantages of an Individual Coverage Health Reimbursement Arrangement, or ICHRA, is greater control over health insurance costs.

Instead of receiving a traditional group renewal from an insurance carrier, the employer establishes an amount it is willing to reimburse employees for individual health insurance.

That sounds straightforward. Set the contribution. Control the budget.

It is true, but there is more to it.

We recently received an ICHRA proposal for a small Ohio employer that helped illustrate what “cost control” actually means, particularly when it comes to future renewals.

The Contribution Has to Start Somewhere

The proposal showed two possible employer contribution strategies.

One would reimburse approximately 50% of the premium for the lowest-cost Silver plan available in the individual market. The other used 75%.

The actual contribution varied by employee age and geographic rating area.

That does not mean employees have to buy that particular Silver plan. Employees can choose from the individual plans and carriers available where they live.

The lowest-cost Silver plan was simply being used as a consistent benchmark for establishing the employer’s initial contribution.

That distinction becomes important when we start thinking about next year.

What Happens When Individual Rates Increase?

Suppose an employer initially establishes an ICHRA contribution equal to roughly 50% of the lowest-cost Silver plan.

Then individual-market premiums increase the following year.

What happens to the employer contribution?

The answer is: the employer decides.

It could increase its contribution enough to maintain approximately the same relationship to the Silver benchmark.

It could increase the contribution by a smaller amount based on its budget.

Or it could leave the contribution unchanged.

The original 50% calculation does not permanently obligate the employer to maintain that percentage.

That is an important form of cost control.

But notice what did not happen.

The health insurance increase did not disappear.

If individual premiums rise 15% and the employer leaves its contribution unchanged, employees absorb more of the increase.

If the employer increases its contribution enough to maintain the same relative support, the employer absorbs more of it.

Or the increase can effectively be shared.

ICHRA does not make health insurance inflation disappear. It gives the employer more control over how it responds to it.

But What About Renewal Volatility?

This is where I think ICHRA can offer a meaningful advantage, but we need to be precise about what kind of volatility we are talking about.

We recently reviewed a traditional employer health plan covering approximately 120 insured lives. Its renewal increase was approximately 59%.

A few years earlier, the same employer had received a renewal increase of roughly 4%.

That is a very wide range.

Traditional employer plans, particularly once we move beyond the ACA small-group market, can have a meaningful relationship to the claims experience and risk characteristics of the employer’s own population. A bad claims year, large ongoing claimants or other underwriting factors can have a substantial impact on the renewal.

An ICHRA moves employees into the individual insurance market.

ACA individual-market premiums cannot be based on an individual’s health status or claims history. Premiums can vary based on permitted factors including age, geography, family size and tobacco use.

That means one employer’s bad claims year does not result in that employer receiving its own 40%, 50% or 60% individual-market renewal.

That particular kind of employer-specific volatility is largely removed from the equation.

But market volatility remains.

Individual Rates Can Move Too

It would be a mistake to turn this into an argument that individual rates only increase by a few percentage points every year.

They don’t.

In Ohio, KFF data show that the average lowest-cost Silver premium increased about 5.1% from 2023 to 2024 and about 1.4% from 2024 to 2025. Then it increased approximately 17% from 2025 to 2026. Nationally, the average lowest-cost Silver premium increased approximately 26% from 2025 to 2026.

So I would not tell an employer that moving to an ICHRA eliminates renewal volatility or guarantees smaller future rate increases.

It doesn’t.

What changes is the source of the volatility.

With a traditional medically influenced employer renewal, the experience of that particular employer can play a significant role.

With an ICHRA, the employer is much more directly exposed to what is happening in the broader individual insurance market where its employees live.

Those are different risks.

The Employer Controls the Response

This is the part of ICHRA that I think is sometimes oversimplified.

With traditional group insurance, the carrier delivers the renewal.

The employer might receive a 12% increase, a 25% increase or, occasionally, something substantially worse. The employer then has to decide what to do with the renewal it has been given.

With an ICHRA, individual-market premiums change, but the employer gets to make a separate decision about its contribution.

Imagine an employee whose applicable Silver premium is $700 per month and whose employer initially provides $350.

The following year that premium increases 15% to $805.

The employer has choices.

It could increase the reimbursement to approximately $402.50 and maintain the same 50% relationship.

It could increase the reimbursement to $375.

Or it could leave it at $350.

The individual-market increase is the same in all three examples.

What changes is the employer’s response.

That is why I would describe the ICHRA advantage this way:

ICHRA can reduce employer-specific renewal volatility. It does not eliminate individual-market volatility. More importantly, it gives the employer more control over how much of a future increase it chooses to absorb.

Small Employers and Large Employers Are Not Quite the Same

There is another consideration.

A smaller employer that is not subject to the Affordable Care Act’s employer shared responsibility provisions has considerable flexibility to determine what it wants to contribute from year to year.

It could hold its ICHRA allowance flat.

But even then, the contribution does not exist in a vacuum. Whether an ICHRA is considered affordable can affect an employee’s eligibility for a Marketplace premium tax credit. An employee offered an affordable ICHRA generally cannot simply decline it and receive a premium tax credit instead. An employee offered an unaffordable ICHRA may be able to opt out and qualify for a premium tax credit if the other eligibility requirements are met.

For an Applicable Large Employer, or ALE, the issue becomes more important from the employer’s perspective as well.

An ALE using an ICHRA to satisfy its employer shared responsibility obligations needs to pay attention to affordability. The ICHRA affordability framework uses the applicable lowest-cost Silver plan for self-only coverage in determining the employee’s required contribution. The IRS also provides employer affordability safe harbors because employers generally do not know an employee’s household income.

So an ALE still controls its ICHRA contribution. But if it wants the ICHRA to remain affordable for employer shared responsibility purposes, it cannot necessarily treat that contribution as permanently disconnected from what is happening to individual-market premiums.

There is still a benchmark to watch.

Cost Control Is Not the Same as Cost Isolation

I still think cost control is one of the stronger arguments for considering an ICHRA.

But we should be careful about what we mean by it.

An employer can establish a defined contribution.

It can decide each year whether to increase that contribution.

It can potentially avoid the employer-specific claims volatility that sometimes produces very large traditional group renewals.

And it can establish a health-benefit budget with much more direct control over what the company itself will spend.

But the employer has not escaped the health insurance market.

Individual premiums can still increase. Employees can still face higher costs. Affordability rules still matter. And an employer that wants to maintain a particular level of employee support may find that its contribution needs to increase over time.

So perhaps the better way to think about an ICHRA is not that it eliminates renewal volatility.

It changes the nature of the volatility and gives the employer more control over the response.

For some employers, particularly those experiencing difficult or unpredictable traditional group renewals, that can be a meaningful advantage.

But it is not the same thing as setting a contribution once and forgetting about health insurance costs forever.

Client-identifying details have been omitted or generalized. The contribution examples discussed in this article are based on an actual ICHRA proposal and are included to illustrate how employers may think about contribution strategy, renewal volatility and affordability. Individual-market premiums, plan availability, contribution strategies and affordability calculations vary by employer, employee location and applicable federal requirements.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses and their owners evaluate health insurance and employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations and observations that come from helping small businesses navigate health insurance.

Talk With McCarthy Stevenot Agency

If your Ohio business is considering an ICHRA, the contribution amount is only part of the decision.

Employers also need to consider the individual plans available to employees, how the contribution will be established, what may happen when individual-market premiums change and how affordability rules may affect the arrangement.

Contact McCarthy Stevenot Agency to discuss whether an ICHRA or traditional group plan makes sense for your business, or call 513-891-9888.

Related Resources

• ICHRA for Ohio Employers
• ICHRA vs. Group Health Insurance for Ohio Employers
• Why Small Businesses Should Build a Health Insurance Renewal System
• Health Insurance Prescreen for Ohio Small Businesses

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio small businesses and their owners navigate health insurance. Some articles explain a process. Others examine the tradeoffs behind real employer decisions. Client-identifying details may be omitted or generalized to protect privacy.

ICHRA contribution strategies, individual-market premiums, plan availability and affordability calculations vary by employer, employee circumstances and location. Federal requirements may also change over time. This article is intended to explain practical considerations involved in evaluating an ICHRA and is not legal or tax advice. Employers should review their specific circumstances with appropriate insurance, tax or legal professionals.

A small employer I work with recently received a 12.1% increase on its health insurance renewal. It became a good example of how health insurance renewal tradeoffs actually work.

The group has three people enrolled, all with single coverage.

There were plenty of alternative plans available. But when I review a renewal, I don’t look at every cheaper plan as though it is equally attractive.

I’m also thinking about disruption.

Can we keep the same carrier?

Can we keep the same provider network?

Can we keep the same general type of plan?

Can we keep the way employees use the plan reasonably familiar?

And then, within those boundaries, how much can we do about the cost?

That is really what a lot of small-group renewal work comes down to.

Health insurance renewal tradeoffs: the knobs you can turn

Health insurance does not have one knob marked “cost.”

There are several:

• Carrier
• Provider network
• Plan type
• Deductible
• Out-of-pocket maximum
• Copays
• Coinsurance
• Prescription coverage
• Employer contribution
• Premium

Move one and something else may change.

A lower premium might require a higher deductible.

Another carrier might have a better rate but a different network.

An HSA-compatible plan might cost less but require employees to use their benefits differently.

A narrower network might create savings but affect someone’s doctor or hospital.

The job is not simply to find the lowest number on the spreadsheet.

Sometimes there are several reasonable choices. Sometimes, as I have written about before, there are no particularly good renewal options.

It is to decide which knobs are worth turning.

Start with the path of least resistance

Health insurance has a certain amount of inertia built into it.

People know their doctors. They know where they go for care. They are familiar with their insurance card, their copays and how their prescriptions work.

There is value in not disturbing all of that unnecessarily.

So in this case, I started by looking at what we could accomplish without changing carriers, without changing networks and without moving the employees into a fundamentally different type of health plan.

That left benefit design and premium as the primary variables.

The comparison looked like this:

The group’s current premium is $1,877.91 per month.

If they keep the current plan, the new premium is $2,104.56.

If they move to the third option, the premium is $1,892.61.

That is only $14.70 more per month than they are paying today.

For the entire year, the increase is $176.40.

So what did it take to make the increase almost disappear?

In this particular renewal, we could get the increase down to less than 1% without changing the carrier.

We could keep the same network.

And we could stay with the same general type of plan.

The most visible tradeoff was the deductible, which moved from $3,000 to $6,000 for an individual.

Other benefits moved too, which is why plans should never be compared on deductible alone. For example, the middle option actually has a lower individual out-of-pocket maximum than the current plan.

But the comparison gives us something useful.

Within this carrier’s available plans, we can see approximately how much the benefit structure has to change to take a 12.1% renewal increase down to less than 1%.

Now the employer can decide what continuity is worth

There is another way to look at the numbers.

Keeping the current plan costs $2,104.56 per month.

The near-flat alternative costs $1,892.61.

The difference is $211.95 per month, or $2,543.40 for the year.

So instead of asking:

“Do we want to accept a 12.1% increase?”

I think the more useful question is:

“Is keeping the current benefit structure worth another $2,543 to the company this year?”

For some employers, it will be.

For others, the higher deductible will be a reasonable tradeoff to keep the premium almost unchanged.

Neither answer is automatically right.

The point is to make the tradeoff visible. That is a big part of having a consistent health insurance renewal process rather than simply reacting to the new rate when it arrives.

Small employers usually cannot make the underlying trend disappear

There are larger employers that can directly attack claims costs through plan design, utilization management, pharmacy strategy, steerage and other approaches.

That is a different conversation.

A small employer generally has much less ability to change the underlying forces that cause health insurance rates to increase during the coming year.

Most of the available choices have already been designed and priced by the carrier.

So when another renewal increase arrives, much of the job becomes deciding how that increase is going to land.

Do we absorb more of it in premium?

Do employees absorb more through deductibles or other cost sharing?

Do we change networks?

Do we change carriers?

Do we change the employer contribution?

These are the health insurance renewal tradeoffs small employers face every year.

Premium is only one of the variables. Every choice moves one of the knobs.

The objective is not disruption for the sake of finding a lower rate.

It is to contain the disruption while managing a cost increase that may not be avoidable.

In this case, we could keep most of the familiar pieces in place and see exactly what it would take to make a 12.1% increase almost disappear.

The employer may still decide to pay the 12.1%.

But now it is a decision rather than just a renewal.

Client-identifying details and plan names have been omitted or generalized. The premiums and benefits shown reflect a specific employer renewal and are included to illustrate the decision-making process. Plan availability, eligibility, underwriting, benefits and rates vary by employer and are subject to current carrier and program requirements.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses and their owners evaluate health insurance and employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations and observations that come from helping small businesses navigate health insurance.

Talk With McCarthy Stevenot Agency

If your Ohio small business is facing a health insurance renewal increase, we can help you review the available options and understand the tradeoffs.

Sometimes the best answer is to keep the existing plan. Other times it may make sense to change the benefit design, network, carrier, funding arrangement or overall approach. The objective is to understand what each alternative saves, what it changes and whether the disruption is worth it.

Contact McCarthy Stevenot Agency to discuss your renewal, or call 513-891-9888.

Related Resources

• Why Small Businesses Should Build a Health Insurance Renewal System
• Health Insurance for 5 or Fewer Employees in Ohio
• Ohio MEWA Health Plans for Small Businesses: A Practical Guide
• ICHRA for Ohio Employers
• Health Insurance Prescreen for Ohio Small Businesses

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio small businesses and their owners navigate health insurance. Some articles explain a process. Others tell the stories behind the work. Client-identifying details may be omitted or generalized to protect privacy. Plan availability, eligibility, underwriting, benefits and rates vary by employer and program. These articles are intended to help readers understand how experienced brokers think through real-world situations, not to suggest there is one right answer for every business or individual.

Can an Ohio employer with one employee get group health insurance? In some circumstances, yes.

One employee group health insurance in Ohio isn’t available through every type of arrangement, but one of the smallest groups we work with recently received its first renewal.

They have one employee.

Before establishing this plan, the organization had never offered group health insurance. They had an employee they wanted to insure, though, and they were willing to go through the process necessary to make it happen.

That process wasn’t insignificant.

We first had to determine what options were realistically available. The employer went through a health insurance prescreen. The employee completed the information necessary for underwriting. We evaluated the available plans and benefits. The organization completed the required membership process.

Then we had to answer a question every employer faces when offering health insurance for the first time:

Which plan do you actually choose?

Starting From Scratch Is Harder Than Renewing a Plan

At renewal, you at least have something to compare.

You know what the current deductible is. You know what the premium costs. You know how the employee feels about the coverage.

A new group doesn’t have any of that.

There may be dozens of plan designs with different deductibles, coinsurance levels, copays and out-of-pocket maximums.

Eventually, this employer selected a PPO plan with a $2,500 individual deductible.

After the deductible, covered major medical expenses were paid at 100% in-network. The individual out-of-pocket maximum was $7,000. Primary care and specialist visits had $30 and $60 copays, along with separate prescription copays.

It was a solid benefit package.

Then they spent the next year covered under it.

Then the First Renewal Arrived

The renewal increase was 7.51%.

The employee’s monthly premium increased from approximately $595 to $639.

Nobody enjoys a 7.51% health insurance increase, but renewals don’t exist in isolation.

For context, Peterson-KFF’s August 2026 analysis of proposed 2027 ACA-compliant small-group rates found a median proposed increase of approximately 14% nationally. Insurers in those filings were estimating underlying medical cost trend at a median of 10.8%. Individual ACA Marketplace insurers are proposing a median increase of approximately 15% for 2027.

Those aren’t direct comparisons to this particular MEWA renewal, and this group’s renewal occurs before the 2027 plan year.

But they do help put a 7.51% increase into perspective.

This was a pretty good renewal.

A Good Renewal Still Deserves a Review

It would have been easy to stop there.

The renewal wasn’t alarming. The plan was working. There was only one employee.

Renew it and move on.

But that’s not really a renewal review.

When I went through the available alternatives, one plan in particular caught my attention.

Its monthly premium was approximately $590, almost $50 per month below the renewal premium and actually a few dollars below what the employer had been paying during the previous year.

There was a tradeoff.

The alternative plan had a lower $2,000 deductible, but after meeting the deductible the plan paid 80% rather than 100%. Its individual out-of-pocket maximum increased from $7,000 to $7,500.

The office visit and prescription copays remained essentially the same.

This is also a useful reminder that you can’t judge a health plan simply by looking at the deductible.

Although the deductible is lower, the 80% coinsurance and slightly higher out-of-pocket maximum create greater potential cost exposure for the employee.

In exchange for that greater potential out-of-pocket exposure, the premium drops by roughly $600 per year.

That’s a real option.

Whether it’s worth making the change is another question.

My suspicion is that this employer may simply renew the existing plan.

And that would be perfectly reasonable.

The purpose of reviewing a renewal isn’t to manufacture a change. Sometimes the review confirms that what you already have remains the best place to be.

What This One-Employee Group Actually Built

There’s another part of this case that I think is easy to miss.

This employer didn’t simply buy health insurance for one employee.

They established a functioning group health insurance arrangement.

The COSE Benefit Plan is a multiple employer welfare arrangement administered by Medical Mutual. At the time of publication, the COSE Benefit Plan is available to qualifying Ohio businesses with one to 50 employees.  Employers must meet applicable eligibility and underwriting requirements and participate through COSE or an affiliated chamber.

That meant more work at the beginning.

But now the structure exists.

If the organization eventually hires additional eligible employees, it isn’t starting the health insurance conversation from zero again. Subject to the plan’s rules and eligibility requirements, it already has an established group arrangement into which future employees may be enrolled.

That matters.

A business doesn’t suddenly have to figure out group health insurance for the first time when employee number two, five or ten arrives.

The foundation is already there.

Not Every One-Employee Employer Should Do This

I wouldn’t take this case to mean every business with one employee should immediately establish a group health plan.

Sometimes individual coverage makes more sense.

Sometimes an ICHRA may be worth considering.

Sometimes the economics simply don’t justify creating an employer-sponsored plan.

That’s why we evaluate the alternatives first.

But this employer had a reason to provide a meaningful benefit to an important employee. They explored their options, completed the underwriting process, joined the required organization, evaluated the plans and went through enrollment.

They went the distance.

A year later, the result is a good health plan, a relatively manageable first renewal and an established group health insurance arrangement capable of growing with them.

For one employee, that’s a pretty substantial accomplishment.

Sometimes being a very small employer doesn’t mean you need to duct-tape together a temporary solution. With the right circumstances and the willingness to do the work, you can build the real thing.

Client-identifying details have been omitted or generalized. Premiums have been rounded. Plan availability, eligibility, underwriting, benefits and rates vary by employer and are subject to current carrier and program requirements.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses and their owners evaluate health insurance and employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations, and observations that come from helping small businesses navigate health insurance.

Talk With McCarthy Stevenot Agency

If your Ohio business has only a few employees and you are trying to determine whether group health insurance is available and practical, we can help you evaluate the realistic options and understand the trade-offs.

For some employers, that may include comparing traditional small-group coverage, MEWA options, an ICHRA or other approaches. If underwriting-sensitive options may be available, a health insurance prescreen can also help determine what is realistic before making a decision.

Contact McCarthy Stevenot Agency to discuss your situation, or call 513-891-9888.

Related Resources

• Health Insurance for 5 or Fewer Employees in Ohio
• Ohio MEWA Health Plans for Small Businesses: A Practical Guide
• Health Insurance Prescreen for Ohio Small Businesses
• ICHRA for Ohio Employers
• Why Small Businesses Should Build a Health Insurance Renewal System

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio small businesses and their owners navigate health insurance. Some articles explain a process. Others tell the stories behind the work. Client-identifying details may be omitted or generalized to protect privacy. Plan availability, eligibility, underwriting, benefits and rates vary by employer and program. These articles are intended to help readers understand how experienced brokers think through real-world situations, not to suggest there is one right answer for every business or individual.

Sometimes there isn’t a better quote.

That’s an uncomfortable place to begin a discussion about a health insurance renewal, but it is where we recently found ourselves with a client facing an unusually difficult renewal increase.

This wasn’t a case where we opened the renewal, saw a large increase and immediately started moving deductibles around.

We pulled it apart.

We looked at the group’s claims experience. We looked at the people and conditions that appeared to be driving the experience. We considered whether some of those claims might be behind us or whether they represented continuing risk. We looked at other carriers. We looked across the renewing carrier’s entire array of available plans. We considered different deductibles, copays and network structures. We considered HMO and EPO options. We considered whether an ICHRA might make sense. We even considered whether there was a reasonable way to separate classes of employees and use different approaches for different parts of the workforce.

The deeper we went, the clearer the problem became.

There wasn’t an easy way out.

The problem wasn’t a lack of health insurance renewal options. It was that none of the realistic options were good.

When a renewal gets everyone’s attention

This increase was large enough that people became involved in the discussion who normally don’t spend their time thinking about health insurance.

That’s understandable.

When employee benefits suddenly create a major financial problem for a business, owners and senior leadership naturally start asking questions.

• Did we shop other carriers?
• Did we really look at everything?
• Where did these particular plan options come from?
• Why did we choose these plans out of all the alternatives?
• Could we look at another carrier someone had heard about?
• Could we wait a few months and try again?

Those are good questions.

In fact, I think an employer facing an increase of this magnitude should ask them.

But answering them requires more than saying, “We shopped the market.”

It requires being able to explain what you did and why.

We tested the market. The market gave us an answer.

We approached the realistic carrier alternatives for this group.

Most were unwilling to quote the case competitively. The alternatives we received did not materially improve the renewal.

That wasn’t a solution.

It also meant we had very little negotiating leverage with the incumbent carrier. Had another credible carrier produced an attractive proposal, we might have been able to use it to push for some relief. Without a competitive alternative, there wasn’t much leverage to bring to that conversation.

One question that came up involved another carrier we hadn’t pursued.

There’s an important distinction here between being able to say you requested a quote from every carrier whose name appears on a list and actually conducting a responsible market review.

Not every carrier has meaningful penetration in every market. Network strength matters. Provider relationships matter. Contracted discounts matter. A carrier with very little local market presence may technically be an option without being an option we would be comfortable recommending.

We could have requested another quote simply so we could say we had done it.

But if we wouldn’t advise the client to take that option, what would that accomplish?

Shopping a health insurance case isn’t a box-checking exercise. The objective isn’t to produce the largest stack of proposals. It is to identify credible alternatives that we would actually be willing to put in front of the employer and its employees.

In this case, the credible market alternatives weren’t better.

A few better claims months don’t necessarily change the underlying problem

Another natural question was whether we should simply wait a few months and shop the case again.

We can certainly revisit a case.

But there is a problem with assuming that waiting a few months will automatically produce a different result.

In this case, we didn’t have the kind of detailed claims information a very large employer may have available. You can see enough to know that claims have been substantial. You may see that claims were particularly high during one period and then improved during another.

That can create an understandable sense that perhaps the group is getting better.

But paid claims looking better for several months doesn’t necessarily mean the underlying risk has disappeared.

There are really two views occurring at the same time.

• There is the backward look: What claims has the plan already paid?
• And there is the forward look: Based on the health conditions present in the group, medical trend and other underwriting factors, what might this population cost going forward?

Those aren’t necessarily the same thing.

A condition that generated significant claims last year may still exist even if it hasn’t generated a major claim during the last few months. From an underwriting perspective, the potential for future claims may remain.

That was an important part of this particular case.

We weren’t looking at a group where everything that had happened could simply be placed in the rearview mirror.

So “let’s try again in a few months” sounded more promising than it actually was.

Eventually you have to manage the trade-offs

Once we had worked through the alternatives, we were left with the renewing carrier and a difficult increase.

Now the question changed.

Instead of asking, How do we make the increase disappear?

We had to ask, How do we make the best of a bad situation?

The employer had been offering multiple medical plan choices.

We went back through the renewing carrier’s larger portfolio of available plans and pulled out the options we thought were most relevant. That selection wasn’t arbitrary. We were trying to find the best intersection of premium, deductible, out-of-pocket exposure, network access and the benefits employees actually use.

We ultimately recommended simplifying the plan structure and consolidating the existing choices into a single option.

You could think of it as meeting in the middle.

For some employees, the change meant greater out-of-pocket exposure. For others, it actually meant somewhat lower cost sharing. Because of how enrollment was distributed across the existing options, the change produced meaningful premium savings for the group.

Was it painless?

No.

More employees were moving toward greater cost sharing than were moving in the other direction. There is no point pretending otherwise.

But we also didn’t take the plan all the way to the bone.

We didn’t move everyone into the highest deductible available. We didn’t force the group into the narrowest network structure. We didn’t move to an HMO simply because it could reduce premium. And we didn’t create the disruption of abandoning the group plan entirely for an ICHRA.

Those possibilities were considered. We just didn’t think the situation required pushing that far.

There are times when benefit management is less about finding a perfect answer and more about knowing how far to turn each dial.

In the middle of reducing benefits, we found a place to add value

There was another part of this renewal that I think is worth mentioning.

The employer already offered some voluntary coverage, meaning employees who wanted those benefits could purchase them through the group without the employer having to absorb the premium.

During the process, we also found an opportunity to expand those voluntary benefits.

At first glance, “voluntary benefit” can sound like something that isn’t much of an employer benefit at all.

After all, the employer isn’t paying the premium.

But I don’t think that’s the right way to look at it.

An employer can create value simply by providing access.

Through a group arrangement, employees can have access to disability coverage, dental and vision plans, and benefit structures that may be difficult or impossible for them to duplicate efficiently in the individual market. Dental and vision plans can also provide access to established provider networks. In the case of dental coverage, for example, group plans can include meaningful annual benefits, strong networks and orthodontia options that an employee may have difficulty reproducing independently at a comparable cost.

The employer is already administering benefits and paying a bill to the carrier. Where good voluntary products are available, opening those options to employees can make sense even if the employer doesn’t contribute toward the premium.

In this case, I especially liked adding voluntary benefits because of everything else that was happening.

We were asking employees to absorb a more difficult medical benefit structure. At the same time, we found another place where we could improve the overall benefits package without adding meaningful employer cost.

That doesn’t erase a difficult medical renewal.

But when you’re managing a difficult situation, you look for every place where you can create value.

Sometimes the answer is simply the best answer available today

This case pressed us.

We care about what happens to the company and its employees. We didn’t want them to receive this renewal, and we certainly didn’t want to walk into the room and tell them there was nothing we could do.

So we kept asking ourselves the same question:

What else could we do?

• We asked it while we were working on the case.
• We asked it when management questioned our approach.
• We asked it among ourselves afterward.
• What did we miss?
• What other carrier should we have approached?
• What other funding arrangement should we have considered?
• What other plan structure could have produced a better balance?

There is an important discipline in doing that. Experience shouldn’t make you defensive about your work. It should make you willing to challenge it.

If somebody has a better idea, I want to hear it.

But after going back through this case, I wouldn’t manufacture an alternative simply to make the process look more exhaustive. I wouldn’t recommend a carrier I didn’t believe was a responsible choice. I wouldn’t disrupt the entire benefits program just to demonstrate that we had done something dramatic.

Sometimes professional judgment means being able to say: We looked. This is where the facts led us.

And we’re not done

There is one more thing I want this employer to understand.

This recommendation isn’t a declaration that these should be their benefits forever.

It is our recommendation for what they should do now.

We will revisit it.

If the group’s circumstances improve, we will look for opportunities to improve benefits. We will look at the market again. We will reconsider carriers. We will reconsider plan structures. We will reconsider funding arrangements. If circumstances eventually make an ICHRA or another approach appropriate, we’ll look seriously at that too.

And if the next renewal is difficult again, we still have additional levers available that we deliberately chose not to pull this time.

That matters.

When an employer is facing a difficult renewal, I don’t think the objective should simply be to survive the meeting, place the coverage and move on.

The objective is to make the best decision available today while remaining vigilant for the next opportunity to make things better.

There are renewals where a broker finds a substantially better carrier and everybody walks away happy.

There are renewals where negotiation produces meaningful savings.

And then there are renewals like this one.

The market has spoken. The claims are real. The alternatives aren’t better. There is no rabbit to pull out of the hat.

That’s when the work becomes less visible but perhaps more important.

You pull the renewal apart. You test your assumptions. You challenge your own recommendations. You explain the trade-offs. You protect the things worth protecting. You make concessions where they produce the most value. You look elsewhere in the benefit package for opportunities to improve something. And you preserve options for the future.

A broker’s value isn’t demonstrated only by finding a cheaper quote.

Sometimes there isn’t one.

Sometimes the value is knowing what to do next.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses and their owners evaluate health insurance and employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations, and observations that come from helping small businesses navigate health insurance.

Talk With McCarthy Stevenot Agency

If your Ohio business is facing a difficult health insurance renewal, we can help you review the renewal, evaluate realistic alternatives and understand the trade-offs before you make a decision.

Contact McCarthy Stevenot Agency to discuss your situation, or call 513-891-9888.

Related resources

• Why Small Businesses Should Build a Health Insurance Renewal System
  
• What to Do When Small Business Health Insurance Rates Go Up in Ohio
  
• How to Get a Second Opinion on Your Small Business Health Insurance in Ohio
  
• What Happens Before We Ever Call About Your Renewal
  
• HMO, EPO, PPO, HDHP, HSA and Copay Plans Explained
  

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio small businesses and their owners navigate health insurance. Some articles explain a process. Others tell the stories behind the work. All are intended to help readers understand how experienced brokers think through real-world situations, not to suggest there is one right answer for every business or individual.

Health insurance when starting a business is one of the first major obstacles many aspiring business owners encounter.

A gentleman approached me recently with a concern I’ve heard, in one form or another, for most of my career.

“I’m thinking about leaving my employer and starting my own business. What should my wife and I do about health insurance?”

Leaving employer-sponsored health insurance is often one of the biggest considerations for people deciding whether to strike out on their own.

The right solution depends on details such as whether the business has employees, where it is located, whether it qualifies for group coverage, and whether individual health insurance may be the more practical starting point.

Health Insurance When Starting a Business Depends on the Facts

His business would be located in Kentucky.

His wife wasn’t part of the business. She wasn’t an employee and wasn’t looking to become one.

The business would consist of one owner.

Those few facts dramatically changed the conversation because health insurance for business owners often depends on details that aren’t immediately obvious.

When geography changes the answer

Our agency is licensed in Ohio, but we’re not currently licensed in Kentucky.

That meant I couldn’t recommend or enroll him in a Kentucky plan.

Instead, I did what I hope any professional would do.

I researched the issue, then called a trusted colleague in Kentucky to make sure I wasn’t missing anything.

A second opinion

I reached out to Jim Beatrice at Business Benefits Insurance Solutions in Northern Kentucky. Jim and I have known each other professionally for many years, and I wanted to make sure I wasn’t overlooking an option unique to Kentucky.

Jim’s practical experience confirmed what my research suggested.

For owner-only businesses, and for some other very small businesses depending on their circumstances, the Kentucky individual marketplace through kynect is frequently the place to begin evaluating coverage.

Every situation deserves its own review, but there usually isn’t a simple small-group health insurance solution waiting for an owner-only business.

Why this surprises people

Many entrepreneurs assume that once they form a business, they automatically have access to small-group health insurance.

Sometimes that’s true.

Sometimes it isn’t.

Ownership structure, employees, state rules, carrier guidelines, and association eligibility can all affect the available options.

For an owner-only business, individual health insurance may ultimately prove to be the most practical starting point. That is a different question from whether a company with employees should offer group health insurance.

That’s why asking the right questions matters before making assumptions.

The next conversation

Once the likely path became clearer, our discussion shifted from “What coverage is available?” to “Given those choices, how do we make the most of them?”

It’s a different conversation.

Sometimes it involves deciding between competing plans.

Sometimes it’s about budgeting for healthcare expenses.

Sometimes it’s about building flexibility into the future rather than simply solving today’s problem.

Those conversations are highly individual, which is why they almost always begin with questions rather than recommendations.

One question. Bigger implications.

This conversation reminded me that health insurance influences far more than medical care.

It affects career decisions.

Business formation.

Retirement timing.

Financial planning.

For many people, finding the right health insurance after leaving an employer becomes one of the deciding factors in whether they’re willing to build something of their own.

That’s a lot of weight for one decision.

Final thoughts

One thing I’ve learned after many years in this business is that the simplest questions are often the ones with the most moving parts.

Sometimes the answer is a group plan.

Sometimes it’s an individual plan.

Sometimes it’s simply knowing why one path makes more sense than another.

That’s why these conversations matter before applications are submitted and decisions are made.

In this instance, we didn’t write an insurance policy.

But we were able to help someone better understand the road ahead.

Sometimes that’s one of the most valuable services we can provide.

If that’s what happens, it’s been time well spent.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses and their owners evaluate health insurance and employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations, and observations that come from helping small businesses navigate health insurance.

Talk With McCarthy Stevenot Agency

If you are starting an Ohio business or trying to understand whether individual or small-group health insurance may apply to your situation, the first step is identifying the facts that affect eligibility and available options.

Contact McCarthy Stevenot Agency to discuss your situation, or call 513-891-9888.

Related resources

• Small Business Health Insurance Options in Ohio
• Health Insurance for Ohio Businesses With Five or Fewer Employees
• Should Your Small Business Even Offer Group Health Insurance?
• Ohio Small Business Health Insurance FAQ

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio small businesses and their owners navigate health insurance. Some articles explain a process. Others tell the stories behind the work. All are intended to help readers understand how experienced brokers think through real-world situations, not to suggest there is one right answer for every business or individual.

 

Insurance and inflation are closely connected whenever an insurer makes a promise that may not have to be fulfilled for years or even decades.

I’m excited to contribute as a speaker at the inaugural Midwest Bitcoin Summit, taking place September 23–24, 2026, at the Greater Columbus Convention Center in Columbus, Ohio.

The detailed schedule and session format are still being finalized. Whether I speak individually or as part of a panel, I hope to bring an insurance perspective to a conversation that frequently centers on technology, finance, mining, energy and monetary policy.

My perspective comes from more than three decades working in insurance and employee benefits as a partner at McCarthy Stevenot Agency, Inc.

The central question I hope to explore is straightforward:

Could Bitcoin eventually play a carefully limited role in helping insurance companies meet certain long-term obligations?

That question begins not with Bitcoin, but with the basic promise made by every insurance company.

Insurance Is a Promise About the Future

Insurance companies accept premiums today in exchange for a promise to pay covered claims in the future.

Sometimes that future is tomorrow. In other cases, the obligation may not become payable for years or even decades.

Life insurance, annuities and long-term care coverage can involve long-duration obligations. Workers’ compensation and certain liability claims can develop and remain open for extended periods. Property losses may happen suddenly, but the ultimate cost of rebuilding can be affected by labor shortages, material costs and concentrated demand following a catastrophe.

These risks are different, but they share an important characteristic: the insurer must maintain the financial capacity to deliver on a promise whose ultimate cost may not yet be known.

Why Insurance and Inflation Must Be Considered Together

Insurers use actuarial analysis to estimate the frequency and severity of future claims.

But the number of claims is only one variable.

The eventual cost of fulfilling those claims can also change. Healthcare services, long-term care, construction materials, skilled labor, litigation and catastrophe recovery may each experience different inflationary pressures.

A broad measure of inflation may not accurately reflect the change in cost affecting a particular insurance obligation.

For example, an insurer covering the replacement cost of a building must consider more than the structure’s cost today. The company must also consider what comparable materials and labor may cost when a future loss occurs.

After a widespread catastrophe, that calculation becomes more difficult. Many policyholders may require repairs or reconstruction at the same time, increasing demand for contractors, materials, temporary housing and other services.

The financial obligation can therefore be affected by the event itself, the number of claims and the inflation occurring within the specific part of the economy needed to fulfill the promise.

The Assets and Liabilities Must Work Together

Insurance companies do not merely collect premiums and wait for claims. They invest assets while maintaining reserves and capital intended to support their obligations.

Bonds remain the largest asset class in the United States insurance industry. At year-end 2025, they accounted for slightly less than 60% of insurer cash and invested assets.

That reliance on fixed-income assets is understandable. Bonds can provide contractual cash flows, defined maturities and an established framework for evaluating credit quality.

Life insurers also use asset-liability management to align expected asset cash flows with anticipated liability payments. The purpose is to reduce the risk that assets and obligations respond differently to interest rates, liquidity needs or changing market conditions.

Regulators reinforce this discipline through statutory accounting, reserve requirements and risk-based capital standards. Risk-based capital requirements establish a minimum level of capital based on an insurer’s size and the inherent riskiness of its assets and operations, helping regulators identify companies that may be weakly capitalized.

The system is intentionally conservative because policyholders depend on insurers to fulfill their promises.

Where the Bitcoin Question Begins

The argument is not that insurers should abandon bonds or replace their traditional portfolios with Bitcoin.

The more focused question is whether a relatively small allocation, matched with an appropriately long time horizon, could someday complement traditional assets when supporting certain long-duration risks.

Bitcoin introduces obvious concerns.

Its price can decline sharply. It does not produce contractual cash flows. Custody must be addressed. An insurer could face a liquidity problem if it had to sell during a severe drawdown. The asset would also require appropriate accounting, regulatory and risk-based capital treatment.

Those objections are real.

But another risk also deserves attention: the possibility that the assets supporting a future obligation do not preserve enough purchasing power to meet the actual cost of the promise.

That risk may become more important when the obligation is remote, the future cost is especially sensitive to inflation or the claim involves an event with low frequency but unusually high severity.

The potential role of Bitcoin would therefore depend on several questions:

• How long is the expected liability horizon?
• How much liquidity must remain immediately available?
• How small would the allocation need to be?
• How would severe and prolonged price declines be handled?
• How would the asset be secured and reported?
• What capital charge would properly reflect its risk?
• Would the proposed allocation improve or weaken policyholder protection?

These are not questions that should be answered by enthusiasm alone.

Regulatory Treatment Would Have to Change

Current statutory accounting presents a substantial obstacle.

NAIC statutory accounting guidance classifies directly held crypto assets as nonadmitted assets. In practical terms, directly held crypto assets are excluded from admitted assets and therefore do not support an insurer’s reported statutory surplus in the same manner as admitted assets.

A responsible path would not begin by pretending Bitcoin has no risk. Nor would it require regulators to grant it the same treatment as a high-quality bond.

It could begin with tightly limited exposure, conservative capital treatment, strict custody requirements and careful matching between the asset and the duration of the obligation it is intended to support.

Policyholder protection would remain the first priority.

A Question Worth Exploring

Insurance is ultimately about making promises deliverable.

Bitcoin raises questions about scarcity, monetary inflation and the preservation of value across time. Insurance raises questions about uncertainty, future obligations and the financial resources required to meet them.

The intersection of the two is not primarily about seeking higher investment returns.

It is about asking whether a new type of asset could someday help support an old and essential objective: maintaining the capacity to fulfill a promise long after it was made.

I look forward to contributing to that discussion at the Midwest Bitcoin Summit and hearing the perspectives of others working in insurance, technology, finance, policy and Bitcoin.

Midwest Bitcoin Summit 2026

September 23–24, 2026
Greater Columbus Convention Center
Columbus, Ohio

Learn more at midwestbtc.com.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses evaluate employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations, and observations that come from helping Ohio employers navigate health insurance renewals and employee benefits.

Disclaimer: This article is provided for general educational and discussion purposes. It is not investment, legal, actuarial or regulatory advice. McCarthy Stevenot Agency does not provide investment-management services. The suitability and permitted treatment of any insurer investment depend on applicable law, regulatory guidance, company circumstances and professional analysis.

When an employer hears there may be a problem with a health insurance claim, it’s natural to assume the insurance company has denied coverage.

Sometimes that’s true.

Sometimes the problem isn’t the claim at all.

Recently, a client contacted us after their healthcare provider indicated there could be a problem obtaining authorization for a scheduled surgery. The explanation centered on the group’s health plan showing an August 31 coverage end date.

That immediately raised more questions than it answered.

Questions about claim authorization can sometimes stem from coverage issues, eligibility information, renewal timing, or simple administrative confusion. The first step is figuring out which one you’re actually dealing with.

Small business health plans renew throughout the year. An upcoming renewal date, by itself, shouldn’t explain why a scheduled procedure suddenly appears to have a problem.

Rather than jumping to conclusions, we started asking a different question:

What are we missing?

At a Glance

• Not every authorization issue is a coverage issue.
• Administrative problems can create confusing signals.
• Experience helps identify where the real problem lies.
• Resolving the underlying issue often allows the claim process to move forward.

When the Pieces Don’t Fit Together

As we looked deeper, the pieces didn’t seem to fit together.

The renewal hadn’t arrived through the normal process. When renewal information finally became available, it didn’t resemble a typical renewal. Instead of clearly showing the current plan renewing into the next plan year, the documents looked more like alternate proposals. At the same time, different people were receiving different information about the group’s eligibility and renewal status.

None of those things, by themselves, meant the surgery wouldn’t be covered.

Together, though, they suggested the claim itself wasn’t the real issue. Something in the administrative process wasn’t lining up, and we needed to untangle that first.

Experience Means Knowing Where to Look

Experience isn’t just knowing the rules. It’s recognizing when the facts don’t fit the explanation.

After decades of working with small group health plans, you develop a sense for what looks normal and what doesn’t. Sometimes the most valuable thing a broker brings isn’t an immediate answer. It’s knowing where to look next.

In this case, that meant making additional calls, confirming the group’s renewal status, and working through the questions until the situation became clear.

Once the renewal information was confirmed, the concern that had been delaying the authorization process was resolved, and everything could continue through the normal channels.

From the client’s perspective, it looked like a surgery might not happen because of an insurance problem.

From our perspective, it looked like several administrative pieces weren’t lining up yet.

Those are two very different things.

What Clients Never See

Most employers never see that part of the process. They don’t see the questions being asked behind the scenes, the unusual renewal paperwork, or the phone calls needed to separate an administrative issue from an actual coverage issue.

They simply hear back that the situation has been sorted out.

In this case, resolving the administrative issue removed the obstacle preventing the authorization process from moving forward.

That’s exactly the outcome we hope for.

Because sometimes the most important work happens before a claim is ever denied.

Sometimes the problem isn’t the claim in the first place.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses evaluate employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations, and observations that come from helping Ohio employers navigate health insurance renewals and employee benefits.

Protecting Client Privacy

Client names, identifying details, and certain facts have been modified or omitted to protect client confidentiality. The situations described reflect real-world experience, but no post is intended to identify a specific employer.

Looking for a deeper explanation of the renewal process? These guides provide additional context.

Related Resources

• Why Small Businesses Should Build a Health Insurance Renewal System
• Health Insurance Prescreen for Ohio Small Businesses
• You Don’t Know Your Broker Until Something Goes Wrong
• Ohio Small Business Health Insurance Guide

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio employers navigate health insurance. Some articles explain a process. Others tell the stories behind the work. All are intended to help employers understand how experienced brokers think through real-world situations—not to suggest there is one right answer for every employer.

 

One of our recent small business health insurance renewals really stood out.

Every client has an expected renewal timeline. As those dates approach, we’re watching for renewal information so we have time to review it before decisions are made.

Based on our renewal calendar, this one should have arrived.

It hadn’t.

That simple observation started everything that followed.

So we contacted the carrier and learned this renewal had fallen outside the normal process and required additional handling. After a little persistence, it finally arrived.

I thought we were ready to begin the review.

We weren’t.

First, We Had to Figure Out What We Were Reviewing

The renewal packet contained several proposal pages, but it never clearly identified which plan the group was actually being renewed into.

It also didn’t include the Summary of Benefits and Coverage (SBC) for that plan.

Before I could compare premiums or benefits, I first had to know exactly what I was comparing.

We contacted the carrier again, confirmed the renewal plan, and requested the SBC.

Only then could the review really begin.

Evaluating the Small Business Health Insurance Renewal

Because the employee census had changed, the first step was recalculating last year’s premium using the current enrollment. That gave us an apples-to-apples comparison.

The result was an true increase of approximately 5.2%.

From there, we compared the benefits.

Almost everything remained the same. The primary change was that emergency room services moved from 100% after the deductible to a $300 emergency room copay plus the deductible, followed by 100% coverage.

For a renewal in that range, it was a relatively modest change.

Could We Do Better?

We still looked at the alternatives.

One thing employers don’t always see is that plan options aren’t always available in small, predictable steps.

The next comparable non-HSA copay plan wasn’t just a slightly higher deductible. It jumped from a $5,000 deductible with 100% coverage after the deductible to a $6,000 deductible with 80% coverage after the deductible.

Yes, it lowered the premium.

It also represented a much bigger change in benefits.

One thing I’ve learned over the years is that you work with the hand you’re dealt. I can’t invent plan options that don’t exist. My job is to understand the options that are available and recommend the least disruptive path for the client.

In this case, staying with the current plan made the most sense.

Broker’s Desk

Looking back, what stands out isn’t the 5.2% increase.

It’s everything that had to happen before we could confidently recommend accepting it.

Had the client opened that renewal packet on their own, I think they would have had more questions than answers. The renewal plan wasn’t clearly identified, the actual increase wasn’t obvious because the employee census had changed, and the benefit documents weren’t included.

That’s why even a good renewal deserves a careful review.

Sometimes the value isn’t finding a different plan.

Sometimes it’s simply bringing clarity to a process that would otherwise leave more questions than answers.

At a Glance

• A scheduled renewal didn’t arrive when expected, prompting us to follow up with the carrier.
• The renewal packet didn’t clearly identify the renewal plan or include the Summary of Benefits and Coverage (SBC).
• We confirmed the correct renewal plan before comparing premiums and benefits.
• After adjusting for changes in the employee census, the actual increase was approximately 5.2%.
• The primary benefit change was a $300 emergency room copay plus the deductible.
• We reviewed alternative plans, but the next comparable option required a much larger change in benefits.
• The recommendation was to remain with the current plan because it represented the least disruptive path.

About the Author

For more than three decades, Ted Stevenot has helped Ohio small businesses evaluate employee benefits as a partner at McCarthy Stevenot Agency, Inc.

He writes the Broker’s Desk series to document the real-world decisions, conversations, and observations that come from helping Ohio employers navigate health insurance renewals and employee benefits.

Protecting Client Privacy

Client names, identifying details, and certain facts have been modified or omitted to protect client confidentiality. The situations described reflect real-world experience, but no post is intended to identify a specific employer.

If you’d like to learn more about health insurance renewals and employee benefits, these guides provide additional context.

Related Resources

• Why Small Businesses Should Build a Health Insurance Renewal System
• The Renewal System You Didn’t Know You Had
• Health Insurance Prescreen for Ohio Small Businesses
• Case Study: Reducing a 22% Renewal
• Ohio Small Business Health Insurance Guide
• Broker’s Desk: Real-World Stories from Ohio Small Business Health Insurance

Disclaimer

Broker’s Desk is a series of observations from more than three decades of helping Ohio employers navigate health insurance. Some articles explain a process. Others tell the stories behind the work. All are intended to help employers understand how experienced brokers think through real-world situations—not to suggest there is one right answer for every employer.