Jesse Freese, Senior Business Consultant at Sequoia, joins the Benefits Brief to discuss rising employee benefits renewal costs, the shift toward multi-year planning, and the tradeoffs employers face as employees ask for broader coverage. Drawing from work across Sequoia Advisory and Sequoia One, he explains why cost containment is leading 2027 benefits decisions and why employers may need to plan further ahead than they have in the past.
Jesse Freese’s Background
- Works across Sequoia Advisory, the company’s traditional brokerage business, and Sequoia One, its PEO.
- Sequoia One clients range from roughly five to 400 employees, while brokerage clients are typically around 50 to 300 employees, with additional work among larger organizations.
- At the time of the interview, many existing brokerage clients were finishing renewals and preparing for open enrollment. Sequoia was also meeting with groups considering leaving the PEO model after higher-than-usual renewals.
Key Takeaways
- Treat benefits renewal as a multi-year strategy. Higher costs and changing employee expectations are making it harder to approach each renewal as an isolated annual decision.
- Renewal expectations have moved materially higher. Single-digit increases were previously more typical, while low-to-mid-teen trends are now expected in many conversations. Some organizations are seeing increases of 30%, 40%, 50% or more.
- Employee benefits questions are becoming harder to navigate. GLP-1 medications, fertility benefits, and other increasingly visible offerings create pressure to expand coverage while employers are already trying to limit premium increases.
- Cost containment is the leading 2027 benefits priority across his clients. CFOs are entering renewal meetings focused on the size of the increase, how it compares with the budget, and what can realistically be absorbed.
- Health insurance does not have to carry the full benefits strategy. Well-being and employee-support programs can complement the core health plan while potentially costing less than additional health insurance coverage.
Recurring Questions
1. What’s one thing you’re telling every client this year, regardless of their size and situation?
Employers should stop viewing benefits renewal as a one-year event and begin treating it as a multi-year strategy. With unusually high renewals and growing demands on health plans, organizations may need to decide what they can afford today, what can be absorbed over time, and which additions should wait.
Build a multi-year benefits strategy
- Higher-than-usual renewals make it harder to solve every benefits need within a single cycle.
- Planning should account for the current renewal, how much of an increase the organization can absorb, and what may need to change in future years.
- This longer view is becoming more important because employee benefits represent a major expense for many organizations.
Prioritize what matters now
- Unexpectedly large increases may force organizations to make tradeoffs between maintaining current coverage and adding new benefits.
- Some “nice-to-have” additions may need to move into a future year rather than being layered onto an already difficult renewal.
- The goal is to make those decisions within a longer-term plan instead of reacting to each renewal independently.
2. What have you changed your mind about since last enrollment season?
Two shifts stand out since the previous enrollment season: employees have become more capable of using AI and decision-analysis tools to navigate benefits decisions themselves, and renewal expectations have moved significantly higher. The increase in expected costs is also pushing employers toward earlier forecasting and longer-term planning.
AI is expanding employee self-service
- Employees are becoming more capable of using AI and decision-analysis tools to refine what they are looking for and navigate parts of the benefits decision process independently.
- That represents a noticeable change from the previous enrollment season.
Benefits renewal expectations have changed
- Renewal conversations have shifted from a period when single-digit increases were considered appropriate to one where low-to-mid-teen trends are becoming expected.
- There are still significant outliers, including organizations facing increases of 30%, 40%, 50% or more.
- Some clients are seeing unexpected increases of $1 million, $2 million, or $3 million.
Forecast earlier and understand what is driving claims
- Organizations with high utilization may need to prepare leadership earlier and budget more conservatively for the following year.
- Large claims should be examined to understand whether they appear to be one-time events or connected to chronic conditions that may continue affecting the plan.
- Potential strategies discussed include different plan options, cost sharing, HSAs, well-being programs, and other approaches intended to help manage future renewals.
3. What do you think most benefit leaders are underestimating right now?
Benefits leaders may be underestimating how difficult employee benefits questions are becoming as workers ask for broader coverage at the same time premiums are increasing. Current open enrollments are creating more conversations about what insurance should cover, what employees and dependents want access to, and what those additions would cost.
Employees are asking for broader benefits coverage
- GLP-1 medications, fertility benefits, and other newer or increasingly visible offerings are creating additional questions during open enrollment.
- HR and finance leaders may want to provide these benefits, while employees and their families are also asking for greater access.
More coverage can mean higher premiums
- Leaders may need to explain not only what the health plan covers, but why certain treatments or benefits are excluded and what adding them could cost.
- The central challenge is balancing a robust, comprehensive benefits program with the potential for significant premium increases.
- That tradeoff becomes harder when leaders see the value of new offerings but also have responsibility for what the organization can afford.
4. For 2027, what’s driving benefits decisions most? Is it cost containment, employee retention, employee trust and experience, or compliance and risk?
Cost containment is the clear No. 1 driver across his clients this cycle. Jesse Freese did not rank the other three options individually. His answer centered on the financial pressure employers are facing at renewal and how that pressure is shaping the conversation with company leadership.
Cost is setting the tone for renewal
- CFOs are often focused on the size of the increase before the renewal is even presented, with “How bad is it?” becoming an expected opening question.
- In many client relationships, the benefits team works with the chief people officer and HR throughout the year, while the renewal meeting may be one of the few times the CFO is directly involved.
- Finance leaders are comparing the renewal against what they budgeted while receiving a number they may feel they have limited visibility into or control over.
- That combination of higher costs and limited predictability is creating real anxiety for leaders responsible for the budget.
Cost containment does not have to mean focusing only on health insurance
Even with the renewal number dominating the conversation, the recommendation is not to let health insurance become the entire benefits strategy.
- Employers should first make sure the core health plan is “tight and right.”
- From there, well-being and employee-support programs can complement the health plan without requiring the same level of spending as additional health insurance coverage.
- In his experience, those surrounding benefits can also see higher utilization, giving employers another way to provide support while managing overall costs.
Impactful Quotes
“I think this year in particular, really sitting down with decision makers and looking at renewal, not just as a one-year event, but really as a multi-year strategy.”
“We’ve moved from a world in which single digits was appropriate for renewal and now we’re looking at trends of low to mid teens as expected.”
“Trying to find that right balance between offering a really robust and comprehensive program without seeing massive spikes in premiums.”
“I would encourage most leaders at Renewal to yes, focus on the number, make sure you get your program tight and right, but also think what else you can wrap around that employees, you know, would love to have and and frankly will use.”
About the Benefits Brief
The Benefits Brief is an ongoing interview series from Bereave that asks benefits leaders, brokers, and employee benefits experts the same questions about what they are seeing today and what they expect ahead. As more experts participate, their answers create a growing view of changing priorities, areas of agreement and disagreement, and where employee benefits may be heading next.
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