If your organization is seeing 2026 health insurance renewal rates jump by 30–50%, you’re not alone. Across the nonprofit and mission-driven sector, these increases are becoming alarmingly common, driven by high-cost claims, GLP-1 medications, and cancer therapies.
We recently worked with a client whose renewal came in at +40%. Like many of you, they were trying to preserve a values-aligned, people-centered approach to benefits, but the increase forced hard decisions around budgeting and plan design.
We know these moments are stressful. They put your values and your budget in direct tension. Without the right guidance, it’s easy to feel stuck.
Below are four practical, people-centered strategies we’re helping clients use to respond to rising costs without sacrificing care or culture.
Offer Plan Options That Meet Different Needs
Offering more than one medical plan can help support a diverse workforce with varying care needs and financial situations.
Base + Buy-Up Plan: Provide a lower-cost plan with minimal employee contribution and a richer plan employees can opt into.
What that might look like:
Plan A (Base): High-Deductible Health Plan with a $5,000 individual / $10,000 family deductible.
Cost to employee: $0 for employee-only coverage
Employee + spouse/children/family: 10% of premium
Plan B (Buy-Up): PPO Plan with $1,000 individual / $2,000 family deductible.
Cost to employee: 25–40% of premium, depending on tier
Adjust Cost-Sharing Structures
If plan costs are going up, consider adjusting how much the organization and employees contribute, without making employees absorb all the increases.
You might shift from a percentage-based contribution to a flat-dollar amount for better budget control.
What that might look like:
Employer contributes $600/month for employee-only coverage (covering the full premium)
Employer contributes $1,000/month for any dependent coverage tier (employee pays the difference)
Explore Alternative Funding Models
More organizations are evaluating non-traditional options like individual coverage arrangements or self-funding for greater control and flexibility.
Options to explore:
ICHRA (Individual Coverage HRA)
QSEHRA (for small employers)
Self-insured plans (if you’re large enough or have predictable claims)
What that might look like:
Employer provides $450/month via ICHRA for employees to shop for individual coverage on the exchange.
Or: Moves to a self-funded PPO and adds stop-loss insurance to limit risk on high-cost claims.
Get a Second Opinion
Don’t be afraid to ask your broker tough questions or bring in a second set of eyes.
Ask: Can we be rated as a large group or small group, and which is more cost-effective?
Explore: Is it time to switch brokers if proactive solutions aren’t being presented?
What that might look like:
A different broker shows you a PEO option or level-funded plan that cuts your renewal increase by 20%
You save by joining a group purchasing pool or co-op model for nonprofits
Still Feeling Stuck?
If you’re facing a tough renewal, unsure how to structure your offerings, or just want to talk through options, we’re here to help.
Book a free consultation with Whitney and get clarity on the HR challenge that’s been weighing on you.
Let’s find a way forward that protects your people and your mission.
