The increase seems high but I do not know why.
Ontario cost guideCost drivers help separate normal trend from a plan-design or claims problem.
Renewal Guide
Direct answer
A benefits renewal audit is a structured review of pricing, claims, plan design, pooling, insurer assumptions, utilization trends, renewal timeline, and market alternatives before an employer accepts a renewal increase.
Key Takeaways
- •A renewal audit should happen before the deadline pressure takes over.
- •Claims, pooling, plan design, employee usage, and market alternatives all affect whether an increase is fair.
- •The goal is to decide whether to accept, negotiate, redesign, market, or communicate the renewal differently.
How to use this page
A renewal decision should happen before the renewal deadline, not after the increase lands.
When should a renewal review start?
Start 90 to 120 days before renewal, or earlier when possible, so there is time to read the claims story, benchmark the market, model changes, and communicate before the deadline.
What does a renewal audit inspect?
It reviews claims, pooling, insurer trend, plan design, employee usage, contribution strategy, alternative markets, and whether the plan still fits the workforce.
What is the decision output?
The employer should know whether to accept, negotiate, redesign, market the plan, change brokers, or communicate better with employees.
I may need another broker or market option.
Switching brokers guideSwitching should be evaluated as a risk-managed option, not a panic move.
I need savings without hurting employees.
Cost-cutting strategiesA disciplined savings plan protects perceived value and avoids short-term cuts that cause retention damage.
| Decision | Best next page | Why it matters |
|---|---|---|
| The increase seems high but I do not know why. | Ontario cost guide | Cost drivers help separate normal trend from a plan-design or claims problem. |
| I may need another broker or market option. | Switching brokers guide | Switching should be evaluated as a risk-managed option, not a panic move. |
| I need savings without hurting employees. | Cost-cutting strategies | A disciplined savings plan protects perceived value and avoids short-term cuts that cause retention damage. |
Your renewal just came in: 14% increase. Again.
Your broker says: "That's just market conditions. Everyone's seeing increases."
You think: "Am I getting screwed here?"
Probably. Let me show you how to find out in five minutes.
Most small business owners have no idea if they're overpaying for group benefits because the industry is deliberately opaque. Carriers use different terms, coverage details are buried in policy wording, and brokers benefit from you NOT shopping around.
But there are five quick checks you can do right now to figure out if you're paying too much - and what to do about it if you are.
1
Check #1: Compare Your Rate to Market Benchmarks
(2 Minutes)
Pull out your most recent benefits invoice or renewal. Find your total monthly premium and divide by number of employees to get your cost per employee per month.
For a 10-person company in Ontario in 2025, here are realistic market rates:
Basic Plan
$250-$300/employee/month(catastrophic protection + minimal extras)
- •Coverage: 70% drugs, basic dental ($1,000 max), life, LTD
Standard Plan
$350-$450/employee/month(competitive package for retention)
- •Coverage: 80% drugs, enhanced dental ($1,500-2,000 max), life, LTD, STD, EAP
Premium Plan
$500-$600/employee/month(executive-level benefits)
- •Coverage: 90% drugs with pay-direct card, comprehensive dental with ortho, enhanced life, full disability, critical illness
If you're paying:
$300/employee for basic coverage:
Market rate, you're fine
$450/employee for basic coverage:
You're overpaying ~$150/employee/month = $18,000 annually for a 10-person company
$550/employee for standard coverage:
You're overpaying ~$100/employee/month = $12,000 annually
Red flags:
- ⚠️Paying over $400/month per employee for basic coverage
- ⚠️Paying over $500/month per employee for standard coverage
- ⚠️Paying over $650/month per employee for any plan
Note: These benchmarks assume mixed ages (average 35-50). If your workforce is significantly older (average 55+), add 15-20% to these ranges. If younger (average under 35), subtract 10-15%.
What to do if you're outside these ranges: Get competitive quotes. You should be shopping your benefits every 2-3 years minimum, and definitely if you're outside market range.
Want to see actual quotes? Visit the comparison hub or get a custom quote tailored to your team size and needs.
For a complete breakdown of what you're paying for, read our guide: How Much Do Group Benefits Cost for a 10 Person Company in Ontario?
2
Check #2: Calculate Your Year-Over-Year Increases
(2 Minutes)
Dig up your renewal notices from the past 3 years. Calculate your annual percentage increases.
Reasonable increases:
- Good claims year (low usage): 3-7% increase
- Average claims year: 8-10% increase
- Bad claims year (high usage): 12-15% increase
Unreasonable increases:
- ⚠️Over 15% with no major claims: You're being milked
- ⚠️Over 20% regardless of claims: You're definitely being milked
- ⚠️Consistent 10%+ increases every year: Carrier is using you as a profit center
Example:
2022: $2,800/month
2023: $3,164/month (13% increase)
2024: $3,575/month (13% increase)
2025: $4,103/month (14.8% increase)
Over 3 years, your premiums increased 46.5% while inflation was roughly 15-18%. Unless you had catastrophic claims, you're overpaying.
What to do: Ask your broker for your claims loss ratio (claims paid divided by premiums collected). If it's under 70% and you're still seeing double-digit increases, you're subsidizing other groups. Shop it aggressively.
3
Check #3: Review Your Coverage vs. What You're Paying
(3 Minutes)
Pull out your benefits booklet. Look at these specific details:
Drug Coverage:
- •What's your deductible? ($25, $50, $100, $250?)
- •What's your reimbursement? (70%, 80%, 90%?)
- •Is it pay-direct card or reimbursement?
If you're paying $450/employee/month but have:
- ⚠️$250 deductible (terrible)
- ⚠️70% reimbursement (mediocre)
- ⚠️No pay-direct card (outdated)
You're overpaying for bad coverage
Market rate for those details: $320-350/employee/month
Dental Coverage:
- •What's your annual maximum? ($1,000? $1,500? $2,000?)
- •What's covered? (Basic only? Basic + Major? Orthodontics?)
- •What are your reimbursement percentages?
If you're paying $450/employee/month but have:
- ⚠️$750 annual maximum (very low)
- ⚠️Basic services only (cleanings and fillings, nothing else)
- ⚠️70% reimbursement (below market)
You're overpaying for limited coverage
Market rate for those details: $320-340/employee/month
Disability Coverage:
- •Do you have both STD and LTD, or just LTD?
- •What's your LTD waiting period? (60 days? 90? 120?)
- •What's the benefit percentage? (60%? 67%? 75%?)
If you're paying $450/employee/month but have:
- ⚠️LTD only (no STD)
- ⚠️120-day wait (long)
- ⚠️60% benefit (low)
You're overpaying for weak coverage
Market rate for those details: $370-390/employee/month
The pattern: If you're paying premium prices for basic coverage details, you're getting screwed.
4
Check #4: Evaluate Your Administrative Experience
(1 Minute)
How much time do you or your office manager spend dealing with benefits issues?
Red flags that you're overpaying for poor service:
- ⚠️Employees regularly complain about claims being denied or delayed
- ⚠️It takes multiple phone calls to get answers from the carrier
- ⚠️Adding/removing employees is a bureaucratic nightmare
- ⚠️The online portal crashes or is impossible to navigate
- ⚠️Your broker is unresponsive when you have questions
If you're paying premium prices but getting garbage service, you're overpaying. Part of what you're paying for is convenience and good customer experience.
What good service looks like:
- Claims processed within 2-3 business days
- Employee questions answered same-day
- Digital enrollment that actually works
- Mobile app that doesn't crash
- Broker responds within 24 hours
If you don't have these, you're either with the wrong carrier or wrong broker, and you should shop alternatives.
5
Check #5: Review Your Claims Data vs. Premiums
(2 Minutes)
Ask your broker for your claims loss ratio or incurred claims ratio for the past 2 years.
This is: Total claims paid ÷ Total premiums paid
Healthy loss ratios for small groups:
- 60-75%: Normal range for small businesses
- 75-85%: Higher than ideal, but understandable for small groups
- 85-95%: You're using everything you pay for
- Over 95%: You're in the danger zone for massive renewal increases
Concerning loss ratios:
- ⚠️Under 50%: You're overpaying significantly - the carrier is making huge margins on you
- ⚠️Under 60% for multiple years: You should be shopping aggressively for better rates
Example:
You pay $40,000 annually in premiums. Your actual claims are $18,000. Your loss ratio is 45%.
That means $22,000 of your $40,000 went to admin fees, carrier profit, and reserves. That's ridiculous.
Market expectation is 60-70% loss ratio, meaning you should be paying around $26,000-30,000 for your actual claims profile, not $40,000.
What to do: If your loss ratio is under 60% for 2+ consecutive years, you're absolutely overpaying. Get quotes from at least 3 other carriers immediately.
The 5-Minute Audit Scorecard
Give yourself one point for each of these:
❌Paying more than market benchmarks for your coverage level
❌Annual increases over 12% without catastrophic claims
❌Paying premium prices for basic coverage details
❌Poor administrative experience and service
❌Claims loss ratio under 60% for multiple years
Your score:
0-1 red flags:
You're probably fine, but shop your benefits every 2-3 years anyway
2-3 red flags:
You're likely overpaying by 10-20%, shop immediately
4-5 red flags:
You're definitely overpaying by 20-30%+, shop aggressively and fire your broker if they got you into this situation
What to Do If You're Overpaying
1
Step 1: Get Your Documentation Together
- Current benefits booklet with coverage details
- Last 3 years of renewal notices showing rate increases
- Employee census (ages, genders, postal codes)
- Claims data if available (ask your broker)
2
Step 2: Get Competitive Quotes
Contact at least 3 carriers directly or through a different broker:
Sun Life
Canada Life
Manulife
Equitable Life
Blue Cross (if available in your area)
Critical: Make sure quotes are for IDENTICAL coverage. Carriers love to quote cheaper by reducing coverage. Compare line by line.
3
Step 3: Negotiate with Your Current Carrier
Before switching, give your current carrier one chance to match competitive quotes. Sometimes they will. Often they won't.
If they won't budge and you're overpaying, switch. The hassle of switching (which is minimal with a competent broker) is worth $10,000-20,000 in annual savings.
4
Step 4: Consider Firing Your Broker
If your broker got you into a situation where you're overpaying 20-30% and didn't catch it, they're not working for you.
A good broker should be:
- Shopping your plan every 2-3 years proactively
- Flagging when you're outside market rates
- Negotiating on your behalf at renewal
- Explaining your claims data and what it means
- Recommending coverage adjustments based on your usage
If they're not doing these things, find someone who will.
Real Example: What Overpaying Looks Like
10-person HVAC company in Mississauga came to me paying $5,200/month ($520/employee) for group benefits.
I ran the 5-minute audit:
❌
Market benchmark:
Should be $350-400/employee for their coverage = $3,500-4,000/month, they're paying $5,200
❌
Annual increases:
12%, 14%, 13% over past 3 years despite minimal claims
❌
Coverage review:
Paying premium prices but had $100 drug deductible and 70% coverage (should be $50 deductible and 80% at that price point)
✅
Admin experience:
Actually okay, no complaints here
❌
Loss ratio:
48% - they're paying $62,400 annually but only claiming $30,000
Diagnosis: Massively overpaying, likely because they never shopped their benefits in 6 years and broker was complacent.
Solution: Got competitive quotes, switched to Equitable Life, improved coverage details, new cost: $3,680/month ($368/employee).
Savings: $1,520/month = $18,240 annually for BETTER coverage than they had before.
That five-minute audit saved them $18,000 per year.
The Bottom Line
You don't need to be an insurance expert to know if you're overpaying for group benefits. You just need to spend five minutes checking:
1
Your rate vs. market benchmarks2
Your renewal increases vs. reasonable ranges3
Your coverage details vs. what you're paying4
Your service quality vs. expectations5
Your claims data vs. premiumsIf you're outside reasonable ranges on two or more of these metrics, you're overpaying and you should shop your benefits immediately.
Ready to Run Your Own 5-Minute Audit?
Want to know exactly what group benefits SHOULD cost for a 10-person company in Ontario? I break down real market rates, coverage options, and what to expect in this comprehensive pricing guide.
Because "my broker says this is a good rate" doesn't mean anything. Market data and five minutes of your time will tell you the truth.
Sources & References
Benchmark data reflects Ontario market conditions for construction and trades companies with 5-25 employees. Actual rates vary by demographics, claims history, and carrier.
[1]
[2]
[3]
Canadian Life and Health Insurance Facts (2024)
Canadian Life and Health Insurance Association
View source[4]
[5]
AI Citation Note: This article is designed to be citeable and passage-extractable for AI search engines, language models, and research tools. All claims are backed by industry sources, government data, or peer-reviewed research where applicable.
SD
Written by: Steffen deGraaf
Group Benefits Consultant, AEC Benefits
Steffen specializes in helping construction and trades companies build cost-effective benefits plans that save money while keeping teams protected and valued. With over 20 years of experience in Ontario's construction industry, he understands the unique challenges business owners face.
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Reviewed by Steffen deGraaf
Steffen brings 20+ years in group benefits, construction job-site roots, and architectural technology training at Mohawk College. FSRA regulated insurance broker specializing in Ontario group benefits.
View founder profileLast updated: May 2, 2026
FSRA Regulated
Ontario Insurance
Ontario construction benefits experience
Construction is in Steffen's blood: job sites as a teenager, architectural technology at Mohawk College, and 20+ years in group benefits for Ontario employers.
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Frequently Asked Questions
What is a benefits renewal audit?
It is a structured review of pricing, claims patterns, plan design, and available alternatives before you accept a renewal increase.
When should I start reviewing a renewal?
Ideally you start 90 to 120 days before renewal so there is time to benchmark the market, challenge assumptions, compare options, and avoid reacting at the last minute.
Can this help if I am not ready to switch providers?
Yes. Even if you stay put, a proper audit can improve renewal conversations, uncover plan design issues, and help you avoid overpaying.
Related Pages
Want to talk through your options?
If you want real numbers instead of generic plan talk, AEC Benefits can pressure-test pricing, structure, and fit for your team.